Consider Operating as a State-Chartered Public Utility |  |
Solar arrays, wind turbines, and micro-antennas supporting next-generation wireless networks may enjoy a more favorable, more relaxed standard of zoning review, or potentially avoid local zoning restrictions altogether, if they incorporate as a public utility with a statewide franchise or locate in the state right-of-way (ROW). The law governing utility siting and access to the public ROW varies from state to state, but in many jurisdictions, obtaining a statewide utility franchise will provide options and strategies for deployment of physical facilities otherwise unavailable.
A statewide franchise may be particularly attractive where an energy project (for example, distributed solar panels or small wind turbines) or a wireless communications project (for example, micro-antennas on streetlights or telephone poles) requires numerous small nodes in multiple municipal jurisdictions. In such instances, multiple local franchises may be required to use the public ROW. Local franchises typically allow the franchisee to install physical plant in, on, over, or under the public ROW; but these local franchises can be time-consuming and costly to secure. Alternatively, a statewide franchise typically authorizes a utility to install its physical plant anywhere within the public ROW without securing any local permits or approvals. Operating as a public utility with a statewide franchise can therefore provide a powerful siting tool, particularly where doing so avoids the need to secure multiple local franchises.
Yet even if it is not practical to locate all or some part of an energy, environmental, or telecommunications project in the public ROW, it may still make sense to proceed as a utility. Utilities are typically accorded a deferential status in zoning—even when the utility seeks a land use approval for a facility located on private property. Moreover, some states grant utilities the power of eminent domain. In addition, under federal law a utility enjoys a special right of access to existing utility poles, towers, and conduits, under the federal Pole Attachment Act. By accessing these existing facilities, particularly when they are located in a ROW, an energy, environmental, or telecommunications project operating with public utility status can potentially accelerate deployment of its infrastructure.
Proceeding as a utility is not a panacea; utilities may be subject to regulatory oversight and the payment of additional taxes and fees depending on the state. Utility corporations also operate in an environment where everything from customer contracts to the sale of bonds and securities can be subject to tariff proceedings and oversight by state agencies.
Nevertheless, if a solar, wind, fiber optic, cable TV, or wireless project is incorporated as a utility, secures a statewide franchise, and finds the state ROW suitable for a build-out, local zoning can be abbreviated or potentially avoided. Given the many potential siting benefits, projects that are eligible should weigh the benefits and burdens of proceeding as a public utility.