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Earth Island Inst. v. Union Elec. Co.

Supreme Court of Missouri, En Banc

February 10, 2015

EARTH ISLAND INSTITUTE, d/b/a RENEW MISSOURI, Appellant MISSOURI COALITION FOR THE ENVIRONMENT, et al., Complainants,
v.
UNION ELECTRIC COMPANY, d/b/a AMEREN MISSOURI, Respondent, AND PUBLIC SERVICE COMMISSION OF THE STATE OF MISSOURI, Respondent

Page 28

APPEAL FROM THE MISSOURI PUBLIC SERVICE COMMISSION.

Earth Island Institute was represented by Henry B. Robertson and Kathleen G. Henry of the Great Rivers Environmental Law Center in St. Louis.

The Empire District Electric Company was represented by L. Russell Mitten II, Paul A. Boudreau and Diana C. Carter of Brydon, Swearengen & England PC in Jefferson City.

The public service commission was represented by Jennifer Leigh Heintz of the commission in Jefferson City.

LAURA DENVIR STITH, JUDGE. Russell, C.J., Draper and Teitelman, JJ., and Van Amburg, Sp.J., concur; Fischer, J., dissents in separate opinion filed; Breckenridge, J., concurs in opinion of Fischer, J. Wilson, J., not participating.

OPINION

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Laura Denvir Stith, Judge

Earth Island Institute, doing business as Renew Missouri, and additional parties (collectively " Renew Missouri" ) appeal the Public Service Commission's determination that section 393.1050,[1] a statute exempting electric utilities that met a certain renewable energy target on a certain date from any solar energy requirements, was not invalidated by the subsequent passage of a ballot initiative (" Proposition C" ) that imposed solar energy requirements on " all electric utilities." The Commission found that the two provisions could be harmonized by considering section 393.1050 a specific exemption to the general provisions of the later-adopted initiative, particularly in light of section 393.1050's use of the phrase " notwithstanding any other provision of law."

This Court disagrees. Contrary to the Commission's order, there is a conflict between section 393.1050 and Proposition C as to solar energy requirements. A statute cannot, merely by inclusion of the phrase " notwithstanding any other provision of law" in legislation adopted after an initiative is approved for circulation, preclude the people by initiative from adopting a law in conflict with the statute. While it is the case that the failure of a subsequent legislature to delete the phrase " notwithstanding any other provision of law" from the earlier legislation may mean that the subsequent legislature intended the more specific earlier statute to remain effective, this reasoning cannot apply here, where the statute was adopted after the wording of the initiative had been finalized and approved for circulation, but prior to its passage at the general election. The legislature could not preemptively negate the effect of the initiative before it had even been voted on by the people and make the people's later vote a meaningless

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act as to the subject of the statute. This would infringe on the constitutionally protected initiative rights of the people.

But this Court agrees that these principles do not preclude the legislature from enacting a law in an area that already is the subject of an approved, but not yet passed, initiative. To hold otherwise would allow the mere repetitive filing of an initiative petition to forestall legislation in that subject area from ever becoming law, even if the people repeatedly rejected the initiative. This would unduly and unnecessarily interfere with the ability of the legislature to carry out its intended duties. Similarly, the passage of an initiative does not preclude the legislature from later enacting contrary laws that have the effect of limiting or repealing the statute adopted by initiative petition.

But neither of these situations is presented here; the only issue is whether the legislature may negate in advance an initiative petition that has been approved for circulation but prior to the time it is adopted by the people at an election. It may not. If a proposed initiative is adopted by the people at an election, then a statute enacted by the legislature during the interim between the initiative's approval for circulation and its passage is impliedly repealed to the extent of any conflict between the two measures. Here, the people by their votes adopted Proposition C as law in November 2008. Because section 393.1050 in its entirety is in conflict with Proposition C, and because an initiative is effective on the date of its adoption, section 393.1050 was repealed by implication upon adoption of Proposition C on November 4, 2008.

I. FACTUAL AND PROCEDURAL HISTORY

On February 4, 2008, the Secretary of State approved for circulation a ballot initiative petition, subsequently designated Proposition C, which proposed a statutory " Renewable Energy Standard" for utility companies operating in Missouri. The official ballot title was certified on February 25, 2008. The Secretary issued a receipt on May 4, 2008, acknowledging delivery of a number of signatures later determined to be sufficient to qualify the proposition for the ballot.[2]

Proposition C, generally, proposed a statutory scheme under which electric utilities would be required to provide progressively higher percentages of their electricity sales from renewable energy resources -- including wind, crops grown for energy, and hydropower, among others -- in certain calendar years. § 393.1030.1, RSMo Supp. 2009; § 393.1025(5), RSMo Supp. 2009. As relevant here, Proposition C included two specific provisions concerning solar energy, codified in section 393.1030, RSMo Supp. 2009. Section 393.1030.1 imposed a " solar carve out" described as " a portfolio requirement for all electric utilities to generate or purchase electricity generated from renewable energy resources" of which " [a]t least two percent of each portfolio requirement shall be derived from solar energy." Section 393.1030.3 mandated a solar rebate, by which " [e]ach electric utility shall make available to its retail customers a standard rebate offer ... for new or expanded solar electric systems sited on customers' premises ...." [3]

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In May 2008, after Proposition C was certified for placement on the 2008 general election ballot, but before it could be voted on in November 2008, the General Assembly passed Senate Bill No. 1181, codified as section 393.1050. SB 1181 stated that " notwithstanding any other provision of law" an electrical corporation is exempt from any solar carve out or solar rebate requirements if the company " achieves an amount of eligible renewable energy ... capacity equal to or greater than fifteen percent of such corporation's total owned fossil-fired generating capacity" by January 20, 2009. Section 393.1050 became effective August 28, 2008. At the November 4, 2008, general election, voters approved Proposition C, and it became effective immediately upon passage.[4] Mo. Const. art. III, § 51.

Empire District Electric Company was the only electric utility that claimed eligibility for the solar carve out or rebate exemption set out in section 393.1050. Renew Missouri thereafter filed a complaint with the Commission against Empire.[5] Renew Missouri asserted that Empire could not claim the section 393.1050 exemption because section 393.1050 was invalid[6] in that: (1) the legislature lacked authority to enact legislation amending Proposition C while it was pending but before it had been voted on; (2) section 393.1050 irreconcilably conflicts with Proposition C and, as the later enacted law, Proposition C repealed section 393.1050 by implication; and (3) there is no rational basis for exempting Empire but no other electrical corporations from the solar requirement such that section 393.1050 constitutes a special law in violation of article III, section 40 of the Missouri Constitution.

The Commission determined: (1) the pendency of Proposition C did not prevent the legislature from passing related legislation; (2) Proposition C did not impliedly repeal section 393.1050 because the two laws could be harmonized; and (3) section 393.1050 is not a special law. Renew Missouri appeals.

This Court affirms the holding that the legislature had the authority to adopt section 393.1050 but reverses the Commission's holding that the two laws could be

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harmonized. Section 393.1050 was impliedly repealed by the adoption of Proposition C because it conflicted with the latter law. Because of this resolution of the first two issues, the third, special law, claim has become moot and is not further addressed.

II. STANDARD OF REVIEW

This Court has exclusive appellate jurisdiction over challenges to the validity of a state statute.[7] Mo. Const. art. V, § 3. Questions of law, including constitutional challenges to a statute, are reviewed de novo. Rentschler v. Nixon, 311 S.W.3d 783, 786 (Mo. banc 2010).

Pursuant to section 386.510, RSMo Supp. 2013, when reviewing an order issued by the Commission: " [F]irst, the reviewing court must determine whether the [Commission]'s order is lawful; and second, the court must determine whether the order is reasonable." Office of Pub. Counsel v. Missouri Pub. Serv. Comm'n, 409 S.W.3d 371, 375 (Mo. banc 2013) (quoting State ex rel. AG Processing, Inc. v. Pub. Serv. Comm'n, 120 S.W.3d 732, 734 (Mo. banc 2003)). The appellant bears the burden of proving that the order is unlawful or unreasonable. Office of Pub. Counsel, 409 S.W.3d at 375. Legal questions are reviewed de novo, and the Court determines the lawfulness of an order " by whether statutory authority for its issuance exists." Id. (quoting AG Processing, 120 S.W.3d at 734).

The reasonableness of an order is assessed based on whether it " is supported by substantial, competent evidence on the whole record; the decision is not arbitrary or capricious or where the [Commission] has not abused its discretion." Office of Pub. Counsel, 409 S.W.3d at 375 (internal citation omitted).

III. PROPOSITION C REPEALED SECTION 393.1050 BY IMPLICATION

Proposition C directs the Commission to " prescribe by rule a portfolio requirement for all electric utilities to generate or purchase electricity generated from renewable energy resources." § 393.1030.1, RSMo Supp. 2009 (emphasis added). It further states that " [a]t least two percent of each portfolio requirement shall be derived from solar energy." Id. In other words, the initiative requires all electric companies, without exception, to satisfy the 2-percent solar carve out.[8]

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By contrast, the legislatively adopted section 393.1050 states, in relevant part:

Notwithstanding any other provision of law, any electrical corporation as defined by subdivision 15 of section 386.020 which, by January 20, 2009, achieves an amount of eligible renewable energy technology nameplate capacity equal to or greater than fifteen percent of such corporation's total owned fossil-fired generating capacity, shall be exempt thereafter from a requirement to pay any installation subsidy, fee, or rebate to its customers that install their own solar electric energy system and shall be exempt from meeting any mandated solar renewable energy standard requirements.

( Emphasis added.) Section 393.1050 thereby states that, notwithstanding any other provision of law, electric companies that provided 15 percent of their electric utility's sales from renewable energy sources by January 20, 2009, are exempt ...


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