Else v. Acc

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

PETER T. ELSE, Plaintiff/Appellant,

v.

ARIZONA CORPORATION COMMISSION, Defendant/Appellee,

SUNZIA TRANSMISSION LLC, Intervenor/Appellee.

No. 1 CA-CV 17-0208
FILED 1-25-2018

Appeal from the Superior Court in Maricopa County
No. CV2016-092030
The Honorable Lori H. Bustamante, Judge

AFFIRMED

COUNSEL

Peter T. Else, Mammoth
Plaintiff/Appellant

Arizona Corporation Commission, Phoenix
By Charles H. Hains, Wesley C. Van Cleve,
Andrew M. Kvesic, Maureen A. Scott
Counsel for Defendant/Appellee
 ELSE v. ACC, et al.
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Ryley Carlock & Applewhite PA, Phoenix
By Albert H. Acken, Samuel L. Lofland
Co-Counsel for Intervenor/Appellee

Munger Chadwick, Green Valley
By Lawrence V. Robertson, Jr.
Co-Counsel for Intervenor/Appellee

MEMORANDUM DECISION

Presiding Judge Lawrence F. Winthrop delivered the decision of the Court,
in which Judge Jennifer B. Campbell and Judge Paul J. McMurdie joined.

W I N T H R O P, Presiding Judge:

¶1 Peter T. Else (“Else”) appeals the superior court’s order
affirming the Arizona Corporation Commission’s (the “Commission”)
grant of a Certificate of Environmental Compatibility (“CEC”) to SunZia
Transmission LLC (“SunZia”). For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 SunZia is an independent transmission project owned by Salt
River Project, Tucson Electric Power Company, Tri-State Generation and
Transmission Association, Shell Wind Energy, and Southwestern Power
Group II, LLC. In 2006, the Southwest Area Transmission Subregional
Planning Group1 proposed a new transmission line between New Mexico
and southern Arizona to provide service for a growing demand for
renewable energy (the “Project”). In 2008, SunZia, as a project owner, filed
a right-of-way application with the Bureau of Land Management (“BLM”).
Subsequently, the BLM, in connection with other federal and state agencies,
began to prepare an Environmental Impact Statement. After hearing public
comment, the BLM issued its final Environmental Impact Statement

1 The Southwest Area Transmission Subregional Planning Group is a
group of governmental entities; transmission regulators, users, owners, and
operators; and environmental groups that promote regional planning of
transmission lines in the Southwest. Regional Planning, WESTCONNECT,
http://regplanning.westconnect.com/swat.htm (last visited Jan. 18, 2018).

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detailing the Project’s proposed route through southern Arizona, and
ultimately in 2015 approved SunZia’s request for a right-of-way.

¶3 After the BLM’s approval of its right-of-way, SunZia applied
for a CEC with the Arizona Power Plant and Transmission Line Siting
Committee (the “Committee”).2 In support of its application SunZia
submitted numerous documents detailing the proposed transmission
route’s geography, the flora and fauna in the area, and any negative impacts
construction would have on the surrounding environment. SunZia further
promoted the Project as helping to generate and transport additional
electricity, helping to relieve existing transmission congestion, and helping
to provide additional energy delivery options to aid Arizona in meeting its
renewable energy portfolio standards and federal mandates. The Project
was expected to begin development in 2018 and conclude construction of
the first transmission facility by 2021.

¶4 The Committee held a multi-day hearing regarding SunZia’s
CEC application. During the hearing, the Committee heard from the
Project’s proponents and opponents, went on site visits to view the
proposed route, and reviewed environmental impact studies. Numerous
parties attended the hearing, including representatives for SunZia, the
Commission, Pinal County, Natural Resources Conservation Districts,
private residential communities, as well as Else3 and other propria persona
intervenors.

¶5 At the hearing, SunZia argued the Project would “create[]
access to stranded renewable [energy] resources.” To support this
proposition, SunZia presented maps of the Project’s proposed route with
estimates of the amount of energy that could be generated from available
solar and wind resources in eastern Arizona and western New Mexico. In
opposition, Else, and other intervenors, argued there was no proven need
for the proposed renewable energy and that it was unlikely the Project

2 The Arizona portion of the Project spans approximately 199 miles
from Greenlee County to the existing Pinal Central Substation, and consists
of two single-circuit 500-kilovolt transmission lines and associated facilities.
The Project primarily crosses lands administered by the Arizona State Land
Department and BLM, with only a small portion crossing private lands.

3 Else moved to intervene as a landowner in the San Pedro watershed
and a conservation activist in the region, and the Committee granted his
motion.

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would come to fruition. At the conclusion of the hearing, the Committee
discussed whether it could require that the Project comply with renewable
energy conditions and proposed two requirements: (1) that the Project not
begin construction more than 90 days before construction of the New
Mexico wind project; and (2) that approval of the Project be conditioned on
transmitting a certain percentage of renewable energy. Ultimately, after
significant debate, both conditions were rejected.4 The Committee,
however, did adopt the condition that SunZia “will, in good faith, and
consistent with the requirements of state and federal law, use its best efforts
to secure transmission service contracts for renewable energy generation[,]”
and approved the CEC.5

¶6 After the Committee approved the CEC, it sent the CEC to the
Commission for independent review. The Commission then heard
additional public comment and argument on the matter. Opponents of the
Project reiterated their concern that the Project would not be constructed as
proposed. They further accused SunZia of wanting an approved right-of-
way without being obligated to deliver renewable energy to Arizona. To
ensure against this, they requested the Commission specifically condition
the CEC on SunZia transmitting renewable energy. The Commission,
however, did not impose any additional conditions and approved the CEC
by a 3-2 vote. In approving the CEC, the Commission incorporated the
Committee’s findings of fact and conclusions of law, and adopted the
Committee’s “good faith” and “best efforts” conditions.6 Else moved for a
rehearing, which the Commission denied, and then filed a timely appeal
with the superior court.

4 In rejecting the conditions, the Committee noted that the
Commission was better qualified to determine the legality of imposing the
proposed conditions on the CEC.

5 The Committee additionally found that “[t]he Project may assist the
state in meeting the goal of increasing the use of renewable energy in the
state.”

6 In the dissent, Chairman Little argued that SunZia presented “either
no evidence or questionable evidence” that any of the Project’s purported
benefits would materialize. Chairman Little further argued that SunZia
provided no “real assurance that the proposed line will actually lead to the
development of additional renewable energy resources.”

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¶7 In the superior court, Else moved and SunZia and the
Commission cross-moved for judgment on the administrative record. The
court then held oral argument regarding the motions at which Else argued
the Project’s actual purpose was different from its purported purpose.7 In
response, the Commission and SunZia argued there was substantial
evidence from which the Commission could render its decision, and that
the Commission properly balanced the competing factors in determining
whether to grant the CEC. They further argued that the CEC’s conditions
were sufficient to address the unique nature and location of the Project.

¶8 The superior court affirmed the Commission’s grant of the
CEC, finding the Commission’s decision was supported by substantial
evidence. Else timely appealed.

¶9 We have jurisdiction pursuant to Article 6, Section 9, of the
Arizona Constitution, and the Arizona Revised Statutes (“A.R.S.”) sections
12-120.21(A)(1) (2016), 12-2101(A)(1) (2016), and 40-254 (2011).8

ANALYSIS

¶10 On appeal Else argues the superior court erred in affirming
the Commission’s grant of the CEC to SunZia because there was insufficient
evidence to grant the CEC and because the actual project will constitute a
substantial change from the proposed project.

I. Standard of Review

¶11 This court must determine whether the Commission’s
decision, and the superior court’s subsequent ruling on the Commission’s
decision, was supported by substantial evidence. City of Tucson v. Citizens
Utils. Water Co., 17 Ariz. App. 477, 481 (1972). Substantial evidence is
evidence from which a person may draw a reasonable inference. Id. See
also Sierra Club v. Ariz. Corp. Comm’n, 237 Ariz. 568, 575, ¶ 22 (App. 2015)
(finding evidence is substantial if it permits “a reasonable person to reach

7 In further support, Else relied on SunZia’s opposition to setting
conditions on the Project which would tie it to renewable energy to argue
that it was unlikely the Project would transmit renewable energy.

8 Statutes which refer to a party’s right to appeal a decision to the
“supreme court” enacted before the establishment of this court are
construed as giving parties the right to appeal to the court of appeals. See
Pioneer Tr. Co. of Ariz. v. Pima Cty., 168 Ariz. 61, 64 n.1 (1991).

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the Commission’s result” (citing In re Estate of Pouser, 193 Ariz. 574, 579,
¶ 13 (1999))). Thus, we will defer to the Commission’s factual findings if
supported by substantial evidence, but, we will review de novo the
Commission’s legal conclusions and statutory interpretations. Grand
Canyon Tr. v. Ariz. Corp. Comm’n, 210 Ariz. 30, 34, ¶ 13 (App. 2005). See also
Sierra Club, 237 Ariz. at 575, ¶ 22 (finding this court will defer to the
Commission’s factual conclusions if supported by substantial evidence,
unless such conclusions are arbitrary or unlawful (quotation omitted)). It
is for the Commission, not this court, to weigh the evidence presented. City
of Tucson, 17 Ariz. App. at 480-81.

¶12 A party challenging the Commission’s decision must show by
clear and satisfactory evidence that the Commission’s decision was
unreasonable or unlawful. See A.R.S. § 40-254(E). “Clear and satisfactory”
evidence requires the same level of proof as “clear and convincing”
evidence. See Tucson Elec. Power Co. v. Ariz. Corp. Comm’n, 132 Ariz. 240,
243 (1982).

II. Substantial Evidence

¶13 On appeal, Else argues the superior court abused its
discretion in affirming the Commission’s decision because it relied solely
on SunZia’s stated intentions and speculations about the Project instead of
credible evidence.9 While we agree with Else that mere speculation does
not constitute “substantial evidence,” we disagree that the superior court
based its decision on purely speculative evidence in this case. Further, as
the challenger to the Commission’s decision, Else bore the burden of proof
to show by clear and satisfactory evidence that the Commission’s decision
was unreasonable or unlawful. See A.R.S. § 40-254(E). Else has not met his
burden of proof.

¶14 The Committee has broad discretion to approve and impose
reasonable conditions on the CEC.10 The Commission, however, need not

9 Else argues it is likely that only a portion of the Project will come to
fruition, and because of this, the actual project constitutes a substantial
change. As explained further below, this argument is not properly brought
before us at this time.

10 The Committee “may impose reasonable conditions on the issuance
of a certificate of environmental compatibility” after considering the
existing plans for development of the proposed site; the flora and fauna in

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adhere to the Committee’s recommendation, and may independently
approve or deny the CEC.11 As previously mentioned, this court defers to
the Commission’s factual findings. See Sierra Club, 237 Ariz. at 573, ¶ 12.
Further, we will not interfere with the Commission’s decision to accept
“evidence presented by one person over that presented by another[,]”
unless the Commission has abused its discretion. City of Tucson, 17 Ariz.
App. at 480-81.

¶15 In City of Tucson, this court found the Commission did not rely
on substantial evidence when calculating the water rate because it relied on
statements from an individual who had not considered all the relevant
factors to determine the fair value of the rate. Id. at 481. In arriving at this
decision, the court found that substantial evidence is evidence that
“establishes facts and from which reasonable inferences may be drawn[,]”
but not evidence which is “purely speculative.” Id. (quotation omitted). In
so ruling, the City of Tucson court did not completely reject the proposition
that individual statements may provide “substantial evidence” for the
Commission’s decision. Id. Instead, the court concluded that an individual
statement is insufficient if the individual fails to consider all relevant factors
and law when making his statement. Id.

¶16 Else contends SunZia presented entirely speculative evidence
which is insufficient to support the Commission’s grant of the CEC. We
disagree. Unlike the record in City of Tucson, the record here indicates that
the Commission considered and debated all relevant factors before

the area; the noise level; the availability of the proposed site for recreational
purposes; the existing scenic area and historical sites in the proposed area;
the total environmental impact; the practicability of achieving the proposed
objective; the estimated cost; and any additional factors. A.R.S. § 40-
360.06(A)(1)-(9) (Supp. 2016). Additionally, the Committee “shall give
special consideration to the protection of areas unique because of biological
wealth or because they are habitats for rare and endangered species.”
A.R.S. § 40-360.06(B).

11 See Albert H. Acken & Matthew G. Bingham, Sustainable Energy in
Arizona, 43 Ariz. St. L.J. 669, 687 (2011) (finding the Committee has “a great
deal of discretion when determining whether to issue a CEC, and . . . what
conditions to impose on the project”). See also Ariz. Corp. Comm’n,
http://www.azcc.gov/divisions/utilities/electric/linesiting-faqs.asp#m.
(last visited Jan. 18, 2018) (noting the Committee has the discretion and
authority to grant a CEC without conditions).

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granting the CEC. The Committee conducted a multi-day hearing in which
it heard from proponents and opponents of the Project. That hearing
generated multiple exhibits totaling over 3,000 pages, and a transcript of
over 2,500 pages. At the close of the hearing, the Committee discussed the
costs and benefits of explicitly conditioning its grant of the CEC on SunZia’s
compliance with renewable energy benchmarks, but ultimately decided not
to impose any such conditions. Following the Committee’s hearing, the
Commission independently reviewed the entire record and considered
additional briefing and arguments regarding the Project. Throughout this
entire process, both proponents and opponents of the Project have had
multiple and adequate opportunities to present evidence of and to argue
their conflicting views. On this record, we cannot say that the superior
court’s decision to affirm the CEC was an abuse of discretion.

¶17 We recognize that certain evidence in this case may have been
speculative to the extent it related to a transmission line project that has not
yet been built; however, that does not mean all evidence in this case was
speculative. SunZia presented numerous environmental studies and
statements regarding the Project’s anticipated energy sources and how the
Project would impact the surrounding area. While there was no evidence
presented that the New Mexico project had been built at the time of the
CEC’s grant, there was similarly no evidence to support Else’s contention
that the New Mexico project would never be built or that SunZia’s
transmission lines would be incapable of carrying renewable energy from
other sources. Thus, there was, on this record, substantial evidence to
support the grant of the CEC.

III. Substantial Change12

¶18 Else argues the superior court abused its discretion in
affirming the Commission’s grant of the CEC because the actual project that
will ultimately be developed could be a substantial departure from
SunZia’s proposed renewable energy transmission line. In this regard, Else
argues the superior court failed to consider the Project’s purpose and scope,

12 SunZia argues Else waived this argument by failing to raise it before
appeal; we disagree. During the hearing in front of the Committee
numerous parties, including Else, articulated their concern that the Project
would never come to fruition or never be used to transmit renewable
energy. This is sufficient to preserve the argument on appeal.

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and the unique, irreparable harm that will occur if the grant of the CEC is
affirmed.13

¶19 Else’s argument is premature and not ripe for judicial review.
See Phelps Dodge Corp. v. Ariz. Elec. Power Coop., Inc., 207 Ariz. 95, 118, ¶ 94
(App. 2004) (finding courts may review formalized agency decisions that
are brought by an individual who has been concretely affected by the
decision). A court may not enter “a premature judgment or opinion on a
situation that may never occur.” Town of Gilbert v. Maricopa Cty., 213 Ariz.
241, 244-45, ¶ 8 (App. 2006) (quoting Winkle v. City of Tucson, 190 Ariz. 413,
415 (1997)). We determine whether an issue is ripe for judicial review by
evaluating “the fitness of the issues for judicial decision and the hardship
to the parties of withholding court consideration.” Phelps Dodge Corp., 207
Ariz. at 118, ¶ 94 (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967),
abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977)).

¶20 Here, although Else argues the actual project will likely be
substantially different from the proposed Project, he has provided no proof
beyond his apprehension, which at this point is mere speculation. Else
relies on the Commission’s Whispering Ranch decision to support his
argument that a substantial change has occurred. Whispering Ranch, Ariz.
Corp. Comm’n Decision No. 58793 (1994).14 Else’s reliance on this decision,
however, is misplaced. Unlike the situation in Whispering Ranch, SunZia
had not as of the time of the issuance of the CEC begun construction on the
Project. Thus, other than its stated plan, we do not know at this time
whether and to what extent the Project will ultimately transmit renewable
energy, and we cannot speculate as to whether a substantial change will
occur.

13 Else’s argument is largely based on his apprehension that the
Arizona portion of the Project will be constructed before the New Mexico
portion, thus, making it likely that SunZia will transmit only nonrenewable
energy.

14 The Commission in Whispering Ranch addressed whether an
applicant who had been granted a CEC to build a direct current
transmission line could instead construct an alternating current line
without the Commission’s approval. Id. at 4. The Commission held that a
change in the system by which power would be transmitted and distributed
constituted a substantial change, thus, requiring the applicant to seek to
amend its CEC with the Commission. Id. at 28.
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¶21 The Committee and the Commission each discussed at length
whether to impose more explicit conditions on the CEC, and ultimately
chose not to. While we understand the fear that many of the opponents of
the Project have—that the Project will ultimately transmit most, if not all, of
its energy generated by fossil fuels, as opposed to renewable energy
sources—there is no evidence in the record that this has happened or likely
will happen. The CEC requires SunZia to “in good faith . . . use its best
efforts to secure transmission service contracts for renewable energy
generation.” If it becomes apparent that SunZia has made no such efforts,
there may in the future be cause to bring an action for an alleged violation
of the CEC to the Commission and/or the superior court.

CONCLUSION

¶22 The superior court’s order affirming the Commission’s grant
of the CEC is affirmed.

AMY M. WOOD • Clerk of the Court
FILED: AA

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