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01/29/93 CITIZENS COALITION v. DISTRICT COLUMBIA

January 29, 1993

CITIZENS COALITION, ET AL., PETITIONERS
v.
DISTRICT OF COLUMBIA BOARD OF ZONING ADJUSTMENT, RESPONDENT, AND GEORGETOWN UNIVERSITY, INTERVENOR



Petition for Review of an Order of the District of Columbia Board of Zoning Adjustment.

Before Rogers, Chief Judge, Terry, Associate Judge, and Gallagher, Senior Judge.

The opinion of the court was delivered by: Gallagher

GALLAGHER, Senior Judge: Petitioners Citizens Coalition *fn1 ("Coalition") seeks review of an Order of the District of Columbia Board of Zoning Adjustment ("BZA"), dated July 31, 1991, which granted special exception relief to intervenor Georgetown University ("Georgetown or the University"). The special exception permits Georgetown to construct an addition to its existing power plant to include a fifty-six megawatt Cogeneration Facility. The BZA, in approving the special exception, found the Cogeneration Facility to be an accessory use to Georgetown's operation as a University.

Based on extensive findings, the BZA concluded that Georgetown substantially complied with the criteria set forth in sections 210 and 3108.1 of the District of Columbia Zoning Regulations and granted Georgetown a special exception. The BZA reached the following Conclusions: (1) the requested relief is in harmony with the general purpose and intent of the Zoning Regulations; (2) the proposed facility is designed to meet federal, local, environmental, and operational standards, (3) the facility is not likely to become objectionable to neighboring property; and (4) the facility complies with the bulk and area requirements of the Zoning Regulations. The Coalition challenges the BZA Order approving the Cogeneration Facility as a special exception on the grounds that the facility is not an accessory use to the University and cannot be permitted in a residential zone unless Georgetown obtains a use variance. We find no basis for reversal of the decision of the BZA.

I.

FACTUAL SUMMARY

A. History of the Heating and Cooling Plant

Georgetown filed an application with the BZA *fn2 on October 18, 1990, seeking authorization for construction of an addition to its existing steam heating and cooling plant located east of McDonough Gymnasium. Georgetown planned the construction and operation of a Cogeneration Facility to be situated on the southwest quadrant of the campus, on a site east of McDonough Gymnasium which is located in an R-3 zone. *fn3 A cogenerator is a relatively recent concept and has the advantage that it provides steam and electric power in the same facility.

To obtain a special exception for development of property for campus purposes in an R-3 zone under the Zoning Regulations, 11 DCMR §§ 210, *fn4 3108.1, a college or university must demonstrate that the proposed use "is not likely to become objectionable to neighboring property because of noise, traffic, number of students, or other objectionable conditions." 11 DCMR § 210.2. *fn5

The BZA has in the past approved heating and cooling facilities on the Georgetown campus in order to meet the University's needs. In 1968, the BZA unanimously approved *fn6 the location of a heating and cooling plant on the campus and concluded that the location, design and operational characteristics were not likely to become objectionable to neighboring property. The initial power plant was designed to use either fuel oil, natural gas or a combination of the two. *fn7

In 1977, the BZA again approved a special exception *fn8 to Georgetown for the construction of an 11,998 square foot addition to that existing heating and cooling plant. *fn9 This addition represented the first phase of the project designed to demonstrate a cost-efficient, environmentally sound system so as to make Georgetown energy self-sufficient. The second phase of the project was later set forth in Georgetown's 1983 Campus Plan *fn10 which detailed its future energy goals and included the implementation of cogeneration technology. Georgetown represented this as an effort to reduce the high cost of fuel, and accomplish implementation of an innovative energy investment program to serve as a national model for other academic institutions. The 1983 Campus Plan set forth the second phase which was to develop a cogeneration system designed in cooperation with local utility interests.

In 1983, the BZA accommodated the second phase of the demonstration project by approving a second addition to Georgetown's existing power plant. The 1983 BZA Order also permitted a steam turbine driven cogenerator of 2.8 megawatt capacity constituting the first Cogeneration Facility on the Georgetown campus. Because this facility could at times deliver electricity to the Potomac Electric Power Company ("PEPCO"), the District of Columbia Public Service Commission ("PSC") required that the Cogeneration Facility furnish electricity in accordance with a Power Purchase Agreement which was approved and reviewed by the PSC. In approving that project the BZA noted that it conformed to the national energy policy of conserving fuel, *fn11 and that the Cogeneration Facility's location and construction would avoid any objectionable impact on neighboring property.

As part of the Power Purchase Agreement, dated January 31, 1990, and approved by the Public Service Commission, Georgetown contracted with Dominion Energy, Inc. ("Dominion"), an affiliate of Virginia Power (formerly VEPCO) whereby Dominion would construct and operate the proposed Cogeneration Facility on the Georgetown campus. Dominion in turn entered into a Power Purchase Agreement with PEPCO in which PEPCO would purchase 100% of the electricity generated by the proposed facility for the next twenty-five years. As part of its energy conservation goal, the Public Utilities Regulatory Policies Act requires PEPCO to purchase electricity from private parties who generate electricity from qualifying facilities. *fn12

On October 12, 1990, the BZA approved Georgetown's 1989 Bicentennial Campus Plan. *fn13 In so doing, the BZA approved, in concept, the proposed fifty-six megawatt Cogeneration Facility, but the BZA made clear that Georgetown must return for special exception approval of the proposed facility. Accordingly, the BZA required Georgetown to submit a separate application setting forth the design details, including capacity, and the specific impact of such a facility. In compliance with the BZA directive, Georgetown filed an application for a special exception to allow for the construction of an addition to the existing power plant in order to house the fifty-six megawatt Cogeneration Facility. After a hearing, the BZA approved Georgetown's application on July 31, 1991 applying 11 DCMR §§ 210, 3108.1, which sets forth the criteria that a University must satisfy in order to obtain a special exception. The Coalition Petitioners now challenge the BZA's grant of the special exception.

B. The Cogeneration Process

The BZA credited evidence presented by Georgetown that the Cogeneration Facility would meet Georgetown's present and future energy demands and further the academic mission of the University. *fn14 Specifically, cogeneration technology simultaneously produces steam and electricity from a single energy source which can satisfy demands for steam, chilled water and electric power. The proposed plant has the capacity to generate fifty-six megawatts of electricity. The existing previously approved cogenerator has only a 2.8 megawatt capacity. Georgetown estimates that it will have peak loads of thirty-six and fifty-two megawatts respectively, in the years 2000 and 2010. Georgetown officials established that the University needed to expand its steam and chilled water capacity, using the steam for on-campus heating, air conditioning, hot water, cooking and sterilizing, followed by plant use for pumps and processing. The steam generated by the proposed facility provides the energy source for chilled water used in air conditioning. The BZA found that Georgetown has currently reached its chilled water capacity, and therefore has an immediate need for additional equipment in order to increase that capacity before any additional construction can take place on campus.

All of the steam produced by cogeneration would be used to meet the University's present needs, but the proposed facility would initially generate a surplus of electricity over the University's present demands. The proposed Cogeneration Facility would not provide a direct source of electricity for the University because all electricity produced by cogeneration would be sold to PEPCO's grid. *fn15 In order to channel to the University buildings the electricity generated by the proposed facility, Georgetown would have to construct extensive duplicate switching and distribution facilities to provide a level of safety and reliability comparable with that presently provided by PEPCO. Additionally, the BZA found that

even if the construction of the appropriate facilities were practical, the University would be forced to contract with PEPCO for back-up service in case of malfunction and for scheduled maintenance outages. The back-up contract with PEPCO would require PEPCO to hold the needed capacity in reserve within its system for University use. The cost of such back-up contract would add several hundred thousand dollars to the University's energy costs and the necessity of PEPCO to generate and maintain such reserves within its system would negate the environmental benefits which would result from cogeneration.

BZA Finding No. 25.

The BZA findings relate that for technical, economic and public interest reasons, the cogenerated electricity would be delivered to the PEPCO grid rather than being delivered directly to the Georgetown campus. PEPCO's distribution uses a radial system, and the Georgetown campus has eight feeders. The PEPCO system does not allow interconnection of the feeders. As a result, it is not feasible from a practical or financial perspective to directly deliver electricity generated from the proposed facility to the Georgetown campus.

A plan utilized to move power from one utility company to another, called "wheeling," could technically deliver the same power back to Georgetown. As explained at the BZA hearing, under the wheeling method

where you have electricity somewhere and you want it delivered to a customer somewhere else and you don't have any right of eminent domain to build lines, so you make a contract with the utility company and they save some space on their transmission and, for a cost, they deliver your power. They don't deliver those same electrons or those same amperes. They measure how much you put into the system, they measure how much the customer took out, and you get what you put in and they charge you for the use of their facility.

Georgetown established that if a line could be connected to the Georgetown substation, then the University could transmit the generated electricity into the substation and PEPCO could deliver this electricity back to Georgetown. A Georgetown official explained, however, that PEPCO, like most utility companies, does not have a provision for wheeling. Further credited testimony indicated that PEPCO and most utility companies are averse to wheeling which is generally utilized among utilities and across utility systems rather than utilized by private entities. For these reasons, the BZA accepted Georgetown's testimony that "it is not technically, operationally or economically feasible to provide electricity directly from the proposed cogeneration facility" to Georgetown. BZA Finding No. 25.

II.

THE COALITION'S CONTENTIONS

A. The Cogeneration Facility as a Commercial Venture

The Coalition contends that Dominion's presence on the University campus represents a commercial intrusion in a residential zone because the electricity generated from the plant would not be delivered directly to Georgetown, but would instead be sold entirely to PEPCO. The Coalition argues that the Cogeneration Facility would therefore generate electricity for commercial sale and profit, and thus fails to constitute a valid accessory use to the mission of the University. The Coalition reasons that the proposed facility is a purely commercial venture and thus is not incidental to University use. Further, the Coalition argues that a Cogeneration Facility is inappropriate for an R-3 zone and therefore non-conforming to other similar uses in the residential area, and thus Georgetown must seek a use variance *fn16 from the BZA as well as a special exception.

B. The Capacity of the Cogenerator Facility and Incremental Construction

Next, the Coalition contends that Georgetown's purpose in its arrangement with Dominion to operate the proposed facility is not merely to serve University needs, but to institute a commercial venture in order to take advantage of the federal program that compels utility companies to purchase electricity produced by cogeneration facilities meeting the applicable standards. The Coalition maintains that a more modest facility could have been planned to satisfy Georgetown's utility demands.

At the hearing, the Coalition introduced an energy consultant who testified that a twenty megawatt facility would adequately meet Georgetown's current heating and cooling needs. However, there was substantial evidence to support the finding that incremental development over the years of the proposed facility would increase the project costs by a minimum of 25% (or $18 million). Georgetown offered evidence to establish that: (1) the University's steam needs would require a facility with thirty-four megawatts capacity in 1993; (2) the University would require additional steam capacity by the year 2000; and (3) the physical size, equipment and stack of a smaller facility would be virtually identical to that of the proposed facility.

The Coalition further contends that the proposed facility represents an industrial-scale power plant, and thus is inappropriate for a residential environment. In addressing the concerns raised by the Advisory Neighborhood Commission 2E (Finding No. 51b) regarding the size of the facility, the BZA found "the capacity of the proposed facility is appropriate given the University's need to meet its peak projected needs for steam, chilled water, and electricity over the life of the project. . . ." BZA Finding No. 60d (emphasis supplied). As a matter of passing interest Advisory Neighborhood Commission ("ANC") 2E, which includes Georgetown University within its borders, was unable to reach a consensus and took no official position on the application.

The BZA further found that the University will utilize approximately 70% of the overall capacity of the facility to meet the demand for steam, chilled water and electricity during the initial year of its operation. But as to electricity alone, Georgetown will use approximately 93% by the year 2010. In sum, the BZA was not persuaded that incremental development was unreasonable given the University's immediate and future demands for energy.

III.

Discussion

A. The Scope of Review and Related Concerns

The District of Columbia Administrative Procedure Act ("DCAPA") § 1-1509 (e) (Repl. 1987) sets forth the applicable standard in this Court's consideration of the validity of the BZA's findings. It requires that all agency decisions must be accompanied by written "findings of fact and Conclusions of law shall be supported by and in accordance with reliable, probative, and substantial evidence." *fn17

Three requirements are inherent in this "substantial evidence" test which has been articulated by this court: (1) findings must be made on each contested issue of fact; (2) the decision must rationally follow from the facts; i.e., there must be a "'rational connection between the facts found and the choice made.'" Citizens Ass'n of Georgetown, Inc. v. District of Columbia Zoning Comm'n, 402 A.2d 36, 41 (D.C. 1979) ("Citizens I") (quoting Brewington v. District of Columbia Bd. of Appeals & Review, 299 A.2d 145, 147 (D.C. 1973)); and (3) there must be sufficient evidence to support each finding, i.e., "'such relevant evidence as a reasonable mind might accept as adequate . . . .'" Citizens I, supra, 402 A.2d at 41 (quoting Vestry of Grace Parish v. District of Columbia Alcoholic Beverage Control Bd., 366 A.2d 1110, 1112 (D.C. 1976)). *fn18

This court is not to substitute its judgment for that of the agency, and thus the decision of the BZA will be upheld provided there is a rational basis for it. Citizens I, supra, 402 A.2d at 44; Silverstone v. District of Columbia Bd. of Zoning Adjustment, 372 A.2d 1286, 1288 (D.C. 1977), aff'd, 396 A.2d 992 (D.C. 1979). It is the agency's, i.e., the BZA's, responsibility to interpret the Zoning Regulations and the agency's interpretation is controlling unless it is plainly erroneous or inconsistent with the regulations. Dietrich, supra note 18, 320 A.2d at 286 (citing Taylor v. District of Columbia Bd. of Zoning Adjustment, 308 A.2d 230, 233 (D.C. 1973)).

A decision by the BZA will not be set aside if: (1) the decision is accompanied by findings of fact sufficient to enable the reviewing court to reach a decision; (2) the decision reached by the agency follows as a matter of law from the facts; and (3) the facts so stated have substantial support in the evidence. Citizens I, supra, 402 A.2d at 41 (citing Saginaw Broadcasting Co. v. Federal Communications Comm'n, 68 App. D.C. 282, 287, 96 F.2d 554, 559, cert. denied, 305 U.S. 613, 59 S.Ct. 72, 83 L.Ed. 391 (1938)).

Accordingly, our scope of review is "limited to whether the Board's interpretation is legally consistent with the regulations and whether the decision is clearly arbitrary and capricious in both a factual and a legal context." Salsbery v. District of Columbia Bd. of ...


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