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NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Department of Environmental Services No. 2011-381 APPEAL OF TOWN OF SEABROOK (New Hampshire Department of Environmental Services) Argued: February 9, 2012 Opinion Issued: May 22, 2012 Donahue, Tucker & Ciandella, of Exeter (Robert D. Ciandella & a. on the brief, and Mr. Ciandella orally), for the petitioner, Town of Seabrook. Pierce Atwood, LLP, of Portsmouth (Jonathan A. Block & a. on the brief, and Mr. Block orally), for the respondent, NextEra Energy Seabrook, LLC. Michael A. Delaney, attorney general (K. Allen Brooks, senior assistant attorney general, on the brief), for the New Hampshire Department of Environmental Services. HICKS, J. The petitioner, Town of Seabrook, appeals an order of the New Hampshire Department of Environmental Services (DES) granting the respondent, NextEra Energy Seabrook, LLC (NextEra), several tax exemptions under RSA 72:12-a (Supp. 2011). We affirm in part and reverse in part. The following facts are supported by the record. NextEra is the majority shareholder and managing agent of the Seabrook Nuclear Power Station (Plant), located in Seabrook, near the Atlantic Ocean, the Browns River, and the Hampton Harbor marsh. The Plant is a single unit nuclear electric

generating facility with a four-loop, pressurized water reactor. To produce electricity, the Plant uses nuclear fuel to create steam that is used to power a turbine generator. The water used during this process is drawn from and discharged to the Atlantic Ocean via intake and discharge tunnels. In 1982, a previous owner of the Plant applied for local property tax exemptions pursuant to RSA 72:12-a. Two separate appeals to this court followed. See Appeal of Town of Hampton Falls, 126 N.H. 805 (1985); Appeal of Public Serv. Co. of N.H., 124 N.H. 79 (1983). The Plant ultimately received various tax exemptions. The relevant tax exemption statute, RSA 72:12-a, provides the following: Any person, firm or corporation which builds, constructs, installs or places in use in this state any treatment facility, device, appliance, or installation wholly or partly for the purpose of reducing, controlling, or eliminating any source of air or water pollution shall be entitled to have the value of said facility and any real estate necessary therefor, or a percentage thereof determined in accordance with this section, exempted from the taxes levied under this chapter for the period of years in which the facility, device, appliance, or installation is used in accordance with the provisions of this section. RSA 72:12-a, I. In 2010, pursuant to this statute, NextEra submitted an application to DES to obtain tax exemptions for the Plant, in part because the New Hampshire Department of Revenue Administration requested that the exemptions be updated. NextEra's Application (Application) was largely duplicative of the prior application. NextEra specifically claimed that the following facilities are entitled to the exemption: Air Pollution Control Facilities: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Containment Structure Containment Spray System Containment Cooling System Combustible Gas Control System Containment Enclosure [and Fission Product Removal System] Primary Auxiliary Building Filtered Exhaust System Fuel Storage Building Exhaust System Waste Processing Building Exhaust System Containment On-Line Purge Exhaust System Vent Stack Radioactive Gaseous Waste System

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Water Pollution Control Facilities: 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Storm Water Run-Off and Treatment System Chemical and Oily Waste System Sanitary Waste System Circulating Water Discharge Tunnel Circulating Water Intake Tunnel Radioactive Liquid Waste System Steam Generator Blowdown Treatment System Boron Recycle System Service Water Cooling Tower Demineralizer Regeneration Waste Neutralization System

In December 2010, DES notified the Town of Seabrook (Town) that it could submit comments on the Application. The Town asked DES to conduct a public hearing on the Application. The Town also alleged that NextEra failed to provide it with sufficient information to evaluate the Application. DES declined to conduct a public hearing. The Town submitted comments on the Application. It also filed the following: Town of Seabrook's Petition for Intervention, Town of Seabrook's Motion for Reconsideration, and Town of Seabrook's Petition to Deny NextEra's Requested Exemptions or Limit DES Review of NextEra's Application Based Upon Prior Tax Exemption Determinations. NextEra filed responses. DES, however, declined to rule on any of the Town's filings on the basis that the 2010 Application was a nonadjudicative proceeding. In the spring of 2011, DES issued a lengthy order ruling that all of the aforementioned facilities are, at least to some extent, eligible for the exemption under RSA 72:12-a. The Town has appealed this decision to us. See RSA 72:12-a, VI. It argues: (1) that DES erroneously granted exemptions for facilities that do not meet the requirements of RSA 72:12-a; (2) that there was not sufficient evidence to support DES's decision; (3) that DES was required to hold a hearing; (4) that NextEra's claims are barred by res judicata, collateral estoppel, and finality; and (5) that DES was required to use an adjudicative process. "The scope of our review of agency decisions under RSA 72:12-a is narrow." Appeal of Town of Bethlehem, 154 N.H. 314, 318 (2006). We will overturn DES's decision only if it committed an error of law, or if the appealing party shows by a clear preponderance of evidence that DES's decision is unjust or unreasonable. RSA 541:13 (2007); Appeal of Town of Rindge, 158 N.H. 21, 24 (2008). Bearing this in mind, we address each issue in turn.

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I. RSA 72:12-a Pursuant to the text of RSA 72:12-a, I, a facility is eligible for a tax exemption (1) if it is a treatment facility and (2) if its purpose is, at least partially, to control, reduce, or eliminate any source of air or water pollution. To satisfy the first requirement, the facility in question must perform some sort of "treatment," which we have interpreted as "the subjection of something to some action or process with a special end in view, the end often being to improve the quality of the thing undergoing treatment." Appeal of City of Berlin, 131 N.H. 285, 290 (1988). With regard to the second requirement, although the statute is not concerned with the "size, shape, effectiveness, or virtually any other criteria relative to the pollution control [facility itself]," N. Country Envtl. Servs. v. State of N.H., 157 N.H. 15, 21 (2008), it nevertheless requires the facility to have the "purpose of reducing, controlling, or eliminating any source of air or water pollution," RSA 72:12-a, I. The statute additionally provides that the exemption is available for as long as the facility "is used in accordance with the provisions of [RSA 72:12-a]." Id. Some of the facilities at issue do not operate on a regular basis because they were designed to operate only in the event of a loss-of-coolant accident (LOCA). Nevertheless, DES ruled that the exemption applies to these facilities, which include the containment structure, the containment spray system, the containment cooling system, the combustible gas control system, and the containment enclosure and fission product removal system. DES ruled that the containment structure and the containment enclosure and fission product removal system are treatment facilities, relying on what it called our "broad interpretation" of the statutory term "treatment." It determined that the containment structure has a partial pollution control purpose and is entitled to an 87% exemption. It determined that the containment enclosure and fission product removal system was "installed for the sole purpose of air pollution control" and is entitled to a 100% exemption. As to the containment spray system, the containment cooling system, and the combustible gas control system, DES ruled that they are integral components of the containment structure and are entitled to the exemption to the extent they serve a pollution control purpose. The Town argues that these facilities are not eligible for the exemption because the plain language of the statute precludes exemptions for facilities "which might be used at some point in the future to control pollution resulting from an extraordinary disaster or emergency . . . when those [facilities are] standing by and [are] not actually being used to treat pollution." According to the Town, the facilities would, however, be entitled to the exemption in the years when they are actively used. To support its interpretation, the Town points to the language in RSA 72:12-a, I, that states the exemption is available "for the period of years in which the facility . . . is used in accordance with the

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provisions of this section." In the same vein, the Town argues that making the exemption available in years in which a facility is not actively used would be inconsistent with the statutory term "treatment." The Town further contends that, contrary to DES's ruling, the statute does not provide the exemption for integral components of treatment facilities. In its view, each component part must meet the statutory test. Finally, the Town argues that some of the facilities are not entitled to the exemption because their purpose is not to control or eliminate pollution, but rather to act as a safety mechanism in the event of a LOCA. NextEra disagrees with the Town's construction of the statute. It first argues that the "is used" clause does not support the Town's position. That clause formerly provided that the exemption was available "for a period of 25 years." RSA 72:12-a, I (1991). In 1998, the legislature replaced it with the current language. See Laws 1998, ch. 66 (effective April 1, 1998). Relying on legislative history, NextEra argues that the "is used" language was merely added to alter the time limitation on the exemption, and that there is no evidence that the legislature enacted this change to "restrict the applicability of the exemption to facilities or systems that continuously treat pollution." NextEra also asserts that the facilities "are `used' because they are, and must be, deployed in place and ready as long as the [P]lant itself is in operation." According to NextEra, our case law demonstrates that active, continuous use is not required to qualify for the exemption under RSA 72:12-a. For example, it points to two cases in which we upheld DES orders ruling that the exemption applies to storm water management systems

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