The Energy Facility Siting Council modified its rules that govern amending site certificates. Petitioners challenge the validity of the new rules, arguing that the council failed to comply with required rulemaking procedures and that the rules exceed the council’s statutory authority. For the reasons that follow, we agree with some, but not all, of those grounds and conclude that the rules are invalid.
The council consists of seven public members, ORS 469.450(1), who oversee the development of large energy facilities in Oregon, including electric power generating plants, high-voltage transmission lines, gas pipelines, and radioactive waste disposal sites, among other projects, ORS 469.300(11).
The council carries out that task by issuing site certificates to developers. See ORS 469.320(1) (“[N]o facility shall be constructed or expanded unless a site certificate has been issued for the site.”). A site certificate authorizes the certificate holder to construct, operate, and retire a facility on an approved site, subject to the conditions that the council includes in the certificate. ORS 469.401(1); see ORS 469.300(26) (defining “site certificate”).
Because site certificates address how and where large energy facilities will operate, applications for site certificates are often long, with many technical details that raise complicated questions of law and policy. To help resolve those complexities, the legislature has tasked the Oregon Department of Energy (ODOE) to provide “clerical and staff support” for the council. ORS 469.450(6); see also ORS 469.040(1)(b) (requiring the director of ODOE to “[s]upervise and facilitate the work and research on energy facility siting applications at the direction of the [council]”).1 The legislature has also created an extensive statutory framework governing the site certificate application process. See ORS 469.330-370 (setting out the numerous steps in the certificate application process).
This case involves the process for amending a site certificate after a certificate holder already has completed that extensive application process and received a site certificate. In contrast to the detailed statutory framework governing the site certificate application process, the statutory provisions for amending a site certificate are brief. We discuss those provisions below. Because of the limited statutory direction, the council created the process for amending a site certificate through its administrative rules. See ORS 469.470(2) (authorizing the council to “adopt standards and rules to perform the functions vested by law in the council”). Those rules appear in Chapter 345, Division 27, of the Oregon Administrative Rules.
In January 2017, after years of considering changes, the council began the formal process to modify its rules that govern amending a site certificate and proposed what the council called a “wholesale re-write” of Division 27. The council continued its rulemaking activities until October 2017, when the council adopted new rules. Over the course of that time, the council issued six public notices about the rulemaking process, extended the comment period four times, held three public hearings, circulated three draft versions of the proposed rules, and considered more than 150 written comments.
We detail below the procedural steps in the rulemaking process and the changes to the rules over the three draft versions, as relevant. A brief overview of those changes is helpful as background. Before the revisions, the rules provided for two procedural paths for reviewing requests for amendment (RFAs): a standard process and an expedited process.2 OAR 345-027-0060, 00070, 0080 (2017). The standard process could also be extended, which was frequently necessary because of the complexity and public interest in site certificate applications. See OAR 345-027-0070(2) (2017) (standards for extended standard process). In the years leading up the rule changes, about 70 percent of RFAs were reviewed under the extended standard process.
In sum, we conclude that, as a procedural matter, the council failed to comply in ORS 183.335(3)(d), because it did not issue a statement identifying how it would later determine whether the proposed rules were accomplishing their objective. We further conclude that, as a substantive matter, OAR 345-027-0068(3)(e)(E), OAR 345-027-0072(3)(d), and OAR 345-027-0072(5) exceed the council’s statutory authority regarding the scope of judicial review.