Westfield Twp. Zoning Inspector v. Emerald Bioenergy, L.L.C.

2021 Ohio 3843
Ohio Court of Appeals·Decided October 28, 2021·No. 2021 CA 0001·Published·Cited by 1 cases

Opinion

[Cite as Westfield Twp. Zoning Inspector v. Emerald Bioenergy, L.L.C., 2021-Ohio-3843.]

COURT OF APPEALS

MORROW COUNTY, OHIO

FIFTH APPELLATE DISTRICT

THE WESTFIELD TOWNSHIP ZONING JUDGES: INSPECTOR Hon. William B. Hoffman, P. J.

Hon. John W. Wise, J.

Plaintiff-Appellant Hon. Earle E. Wise, Jr., J.

-vs- Case No. 2021 CA 0001 EMERALD BIOENERGY, LLC Defendant-Appellee OPINION

CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common Pleas, Case No. 2020 CV 00053

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: October 28, 2021

APPEARANCES: For Plaintiff-Appellant For Defendant-Appellee

DAVID HOMER CATHERINE CUNNINGHAM ASSISTANT PROSECUTOR KEGLER, BROWN, HILL & RITTER 60 East High Street 65 East State Street, Suite 1800 Mt. Gilead, Ohio 43338 Columbus, Ohio 43215

N. TREVOR ALEXANDER

BENESCH, FRIEDLANDER, COPLAN & ARANOFF

41 South High Street, Suite 2600 Columbus, Ohio 43215

Wise, John, J.

{¶1} Appellant The Westfield Township Zoning Inspector appeals the February 2, 2021, decision by the Morrow County Court of Common Pleas, dismissing its Complaint for Injunction Due to a Zoning Violation filed against Appellee Emerald Bioenergy, LLC.

STATEMENT OF THE FACTS AND CASE

{¶2} The relevant facts and procedural history are as follows:

{¶3} On April 16, 2020, Appellant Westfield Township Zoning Inspector (Westfield Township) filed a "Complaint for Injunction Due to a Zoning Violation” against Appellee Emerald Bioenergy, LLC, (Emerald) along with other individually named defendants who were subsequently dismissed by the trial court. The Complaint sought to enjoin the business from operating its anaerobic biodigester in the township as if it were an agricultural use of the land because it was located in a district zoned for agricultural use only, in which people lived and worked.

{¶4} In paragraph 19 of its Complaint, Appellant asserted “[t]he stench and noise from the biodigester are constantly emitted from the defendant’s premises at all times of the day and night. The people of Westfield Township are deprived of the enjoyment of their property.”

{¶5} In its Answer, at paragraph 19, Appellant stated “as long as at least fifty percent of the feedstock used in the biodigester is derived from parcels of land contiguous to or part of parcels otherwise devoted exclusively to agricultural use that are under common ownership or leasehold, the biodigester facility is an agricultural use exempt from township zoning under state law and … R.C. 5713.30 is relevant to that determination.”

{¶6} On December 14 and December 29, 2020, a bench trial was held.

{¶7} At the bench trial, the trial court heard testimony and received evidence as follows:

{¶8} Emerald operates an anaerobic biodigester on Morrow County Tax Parcel R4 1-001-00-123-02. Anaerobic digestion is a natural process by which microorganisms break down organic matter in a closed space without oxygen and produce biogas that is used to generate electricity. (T. at 333-334). The Biodigester was built in 2013 as a renewable energy facility that would process farm and other biological waste and convert it into renewable energy. (T. at 50, 214-218, 331-334, 364). The Permit to Install the Biodigester was issued by the Ohio Environmental Protection Agency ("OEPA") in 2012 and allows Emerald to process a variety of biological feedstocks including animal manure, food wastes and sewage sludge (biosolids), which are used to produce biologically- derived methane gas that is used to generate electricity, and fertilizer.

{¶9} The Biodigester is located on property owned by Ringler Energy, LLC, a company owned by Alex Ringler and leased to Emerald. (T. at 190, 328-332). Alex Ringler and his companies own 510 acres of property and farming operations contiguous to the Property that are all subject to current agricultural use valuation (CAUV) and include a hog farm with finishing barns housing 7,000 hogs, row crops and other farming operations.

{¶10} Testimony was presented by Alex Ringler and Michael Oberfield, Chief Financial Officer of Renergy, Emerald’s parent company, that the Biodigester is integral to the adjacent Ringler farming operations. It directly accepts and processes 100% of the manure from the farm through a closed underground piping system. It also accepts other

Morrow County, Case No. 2021 CA 0001 4

biological feedstocks including food waste and, at one time, biosolids that produce methane gas within the Biodigester that is used to generate electricity. (T. at 213-216, 331-334). A small portion of that electricity powers the entire Ringler Farm, and the remainder is sold through Buckeye Power, Inc., a local electric co-op, to the wholesale electric grid for public consumption. The fertilizer it produces is used on Ringler and other farm fields. (Tr. 212-218, 329-332). It is a continuing integrated process and system. (Tr. 445-451).

{¶11} John Bentine, an attorney who worked at PUCO and the Attorney General’s office as counsel to PUCO, was called by Appellant as an expert witness in public utility issues in the state of Ohio. He testified that Emerald’s name plate generation capacity for electricity is 850 kW, over three times the minimum 250 kW statutory threshold of the size that Ohio renewable energy resources are required to have, which subjects it to government regulation. (T. at 412-414). Atty. Bentine stated that although Emerald does not generate electricity on the same scale as big coal-fired or nuclear units, it "nonetheless, is a significant size in terms of its effect on the overall electric system, especially locally in the area" where it would serve someplace between 500 and 800 homes. (T. at 412-414). He stated that the electricity generated is a "renewable energy resource" as certified by the Public Utilities Commission of Ohio ("PUCO") since 2014. (T. at 412-414). As such, Emerald is certified to produce "Renewable Energy Credits" which are sold into the public market. (T. at 339-344).

{¶12} At its inception, the Biodigester received support from Morrow County and others. The State of Ohio and United States government have adopted laws providing for a variety of grants and tax incentives to implement their policies to encourage the

Morrow County, Case No. 2021 CA 0001 5

development and use of renewable energy. (T. at 53-55, 419-420). Emerald received a $500,000 grant and loan guarantees from the United States Department of Agriculture for its $5.5 million investment in the facility. (T. at 187-191, 419-420). It also received a public utility tax exemption and "Conversion Facilities Tax Exemption Certificate" through the Ohio Development Services Agency for the Biodigester as a solid waste conversion facility based on a 2016 Ohio Tax Commissioner finding. (T. at 47, 53, 56, 58-60, 67).

{¶13} According to Mr. Oberfield, the first objection received by Emerald from Westfield Township regarding the Biodigester or its use was the notice of violation it received on September 25, 2019. (T. at 358-359).

{¶14} Patricia Davies, who at the time was the Morrow County Director of Operations1, testified that the State of Ohio determines whether an entity is a public utility for purposes of the personal property tax. (T. at 56-62). Ohio made that determination for Emerald and has been taxing Emerald as a public utility since at least 2015. (T. at 56- 60). Emerald has also been paying public utility taxes to Morrow County, including Westfield Township, since 2015, subject to its solid waste energy conversion facility tax exemption. (T. at 56-60).

{¶15} Ms. Davies worked with Emerald to establish the facility and make connections for Emerald to obtain federal and state government financial incentives, including grants and tax exemptions to build a leading-edge renewable energy facility on the Ringler Farm. (T. at 62-64). Ms. Davies also helped Emerald make connections and negotiate with the local electric Co-Op and Consolidated for the provision of electricity from the Biodigester to the grid. (Id.).

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Westfield Twp. Zoning Inspector v. Emerald Bioenergy, L.L.C., 2021 Ohio 3843 (Ohio Ct. App. 2021).

2021 Ohio 3843 (Westfield Twp. Zoning Inspector v. Emerald Bioenergy, L.L.C.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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