3. Analysis of the Court’s Legal Reasoning
A. Standing depended on concrete neighboring-property interests
Wyoming Statutes § 16-3-114(a) permits judicial review by a person “aggrieved or adversely affected in fact” by agency action. The court treated this as a question of statutory standing: whether Stephens possessed a legally recognizable interest affected by the lease approval.
The court applied the established requirement that the interest generally be substantial, immediate, and pecuniary rather than contingent or speculative. Stephens satisfied that requirement through adjoining ownership and identified effects on property value, scenic enjoyment, traffic, and residential and ranching activities. These were not merely objections shared indiscriminately by the public.
The Board argued that construction still depended on future approvals. The court nevertheless distinguished an abstract development possibility from the concrete project before it. Pronghorn had submitted extensive plans, completed the state-land application process, and obtained a 40-year lease granting the exclusive right to use the lands for wind energy development.
The important distinction is that remaining regulatory steps did not render the completed leasing decision legally inconsequential. The holding does not establish standing for every neighbor challenging every preliminary administrative action; it rests on a developed proposal, a substantive lease approval, and identifiable property-related injuries.
B. The applicable standard separated legal interpretation from administrative judgment
The Supreme Court reviewed the agency decision directly, without deferring to the district court’s conclusions. Because the Board acted after a public meeting rather than a formal contested-case hearing, the governing standard was whether its approval was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law under § 16-3-114(c)(ii)(A).
Within that framework, interpretation of statutes and agency rules remained a legal question reviewed de novo. The court also reaffirmed that agency rules have the force of law and bind the agency itself. Thus, the Board could not approve an otherwise desirable project if its own rules prohibited that project.
The opinion also recognized deference to an agency’s interpretation of its own rules unless clearly erroneous or inconsistent with their plain language. Here, however, the court independently concluded that the rule’s text supported the Board’s interpretation. The result therefore did not depend solely on administrative deference.
C. “Including” did not transform grid transmission into a compulsory feature
The disputed rule defined “Wind Energy Leasing” as:
“[L]easing of state land for the exclusive right to convert wind energy into electrical energy including collecting and transmitting the electrical energy so converted to the substation from which the electricity will be transmitted from the wind energy development to the interconnection of the transmission grid.”
Stephens read the language following “including” as an indispensable component of the definition. The court instead identified the essential activity as leasing state land to convert wind energy into electrical energy. The remaining language described one covered use of that electricity.
Dictionaries and precedent supported this reading: “including” ordinarily introduces a partial list and enlarges rather than restricts the preceding category. The specificity of the grid-transmission example did not make it compulsory.
The court also rejected two arguments for a narrower construction. First, a definition’s opening use of “means” does not necessarily make every example introduced later by “including” a mandatory condition. Second, locating language in a definitions section does not trigger a special rule requiring stricter interpretation. The court declined to invent such an interpretive rule.
The opinion further explained that “including,” “including without limitation,” and “including but not limited to” ordinarily introduce nonexclusive examples. Accordingly, the absence of the additional words “but not limited to” did not make this definition exhaustive.
The holding is best understood as a textual interpretation of this particular regulation, informed by the ordinary expansive meaning of “including.” It does not dispense with contextual interpretation of different statutory or regulatory language.
D. Judicial economy justified deciding the remaining objections
The district court had not addressed Stephens’s alternative grounds because its grid-connection ruling disposed of the case. Although remand is often appropriate in that situation, the Supreme Court resolved the remaining issues itself.
The record was sufficiently developed, the issues had been fully briefed below, and the additional arguments largely presented legal questions. These circumstances permitted a complete review without requiring the district court to undertake another round of proceedings.
Stephens had withdrawn a separate challenge concerning statutory authority over improvement-removal requirements. The court expressly did not decide that abandoned issue.
E. The state-land trust mandate allowed project-specific leasing terms
Section 36-5-114(b) authorizes leases that bring about compatible surface use and “inure to the greatest long term benefit of the state land trust.” Stephens argued that the lease failed this standard because its operating fee for electricity delivered to the grid exceeded the base rate applicable without grid delivery.
The court rejected the proposition that this difference established noncompliance. The Board’s rules required rental determinations on an individual-lease basis. OSLI negotiated the fees with the hydrogen project’s characteristics in mind, and the application did not entirely foreclose future grid connection. Either fee structure could therefore become applicable during the lease term.
The decision accepts individualized leasing arrangements rather than treating a higher hypothetical grid-connected payment as dispositive. Its reasoning is record-specific: the court upheld the negotiated structure before it, not an unrestricted power to disregard trust returns.
Stephens also argued that the lease improperly subordinated mineral interests. The court emphasized that existing mineral leases remained protected, future mineral leasing was not prohibited, and future mineral lessees were only restricted from unreasonably interfering with the wind project. Those provisions accommodated concurrent uses rather than rendering underlying minerals valueless.
F. Wildlife review did not require every recommendation to become a lease term
Sage grouse and Executive Order 2019-3
The Wyoming Game and Fish Department, or WGFD, reviewed the initial application and identified sage grouse concerns, including lands within a Core Protection Area and buffers around occupied leks. Pronghorn subsequently removed all proposed state lease lands within the Core Protection Area. OSLI informed the Board that the amended application site was outside the sage grouse core area.
Stephens did not identify a requirement in Executive Order 2019-3 obligating a second WGFD review of the amended application. The court treated the initial comments and recommendations as continuing to stand; it did not hold that amendment erased other wildlife concerns.
Nor did the omission of express sage grouse stipulations from the lease establish arbitrary action. The Board knew of WGFD’s feedback and the application changes. On this record, neither the executive order nor the Board’s management-goals rule required a species-specific clause in the lease.
Big game habitat and written findings
WGFD also identified mule deer and antelope crucial winter range and recommended avoiding development in those areas from November through April. The court acknowledged that the record did not clearly establish whether the amended application excluded that winter range. It did not resolve that uncertainty by assuming the habitat concern had disappeared.
Instead, the court focused on the governing legal requirements. Chapter 6, § 3(b) required the Board to determine that the lease would not adversely affect its land management goals. It did not mandate adoption of every WGFD recommendation or require a written finding addressing each concern.
OSLI had consulted WGFD, conveyed the feedback to the Board, and reported that the lease lands were outside designated migration corridors. The court concluded that approval on the assembled record reasonably reflected the required management determination.
This is a distinction between a duty to consider and determine, and a duty to issue formal written findings. The former remained operative even though the latter did not apply. Similarly, the hunting-access provision merely allowed Pronghorn to request OSLI approval for specified temporary closures; it did not grant an unrestricted power to exclude hunters.
G. Financial assurances could be coordinated across regulatory stages
The Board’s rules required financial assurances sufficient to secure compliance with lease terms. The lease required Pronghorn to provide them before construction, supplied methods for calculating the amount, and contemplated coordination with the Department of Environmental Quality during industrial siting review.
That additional process included requirements concerning decommissioning, reclamation, financial assurances, and cost estimates. Crucially, the Board retained sole discretion to determine when final reclamation had been achieved and when assurances could be released.
The holding therefore concerns the adequacy of an enforceable assurance framework, not a finding that every bond had already been posted. Interagency coordination was permissible because the lease preserved the Board’s own compliance protections and continuing oversight.