Petition — North Carolina v. Federal Power Commission

Supreme Court brief1976

Ask Donna

What actually matters in this document.

Text

MICHAEL KUDAK, JR. CLERK

IN THE

Supreme Court of the United States

October Term, 1975

No. 75-1657

STATE OF NORTH CAROLINA,

Petitioner,

FEDERAL POWER COMMISSION,

Respondent,

APPALACHIAN POWER COMPANY, INC.,

COMMONWEALTH OF VIRGINIA,

STATE OF WEST VIRGINIA,

Intervenors.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

PETITION FOR V. RIT OF CERTIORARI

Rufus L. Edmisten

Millard R. Rich, Jr.

Norman B,. Smith*

Thomas J. Schoenbaum

Counsel for Petitioner

*704 Southeastern Building

Greensboro, N. C. 27401

ee eee

INDEX

Table of Citations 0.000000 0. EE TNT RS

Citations to Opinions Below -

Jurisdiction —0

Questions Presented |.

Constitutional and Statutory Provisions Involved

Statement of the Case

Reasons for Granting the Writ

I. In violation of the National Environmental Policy

Act, 42 U.S.C, sec, 4332, the Federal Power Commission

failed to give adequate consideration to the scenic river

alternative in its environmental impact statement —

II. This Court must enforce the statutory prohibition

against the Federal Power Commission's licensing and

otherwise assisting in the construction of the Modified

Blue Ridge Project. —.

A. The Secretary of the Interior's approval of the

New River for inclusion in the National Wild and Scenic

Rivers System renders the license invalid. _.

B. While the New River was a state-nominated study

river, the Federal Power Commission was also prohibit-

ed from licensing the project.

C. Because of the effective prohibition of 16 U.S.C.

sec. 1278, this case has become moot, and the Court

should direct the dismissal of the licensing proceeding

before the Federal Power Commission. .

III. The license for the Modified Blue Ridge Project

should be set aside because Appalachian Power Com-

pany caused the Federal Power Commission to violate

federal statutes and regulations pertaining to historical

and archaeological properties. .

er ee ee ee

Page Page

IV. In holding that the Federal Power Commission's Secretary of the Interior's approval of the New River as

consideration of the impact of energy conservation a 155

measures such as peak load pricing and reduced demand Affidavit of Robert SRO Ee ee a: 156

factors was adequate, the Court of Appeals disregarded

the teaching of this Court in Udall v. FPPC, 387 U.S. 428 Affidavit of Charlton G. Holland .........-..... 159

(1967) , as well as the duties imposed under the National

Environmental Policy Act. __ 40 core, beside and wesasand by Chariton G.

Holland - Ah Ee Se

V. The Court of Appeals should have reviewed . .

whether the FPC violated the National Environmental | Archaeological Resources Appraisal by Harvard Ayers... 200

Policy Act by failing to consider the designation of the Draft Comments by Interagency Archaeological Services. 237

New River as a “federal scenic river” as an alternative ,

to the project since petitioner raised the objection in its Preliminary Cultural Resources Reconnaissance by Na-

application for rehearing before the FPC. 45 | ee

Conclusion | Bt a Ee vo 49

: . ! TABLE OF CITATIONS

Appendix | .

on ” | CASES:

ne ey - An ary bs Court of Appeals for the Dis - | Application of Madison Gas and Electric Co., 2-U-

: ' | 7423 (Pub. Serv. Comm. of Wis. 1974) 0... 48

Opinion and Order of the Federal Power Cominission 62 Calvert Cliffs’ Coordinating Committee v. Atomic

Letter from Nathaniel P. Reed, Assistant Secretary of Energy Commission, 449 F.2d 1109 (D.C, Cir. 1971)... 40

the Interior for Fish and Wildlife and Parks to John N. Central Vt. Pub. Serv. _— . (Vt. Pub. Serv. Bd.

Nassikas, Chairman of the Federal Power Commission, 1974) . ri eisiaeeensiinieniicaicindiniaciacdaeniieniones pesnvenen 43

January 7, 1975 : | 145 .

City of Davis v. Coleman, 521 F.2d 661 (9th Cir.

Letter from Rogers C. B. Morton, Secretary of the In- EE a ee sabtainastniit

terior to James E. Holshouser, Jr., Governor of North ,

Carolina, March 25, 1974 149 De Funis v. Odegaard, 416 US. 312 (1974) 200000... 35

Letter from James FE. Holshouser, Jr.. Governor of gra oe pon v. Corps of Engineers, 1

North Carolina, to Rogers C. B. Morton, Secretary of ; { ” Fe sepirintinceheeton

the Interior, December 12, 1974 152 Environmental Defense Fund v. Froehlke, 473 F.2d

Letter from Rogers C. B. Morton, Secretary of the In- siestlinsnisdhuait betel gummeeer ememememammmmmmemianidas

terior, to James E. Holshouser, Jr., Governor of North Federal Power Commission v. Colorado Interstate

Carolina, December 24, 1974 154 eM

il ii

( \sks: Prue

Hhivelscon is er Pishermen’s Vescneuaitpon a becleral

Power Commission, #OS Pld set 2d Cie, pote, ho be

Pea licitics ned Miehtoun Bleetrie Gao. Bederal Power

(Commission, O02 Fad oe DC Cie pots

Natural Reese ores ]derfertyse C corprie tl \ Nbertoon bos

Peat set DC Cir tate *

(Mes \ 0 MeDenald too tos pj sss

Parker Dotted States, BES Boad tos both Cy

Soome Phiiedson Presser s atten Crnitereneen 4 beleral

Power Commission, (56 Fat Gos ad Gar foes Th

serra Clubs Frochithe, 86 Fog ote Tth Cin bas

“ilvaov. barn, $82 Ftd bese det Gar bots,

Ios. bes

Cdlall vo Federal Power Cotuntnetsston. 87

Diy 2. Wb. BOL oS

United states. Alaska Steamshiyp Go. 295 ES nb

hve

Voited States. Nnehor Coal €o. sto Es) spe

Tited States v0 Phanburge ANmerikonieehe Cie. te

| ee © ee CT

STATUTES

16 TSC) see. Bina t i eee

6 USO wee, FF

i Tose “ie, SOD a Mth,

i TSO wee N25/ Ln ee ee

1M ESO wee DESE et ny

CASES: Page

16 USC. a _... 6, 22-23, 24, 34

16 US.C. sec. 1272 _... 6, 22, 24

16 USC. 1273 6-8, 28, 35, 46, 48, 57, 59

16 USC.

28 USC.

42 USC.

1274. pintnedeabetenies : 8, 28, 52

1275 8-11

1276 11-12, 28, 30-52

1278 12-15, 27, 30-54

1254/1) 2

4531 2, 15-17, 26, 36, 39, 45

£34432443%

422 USC. 4552 17-20, 22, 25, 40, 46, 47

Endangered Species Act of 1978 23

N.C.GS. see. 113A-35.1 - 24, 28

P.L. 93-279 | 32

Rule 4). Rules of Appellate Procedure 29

MISCELLANEOUS:

Executive Order No. 11595, 36 F.R. 8921 (May 13,

1971) |. 36, 39

Federal Power Commission, National Power Survey

0 ine : . 41

Guidelines of the Council on Environmental Quality,

40 C.F.R. sec. 1500.8 (1973) AR 26

H.Rept. No. 1623, 90th Cong., 2d Sess. (1968) . 23, 33

Jones, “Judicial Determination of Public Utility

Rates: A Critique,” 54 B.U.L. Rev. 873 (1974) ... 48

Note, “Case Moot on Appeal: A Limit on the Judicial

Power,” 103 U.Pa. L.Rev. 772 (1955) —.. - ~ 35

Note, “Lexonomics and the Electrival Utility Indus-

try: In Search of the Optimal Rate Structure,” 61

Ta.L.Rev. 134 (1975) _... nce 42-43

MUSCELLAN EOL S

Willrieh. "The leet rie Utility ated

Part 1" Pub. Chil, Bort. de

bie Diver ( risi-

dan. pets

S 2b 120 Cone. Row Wn 7

Lats ae oso

IS CORR wee bboek,

dematicny ©

‘

;

IN THE

Supreme Court of the United States

October Term, 1975

No. 75-1657

STATE OF NORTH CAROLINA,

Petitioner,

FEDERAL POWER COMMISSION,

Respondent,

APPALACHIAN POWER COMPANY, INC.,

COMMONWEALTH OF VIRGINIA,

STATE OF WEST VIRGINIA,

Intervenors.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Petitioner prays that a writ of certiorari issue to review the

judgment of the United States Court of Appeals for the

District of Columbia Circuit entered March 24, 1976.

CITATIONS TC OPINIONS BELOW

The March 24, 1976, opinion of the United States Court of

Appeals for the District of Columbia Circuit is not yet pub-

lished. It is set out in the appendix, infra, pp. 50-61. The

opinion and order of the Federal Power Commission reviewed

by the Court of Appeals is not published, and is set out in the

appendix, infra, pp. 62-144.

JURISDICTION

The judgment of the United States Court of Appeals for the

District of Columbia Circuit was entered on March 24, 1976.

Jurisdiction of this Court is invoked under 28 U.S.C. sec.

1254(1) and 16 U.S.C. sec. 8251(b). Jurisdiction of the

United States Court of Appeals for the District of Columbia

Circuit was founded upon 16 U.S.C. sec. 8251 (b) . Jurisdiction

of the Federal Power Commission was founded upon 16 U.S.C.

sec. 797 (e) .

QUESTIONS PRESENTED

1. Did the Federal Power Commission fail to give adequate

consideration to the scenic river alternative in its environ-

mental impact statement in violation of the National Environ-

mental Policy Act?

2. Should the licensing proceeding be dismissed for moot-

ness as a result of either the Secretary of the Interior's

approval of the New River as a scenic river, or the application

of the Governor of North Carolina making the river a scenic

study river?

3. Should the license for the project be set aside because

Appalachian Power Company caused the Federal Power Com-

mission to violate federal statutes and regulations pertaining

to historical and archaeological properties?

4. Did the Court of Appeals misapply the Nationa] Erviron-

mental Policy Act and Udall v. Federal Power Commission

in upholding the Federal Power Commission’s consideration

of the impact of energy conservation measures such as peak

load pricing and reduced demand on the need for the project?

5. Was the question of the Federal Power Commission’s

consideration of the scenic river alternative adequately raised

to require judicial review by the application for rehearing?

Coreen Oe

Wee

CONSTITUTIONAL AND STATUTORY - PROVISIONS

INVOLVED

16 U.S.C. sec. 469a-1

Same; threat of irreparable loss or destruction of significant

scientific prehistorical, historical, or archaeological data by

Federal construction projects; notice to Secretary of Interior;

survey; recovery, preservation, and protection of data.

(a) Whenever any Federal agency finds, or is notified, in

writing, by an appropriate historical or archeological author-

ity, that its activities in connection with any Federal con-

struction project or federally licensed project, activity, or pro-

gram may cause irreparable loss or destruction of significant

scientific, prehistorical, historical, or archeological data, such

agency shall notify the Secretary, in writing, and shall provide

the Secretary with appropriate information concerning the

project, program, or activity. Such agency may request the

Secretary to undertake the recovery, protection, and preserva-

tion of such data (including preliminary survey, or other in-

vestigation as needed, and analysis and publication of the

reports resulting from such investigation), or it may, with

funds appropriated for such project, program, or activity,

undertake such activities. Copies of reports of any investiga-

tions made pursuant to this section shall be submitted to the

Secretary, who shall make them available to the public for

inspection and review.

(b) Whenever any Federal agency provides financial] assist-

ance by loan, grant, or otherwise to any private person, asso-

ciation, or public entity, the Secretary, if he determines that

significant scientific, prehistorical, historical, or archeological

data might be irrevocably lost or destroyed, may with funds

appropriated expressly for this purpose conduct, with the con-

sent of all persons, associations, or public entities having a

legal interest in the property involved, a survey of the affected

site and undertake the recovery, protection. and preservation

of such data (including analysis and publication) . The Secre-

\ 4

tary shall, unless otherwise mutually agreed to in writing, com-

pensate any person, association, or public entity damaged as a

result of delays in construction or as a result of the temporary

loss of the use of private or any nonfederally owned lands.

16 U.S.C. sec. 8251

Rehearings; court review of orders

(a) Any person, State, municipality, or State commission

aggrieved by an order issued by the Commission in a proceed-

ing under this chapter to which such person, State, municipal-

ity, or State commission is a party may apply for a rehearing

within thirty days after the issuance of such order. The appli-

cation for rehearing shall set forth specifically the ground or

grounds upon which such application is based. Upon such

application the Commission shall have power to grant or deny

rehearing or to abrogate or modify its order without further

hearing. Unless the Commission acts upon the application for

rehearing within thirty days after it is filed, such application

may be deemed to have been denied. No proceeding to review

any order of the Commission shall be brought by any person

unless such person shall have made application to the Com-

mission for a rehearing thereon. Until the record in a proceed-

ing shall have been filed in a court of appeals, as provided in

subsection (b) of this section, the Commission may at any

time, upon reasonable notice and in such manner as it shall

deem proper, modify or set aside, in whole or in part, any find-

ing or order made or issued by it under the provisions of this

chapter.

(b) Any party to a proceeding under this chapter aggrieved

by an order issued by the Commission in such proceeding may

obtain a review of such order in the United States Court of

Appeals for any circuit wherein the licensee or public utility to

which the order relates is located or has its principal place of

business, or in the United States Court of Appeals for the Dis-

trict of Columbia, by filing in such court, within sixty days

after the order of the Commission upon the application for

Bia

ries

5 tay.

rehearing, a written petition praying that the order of the

Commission be modified or set aside in whole or in part. A

copy of such petition shall forthwith be transmitted by the

clerk of the court to any member of the Commission and

thereupon the Commission shall file with the court the record

upon which the order complained of was entered, as provided

in section 2112 of Title 28. Upon the filing of such petition

such court shall have jurisdiction, which upon the filing of the

record with it shall be exclusive, to affirm, modify, or set aside

such order in whole or in part. No objection to the order of the

Commission shall be considered by the court unless such objec-

tion shall have been urged before the Commission in the appli-

cation for rehearing unless there is reasonable ground for failure

so to do. The finding of the Commission as to the facts, if

supported by substantial evidence, shal] be conclusive. If any

party shall apply to the court for leave to adduce additional

evidence, and shall show to the satisfaction of the court that

such additional evidence is material and that there were reason-

able grounds for failure to adduce such evidence in the pro-

ceedings before the Commission, the court may order such

additional evidence to be taken before the Commission and to

be adduced upon the hearing in such manner and upon such

terms and conditions as to the court may seem proper. The

Commission may modify its findings as to the facts by reason

of the additional evidence so taken, and it shall file with the

court such modified or new findings which, if supported by

substantial evidence, shall be conclusive, and its recommenda-

tion, if any, for the modification or setting aside of the orig-

inal order. The judgment and decree of the court, affirming,

modifying, or setting aside, in whole or in part, any such order

of the Commission, shall be final, subject to review by the

Supreme Court of the United States upon certiorari or certifi-

cation as provided in sections 346 and 347 of Title 28.

section (a) of this section shall not, unless specifically ordered

by the Commission, operate as a stay of the Commission’s

order. The commencement of proceedings under subsection

(b) by this section shall not, unless specifically ordered by

the court, operate as a stay of the Commission’s order.

Wild and Scenic Rivers Act

16 U.S.C. sec. 1271 et seq.

$ 1271. Congressional Declaration of Policy

It is hereby declared to be the policy of the United States

that certain selected rivers of the Nation which, with their

immediate environments, possess outstandingly remarkable

scenic, recreational, geologic, fish and wildlife, historic, cultural,

or other similar values, shall be preserved in free-flowing con-

dition, and that they and their immediate environments shall

be protected for the benefit and enjoyment of present and

future generations. The Congress declares that the established

national policy of dam and other construction at appropriate

sections of the rivers of the United States needs to be com.

plemented by a policy that would preserve other selected rivers

or sections thereof in their free-flowing condition to protect the

water quality of such rivers and to fulfill other vital national

conservation purposes.

§$ 1272. Congressional Declaration of Purpose

The purpose of this chapter is to implement the policy set

out in section 1271 of this title by instituting a national wild

and scenic rivers system, by designating the initial components

of that system, and by prescribing the methods by which and

standards according to which additional components may be

added to the system from time to time.

$1273. National Wild and Scenic Rivers System; Congres-

sional Authorization For Inclusion; Designation By

State Legisiatures; Permanent Administration By

States; Application For Inclusion By Governors;

Satisfaction Of Criteria; Eligibility For Inclusion.

(a) The national wild and scenic rivers system shall com-

prise rivers (i) that are authorized for inclusion therein by

Act of Congress, or (ii) that are designated as wild, scenic or

recreational rivers by or pursuant to an act of the legislature

of the State or States through which they flow, that are to be

permanently administered as wild, scenic or recreational rivers

by an agency or political subdivision of the State or States

concerned without expense to the United States, that are

found by the Secretary of the Interior, upon application of the

Governor of the State or the Governors of the States concern-

ed, or a person or persons thereunto duly appointed by him

or them to meet the criteria established in this chapter and

such criteria supplementary thereto as he may prescribe, and

that are approved by him for inclusion in the system, includ-

ing, upon application of the Governor of the State concerned,

the Allagash Wilderness Waterway, Maine, and that segment

of the Wolf River, Wisconsin, which flows through Langlade

County.

(b) A wild, scenic or recreational river area eligible to be

included in the system is a free-flowing stream and the related

adjacent land area that possesses one or more of the values

referred to in section 1271 of this title. Every wild, scenic or

recreational river in its free-flowing condition, or upon restora-

tion to this condition, shall be considered eligible for inclusion

in the national wild and scenic rivers system and, if included,

shall be classified, designated, and administered as one of the

following:

(1) Wild river areas—Those rivers or sections of rivers

that are free of impoundments and generally inaccessible

except by trail, with watersheds or shorelines essentially

primitive and waters unpolluted. These represent vestiges

of primitive America.

(2) Scenic river areas—Those rivers or sections of

rivers that are free of impoundments, with shorelines or

watersheds still largely primitive and shorelines largely

undeveloped, but accessible in places by roads.

(3) Recreational river areas—Those rivers or sections

of rivers that are readily accessible by road or railroad,

that may have some development along their shorelines,

and that may have undergone some impoundment or

diversion in the past.

$ 1274. Component Rivers and Adjacent Lands; Establish-

ment of Boundaries; Classification; Development Plans.

(a) The following rivers and the land adjacent thereto are

hereby designated as components of the national wild and

scenic rivers system:

{Remainder of subsection (a) omitted.)

(b) The agency charged with the administration of each

component of the national wild and scenic rivers system

designated by subsection (a) of this section shall, within one

year from October 2, 1968, establish detailed boundaries there-

for (which boundaries shall include an average of not more

than three hundred and twenty acres per mile on both sides

of the river); determine which of the classes outlined in sec-

tion 1273(b) of this title best fit the river or its various

segments; and prepare a plan for necessary developments in

connection with its administration in accordance with such

classification. Said boundaries, classification, and development

plans shall be published in the Federal Register and shall not

become effective until ninety days after they have been for-

warded to the President of the Senate and the Speaker of the

House of Representatives.

$ 1275. Additions to National Wild and Scenic Rivers System

—Reports by Secretaries of Interior and Agriculture;

Recommendations to Congress; Contents of Reports.

(a) The Secretary of the Interior or, where national forest

lands are involved, the Secretary of Agriculture or, in appro-

priate cases, the two Secretaries jointly shal] study and sub-

mit to the President reports on the suitabiliy or nonsuitability

for addition to the national wild and scenic rivers system of

rivers which are designated herein or hereafter by the Congress

as potential additions to such system. The President shall re-

port to the Congress his recommendations and proposals with

respect to the designation of each such river or section thereof

under this chapter. Such studies shall be completed and such

reports shall be made to the Congress with respect to all rivers

named in section 1276(a) (1) through (27) of this title no

later than October 2, 1978. In conducting these studies the

Secretary of the Interior and the Secretary of Agriculture shall

give priority to those rivers with respect to which there is the

greatest likelihood of developments which, if undertaken, would

render the rivers unsuitable for inclusion in the national wild

and scenic rivers system. Every such study and plan shall be

coordinated with any water resources planning involving the

same river which is being conducted pursuant to the Water

Resources Planning Act.

Each report, including maps and illustrations, shall show

among other things the area included within the report; the

characteristics which do or do not make the area a worthy

addition to the system; the current status of land ownership

and use in the area; the reasonably foreseeable potential uses

of the land and water which would be enhanced, foreclosed,

or curtailed if the area were included in the national wild and

scenic rivers system; the Federal agency (which in the case

of a river which is wholly or substantially within a national

forest, shall be the Department of Agriculture) by which it is

proposed the area, should it be added to the system, be ad-

ministered; the extent to which it is proposed that such ad-

ministration, including the costs thereof, be shared by State and

local agencies; and the estimated cost to the United States of

acquiring necessary lands and interests in land and of ad-

ministering the area, should it be added to the system. Each

such report shall be printed as a Senate or House document.

Study of Report By Affected Federal and State Officials;

Recommendations and Comments; Transmittal to Presi-

dent and Congress.

(b) Before submitting any such report to the President

and the Congress, copies of the proposed report shall, unless

it was prepared jointly by the Secretary of the Interior and

the Secretary of Agriculture, be submitted by the Secretary of

the Interior to the Secretary of Agriculture or by the Secretary

of Agriculture to the Secretary of the Interior, as the case may

be, and to the Secretary of the Army, the Chairman of the

Federal Power Commission, the head of any other affected

Federal department or agency and, unless the lands proposed

to be included in the area are already owned by the United

States or have already been authorized for acquisition by Act

of Congress, the Governor of the State or States in which they

are located or an officer designated by the Governor to receive

the same. Any recommendations or comments on the proposal

which the said officials furnish the Secretary or Secretaries who

prepared the report within ninety days of the date on which

the report is submitted to them, together with the Secretary's

or Secretaries’ comments thereon, shall be included with the

transmittal to the President and the Congress. No river or

portion of any river shall be added to the national wild and

scenic rivers system subsequent to October 2, 1968, until the

close of the next full session of the State legislature, or legis-

latures in case more than one State is involved, which begins

following the submission of any recommendation to the Presi-

dent with respect to such addition as herein provided.

Publication in Federal Register

national wild and scenic rivers system any river designated as

a wild, scenic or recreational river by or pursuant to an act

of a State legislature, the Secretary of the Interior shall sub-

mit the proposals to the Secretary of Agriculture, the Secretary

of the Anny, the Chairman of the Federal Power Commission,

and the head of any other affected Federal department or

agency and shall evaluate and give due weight to any recom-

mendations or comments which the said officials furnish him

within ninety days of the date on which it is submitted to

them. If he approves the proposed inclusion, he shall publish

notice thereof in the Federal Register.

£1276. Rivers Constituting Potential Additions to National

Wild and Scenic Rivers System—Enumeration of

Designated Rivers.

(a) The following rivers are hereby designated for potential

addition to the national wild and scenic rivers system:

[Remainder of subsection (a) omitted.]

Studies and Reports

(b) (1) The studies of rivers named in subparagraphs (28)

through (55) of subsection (a) of this section shall be com-

pleted and reports thereon submitted by not later than October

2, 1979: Provided, That with respect to the rivers named in

subparagraphs (33), (50), and (51), the Secretaries shall not

commence any studies until (i) the State legislature has acted

with respect to such rivers or (ii) one year from January 3,

1975, whichever is earlier.

(2) The study of the river named in subparagraph (56) of

subsection (a) of this section shall be completed and the re-

port thereon submitted by not later than January 3, 1976.

(3) There are authorized to be appronriated for the purpose

of conducting the studies of the rivers named ir. subparagraphs

(28) through (56) such sums as may be :siecessary, but not

more than $2,175,000.

State Participation

close cooperation with appropriate agencies of the affected

State and its political subdivisions as possible, shall be carried

on jointly with such agencies if request for such joint study

is made by the State, and shall include a determination of the

degree to which the State or its political subdivision might

participate in the preservation and administration of the river

should it be proposed for inclusion in the national wild and

scenic rivers system,

Continuing Consideration By Federal Agencies to

Potential National Wild, Scenic and Recreational

River Areas.

(d) In all planning for the use and development of water and

related land resources, consideration shall be given by all

Federal agencies involved to potential national wild, scenic

and recreational river areas, and all river basin and project

plan reports submitted to the Congress shall consider and

discuss any such potentials. The Secretary of the Interior and

the Secretary of Agriculture shall make specific studies and

investigations to determine which additional wild, scenic and

recreational river areas within the United States shall be

evaluated in planning reports by all Federal agencies as po-

tential alternative uses of the water and related land resources

involved,

[Section 1277 omitted.]

$1278. Restrictions On Water Resources Projects — Con-

struction Projects Licensed By Federal Power Com-

mission,

(a) The Federal Power Commission shall not license the

construction of any dam, water conduit, reservoir, powerhouse,

transmission line, or other project works under the Federal

Power Act, as amended, on or directly affecting any river which

is designated in section 1274 of this title as a component of

the national wild and scenic rivers system or which is hereafter

designated for inclusion in that system, and no department or

agency of the United States shall assist by loan, grant, license,

or otherwise in the construction of any water resources project

that would have a direct and adverse effect on the values for

which such river was established, as determined by the Secre-

tary charged with its administration. Nothing contained in the

foregoing sentence, however, shall preclude licensing of, or

assistance to, developments below or above a wild, scenic or

recreational river area or on any stream tributary thereto

which will not invade the area or unreasonably diminish the

scenic, recreational, and fish and wildlife values present in the

area on October 2, 1968. No department or agency of the

United States shall recommend authorization of any water

resources project that would have a direct and adverse effect

on the values for which such river was established, as deter-

mined by the Secretary charged with its administration, or re-

quest appropriations to begin construction of any such project,

whether heretofore or hereafter authorized, without advising

the Secretary of the Interior or the Secretary of Agriculture,

as the case may be, in writing of its intention so to do at least

sixty days in advance, and without specifically reporting to

the Congress in writing at the time it makes its recommenda-

tion or request in what respect construction of such project

would be in conflict with the purposes of this chapter and

would affect the component and the values to be protected

by it under this chapter.

Construction Projects On Rivers Designated For

Potential Addition to System.

(b) The Federal Power Commission shall not license the

construction of any dam, water conduit, reservoir, power-

house, transmission line, or other project works under the

Federal Power Act, as amended, on or directly affecting any

river which is listed in section 1276(a) of this title, and no

department or agency of the United States shall assist by

loan, grant, license, or otherwise in the construction of any

water resources project that would have a direct and adverse

effect on the values for which such river might be designated,

as determined by the Secretary responsible for its study or

approval—

(i) during the ten-year period following October 2, 1968

or for a three complete fiscal year period following any

Act of Congress designating any river for potential addi-

tion to the national wild and scenic rivers system, which-

ever is later, unless, prior to the expiration of the relevant

period, the Secretary of the Interior and, where national

forest lands are involved, the Secretary of Agriculture, on

the basis of study, determine that such river should not

be included in the national wild and scenic rivers system

and notify the Committees on Interior and Insular Affairs

of the United States Congress, in writing, including a copy

of the study upon which the determination was made, at

least one hundred and eighty days while Congress is in

session prior to publishing notice to that effect in the

Federal Register: Provided, That if any Act designating

any river or rivers for potential addition to the national

wild and scenic rivers system provides a period for the

study or studies which exceeds such three complete fiscal

year period the period provided for in such Act shall be

substituted for the three complete fiscal year period in the

provisions of this clause (i); and

(ii) during such additional period thereafter as, in the

case of any river the report for which is submitted to the

President and the Congress, is necessary for congressional

consideration thereof or, in the case of any river recom-

mended to the Secretary of the Interior for inclusion in

the national wild and scenic rivers system under section

1273 (a) (ii) of this title, is necessary for the Secretary’s

consideration thereof, which additional period, however,

shall not exceed three years in the first case and one year

in the second.

Nothing contained in the foregoing sentence, however, shall

preclude licensing of, or assistance to, developments below or

above a potential wild, scenic or recreational river area or on

any stream tributary thereto which will not invade the area

or diminish the scenic recreational, and fish and wildlife values

present in the potential wild, scenic or recreational river area

on the date of approval of this chapter. No department or

DLN 0 i Rede Sale

agency of the United States shall, during the periods hereim-

before specified, recommend authorization of any water re-

sources project on any such river or request appropriations to

begin construction of any such project, whether heretofore or

hereafter authorized, without advising the Secretary of the

Interior and, where national forest lands are involved, the

Secretary of Agriculture in writing of its intention so to do

at least sixty days in advance of doing so and without specific-

ally reporting to the Congress in writing at the time it makes

its recommendation or request in what respect construction of

such project would be in conflict with the purposes of this

chapter and would affect the component and the values to be

protected by it under this chapter.

Activities in Progress Affecting River of System:

Notice to Secretary.

agencies shall, promptly upon enactment of this chapter, in-

form the Secretary of the Interior and, where national forest

lands are involved, the Secretary of Agriculture, of any pro-

ceedings, studies, or other activities within their jurisdiction

which are now in progress and which affect or may affect any

of the rivers specified in section 1276(a) of this title. They

shall likewise inform him of any such proceedings, studies, or

other activities which are hereafter commenced or resumed

before they are commenced or resumed.

Grants Under Land and Water Conservation

Fund Act of 1965.

(d) Nothing in this section with respect to the making of a

loan or grant shall apply to grants made under the Land and

Water Conservation Fund Act of 1965.

[Sections 1279-1287 omitted.|

42 US.C. sec, 4331

Congressional Declaration of National Environ-

mental Policy.

(a) The Congress, recognizing the profound impact of man’s

activity on the interrelations of all components of the natural

environment, particularly the profound influences of population

growth, high-density urbanization, industrial expansion, re-

source exploitation, and new and expanding technological ad-

vances and recognizing further the critical importance of re-

storing and maintaining environmental quality to the overall

welfare and development of man, declares that it is the con-

tinuing policy of the Federal Government, in cooperation with

State and local governments, and other concerned public and

private organizations, to use all practicable means and meas-

ures, including financial and technical assistance, in a manner

calculated to foster and promote the general welfare, to create

and maintain conditions under which man and nature can

exist in productive harmony, and fulfill the social, economic,

and other requirements of present and future generations of

Americans.

(b) In order to carry out the policy set forth in this chapter,

it is the continuing responsibility of the Federal Government

to use all practicable means, consistent with other essential

considerations of national policy, to improve and coordinate

Federal plans, functions, programs, and resources to thesend

that the Nation may—

(1) fulfill the responsibilities of each generation as

trustee of the environment for succeeding generations;

(2) assure for all Americans safe, healthful, productive,

and esthetically and culturally pleasing surroundings;

(3) attain the widest range of beneficial uses of the

environment without degradation, risk to health or safety,

or other undesirable and unintended consequences;

(4) preserve important historic, cultural, and natural

aspects of our national heritage, and maintain, wherever

possible, an environment which supports diversity and

variety of individual choice;

(5) achieve a balance between population and resource

use which will permit high standards of living and a wide

sharing of life’s amenities; and

(6) enhance the quality of renewable resources and

approach the maximum attainable recycling of depletable

resources.

a healthful environment and that each person has a respon-

sibility to contribute to the preservation and enhancement of

the environment.

42 U S.C. sec. 4332

Cooperation of Agencies; Reports; Avatiability of

Information, Recommendations; Inte national aid

National Coordination of Efforts.

The Congress authorizes and directs that, to the fullest ex-

tent possible: (1) the policies, regulations, and public laws of

the United States shall be interpreted and administered in

accordance with the policies set forth in this chapter, and (2)

all agencies of the Federal] Government shall—

(A) utilize a systematic, interdisciplinary approach which

will insure the integrated use of the natural and social sciences

and the environmental design arts in planning and in decision-

making which may have an impact on man’s environment;

(B) identify and develop methods and procedures, in con-

sultation with the Council or Environmental Quality estab-

lished by subchapter IT of this chapter, which will insure that

presently unquantified environmental amenities and values

may be given appropriate consideration in decision-making

along with economic and technical considerations;

for legislation and other major Federal actions significantly

affecting the quality of the human environment, a detailed

statement by the responsible official on—

(i) the environmental impact of the proposed action,

(ii) any adverse environmental effects which cannot be

avoided should the proposal be implemented,

(ii) alternatives to the proposed action,

(iv) the relationship between local short-term uses of

man’s environment and the maintenance and enhancement

of long-term productivity, and

(v) any irreversible and irretrievable commitments of

resources which would be involved in the proposed action

should it be implemented.

Prior to making any detailed statement, the responsible Fed-

eral official shall consult with and obtain the comments of any

Federal agency which has jurisdiction by law or special exper-

tise with respect to any environmental impact involved. Copies

of such statement and the comments and views of the appro-

priate Federal, State, and local agencies, which are authorized

to develop and enforce environmental standards, shall be made

available to the President, the Council on Environmental Qual-

ity and to the public as provided by section 552 of Title 5, and

shall accompany the proposal through the existing agency re-

view processes;

(D) Any detailed statement required under subparagraph

ed under a program of grants to States shall not be deemed to

be legally insufficient solely by reason of having been prepared

by a State agency or official, if:

(i) the State agency or official has statewide jurisdic-

tion and has the responsibility for such action,

(ii) the responsible Federal official furnishes guidance

and participates in such preparation,

(ii) the responsible Federal official independently

Gt whlidinei!

evaluates such statement prior to its approval and adop-

tion, and

(iv) after January 1, 1976, the responsible Federal

official provides early notification to, and solicits the views

of, any other State or any Federal land management entity

of any action or any alternative thereto which may have

significant impacts upon such State or affected Federal

land management entity and, if there is any disagreement

on such impacts, prepares a written assessment of such

impacts and views for incorporation into such detailed

statement.

The procedures in this subparagraph shal! not relieve the

Federal official of his responsibilities for the scope, objectivity,

and content of the entire statement or of any other respon-

sibility under this chapter; and further, this subparagraph does

not affect the legal sufficiency of statements prepared by State

agencies with less than statewide jurisdiction.

(E) study, develop, and describe appropriate alternatives

to recommended courses of action in any proposal which in-

volves unresolved conflicts concerning alternative uses of avail-

able resources;

(F) recognize the worldwide and long-range character of

environmental problems and, where consistent with the foreign

policy of the United States, lend appropriate support to initi-

atives, resolutions, and programs designed to maximize inter-

national cooperation in anticipating and preventing a decline

in the quality of mankind’s world environment;

(G) make available to States, counties, municipalities, insti-

tutions, and individuals, advice and information useful in re-

storing, maintaining, and enhancing the quality of the environ-

ment;

(H) initiate and utilize ecological information in the plan-

ning and development of resource-oriented projects; and

(I) assist the Council on Environmental Quality established

by subchapter IT of this chapter.

STATEMENT OF THE CASE

The Federal Power Commission's Opinions and Orders Nos.

698 and 698-A granted a license to Appalachian Power Com-

pany to construct a pumped storage hydroelectric project on

the New River in Northwestern North Carolina and South-

western Virginia.

Appalachian Power Company was granted a two year pre-

liminary permit in March, 1963, by the Commission. In

February, 1965, Appalachian applied for a license for the “Blue

Ridge Project”, much smaller than the project ultimately

approved. At hearings conducted in 1967, considerable oppo-

sition developed to the project. In response to the objections

the Commission staff proposed and Appalachian accepted, the

present “Modified Blue Ridge Project’, consisting of a lower

reservoir of 12,390 acres and an upper reservoir of 26,000

acres. Hearings on the modified project were held in 1969. On

Octobr 1, 1969, Examiner (now Administrative Law Judge)

Levy issued his initial decision. Oral arguments were held,

further briefs were filed, and a supplemental initial decision

was issued by Judge Levy on June 21, 1971. Further excep-

tions were filed, and additional ora] arguments were held.

Following publication of a draft environmental impact state-

ment and receipt of comments thereon, the Commission's staff

filed its final environmental impact statement on June 18,

1973. The parties were granted an opportunity to cross examine

staff witnesses with respect to the final environmental impact

statement.

Judge Levy issued a third decision on January 23, 1974.

This decision was approved by the Commission for the most

part and adopted in the Opinion and Order No. 698. The

order required further modification of the project, consisting

of a slight reduction in size of the lower reservoir and limiting

the drawdown on the upper reservoir to no more than ten

feet.

North Carolina and other parties filed objections to Opinion

and Order No. 698. On July 15, 1974, North Carolina filed a

petition for rehearing. The petition was denied by Opinion No.

698-A, dated August 12, 1974. North Carolina filed a timely

notice of appeal to the United States Court of Appeals for

the District of Columbia Circuit.

Opinion No. 698 made the license effective January 2, 1975.

On December 13, 1974, North Carolina petitioned the Com-

mission for a stay of the effective date of the license pending

the appeal. The petition was denied by the Commission on

December 31, 1974. On January 27, 1975, North Carolina

petitioned the Commission for a rehearing of this order, which

was denied. North Carolina appealed from this order, as well,

but the appeal was dismissed as moot by the Court of

Appeals.

Appalachian Power Company, the Commonwealth of Vir-

ginia, and the State of West Virginia were allowed to inter-

vene by the Court of Appeals.

On December 23, 1974, North Carolina petitioned the

Court of Appeals for a stay of the Commission’s licensing

order pending review. This petition was granted on January

31, 1975.

By application for leave to adduce additional evidence

dated September 11, 1975, North Carolina brought to the

attention of the Court of Appeals material evidence relating

to significant archaeological items in the proposed area of the

impoundment, which was allegedly suppressed by Appalachian

Power Company.

The Court of Appeals’ Opinion and Judgment affirming the

grant of the license was entered on March 24, 1976.

Petitioner North Carolina and certain of its citizens (who

are not parties to this proceeding) commenced a civil action

in the United States District Court for the Middle District

of North Carolina on December 18, 1974, seeking injunctive

and declaratory relief against the Federal Power Commission

and Appalachian Power Company, to enforce the Wild and

Scenic Rivers Act, 16 U.S.C. sec. 1271 et seq. The district

court dismissed this action on May 7, 1975, on the theory that

the court was without jurisdiction, and that exclusive juris-

diction was possessed by the court of appeals reviewing the

Federal Power Commission license. This judgment was appeal-

ed to the United States Court of Appeals for the Fourth Cir-

cuit, but proceedings in that appeal have been stayed, pend-

ing final judgment in the instant case.

REASONS FOR GRANTING THE WRIT;

I. IN VIOLATION OF THE NATIONAL ENVIRON-

MENTAL POLICY ACT, 42 U.S.C. sec. 4332, THE FED-

ERAL POWER COMMISSION FAILED TO GIVE ADE-

QUATE CONSIDERATION TO THE SCENIC RIVER

ALTERNATIVE IN ITS ENVIRONMENTAL IMPACT

STATEMENT.

Some 70 miles of the 220 mile New River would be in-

undated by the Modified Blue Ridge Project. (Opinion and

Order Granting a License, June 14, 1974, p. 48.) The entire

river, particularly that part which would be flooded, possesses

characteristics making it ideally suited for ciassification as a

scenic river under the Wild and Scenic Rivers Act, 16 U.S.C.

sec. 1271, et seq. Scenic rivers are those “that are free of

impoundments with shorelines and watersheds still largely

primitive and shorelines largely undeveloped, but accessible

in places by roads,” which, “with their immediate environ-

ments, possess outstandingly remarkable scenic, recreational,

geologic, fish and wildlife, historic, cultural, or other similar

values, .. .” 16 U.S.C. sec. 1271, 1273 (b) (2).

The New River is the oldest river in the Western Hemis-

phere, and is exceeded in age only by the Nile River among

—_——_—_— LS Tg eee ge

ee ee

all the world’s rivers. The proposed impoundment would flood

the New, below the point where the North Fork and South

Fork meet, nestled between the Blue Ridge and the first ridge

of the Appalachians. (R. 11,104.) The river, as it meanders

through lush bottomlands and among graceful mountains, is

a setting of extraordinary natural beauty.

The New River is essentially free from pollution, and as the

Commission found, is one of the largest free-flowing, least

polluted rivers in the region. (R. 11,118, 11,121.) The Wild

and Scenic Rivers Act was passed with a view toward giving

“special attention . . . to the dwindling number of American

streams that are still in a relatively natural state.’ H. Rept.

No. 1623, 90th Cong., 2d Sess. (1968) , U. S. Cong. and Admin.

News 3801, 3802.

The United States Fish and Wildlife Service has identified

23 species of plants and animals in the New River, which are

found nowhere else in the world. Eight of these species, in-

cluding a crayfish, a snail, a plant, and five species of fish,

would be adversely affected by the impoundment, and would

likely become threatened or endangered. The Secretary of the

Interior sought unsuccessfully to delay authorization of con-

struction of the project in order to allow additional study of

these species, as required by the Endangered Species Act of

1973, and to permit consideration of scenic river designation,

which would have the effect of protecting these species. (Letter

from Nathaniel P. Reed, Assistant Secretary for Fish and

Wildlife and Parks to Federal Power Commission Chairman

John N. Nassikas, dated January 7, 1975, Appendix, infra, pp.

145-148) .

Smallmouth bass, and brown, rainbow, and brook trout

inhabit this river system. (R. 11,121, 11,452.) Development

of the project would result in extensive losses of wildlife pop-

ulation, including deer, fox, turkey, and grouse. (R. 11,122,

11,412.)

Construction of the reservoir would entail the permanent

loss of innumerable prehistoric artifacts and sites, as well as

several important historic buildings and sites. These losses

are discussed in Part ITI, infra.

Development of the project would have a profound effect

on local cultural values, substituting an intense tourist-oriented

recreational development for a stable, traditional society,

descended from original settlers, who live in harmony with the

land and make their livelihood from the pastures, croplands

and woodlands which border the river. (R. 11,232-6, 11,497-

527.)

The New River in its natural state provides excellent oppor-

tunities for stream fishing and white water-wilderness canoe-

ing, that would be lost if the project were constructed. (R.

11,561-2.)

The Wild and Scenic Rivers Act was passed on October 2,

1968. Pursuant to 16 U.S.C. sec. 1273 (a) (ii) the North Caro-

lina General Assembly on March 21, 1974, enacted N.C.GS.

sec. 113A-35.1, designating the New River as a scenic river,

and on March 5, 1974, North Carolina Governor James Hols-

houser made a preliminary application to the Secretary of the

Interior for classification of the New River as a scenic river.

On March 25, 1974, in a letter to Governor Holshouser, Secre-

tary of the Interior Rogers B. Morton stated that he is “reason-

ably sure that physically and aesthetically [the New River]

qualifies for inclusion in the National [Scenic River] System.

(Appendix, infra, pp. 149-151). The Federal Power Commis-

sion’s Opinion and Order Granting a License for the project

was issued on June 14, 1974, some three months later. Also

prior to the Commission’s licensing order, the United States

Senate on May 28, 1974, passed $.2439, designating a portion

of the New River where the project would be located as a

subject for study for inclusion in the National Wild and

Scenic Rivers System. (120 Cong. Rec. 9077.)

In the section of the environmental impact statement deal-

ing with alternatives, the alternative of “no action” is’ briefly

2 5

discussed, and there it is said that no action would “preserve

the river for possible selection in the future as a wild or scenic

river.” (R.11,168-9.) This is the only reference to scenic

river classification set forth in the body of the impact state-

ment. The Environmental Protection Agency in its comments

on the environmental impact statement for the project, sug-

gested that the statement should address those features of the

New River that would make it desirable for inclusion in the

Wild and Scenic Rivers System. (R.11,425-6.) The response

of the Federal Power Commission to this comment was that

a description of the New River and its relevant characteristics

is given in Section IT of the document; no changes were made

in that part of the statement dealing with alternatives. (R.

11,188-9.)

The potential environmental and economic benefits that are

unique to this alternative require that it be distinguished from

the simple “no action” alternative and that it be separately

presented. As stated in the Council on Environmental Quality’s

letter of comment to the Federal Power Commission:

Although EPA in its comments on the draft to EIS,

specifically requested the Commission to discuss features

of the New River that would make it desirable as a Wild

and Scenic River, Section VI of the Final EIS |.mits

discussion of this important alternative to two sentences.

The potential environmental and economic benefits of

this alternative should have been presented in sufficient

detail to allow comparison with, and subtraction from,

the numerous benefits claimed for the proposed action.

The National Environmental Policy Act, 42 U.S.C. sec.

4332 (2) (E) requires that agencies “study, develop, and de-

scribe appropriate alternatives to recommended courses of

action in any proposal which involves unresolved conflicts con-

cerning alternative uses of available resources; . . .” It is di-

rected in sec, 4332 (2) (C) (iii) that the environmental impact

statement contain a “detailed statement on .. . alternatives to

the proposed action.”

The authoritative Guidelines of the Council on Environ-

mental Quality pertaining to the explication of alternatives

require a “rigorous exploration and objective evaluation of

alternative actions that might avoid, some or all of the ad-

verse environmental effects. . . .” This analysis of each alter-

native must accompany the proposed action through the re-

view process to prevent premature foreclosure of options that

might be less detrimental to the environment. 40 C.F.R. sec.

1500.8 (a) (4) (1973). The Federal Power Commission's own

regulations require that environmental impact statements

“fully deal with alternative courses of action to the proposal

and, to the maximum extent practicable, the environmental

effects of each alternative.” 18 C.F.R. sec. 2.80 (b) .'

The environmental] impact statement in this case is mani-

festly deficient with respect to the scenic river alternative.

There is no detailed statement of the possible classificaion and

management of the New as a scenic river. It is clear that this

alternative has not been studied, developed, and described.

The offhand reference in the environmental impact statement

to the scenic river alternative certainly does not amount to

the rigorous exploration and objective evaluation required by

the Council on Environmental Quality Guidelines.’ Likewise,

the required analysis of the costs and impact on the environ-

ment of this alternative, are altogether missing. Further, the

Commission fell far short of the demands of its own regulations

1 Further, the Commission's regulations require with respect to alternatives:

“(T)he systematic procedure [used to arrive at the proposed action by

considering all the alternatives) should include the decision criteria used,

the information weighed, and an explanation of the conclusion at each

decision point. The decision criteria must show how environmental bene-

fits/costs, even if not quantifiable, are weighed against economic bene-

fits/costs and technology and procedural! constraints. All realistic alterna-

tives must be discussed even though they may not be within the juris-

diction of the Commission or the responsibilities and capabilities of the

applicants. .. . Describe the timeliness and environmental consequences

of each alternative discussed.” 18 C.F.R. sec. 2.80, App. A, par. 8.

2 Even without regard to the National Environmental Policy Act, the Com-

mission has a judicially enforceable duty to give full consideration to

alternatives under 16 U.S.C. sec. 803(a). Scenic Hudson Preservation Con-

ference v. Federal Power Commission, 354 F.2d 608 (2d Cir. 1965).

wens So eee

a ae a er OS

dealing with the presentation of alternatives in environmental

impact statements.

The Court of Appeals failed to discuss this issue in its

opinion, although the issue was thoroughly briefed in that

court, and treatment of the scenic river alternative in thiis case

appears to be altogether inconsistent with the great weight of

authority in the other circuits, e.g., City of Davis v. Coleman,

521 F.2d 661 (9th Cir. 1975); Silva v. Lynn, 482 F.2d 1282

(Ist Cir. 1973); Environmental Defense Fund v. Froehlke,

473 F.2d 346 (8th Cir. 1972); and with its own decision in

Natural Resources Defense Council v. Morton, 458 F.2d 827

(D.C. Cir. 1972) . As stated in Environmental Defense Fund v.

Froehlke, 473 F.2d at 350, “[T]he impact statement should

not just list the alternatives to the proposed project but

should also include results of the [agency’s] own investigation

and evaluation of alternatives so that the reasons for the choice

of a course of action are clear.” This court ought to grant

certiorari and reverse, requiring that the Federal Power Com-

mission adhere to the staiutory and regulatory requirements

for presentation of the scenic river alternative in the environ-

mental impact statement.

II. THIS COURT MUST ENFORCE THE STATUTORY

PROHIBITION AGAINST THE FEDERAL POWER COM-

MISSION’S LICENSING AND OTHERWISE ASSISTING

IN THE CONSTRUCTION OF THE MODIFIED BLUE

RIDGE PROJECT.

The Wild and Scenic Rivers Act, 16 U.S.C. sec. 1278 (a),

forbids the Federal Power Commission to license the construc-

tion of any dam or other project works, and to assist by license

or otherwise in the construction of any water resources project

that would adversely affect a designated scenic river. By sub-

section 1278(b) this prohibition is extended to rivers which

have been designated for potential addition to the wild and

scenic rivers system.

There are two ways by which rivers can become a part of

the wild and scenic rivers system:

1. By Act of Congress enlarging the list contained in 16

US.C. sec. 1274.

2. By designation by a state legislature, application by the

governor of the state, and finding by the Secretary of

the Interior, that the river meets the criteria established

by the Act. 16 U.S.C. sec. 1273 (a) (ii) .

It is permissible, but not required, that additions to the

system be selected from the rivers designated by Congress for

potential addition to the system in Section 1276. 1

sec. 1273 (a) (i). a

On March 21, 1974, the North Carolina General Assembly

enacted N.C.GS. 113A-35.1, designating the New River as a

scenic river. On December 12, 1974, North Carolina Governor

James Holshouser made formal application to the Secretary

of the Interior pursuant to 16 U.S.C. sec. 1273 (a) (ii) for in-

clusion of a 26.5 mile part of the river into the wild and scenic

rivers system. (Appendix, infra, pp. 152-153). On December

24, 1974, the Secretary of the Interior declared that the applica-

tion was valid and would be considered by the Department

‘Appendix, infra, p. 154) . ;

On April 13, 1976, Secretary of the Interior Thomas S.

Kleppe designated the 26.5 mile section of the river as a

scenic river and a component of the National Wild and Scenic

Rivers System, pursuant to 16 U.S.C. sec. 1273 (a) (ii). (Ap-

pendix, infra, pp. 163-164). A large part of the proposed im-

poundment of the Modified Blue Ridge Project would be on

that part of the river designated a scenic river.

The Federal Power Commission in the opinion which is here

for review extended the effective date of the license for the

Modified Blue Ridge Project to January 2, 1975, pending pos-

sible action by the Congress for potential addition of the New

River to the Wild and Scenic Rivers System. (Opinion and

aoe ee ee

Order Granting a License, June 14, 1974, Appendix, infra, p.

126). Denying petitioner’s motion for a stay of this order on

December 31, 1974, the Commission stated the license would

become effective on January 2, 1975, “unless otherwise delayed

by judicial review.”

On December 23, 1974, before the license became effective,

petitioner State of North Carolina, filed a motion in the Court

of Appeals for a stay of the effective date of the license, and

a stay order was entered by that court on January 31, 1975.

The decision of the Court of Appeals affirming the license was

announced on March 24, 1976. The Court of Appeals stated

that the license was not then effective, but granted authority

to the Federal Power Commission to decide whether or not to

make the license presently effective. (Appendix, infra, p. 61).

A motion for stay of that court’s mandate was timely filed.

The mandate has been withheld pending determination of the

motion, and this petition for writ of certiorari is filed before

the mandate of the Court of Appeals has issued. In accordance

with Rule 41 of the Rules of Appellate Procedure, the mandate

of the Court of Appeals remains stayed until this Court acts

on the certiorari petition.”

A. The Secretary of the Interior's Approval of the New

River for Inclusion in the National Wild and Scenic Rivers

System Renders the License Invalid.

Following proper designation by the North Carolina General

Assembly and application by the Governor of North Carolina,

the Secretary of the Interior on April 13, 1976, designated the

New River as a scenic river component of the National Wild

and Scenic Rivers System, as provided in 16 US.C. sec. 1273

(a) (ii). This action by the Secretary of the Interior has the

3 On March 26, 1976, two days after the Court of Appeals opinion was

issued, the Federal Power Commission purported in an order to make the

license effective immediately. However, because the mandate of the court

of appeals had not issued, the Commission was without jurisdiction.

Obey v. McDonald, 109 US. 150 (1883). Petitioner has filed a timely

application for rehearing, pursuant to 16 U.S.C. 825!, and a motion that

the Commission rescind its March 26 order for want of jurisdiction.

effect of prohibiting the Federal Power Commission to license

the construction of the dam and reservoir. “The Federal Power

Commission shall not license the construction of any dam,

water conduit, reservoir, powerhouse, transmission line, or

other project works under the Federal Power Act, as amended,

on or directly affecting any river . . . which is hereafter desig-

nated for inclusion in [the wild and scenic rivers] system, . . .”

16 U.S.C. sec. 1278 (a). The Court of Appeals conceded that

once the Secretary of the Interior accepted the river for in-

clusion in the system, it is illegal to create the dam and reser-

voir. (Appendix, infra, p. 61, n. 2).

B. While the New River was a State-Nominated Study

River, the Federal Power Commission was also Prohibited

from Licensing the Project.

The act of the Governor of North Carolina in making

formal application on December 12, 1974, to the Secretary of

the Interior to have the New River designated as a scenic

river, was the last act necessary to classify the river as a state-

designated study river pursuant to 16 U.S.C. sec. 1273 (a) (ii).

State-designated study rivers are subject to the same pro-

tections against impoundments and other development by 16

US.C. sec. 1278(b), to which components of the wild and

scenic rivers system are subject by subsection (a) of the same

statute. The Court of Appeals incorrectly held that Section

1278(b) was inapplicable to the New River while it was a

state-designated study river, and that the protection of this

subsection is limited to those rivers designated in 16 U S.C.

sec. 1276 (a) by Congress for study as potential wild or scenic

rivers.

If this interpretation were correct, then there would be ab-

solutely no reason for inclusion in subsection (b) of the

reference to the state-designation method of including a river

in the system by the terms of 16 U.S.C. sec. 1273 (a) (ii). Yet

subsection 1278(b) specifically accords protection to rivers

recommended to the Secretary of the Interior under Section

1273 (a) (ii). The proper interpretation of subsection 1278 (b)

is that it protects state-designated rivers during the study pe-

riod, although the maximum term for protection is one year

instead of three years after the initial ten-year period follow-

ing October 2, 1968.

The interpretation contended for by petitioner is clear from

a close reading of the statute. The first clause of subsection

1278 (b) is clearly limited to study rivers designated by Con-

gress in Section 1276 (a):

The Federal Power Commission al] not license the

construction of any dam .. . or other project works under

the Federal] Power Act . . . directly affecting any river

which is listed in Section 1276 (a).

However, petitioner relies upon the second clause of sub-

section 1278 (b):

[Njo department or agency of the United States shall

assist by loan, grant, license, or otherwise in the con-

struction of any water resources project that would have

a direct and adverse effect on the values for which such

river might be designated .. . or, in the case of any river,

recommended to the Secretary of the Interior for inclusion

in the system under section 1273 (a) (ii) of this title,...

[Emphasis supplied].

Clearly the New River has been designated a 1273 (a) (ii)

study river, and if the FPC allows the license to become

effective, it will be wrongfully assisting in the construction of

a water resources project during the study period. This pro-

vision, not only prohibits the Federal Power Commission from

licensing the project, but also bars it from assisting in the

development in any way, including allowing the license to be-

come effective, approving plans, authorizing studies.

The use of the term “such river” in the second clause does

not refer to the phrase “any river which is listed in Section

1276 (a). The term “such river” can properly refer either to

the overall heading of Subsection 1278(b), which is “Con-

struction Projects on Rivers Designated for Potential Addition

to System”, or alternatively, this term can refer to the phrase in

subsection 1278 (b) (2) “any river recommended to the Secre-

tary of the Interior for inclusion in the national wild and scenic

rivers system under Section 1273 (a) (ii) of this title”. More-

over the use of the term “any river’, without limiting language

in paragraph 1278 (b) (ii) means that no limitation to Section

1276 Congressional Study Rivers was intended.

This is a case of first impression under the Wild and Scenic

Rivers Act. Since subsection 1278(b) is not free from am-

biguity, a consideration of legislative intent is appropriate.

The legislative history of the act favors the interpretation

recommended by petitioner:

(Subsection 1278(a)] forbids the Federal Power Com-

mission to license any project on or directly affecting any

river designated for inclusion in the scenic rivers system.

While this prohibition is immediately applicable only to

the six scenic rivers named in section 3 of the bill [Section

1274), it will become applicable to other rivers as they

are hereafter added to the system by act of Congress or

under the provisions of section 2(a) (ii) of the bill [section

1273 (a) (ii) |. Subsection (a) also prohibits other Federal

departments or agencies from making loans or grants for,

and from licensing, water resources projects on such a

river if the project would have an adverse effect on its

scenic river values. . . . Subsection (b) imposes similar

prohibitions and requirements with respect to rivers in thy

study category for the five years [Amended to ten years

by P.L. 93-279, sec. 1(b) (3).] after the date of the act

and for an additional period 3 years in the case of study

rivers which the Secretary of the Interior or the Secretary

of Agriculture recommends be added to the authorized

category or for an additional period of 1 year in the case

of a State-named river which is recommended to the

Secretary of the Interior for inclusion in the system. —

House Report No. 1623, 3 US. Code and Admin. News

3811-2812, 90th Cong. 2d Sess. (1968) .*

For these reasons, the Court of Appeals incorrectly inter-

preted subsection 1278(b). The logical reading of this pro-

vision, and an interpretation of it in light of its statutory his-

tory, compels the holding that the New River was protected

against licensing and other activities by the Federal Power

Commission for the period specified in the statute, once the

governor's application was filed with the Secretary of the In-

terior on December 12, 1974.

C. Because of the Effective Prohibition of 16 USC. sec.

1278, this Case has become Moot, and the Court should Direct

the Dismissal of the Licensing Proceeding Before the Federal

Power Commission.

At no time has the license for the Modified Blue Ridge

Project become effective. In its June 14, 1974, licensing order,

the Federal Power Commission suspended the effective date

of the license until January 2, 1975. The Court of Appeals

entere: its order on January 31, 1975, staying the effective

date of the license. The stay order was dissolved and the Fed-

eral Power Commission was authorized to “make the license

4 Subsection 1278(b) as applied to the New River as a state-designated

study river, is to be read:

“no department or agency of the United States [the Federal Power

Commission) shall (shall not) assist by loan, grant, license, or other-

wise [permit the license to become effective or assist Appalachian

Power Company in any other way) in the construction of any water

resources project {in the construction of the Blue Ridge Project)

that would have a direct and adverse effect on the values for which

such river might be designated [that would create an impoundment),

as determined by the Secretary responsible for its study or approval—

“(i) during the ten-year period following October 2, 1968 .. . and

“<(ii) during such additional period thereafter as,... in the case of

any river recommended to the Secretary of the Interior for inclu-

sion in the wild and scenic rivers system under section 1273 ‘a)

(ii) of this title [in the case of the New River recommended to the

Secretary of the Interior for inclusion in the wild and scenic rivers

system under section 1273(a)(ii) of this title}, is necessary for the

Secretary's consideration thereof, which additional period, how-

ever, shall not exceed... one year... .”

effective immediately” in the Court of Appeals March 14, 1976,

opinion. However, the mandate of the Court of Appeals has

been stayed, the Federal Power Commission remains without

jurisdiction, and the license is not in effect.

Under these circumstances the Secretary of the Interior’s

April 13, 1976, designation of the New River as a scenic river

is fully operative. Alternatively, the Governor of North Caro-

lina’s application for scenic river status submitted on December

12, 1974, even before the Commission ordered the license effec-

tive, antedates the license. Not only is the Federal Power Com-

mission prohibited by 16 U.S.C. Sec. 1278(a) from licensing

the project, but it is also prohibited with respect to both in-

cluded rivers and study rivers by subsections 1278 (a) and (b)

from assisting by “loan, grant, license, or otherwise in the con-

struction of any water resources project that would have a

direct and adverse effect on the values” for which a scenic

river has been established or might be designated. This pro-

hibition covers all on-going activities of the Commission in

assisting and regulating a licensee with its activities. Even if

the initial grant of the license had been effective prior to the

time that the river came under the protections of section 1278,

the license would be a nullity because continuing activities of

the Commission pursuant to the license will be illegal.

The Wild and Scenic Rivers Act, designed to protect the

nation’s unspoiled and undeveloped waterways, is the counter-

part of the Wilderness Act, 16 U.S.C. sec. 1131 et seq., the

purpose of which is to protect the nation’s primitive land areas.

Enforcement of the Wild and Scenic Rivers Act, like the

Wilderness Act, requires that the agencies of the government

responsible for carrying out the law be given a meaningful

opportunity to designate new areas for protection from spoila-

tion. It is so held in Parker v. United States, 448 F.2d 793

(10th Cir. 1971) , enforcing the Wilderness Act. Pending study

and consideration for protected classification, agencies engaged

in development of the area should be compelled to stay their

hands. New dams can be buiit anytime, but ancient rivers can

be destroyed only once.

Because the Federal Power Commission has become effective-

ly precluded from granting and making effective a license for

the Modified Blue Ridge Project, this proceeding and the pro-

ceeding before the Federal Power Commission have become

moot. Where either supervening administrative action, United

States v. Anchor Coal Co., 279 U.S. 812 (1929) , or legislation,

United States v. Alaska Steamship Co., 253 U.S. 114 (1920),

renders an administrative license or regulation ineffective,

there is no case or controversy, and the proceedings must be

dismissed on the ground of mootness. The proper procedure

is to remand to the agency and direct the dismissal of the pro-

ceeding. United States v. Hamburg-Amerikanische Co., 239

US. 446 (1916); United States v. Alaska Steamship Co.,

supra. See Note, “Cases Moot on Appeal: A Limit on the

Judicial Power,” 103 U.Pa. L.Rev. 772 (1955); DeFunis v.

Odegaard, 416 U.S. 312 (1974) . Accordingly, the Court should

direct the Commission to dismiss the application for license.

III. THE LICENSE FOR THE MODIFIED BLUE

RIDGE PROJECT SHOULD BE SET ASIDE BECAUSE

APPALACHIAN POWER COMPANY CAUSED THE FED-

ERAL POWER COMMISSION TO VIOLATE FEDERAL

STATUTES AND REGULATIONS PERTAINING TO HIS-

TORICAL AND ARCHAEOLOGICAL PROPERTIES.

On September 11, 1975, North Carolina filed with the Court

of Appeals an application for leave to adduce additional

evidence, pursuant to 16 U.S.C. sec. 8251 (b). This application

was made on the basis of a discovery by North Carolina on

August 31, 1975, that three archaeological surveys were carried

out in the New River valley in the 1960’s under contract with

Appalachian Power Company, that these surveys disclosed

that the area to be flooded is an extremely rich and important

archaeological repository, and that Appalachian Power Com-

pany suppressed the results of these studies and failed to bring

them to the attention of the Federal Power Commission. This

motion was considered by the Court of Appeals at oral argu-

ment. The Court of Appeals required only that the Federal

Power Commission order Appalachian to provide the necessary

time and funding for archaeological research, excavation and

salvage as a condition of the licensing. (Appendix, infra, p. 61) .

Petitioner submits that the response of the Court of Appeals

does not cure the clear cut violations of federal statutes and

regulations by the Commission as a result of the conduct of

Appalachian.

The National Environmental Policy Act requires that the

Commission use all practicable means to preserve our historic

and cultural heritage. 42 U.S.C. sec. 4331 (b).

By Executive Order No. 11593, 36 F.R. 8921 (May 13,

1971), the Commission is required to institute procedures to

insure that its programs “contribute to the preservation and

enhancement of non-federally owned sites, structures and ob-

jects of historical, architectural or archeaological significance.”

By its own regulations, 18 C.F.R. sec. 4.40(k) , the Commis-

sion requires that the license application contain “a description

of any historical or archaeological properties . . . eligible for

listing in the National Register which are or may be affected

by the project... .”

The Commission also has a duty under 16 U.S.C. sec.

469a-1, if it finds or is notified that its federally licensed

project “may cause irreparable loss or destruction of significant

scientific, prehistorical, historical, or archaeological data,” to

“notify the Secretary [of the Interior], in writing, and shall

provide the Secretary with appropriate information concern-

ing the project, program, or activity.” The Commission is

given the alternative by the statute either to request the

Secretary of the Interior to, or to proceed on its own to, under-

take the protection, preservation, and recovery of these items.

An examination of the Commission’s Opinion and Order

granting a license for the Modified Blue Ridge Project, the

license application, the final environmental impact statement,

and the applicant’s environmental impact statement discloses

that the only attention given to items of archaeological and

architectural significance are the mention of the proximity of

the Ripshin National Historic Landmark in the impact state-

ment (R. 11,156) and the condition in the license requiring

that the licensee consult with the Smithsonian Institution to

determine the extent of archaeological surveys and salvage

operations that may be necessary, with an amount not to

exceed $7500.00 being specified for this purpose (Appendix,

infra, p. 133-134) .

North Carolina’s newly discovered evidence was that there

were three archaeological surveys carried out in the New River

valley in the 1960’s by archaeologists Harvard Ayers and

Charlton Holland. (Appendix, infra, pp. 156-218) . These sur-

veys were only preliminary field work to determine whether

sites relating to activities of prehistoric cultures were present

within the project area. From a preliminary analysis of the

artifacts, projectile points, and pottery sherds found at these

sites, these experts concluded that the New River valley is one

of the most important archaeological areas in the Eastern

United States. Of particular significance are artifacts found in

the project area that make it possible to reconstruct aspects

of the “Hopewell Interaction System”, a long-distance trade

network that operated during the period 300 B.C._—700 A.D.,

linking societies of the southeastern and midwestern part of

the continent by means of the New River, the only waterway

which crosses the Appalachian mountain chain from east to

west. These cursory examinations of the area disclosed some

65 prehistoric sites, including camps, villages, rockshelters,

soapstone quarries, burial grounds, and in addition some 11

fish weirs.

Although both the Ayers and Holland surveys were com-

missioned by Appalachian Power Company, they were never

transmitted to the Federal Power Commission. They are not

a part of the FPC record. Paul Johnson, a project engineer for

Appalachian, stated that the surveys were kept secret and

were never transmilted to the Commission. (Appendix, infra,

p. 158). Because of this deception by Appalachian, the Com-

mission did not comply with 16 U.S.C. sec. 469a-1(a), and

did not give written notification to the Secretary of the In-

terior about the archaeological treasures which were threaten-

ed. The Secretary, like the petitioner, received his information

after the Commission made its licensing decision. Nevertheless,

the Secretary acted in a timely manner and undertook to

evaluate archaeological findings, and to make a cultural re-

search survey on properties of historical and architectural

significance in the project area. Copies of this preliminary work

of the Department of the Interior are set forth in the Appen-

dix, infra, pp. 218-261.

This work indicates that if Appalachian and the Commission

had complied with applicable laws and regulations, an abun-

dance of cultural resources would have been discovered and

disclosed in the environmental impact statement. A preliminary

reconnaissance survey resulted in the assessment that the en-

tire area to be flooded “appears to qualify for listing in the

National Register as a district because of its historic, cultural,

and architectural cohesiveness and because of its integrity and

lack of intrusions. The area embodies the distinctive character-

istics of the late 18th and 19th centuries rural life as exempli-

fied in the architecture, industry and rural isolation. In addi-

tion, a number (32) of the buildings appear to qualify in-

dividually for listing in the National Register. . . . The Field’s

Manufacturing Company may be of national significance.”

(Appendix, infra, p. 249). Field’s Manufacturing Company is

possibly a unique industrial complex in which some of the

old 19th century water-powered machinery remains. Cochran

Grist Mill on Dog Creek is a 19th century water-driven mill

and has one of about a half a dozen extant Fitz wheels. The

site of a spa and hotel at Healing Springs, source of historic-

ally important curative mineral waters, would also be in-

undated. Some 18th and early 19th century log houses were

also found. (Appendix, infra, pp. 249-252) .

North Carolina, following discovery of the surveys sup-

pressed by Appalachian, has initiated the process of nominat-

ing at least 18 prehistoric sites within the impoundment area

to the National Register of Historic Places. On the basis of

more adequate data, it is likely that a number of additional

historic sites would be discovered that would qualify for the

National Register.

In clear violation of 18 C.F.R. sec. 4.40(k), Appalachian

failed to furnish the Commission a description of historical

and archaeological properties eligible for listing in the National

properties that would qualify for the Register, but deliberately

kept them secret. Appalachian apparently did not undertake

even the most cursory examination of historical and architec-

tural properties, required by the same regulation, that neces-

sarily would have disclosed a number of other items that

should have been listed in the National Register. It would

be manifestly inequitable for Appalachian to profit by its de-

ception with regard to the archaeological findings. Although

the Federal Power Commission perhaps cannot be held equally

at fault with regard to this suppressed archaeological data,

the Commission certainly did not fulfill its responsibilities

under Executive Order No. 11593, requiring programs for the

preservation of obqects of historical and architectural signifi-

cance, by failing to require Appalachian to undertake even a

preliminary survey of this material.

Because Appalachian and the Commission failed either to

undertake or disclose the studies of archaeological, historical,

and architectural data, as required by the statutes and regula-

tions referred to in this part of the petition, the environ-

mental impact statement did not present information or dis-

cussion on this important subject. This is contrary to the

National Environmental Policy Act requirement that all prac-

ticable means be used to preserve our historic and cultural

heritage.

Had all of the relevant information been developed and

presented in the impact statement, it is entirely conceivable

that the Commission would have been compelled not to grant

the license, but to embrace the “no action” aiternative as the

only rational way of preserving the cultural treasures of the

New River valley. The impact statement could not serve its

statutory function in this instance, which is to insure that

“agency decision maker has before him and takes into proper

account all possible approaches to a particular project (includ-

ing total abandonment of the project) which would alter the

environmental impact and the cost-benefit balance.” Without

all relevant information before the decision maker, it is not

“likely that the most intelligent, optimally beneficial decision

will ultimately be made.” These procedures of NEPA, 42 U.S.C.

sec. 4332, are not discretionary, but must be rigorously enforced

by reviewing courts. Calvert Cliffs’ Coordinating Committee

v. The Atomic Energy Commission, 449 F.2d 1109, 1114-1115

(D.C. Cir. 1971). Accord, Environmental Defense Fund v.

Froehlke, 473 F.2d 346 (8th Cir. 1972); Environmental De-

fense Fund v. Corps of Engineers, 492 F.2d 1123 (5th Cir.

1974) ; Sierra Club v. Froehlke, 486 F.2d 946 (7th Cir. 1973).

The Court of Appeals’ requirement to give greater atten-

tion to the removal! of artifacts was not a sufficient remedy.

The procedural deficiencies in this instance can be cured only

by setting aside the license and ordering new hearings. As

correctly determined in Hudson River Fishermen's Association

v. Federal Power Commission, 498 F.2d 827 (2d Cir. 1974),

newly discovered material evidence (even after a license is

issued) requires additional hearings and a reconsideration of

the license, consistent with this Court’s decision in Udall v.

Federal Power Commission, 387 U.S. 428 (1967).

IV. IN HOLDING THAT THE FEDERAL POWER

COMMISSION'S CONSIDERATION OF THE IMPACT

OF ENERGY CONSERVATION MEASURES SUCH AS

PEAK LOAD PRICING AND REDUCED DEMAND

FACTORS ON THE NEED FOR THE PROJECT WAS

ADEQUATE, THE COURT OF APPEALS DISREGARD-

ED THE TEACHING OF THIS COURT IN UDALL V.

FPC, 387 US. 428 (1967), AS WELL AS THE DUTIES

IMPOSED UNDER THE NATIONAL ENVIRONMENTAL

POLICY ACT.

The Court of Appeals relied on the “rule of reason” doctrine

of Natural Resources Defense Council v. Morton, 148 US.

App. D.C. 5, 458 F.2d 827 (1972), to uphold the Federal

Power Commission's consideration of energy conservation

measures in relation to the need for this project, quoting the

FPC’s statement that:

Even if all U. 5S. consumers were to adopt stringent

conservation practices with respect to electricity, the de-

mand for electric power would continue to increase to

such an extent that all of the production of Blue Ridge

would be essential and, in fact, would meet only a small

part of the foreseen future need.

The Court of Appeals also cites the discussion of the FPC in

Opinion 698-A, denying petitioner's application for a rehearing,

in which the only study the FPC cites is its own 1970 National

Power Survey.

This holding is in irreconcilable conflict with this Court’s

decision in Udall v. Federal Power Commission, 387 US. 428

(1967) in which it is stated that the Federal Power Com-

mission’s obligation under section 10 (a) of the Federal Power

Act, 16 U.S.C. sec, 803(a), is to closely scrutinize changing

demand projections for the useful life of a proposed project.

This Court specifically rejected the “we can use all we can

produce even with conservation” argument advanced by the

FPC, stating that “we cannot assume that the Act commands

the immediate construction of as many projects as possible.”

387 US. at 449. The Court of Appeals’ implicit approval of

the FPC’s refusal to go beyond its 1970 demand study is also

in conflict with the Second Circuit's decision in Hudeon River

Fishermen's Association v. Federal Power Commission, 498

F.2d 827, 833 (2d Cir. 1974), wherein the court held the FPC

abused its discretion by “donning . . . complete blinders . . . to

a new situation” (new hearings compelled because of new

evidence of danger to fish through the operation of a licensed

project) .

The “new situation” on which petitioner seeks FPC’s recon-

sideration is the impact of the “energy crisis” and conservation

alternatives on the need for the project. The current “energy

crisis” not only produced, beginning in 1974, a pause in the

acceleration of demand for electricity, which had been in-

creasing at a steady rate of seven percent per year (Willrich,

The Electric Utility and the Energy Crisis Part II, Pub. Util.

Fort., January 6, 1975, at 26) , but also caused regulatory com-

missions and economists to examine ways of reducing demand

during that period of time when the rate of customer demand

is highest—at peak demand, or peak load.

Unrestrained peak-demand has been recognized as a major

problem:

Peak demand results in an inefficient allocation of re-

sources, increased pollution, and economic waste. In the

short run, peak demand requires the use of inefficient peak

load equipment, and expensive, greater polluting fuels. In

the longer run, it requires the plant to expand to meet

the peak load. Such expansion uses a great deal of land,

to create a facility which sits relatively idle at off-peak

times. Furthermore, the increased on-peak customer de-

mand means higher costs to the utility which if not ade-

quately compensated will engender requests for rate in-

creases before the state regulatory commission. — Note,

“Lexonomics and the Electrical Utility Jndustry: In

Search of the Optimal Rate Structure”, 61 Ja.L.Rev. 134,

136 (1975).

Time-differentiated rate design or “peak-load pricing” has

been recognized as a potential major energy conservation tool

because it creates the possibility of specifically ameliorating

peak-load demand:

The higher cost burden imposed by customer demands

for electricity at time of peak load would seem to be

amenable to price constraint. That is, the costs to the

utility of on-peak demand could be reduced by imposing

e rate which is high enough to restrain demand at the

system peak. At the very least, the rate imposed for peak

electricity consumption should be high enough to com-

pensate the utility for incurring the increased costs of peak

production. Although the cost-compensation function of

rate design has in the past been given primary focus, both

economists and an emerging cadre of regulatory com-

missions are recognizing that the demand-control function

is just as significant. Thus, rate design is beginning to be

considered as not simply a method of allocating costs

among the customers, and extracting revenues to cover

these costs, but also as a device for leveling off peak de-

mand by channelling scarce resources into their most

productive uses and by discouraging the wasteful use of

electricity. Id. at 136-137.

Several state regulatory commissions have already taken

steps to implement or study time differentiated rate design as

a conservation measure. A pplication of Madison Gas and Elec-

tric Co., Findings of Fact and Order, 2-U-7423 (Pub. Serv.

Comm. of Wis., August 8, 1974) ; Central Vt. Pub. Serv. Corp.,

Doc. No. 3744, at 27-28 (Vt. Pub. Serv. Bd. Sept. 27, 1974).

See Jones, Judicial Determination of Public Utility Rates: A

Critique, 54 B.U.L. Rev. 873 (1974).

These factors should have been relevant to the consideration

of the need for the Blue Ridge Project, which has very little

base load capacity and is almost totally intended to fulfill

system peak demand. This explains why Blue Ridge was li-

censed although it is a net user of electricity, as is shown by

the following table taken from the Environmental Impact

Statement, p. 17:

Energy Output Pumping Require-

MWII ments—M WIT

1975 4,100,000 5,500,000

1980 3,900,000 5,175,000

1985 3,250,000 4,255,000

1990 2,525,000 3,250,000

1995 1.800.000 2.175.000

The facility is thus predicated on the existence of a large

differential between peak demand and base demand; during

peak demand times, it will be generating electricity, whereas

during non-peak demand periods it will be using electricity

for pumping requirements. This in itself will lessen the differ-

ential between peak and non-peak demand, but only through

the device of allowing the utility to become a major con-

sumer—perhaps the major consumer—of its own output.

The Court of Appeals, in using the “rule of reason” doc-

trine to gloss over these issues and in holding that “Opinion

698-A contains a thorough discussion of the impact of energy

conservation on the nation’s energy needs in general and on

the need for the Blue Ridge Project. in particular’, mis-

applied this legal standard. The court committed the fallacy

of assuming that a pumped-storage project such as Blue Ridge

is equally efficient in meeting both peak-load demand and in-

crease in overall demand. The court fails to see the absurdity

of its claim that future increases in overall electrical energy

demand can be met by a project that consumes more power

than it produces. It is no answer at all to cite the FPC’s claim

(based on 1970 projections) that even with conservation

measures, all t!e power produced by Blue Ridge would be

essential since this fails to distinguish between the verv real

possibility of an increase in overall demand but a decrease in

peak-load demand caused by time-differentiated pricing. This

may totally remove any justification for the Blue Ridge

Project. The Court of Appeals’ decision on this issue holds the

FPC, in effect, to no standard at all in justifying the need for

future projects, and this cannot be reconciled with the statu-

tory duties imposed by NEPA or this Court’s holding in

Udall.

The Court of Appeals also justified its holding on this issue

on the ground that petitioner did not go into detail about

specific conservation measures in its petition for rehearing

(although the Court held that the energy conservation meas-

ures argument was raised with the degree of specificity nec-

essary to satisfy 16 U.S.C. sec. 825/(b)) and in such circum-

stances a summary discussion by the FPC was sufficient. This

is wholly untenable since it in effect puts petitioner and those

like it who are attempting to require agencies to consider pub-

lic interest factors, in the position of having to carry an ad-

versary burden. This is contrary to the idea expressed in

Scenic Hudson Preservation Conference v. Federal Power Com-

mission, 354 F.2d 608, 614 (2d Cir. 1965), cert. denied sub

nom Consolidated Edison Co. of New York v. Scenic Hudson

Preservation Conf., 384 U.S. 941 (1966), that the FPC in its

licensing process must act as a representative of the public

interest; it should not merely assume the role of umpire bland-

ly calling balls and strikes for adversaries appearing before it.

Accord: Udall v. Federal Power Commission, supra.

V. THE COURT OF APPEALS SHOULD HAVE RE-

VIEWED WHETHER THE FPC VIOLATED THE NA-

TIONAL ENVIRONMENTAL POLICY ACT BY FAILING

TO CONSIDER THE DESIGNATION OF THE NEW

RIVER AS A “FEDERAL SCENIC RIVER” AS AN AL-

TERNATIVE TO THE PROJECT SINCE PETITIONER

RAISED THIS OBJECTION IN ITS APPLICATION FOR

REHEARING BEFORE THE FPC.

The Court of Appeals refused to review the adequacy of the

FPC’s consideration of the New River as a “federal scenic

river” as an alternative under the National Environmental

Policy Act (NEPA), 42 US.C. sec. 4332 (2) (E), on the

ground that petitioner had not raised this issue in an applica-

tion for rehearing directed to the FPC as required by section

313(b) of the Federal Power Act, 16 U.S.C. sec. 8251 (b).

Thus the petitioner was completely deprived of a court deter-

mination of whether the FPC violated NEPA by attempting

to arbitrarily cut off study of the New as a federal scenic

river.

Petitioner's Petition for Rehearing of July 12, 1974, specific-

ally objected to the two findings of the FPC in its order grant-

ing the license that its procedures were in compliance with

NEPA and that the Final Environmental Impact Statement

complied with the requirements of NEPA. Under the circum-

stances, this should be, as a matter of law, sufficient objection

to satisfy section 313(b). First, the consideration of alterna-

tives is, of course, an important and specific legal duty imposed

upon federal agencies by NEPA. Second, as the FPC’s order

issuing the license makes perfectly clear, from the time of the

issuance of the license, there could be only one other possible

use-option for the resources of the New River—federal scenic

river status. The FPC in its order of June 14, 1974, took official

n ice of possible further study of the New as a scenic river

pursuant to legislation which at that time was pending in Con-

gress to designate the New River a subject of study as a

potential component of the National Wild and Scenic Rivers

System. The only concession the FPC made to this was to

delay the effective date of the license granted until January

2, 1975, unless otherwise delayed by judicial review. The Fed-

eral Power Commission thus not only gave Congress a dead-

line, but also completely ignored the possibility of a study of

the New triggered by a state application pursuant to 16 US.C.

sec. 1273 (a) (ii), preparation for which was already underway

before the FPC’s issuance of the license.

Petitioner also raised the scenic river study alternative in its

second petition for rehearing filed on January 27, 1975. This

petition was filed in response to the FPC’s Order of December

31, 1974, denying the petitioner’s motion filed with the FPC

on December 16, 1974, seeking a delay in the effective date of

the license until the Secretary of the Interior could complete

his then begun study of the New as a federal scenic river. In

the petition for rehearing of January 27, 1975, petitioner spe-

cifically pointed out to the FPC, as it had in its original mo-

tion, the duty to suspend the effective date of the license to

allow consideration of the scenic river alternative. This second

petition for rehearing was brought to the attention of the Court

of Appeals. Petitioner first filed a separate petition for review

in the Court of Appeals (State of North Carolina v. Federal

Power Commission, No. 75-411), and then filed a motion for

consolidation with the present case. The Court of Appeals not

only ignored the second petition for rehearing and the motion

for consolidation, but also, dismissed the appeal on the second

Federal Power Commission order as moot.

The case relied on by the Court of Appeals, Federal Power

Commission v. Colorado Interstate Gas Co., 348 US. 492

(1955), is inapposite. The teaching of that case is that the

Court of Appeals cannot sua sponte consider an objection. In

the present case, however, petitioner raised the objection in

two petitions for rehearing of two separate orders of the Fed-

eral Power Commission.

Moreover, the policy behind section 313(b) dictates that

the violation of NEPA issue should have been considered by

the Court of Appeals. This Court has stated that policy to be

that a party must exhaust his administrative remedies before

seeking judicial review and give the FPC an apportunity to

correct its errors. Federal Power Commission v. Colorado Intcr-

state Gas Co., supra, at 498-499. This policy was fulfilled

since FPC’s order issuing the license was clear in stating that

it would brook no further consideration of the scenic river

alternative (“we are persuaded that the Blue Ridge Project is

necessary now, and . . . we therefore hope it will not be de-

layed or foreclosed by Congressional action .. .” (Appendix,

infra, p. 136) .] In its second order of December 31, 1974, the

FPC also made it abundantlv clear that its refusal to consider

or wait for study of the New as a scenic river was final.

Ignoring the petitioner's concededly valid application for a

study of scenic river status for the New filed pursuant to 16

U.S.C. sec. 1273 (a) (ii), the FPC stated:

The 93rd Congress has adjourned without enacting legis-

lation that would foreclose or delay the Blue Ridge Project.

Accordingly, the license we granted on June 14, 1974 will

become effective on January 2, 1975, unless otherwise de-

layed by judicial review.

In accord: Indiana and Michigan Electric Co. v. Federal

Power Commission, 502 F.2d 336, 339-340 (D.C. Cir. 1974),

wherein it was held sufficient to overcome the sec. 313(b) bar

that the FPC declined to correct its alleged error and expressly

defended the validity of its position, although the petition for

rehearing did not explicitly raise the point involved.

Moreover, because of the impact on the public interest, it is

accepted law that the courts should not seek to narrowly con-

strue the scope of judicial review of FPC licenses. In Udall v.

Federal Power Commission, 387 U.S. 428, 450 (1967), this

Court stated:

A license under the Act empowers the licensee to con-

struct, for its own use and benefit, hydroelectric projects

utilizing the flow of navigable waters and thus, in effect,

to appropriate water resources from the public domain.

The grant of authority to the Commission to alienate fed-

eral water resources does not, of course, turn simply on

whether the project will be beneficial to the licensee. Nor

is the test solely whether the region will be able to use

the additional power. The test is whether the project

will be in the public interest. And that determination can

be made only after an exploration of all issues relevant

to the “public interest,” including future power demand

and supply, alternate sources of power, the public interest

in preserving reaches of wild rivers and wilderness areas,

the preservation of anadromous fish for commercial and

recreational purposes, and the protection of wildlife.

This Court mandated FPC consideration of the public in-

terest in preserving “wild rivers and wilderness areas”, although

petitioner apparently only made a general objection of the

failure of the FPC to consider the issue of federal development

of the waterway in question. 387 US. at 450-451.

Thus, in summary, although the section 313(b) bar may

be rigidly adhered to in the case of a private applicant for a

license who is attempting to flyspeck an FPC decision denying

a license, this section was never intended to deprive the

courts from reviewing the FPC’s consideration of public in-

terest factors upon application of a non-economic § petitioner

as in the present case.

CONCLUSION

For the reasons stated in part III of the petition, this pro-

ceeding should be remanded to the Federal Power Commis-

sion with the directions that it be dismissed as moot. Other-

wise, for the reasons stated in Parts I, IT, IV, and V, of the

petition, the petition for certiorari should be granted, the Court

of Appeals’ decision reversed, and this proceeding remanded

with directions that the license for the Modified Blue Ridge

Project be set aside.

Respectfully submitted, Norman B. Smith

Rufus L. Edmisten Smith, Patterson, Follin,

Attorney General of N. C. Curtis & James

Justice Building 704 Southeastern Building

Raleigh, N. C. 27602 Greensboro, N. C. 27401

Telephone: 919-829-3377 Telephone: 919-274-2992

Millard R. Rich, Jr. Thomas J. Schoenbaum

Assistant Attorney General Smith, Patterson, Follin,

of North Carolina Curtis & James

Justice Building 704 Southeastern Building

Raleigh, N. C. 27602 Greensboro, N. C. 27401

Telephone: 919-829-3377 Telephone: 919-274-2992

Counsel for Petitioner

APPENDIX

Notice: This opinion is subject to formal revision before publication in

the Federal Reporter or U. S. App. D. C. Reports. Users are requested to

notify the Clerk of any formal errors in order that corrections may be

made before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 74-1941

STATE OF NORTH CAROLINA, Petitioner

Vv.

FEDERAL POWER COMMISSION, Respondent

APPALACHIAN POWER COMPANY

COMMONWEALTH OF VIRGINIA

STATE OF WEST VIRGINIA, Intervenors

Petition for Review of an Order of the

Federal Power Commission

Argued October 23, 1975

Decided March 24, 1976

Millard R. Rich, Jr., Assistant Attorney General of the

State of North Carolina, Norman B. Smith and Thomas J.

Schoenbaum, with whom Rufus L. Edmisten, Attorney General

of the State of North Carolina, was on the brief for petitioner.

Steven A. Taube, Attorney, Federal Power Commission,

with whom Drezel D. Journey, General Counsel and John R.

Staffier, Attorney, Federal Power Commission, were on the

brief for respondent. George W. McHenry, Jr., Solicitor, Fed-

eral Power Commission at the time the record was filed also

entered an appearance for respondent. Alan Abbot Tuttle,

Solicitor, Federal Power Commission, entered an appearance

for respondent.

William J. Madden, Jr. with whom Donald K. Danker, was

on the brief for intervenor Appalachian Power Company.

James E. Ryan, Jr., Assistant Attorney General of the

Commonwealth of Virginia, for the intervenor, Commonwealth

of Virginia. Anthony F. Troy, also entered an appearance for

intervenor Commonwealth of Virginia.

Frank M. Ellison, Deputy Attorney General for the State

of West Virginia was on the brief for intervenor State of West

Virginia. Nicholas W. Johnson, also entered an appearance for

intervenor State of West Virginia.

Edmund I. Adama, filed a brief on behalf of the Committee

for New River et al. as amici curiae urging reversal.

Dan R. Murray, filed a brief on behalf of the Committee for

the Improvement of Alleghany et al. as amici curiae urging

affirmance.

Frederick E. Miller, Jr., filed a motion on behalf of West

Virginia Division of the Izaak Walton League, et al. for leave

to file a brief as amici curiae and the brief was filed.

Before: Bazelon, Chief Judge, Robinson and Robb, Circuit

Judges

Opinion for the Court filed by Circuit Judge Robb.

Robb, Circuit Judge: This is a petition by the State of

North Carolina to review an order of the Federal Power Com-

mission, granting the Appalachian Power Company a license

to build a hydroelectric project on the New River.

The New or New-Kanawha River rises in the Appalachian

Mountains of North Carolina and Tennessee and flows north

through southwestern Virginia and into West Virginia where

it becomes part of the main channel of the Kanawha River.

In 1962 Appalachian Power Company (Appalachian) sought

and received permission from the Federal Power Commission

to study the river as a potential site for a hydroelectric dam.

On the basis of this study, Appalachian in 1965 applied to the

FPC for a license to build a dam, to be known as the Blue

Ridge Project, on that part of the New River located in North

Carolina and Virginia. Hearings on the application commenced

in May 1967 and continued for two years.

In October 1969 the Administrative Law Judge (ALJ)

rendered a decision recommending the issuance of a license

for the Blue Ridge Project. The Project was to include a

650,000 acre-foot water storage capacity, the stored water to

be used for downstream water quality control. The states of

North Carolina and Virginia generally supported the project,

but objected to the ALJ’s recommendation that drawdowns

up to twelve feet in the level of the reservoir be permitted at

certain times of the vear. North Carolina also objected to the

use of stored water for downstream pollution dilution.

The Commission ordered further hearings before the ALJ

on the issues raised by the objections of North Carolina and

Virginia. After the hearings the ALJ issued a “Supplemental

Initial Decision” recommending the limitation of drawdowns

to ten feet and reducing the size of the releases permitted for

downstream pollution dilution. North Carolina and Virginia re-

peated their objections to the size of the permissible drawdowns

and North Carolina once again objected to the inclusion of

any storage capacity for downstream pollution control. The

two states sought and were granted perm/’ssion to argue be-

fore the Commission on their objections to the Supplemental

Initial Decision.

While the case was pending before the Commission the

decision came down in Greene County Planning Board v. FPC,

455 Fd 412 (2d Cir.), cert denied, 409 US. 849 (1972).

Under that decision the FPC is required by the National En-

vironmenta! Policy Act of 1970, 42 U.S.C. § 4321 et seq., to

prepare an environmental impact statement in advance of

a re eS ele ee --oeoo, ~ 2

hearings on a proposed project so that the statement may be

scrutinized in the course of the hearing. The FPC accordingly

remanded the Blue Ridge proposal to the ALJ for further

hearings, to afford an opportunity for cross-examination on the

impact statement. Prior to these hearings the State of North

Carolina withdrew its support of the Blue Ridge Project, cit-

ing potential adverse impact upon the land and way of life

of the people in the area near the proposed dam.

North Carolina participated in the hearings on the impact

statement and filed briefs which concerned themselves primar-

ily with the adequacy of the statement’s discussion of the

social and economic effects of the project. In January 1974

the ALJ issued a decision finding the impact statement ade-

quate and recommending the issuance of the license. On June

14, 1974 the FPC, in its Opinion No. 698, approved the Final

Decision of the ALJ and issued a license for the Blue Ridge

Project. The FPC postponed the effective date of the license

in view of pending legislation which would have designated

the New River as a wild and scenic river under the Wild and

Scenic Rivers Act, 16 U.S.C. § 1271 et seq. The proposed legis-

lation was not enacted by Congress.

On July 15, 1974 North Carolina and others petitioned the

FPC for a rehearing on its opinion granting the license, citing

several alleged errors in the opinion and in the FPC’s con-

sideration of the Project. The FPC on August 12, 1974 denied

the petition for rehearing. North Carolina then filed this peti-

tion for review.

Section 313(b) of the Federal Power Act, 16 U.S.C.

$ 825/(b), provides that any party aggrieved by an order

of the FPC may seek review in this court. The statute fur-

ther provides, however, that no objection to an order of the

FPC may be considered on review unless the same objection

was first raised in an application for rehearing directed to the

FPC. As the Supreme Court has stated, it is the purpose of

this provision to give the FPC notice of its alleged errors so

that it may have the opportunity to correct them. FPC v.

Colorado Interstate Gas Co., 348 US. 492, 500 (1955).

In its petition for review in this court North Carolina raised

the following issues:

(1) whether the FPC failed to consider the alternative of

energy conservation;

(2) whether the FPC had authorized inclusion in the

project of water storage capacity for pollution dilu-

tion;

(3) whether the FPC failed to analyze adequately cer-

tain costs of the Project;

(4) whether the FPC failed to consider as an alternative

to the Project the possibility that the river should be

made a component of the National Wild and Scenic

Rivers System.

North Carolina suggests that each of these arguments was’

raised with the necessary specificity in the petitions for rehear-

ing directed to the FPC. We disagree.

The specific issue of water storage for pollution dilution is

not foreshadowed by the evidentiary objection to Finding of

Fact 18 which states that the Project will provide benefits

such as flood control, low flow augmentation, recreational

development, fishing opportunities and water supply. Neither

are the references to the petitions of Alleghany and Ashe

Counties sufficient. Those petitions only question whether the

original smaller Project should have been reconsidered. No

reference is made in them to the allegedly illegal inclusion of

water storage for pollution dilution.

Similarly, Paragraph 4 of North Carolina’s petition for

rehearing simply attacks, in general terms, five of the Com-

mission’s findings of fact. These findings state that the Project

will provide desirable public benefits, will enhance the aesthetic

values of the area and that the Commission complied with

ee ee

aw ee em we ee

the provisions of the National Environmental Policy Act in the

licensing proceedings. The National Wild and Séenic Rivers

Act is not mentioned. Neither is the Act mentioned in the

petition of Ashe and Aileghany Counties. The portions of the

petition cited to us by North Carolina, while containing a

reference to the pendency in Congress of legislation pursuant

to the Act, do not state that the Commission failed to consider

designation of the New River as an alternative to the Project.

North Carolina contends that three of the specific issues

raised in its argument concerning consideration of costs and

benefits of the Project were also raised in the petitions for re-

hearing. These issues are (1) the purported consideration of

the gross benefits rather than the net benefits of the Project;

(2) the loss of natural stream flow due to the Project; and

(3) the cost of electricity to pump water from the lower

reservoir to the upper reservoir. None of these issues was spe-

cifically discussed in the petitions for rehearing.

North Carolina purports to have raised the “gross benefits”

issue in portions of its petition that deal with whether the

Project will be beneficial on balance. The cited part of the

Ashe and Alleghany Counties petition contains only a general

discussion of the need for the Project. The “loss of natural

stream flow” issue is said to have been raised in the same

parts of the petitions in which the Wild and Scenic River

alternative was raised. A reading of those passages referred to

shows that no such specific matter is raised. The same is true

of North Carolina’s argument concerning the cost of water

pumping. This issue is said to be subsumed in the discussion

of energy conservation as an alternative to the Project, but it

is not mentioned there. We think that section 313(b) of the

Federal Power Act requires something more concrete and spe-

cific than the vague references cited to us by North Carolina.

We think two issues were raised in the petitions for rehear-

ing with the degree of specificity necessary to call the FPC’s

attention to them or “stimulate [its] consideration of” them.

Indiana & Michigan Electric Co. v. FPC, 163 U.S. App. D.C.

334, 337, 502 F.2d 336, 339 (1974), cert. denied, 420 US. 946

(1975). The two issues are (1) the FPC’s alleged failure to

consider energy conservation measures as an alternative to

the Project and (2) the FPC’s alleged failure to give adequate

consideration to one of the social costs of the Project, specific-

ally the relocation of persons displaced by the Project. We

think however that North Carolina’s contention that these

issues were not adequately considered by the Commission is

without merit.

Section 102(2) (D) ef the National Environmental Policy

Act of 1970, 42 U.S.C. $ 4332 (2) (D) requires all agencies of

the federal government to “study, develop and describe appro-

priate alternatives to recommended courses of action in any

proposal which involves unresolved conflicts concerning alter-

native uses of available resources.” North Carolina argues that

the FPC failed to comply with this requirement of the Act in

that it failed to consider whether the adoption of energy con-

servation measures such as reduced consumption and “peak

pricing” would make unnecessary the power to be supplied by

the Blue Ridge Project. The argument does not persuade us.

The Commission staff’s final environmental impact statement

makes it clear that the FPC did consider this alternative. The

statement notes:

Even if all U. S. consumers were to adopt stringent con-

servation practices with respect to electricity, the demand

for electric power would continue to increase to such an

extent that all of the production of Blue Ridge would be

essential and, in fact, would meet only a small part of the

foreseen future need.

The Commission again discusses the matter of energy con-

servation in its Opinion No. 698-A, denying North Carolina's

application for rehearing. Opinion No. 698-A contains a thor-

ough discussion of the impact of energy conservation on the

nation’s energy needs in general and on the need for the Blue

Ridge Project in particular. The discussion makes it clear that

the consideration of the energy conservation alternative is

sufficient under the standard established by this court. in

Natural Resources Defense Council v. Morton 148 US. A

D.C. 5, 458 F.2d 827 (1972) : si. -

We reiterate that the discussion of environmental

effects of alternatives need not be exhaustive. What is

required is information sufficient to permit a reasoned

choice of alternatives so far as environmental aspects are

concerned.

eo 4 ©

. . the requirement in NEPA of discussion as to

reasonable alternatives does not require “crystal ball”

inquiry. ... The Statute must be construed in the light

of reason if it is not to demand what is, fairly speaking,

not meaningfully possible, given the obvious, that the

resources of energy and research—and time—available to

meet the Nation’s needs are not infinite. [Emphasis sup-

plied]. Id. at 14-15, 458 F.2d at 836-37.

A relatively brief discussion of an issue might not always

be sufficient to satisfy the “rule of reason” test laid down in

Natural Resources Defense Council v. Morton, supra. In the

present case, however, the parties raised only the most general-

ized concern about “conservation of energy” in their petitions

for rehearing and never specifically brought such matters as

“peak load pricing” to the Commission's attention. In these

circumstances the discussion of these issues by the Commis-

sion is sufficient.

North Carolina's second argument is that the FPC’s analysis

of the costs and benefits of the Blue Ridge Project is inade-

quate to show that the benefits exceed the costs. The specific

issue that North Carolina is permitted by section 313(b) of

the Federal Power Act, 16 US.C. § 8251 (b) , to raise in ihis

regard relates to the relocation of persons who will be dis-

possessed by the creation of the reservoirs adjacent to the Blue

Ridge Dam. North Caroli: 1 argues that the proviso attached

to Appalachian’s license by the Commission does not guarantee

that replacement housing will be provided.

The question here is not whether the FPC may require

guarantees of replacement housing; rather the question is

whether the FPC adequately considered the projected social

cost of the project. We think it clear that the Commission did

consider it thoroughly. The Final Environmental Impact State-

ment contains precise data concerning the numbers of persons

to be dispossessed; and recognizing the problem the FPC spe-

cifically provided in the license that Appalachian would carry

the burden of assisting in relocation under the continuing

scrutiny of the FPC and pursuant to the recommendations of

the Department of Housing and Urban Development. Thus

the license provides:

Article 55. The License shall establish a relocation ad-

visory service and give reasonable financial assistance to

assist in the relocation of persons now located in the

project area and to minimize any hardship to such per-

sons arsing from such relocation and, within six months of

the effective date of the license and annually thereafter

during the construction of the project, shall report to the

Commission on the success of its efforts. The provision of

the Uniform Relocation Assistance and Reel Property

Acquisition Policies Act of 1970 shall be used as a guide

to implement this article.

The Wild and Scenic Rivers Act provides two methods by

which a river may be included in the national wild and scenic

rivers system: (1) by Act of Congress, section 2(a) (i), 16

U.S.C. § 1273 (a) (i) and (2) by designation by the legislature

of the state through which the river flows followed by a de-

termination by the Secretary of the Interior, upon application

of the governor of the state, that the river meets the criteria

established by the Act, Section 2(a) (ii), 16 U.S.C. § 1273 (a)

(ii). Rivers designated by the state are to be administered

eee

by the state without expense to the United States. In section

3, 16 U.S.C. § 1274, Congress itself designates ten rivers as

components of the system; and in section 5(a), 16 US.C.

$ 1276 (a), Congress designates certain additional rivers “for

potential addition” to the system. Section 4, 16 U.S.C. § 1275,

directs the Secretary to study and the President to submit to

the Congress no later than October 2, 1978 reports on the suit-

ability for addition to the system of the rivers designated in

section 1276 (a) as potential additions.

Pursuant to 16 U.S.C. § 1273 (a) (ii), following designation

of the New River by the state legislature, the Governor of

North Carolina recommended to the Secretary of the Interior

on December 12, 1974 that the river be included in the national

wild and scenic rivers system. The petitioners contend that

section 1278(b) of the Act prohibits the Commission from

licensing the New Blue Ridge Project while the state’s recom-

mendation is being considered by the Secretary of the In-

terior.’ We are unable to agree.

1The pertinent part of 16 US.C. §1278(b) is:

§ 1278. Restrictions on water resources projects.

see @ &

(b) Construction projects on rivers designated for potential addition to

the system.

The Federal Power Commission shall not license the construction of

any dam, water conduit, reservoir, powerhouse, transmission line, or other

project works under the Federal Power Act, as amended, on or directly

affecting any river which is listed in section 1276(a) of this title, and no

department or agency of the United States shall assist by loan, grant,

license, or otherwise in the construction of any water resources project

that would have a direct and adverse effect on the values for which such

river might be designated, as determined by the Secre

for its study or approval— y tary responsible

(i) during the ten-year period following October 2, 1968, or for a

three complete fiscal year period following any Act of Congress desig-

nating any river for potential addition to the national wild and scenic

rivers system, whichever is later, unless, prior to the expiration of the

relevant period, the Secretary of the Interior and, where national forest

lands are involved, the Secretary of Agriculture, on the basis of study,

determine that such river should not be included in the national wild

and scenic rivers system and notify the Committees on Interior and

Insular Affairs of the United States Congress, in writing, including a

copy of the study upon which the determination was made, at least one

hundred and eighty days while Congress is in session prior to publish-

ing notice to that effect in the Federal Register: Provided, That if any

Act designating any river or rivers for potential addition to the national

The pertinent part of section 1278 (b), i.e. section 1278 (b)

(i) and (b) (ii) comprises one sentence of 384 words. The syn-

tax is poor, the language is confusing and at first glance may

seem inexplicable. Careful analysis however discloses the sense

of the verbiage. The entire sentence relates to those rivers

“listed in section 1276(a)” as potential additions to the sys-

tem. For a ten-year period following October 2, 1968 the Fed-

eral Power Commission is forbidden to license the construction

of any dam on such a designated river unless the Secretary has

determined that it should not be included in the system. If

the Secretary reports to the Congress his recommendations

concerning any river designated as a potential addition to the

system an additic al period of three years, beyond that speci-

fied, is allowed for congressional consideration of the report. If

a state, proceeding under section 1273 (a) (ii) , recommends to

the Secretary that any river designated as a potential addi-

tion by section 1276 (a) be included then the additional period

allowed for action by the Secretary is one year.

The New River is not one of those designated by Congress

in 16 U.S.C. $1274 as a component of the wild and scenic

rivers system. That section therefore offers no comfort to the

petitioners. Moreover the New River is not designated b- 16

U.S.C. §$ 1276 (a) as a potential addition to the syste: ace

in our view section 1278(b) applies to only those river: desig-

nated by section 1276 (a) it follows that section 1278 (b) does

wild and scenic rivers system provides a period for the study or studies

which exceeds such three complete fiscal year period the period provid-

ed for in such Act shall be substituted for the three complete fiscal

year period in the provisions of this clause (i); and

(ii) during such additional period thereafter as, in the case of any

river the report for which is submitted to the President and the Con-

gress, is necessary for congressional consideration thereof or, in the

case of any river recommended to the Secretary of the Interior for

inclusion in the national wild and scenic rivers system under section

1273(a)(ii) of this title, is necessary for the Secretary's consideration

thereof, which additional period, however, shall not exceed three years

in the first case and one year in the second.

(As amended Pub. L. 93-279, § 1(b)(3),(4), May 10, 1974, 88 Stat. 123: Pub.

L. 93-621, § l(c), Jan. 3, 1975, 88 Stat. 2096.)

————

en Ce te Ee tr ns

not prohibit the licensing of the New River project.”

After the briefs were filed in this case North Carolina filed

in this court a motion for leave to adduce additional evidence.

The motion represents that information to which North Caro-

lina and the FPC were previously denied access, but which

was in the possession of Appalachian, indicates that the New

River Valley is an archaeological site of great significance.

North Carolina urges that complete research, excavation and

salvage work should be undertaken and completed prior to the

inundation of the valley. Appalachian apparently concedes that

two or three years work will be required to complete the

archaeological excavation and salvage but states that sufficient

time will be available to complete the work if the license is

made effective immediately. Accordingly, whether it chooses

to make the license effective immediately or not, the FPC will

modify the license to require that Appalachian provide the

necessary time and funding for complete research, excavation

and salvage as a condition of licensing. As so modified, the

order of the FPC is affirmed. The stay order by this court

dated January 31, 1975 is vacated.

Affirmed.

2Our conclusion that Congress intended the protections of section 1278(b)

to apply only to those rivers listed in section 1276(a) finds support in the

legislative history of the National Wild and Scenic Rivers Act. In the

original House version of the Act it was contemplated that either a state

or the Secretary of the Interior could conduct the required study of a river

designated for potential inclusion in the national wild and scenic rivers

system. Section 1278(b) protection against “adverse Federal agency action”

was intended to apply to “the rivers listed in section (1276) which are being

studied by a State” to the same extent as those being studied by the Secre-

tary. H.R. Rep. No. 1623, 90th Cong., 2d Sess. 8 (1968). While the provision

allowing states to conduct studies on their own was modified in conference,

HR. Rep. No. 1917, 90th Cong., 2d Sess. 16 (1968) (conference), this is an-

other indication Congress intended section 1278(b) to apply only to rivers

listed in section 1276(a). Of course, states may recommend rivers other

than those listed in section 1276(a) for inclusion pursuant to section 1273

(a) (ii). They are protected under section 1278(a), but only after being

accepted by the Secretary.

UNITED STATES OF AMERICA

FEDERAL POWER COMMISSION

OPINION NO. 698

Appalachian Power Company ) Project No. 2317

OPINION AND ORDER

GRANTING A LICENSE FOR THE

MODIFIED BLUE RIDGE PROJECT

Issued: June 14, 1974

DC-45

I es ee,

UNITED STATES OF AMERICA

FEDERAL POWER COMMISSION

Appalachian Power Company ) Project No. 2317

OPINION NO. 698

APPEARANCES

A. Joseph Dowd, Thomas M. Debevoise, and William J.

Madden, Jr., for Appalachian Power Company.

R. F. Crouse and Edmund I. Adams for Ashe and Alleghany

Counties. North Carclina.

Wiliam T. Crisp for North Carolina Electric Membership

Corporation, Blue Ridge Electric Membership Corpora-

tion, and Harrison (County) Rural Electric Association.

Ted G. West for Blue Ridge Electric Membership Corporation.

Philip P. Ardery and James A. H. Ferguson for the City of

Danville, Virginia.

D. Gardiner Tyler for the Department of Conservation and

Economic Development, Commonwealth of Virginia.

Willian. C. Wise for Intervening Cooperatives.

Lynwood H. Wilson for Old Dominion Electric Cooperative

and Mechlenburg Electric Cooperative.

Curtis H. Bell for the Secretary of the Interior.

Joseph Swidler and William Harkaway for Sprague Electric

Co.

George A. Goodwyn, Millard R. Rich, Jr., Robert Morgan, and

Theodore S. Farfaglia for the State of North Carolina.

Willard W. Gatchell and Howard E. Wahrenbrock for Wash-

ington Mills Company.

Kenwood K. Harris for the Conservation Council of Virginia,

Inc.

Paul X. Bolt and Lorne R. Campbell for Grayson County,

Virginia.

Arnold L. Young for the Alleghany Farm Bureau and North

Carolina Farm Bureau.

Chauncey H. Browning, Jr. and Frank M. Ellison for the State

of West Virginia.

Paul J. Kaufman for the Congress for Appalachian Develop-

ment and the Appalachian Research and Defense Fund.

Andrew P. Miller, Francis C. Lee, James E. Ryan, Jr., and

D. Gardiner Tyler for the Commonwealth of Virginia.

Edward Berlin for the Conservation Council of Virginia, Inc.,

the West Virginia Natural Resources Council, Inc., and

the Izaak Walton League.

Michael B. Gross and Robert V. Zener for the Environmental

Protection Agency.

Gerald L. Chafin for the Izaak Walton League of America,

West Virginia Division.

Ira S. Latimer, Jr., for the West Virginia Department of

Natural Resources.

Gordon Ebersole for the Congress of Appalachian Develop-

ment.

Sidney Gambill for the Upper New River Development Asso-

ciation.

Raymond E. Hagenlock, Thomas E. Nelson, Sheldon L. Bier-

man, Daniel P. Behuniak, and Philip R. Telleen for the

Staff of the Federal Power Commission

UNITED STATES OF AMERICA

FEDERAL POWER COMMISSION

HISTORIC LANDMARKS; LICENSE (Major); NAVIGA-

BLE WATERS; PRESERVATION AND ENHANCEMENT

OF SCENIC ENVIRONMENT; PRIMARY TRANSMIS-

SION LINE; PUBLIC INTEREST; PUBLIC RECREA-

TION; RELIABILITY; WATER QUALITY.

Before Commissioners:

John N. Nassikas, Chairman;

Albert B. Brooke, Jr., Rush Moody, Jr.,

William L. Springer, and Don 3S. Smith.

Appalachian Power Company ) Project No. 2317

OPINION NO. 698

OPINION AND ORDER

GRANTING A LICENSE FOR THE

MODIFIED BLUE kIDGE PROJECT

(Issued June 14, 1974)

BROOKE, Commissioner:

The Appalachian Power Company (Appalachian) seeks a

license to build a combined conventional and pumped storage

hydroelectric project in the Blue Ridge Mountains of south-

western Virginia and northwestern North Carolina. By this

Opinion and Order, we grant the license for the project.

We do so following a proceeding that we regard as being

as noteworthy for its thoroughness as for its duration. A dozen

years ago the Appalachian Power Company first indicated

officially to us its interest in a Blue Ridge project. On June

20, 1962, Appalachian applied for a preliminary permit to

allow it to investigate locating a possible project in that area.

Subsequently, the preliminary permit was granted, and on

February 27, 1965, an application for a license was filed. In

the years since, a record of mountainous proportions has been

built. The Presiding Administrative Law Judge has conducted

many weeks of hearings and has issued three lengthy decisions.

Scores of experts have contributed testimony, and scores of

others—landowners and private citizens in the affected areas

and public officials—have been heard in public sessions before

the presiding officer or in oral argument before us. We have

permitted all interventions, although some were exceedingly

tardy. The Commission itself examined the site, on foot and

by automobile to the extent the terrain permitted, and other-

wise by air. Oral argument has twice been heard.

In short, we have before us a very extensive record, and that

record in our judgment is sufficient to permit our informed

judgment on all of the many issues presented by this case.

We are therefore prepared to act, and to act now. As we shall

explain, however, we shall delay the effective date of the

license herein granted until January 2, 1975, so that the 93d

Congress will have an opportunity to act upon legislation that

would affect the project.

We herein grant a license to the Appalachian Power Com-

pany to construct a combined conventional and pumped stor-

age hydroelectric project on the New River near Galax and

Independence, Virginia, and Sparta, North Carolina. The two

project reservoirs will lie in Grayson County, Virginia, and in

Ashe and Alleghany Counties, North Carolina. The latest esti-

mate of record shows that the combination project, known as

the Modified Blue Ridge Project, will cost approximately

$430 million. It will have an installed capacity of 1,800,000

kilowatts. Its purposes, in addition to the production of power,

are several. As will appear below, the project will provide need-

ed flood contro] capacity; it will markedly enhance the recrea-

tion potential of a portion of Appalachia, and in so doing will

be of benefit to the people in the crowded metropolitan areas

of much of the eastern United States; and it will encourage eco-

nomic development in the immediate area surrounding the

project, as well as provide water benefits downstream where

New River flows are periodically in need of augmentation.

In light of these several results, we find that the Modified

Blue Ridge Project meets the requirements of section 10 (a) of

the Federal Power Act. In the language of that section, “the

project .. . in the judgment of the Commission will be best

adapted to a comprehensive plan for improving and developing

a waterway or waterways .. .”. We also conclude that the

environmental consequences of this project will be both pro-

found and, on balance, beneficial. Inevitably so massive

a project as this will effect very substantial environmental

changes. These changes have been examined in this proceed-

ing in great detail. In our judgment, the environmental changes

associated with the project herein authorized will promote the

“productive and enjoyable harmony between man and his

environment” that the Nationa! Environmental Policy Act

articulates as a national goal. We find the project to be in the

public interest.

In the discussion that follows, we shall undertake first to

set forth some of the history of this proceeding (1), and then

to describe the Modified Blue Ridge Project that we herein

license (2). Thereafter we will discuss (3) the power benefits

of the project; (4) the recreation benefits that will be asso-

ciated with, and to some extent required, of the project, to-

gether with the related questions of shoreline control and draw-

downs; (5) the flood control benefits; (6) the questions of

water quality control and low flow augmentation; (7) the issue

of Federal development under section 7(b) of the Federal

Power Act; (8) the matter of State certification for water dis-

charges; (9) the question concerning the location of transmis-

sion lines; and (10) the questions raised by the City of Dan-

ville, Virginia, concerning its needs for Blue Ridge project pow-

er and concerning Appalachian’s alleged anti-competitive be-

havior. We will then turn to a discussion of environmental con-

siderations, both procedural and substantive (11). Thereafter

we will consider certain provisions of the license (12), and we

will finally dispose of a miscellany of remaining exceptions

(13) . The license itself commences at page 61.

(1) HISTORY OF THE PROCEEDING

In June, 1962, the Appalachian Power Company made ap-

plication to us for a two-year preliminary permit under sec-

tion 4(f) of the Federal Power Act, a section which has the

effect of affording to an applicant a priority for a license dur-

ing the time its investigations of a possible project are per-

formed. We granted the preliminary permit to our order of

March 11, 1968, 29 FPC 445. In that order we stated that

the portion of the New-Kanawha River proposed to be affect-

ed is a navigable water of the United States. We also explored

and disposed of the question whether the proposed site had

been authorized and, in effect, pre-empted for Federal develop-

ment. As to the later question, our order acknowledged that

the Appalachian project would occupy the site of the proposed

Federal Moores Ferry Project, such Moores Ferry Project be-

ing a part of a general, comprehensive plan for flood control

and other purposes in the Ohio River Basin. But we conclud-

ed that the Moores Ferry Project had not been selected and

approved for development by the United States Government,

and thus that our licensing jurisdiction continues.

Two years thereafter, on February 27, 1965, Appalachian

applied for a license for the Blue Ridge Project. The project

then applied for was substantially smaller than the Modified

Project that we herein authorize. The 1965 application con-

cerned a project estimated to cost $140 million; its installed

capacity would have been 980,000 kilowatts, rather than

1,800,000 kilowatts; its lower reservoir would have covered

2,850 acres, rather than the 12,390 acres of the Modified Proj-

ect; and its upper reservoir would have covered 16,600 acres,

rather than the 26,000 acres now foreseen. The application

also proposed the installation by Appalachian of power gen-

erating facilities at the existing Bluestone Reservoir, a project

of the Army Corps of Engineers lying 140 miles downstream

from the proposed lower reservoir. By order of March 8, 1966,

the Commission dismissed that portion of Appalachian’s ap-

plication, holding that the Congress had earlier authorized

Federal installation of power-generating facilities at Bluestone.

Although such installation was later deferred, we held that the

authorization remains. 35 FPC 359; rehearing denied, 35 FPC

669.

The project originally applied for would have been operated

to provide 25,000 acre-feet of storage for low-flow augmenta-

tion. In a petition to intervene filed in June, 1966 (and grant-

ed in July, 1966) , the Secretary of the Interior contended that

the project would require extensive modification if it were to

meet the section 10(a) requirement for being “best adapted

to a comprehensive plan”. Interior argued that in order to

meet the need for water quality contro] to alleviate down-

stream pollution, 500,000 acre-feet of storage, not 25,000 acre-

feet, were required.

Hearings commenced in May, 1967, and continued in Octo-

ber and November of that year. By that time the intervenors,

in addition to Interior, included the States of Virginia and

North Carolina and a group of REA cooperatives. (Two pri-

vate companies were also granted intervention, ‘ut each has

ceased to be an active participant. The two companies are the

Sprague Electric Company and the Washington Mills Com-

pany, each of whom maintains facilities on the New River that

they believed might suffer damage from the Appalachian

project, but each later came into agreement with Appalachian

as to protective measures.)

During the course of the 1967 hearings, it became clear that

if the project were operated so as to fulfill the water quality

control function then advocated by Interior, the recreational

and aesthetic values of the project would be greatly diminish-

ed. Drawdowns from the upper reservoir, foreseen as the prin-

cipal recreation area, of over 30 feet during the summer

recreation months, and over 40 feet at other times, would then

have occurred. The States understandably objected to this

destruction of some of the project’s principal values. There-

upon, toward the end of the 1967 hearings, the Commission

Staff suggested the modified plan#hereby the smaller _reser-

voirs of the original Blue Kidge Project were replaced by two

larger reservoirs. For the next several months Appalachian

studied all aspects of this alternative, and it ultimately con-

cluded that a Modified Blue Ridge Project was feasible. Appa-

lachian applied for the Modified Project in June, 1968. That

Modified Project, with additional changes we find necessary,

is the project licensed herein.

Hearings on the Modified Project were held in February,

1969. Thereafter we permitted intervention by the City of

Danville, Virginia, which sought, among other things, an owner-

ship interest in the project. Further hearings were held in June

and July, 1969, on the matters raised by Danville, and there

followed on October 1, 1969, the Examiner's Initial Decision. * /

In that 1969 decision, Presiding Judge William C. Levy con-

cluded that a license should be granted to Appalachian for

the Modified Project. That project, to be operated to provide

initially 400,000 and later 650,000 acre-feet of water quality

storage, and with its flood control, recreation, aesthetic and

power benefits, would, he said, represent the highest and best

use of the river reach. He found that the requirements of sec-

tion 10(a) of the Federal Power Act were met. Exceptions to

the Initial Decision thereafter filed indicated that in large

measure the Applicant, Interior and our Staff agreed. The

States of Virginia and North Carolina did not, objecting on a

number of grounds but principally on matters concerning water

quality control and drawdowns. Danville took exception to

all of the Presiding Judge’s conclusions relating to its concerns.

We granted oral argument, which was heard on February 2,

1970. During the oral argument the Attorney General of West

Virginia appeared and objected strenuously to the adverse

environmental effects the project allegedly would have upon

downstream reaches of the New River in West Virginia. He

then petitioned to intervene out of time, and we later granted

the petition. We also ordered the record reopened to permit

further testimony on “the effects of the Modified Blue Ridge

Project upon recreational aspects of the New River in West

Virginia”. Further hearings then occurred—in Beckley, West

Virginia, in July and in Washington in December, 1970. Fur-

ther interventions were also accorded to all who petitioned:

the Conservation Council of Virginia, the West Virginia Nat-

ural Resources Council, the Izaak Walton League (West Vir-

ginia Division), the Congress for Appalachian Development,

*/ The title “Examiner” was changed to “Administrative Law Judge” on

September 1, 1972. In general in this Opinion, the current terminology

(Le., “Presiding Administrative Law Judge”, or “Presiding Judge”, or

simply “Judge”), will be used, whether the event in question preceded

or succeeded September 1, 1972.

the Appalachian Research and Defense Fund, Inc., Grayson

County (Virginia), Ashe and Alleghany Counties (North

Carolina) , the Alleghany Farm Bureau and the North Caro-

lina Farm Bureau. Although it has not petitioned to intervene,

the Environmental Protection Agency (EPA) has been accord-

ed the status of an intervenor, inasmuch as the functions of

the Federal Water Quality Administration, formerly within the

responsibility of the Interior Department, are now within the

jurisdiction of EPA. Following the conclusion of hearings in

December, 1970, briefs and environmental statements were

filed and on June 21, 1971, Judge Levy’s Supplemental Initial

Decision was issued.

The Supplemental Initial Decision did not differ in many

particulars from its predecessor. The Presiding Judge stated,

The record in this remanded hearing reinforces the

earlier conclusion that the Modified Blue Ridge Project,

which emerged after six years of studies, investigations,

and hearings, represents the “maximum utilization of the

applicable reach of the New River sub-basin above Galax,

Virginia with optimum project benefits.” . . . The pro-

posed project provides comprehensive development of the

river reach with the maximum public benefits that can be

supported within the limits of economic feasibility, in-

cluding flood control, water quality storage, recreation,

pollution control, esthetics, fishery and power. (p. 5)

The Judge found that the environmental impact would be, on

balance, beneficial. But he did modify his earlier decision in two

important particulars: he lessened the downstream release rate,

and he lowered the limit on maximum drawdown of the upper

reservoir in 1985 and thereafter. The Judge’s proposed down-

stream release rate in his October, 1969 decision had been 4,000

cfs during July and 5,000 cfs at all other times; in June, 1971,

as urged by the Staff, he adopted 3,000 cfs for April through

October, and 5,000 cfs at all other times. As for the upper

reservoir drawdown, in his 1969 decision the Judge had adopted

i i

10 feet from June 1 through Labor Day and 12 feet at all other

times; in his 1971 decision he proposed 10 feet at all times after

1985. The Commonwealth of Virginia had earlier urged a limit

of 10 feet at all times.

The exceptions filed in August, 1971, indicated that Appa-

lachian and Interior continued generally to support the Presid-

ing Judge, and our Staff in most major respects did so as well.

The three intervening States of Virginia, North Carolina and

West Virginia continued to express misgivings, particularly in

the area of water quality control, and on this subject they

were joined by the conservation groups that have intervened

(the Conservation Council of Virginia, the West Virginia Nat-

ural Resources Council and the West Virginia Division of the

Izaak Walton League), by the intervening counties (Ashe,

Alleghany and Grayson) , and by the two Farm Bureaus (Alle-

ghany and North Carolina). The Congress for Appalachian

Development and the Appalachian Research and Defense

Fund, Inc., also excepted, arguing particularly that Federal

development of the Blue Ridge site had been insufficiently

explored.

We granted a second oral argument, held on November 11,

1971, at which ail of the above parties were heard. And follow-

ing public notice, the Chairman and all of the members of the

Commission at the time visited the project site on December

13, 1971. We explored the sites of both reservoirs, in part by

helicopter and in part from the ground; we viewed from the

air the sites of the proposed state parks; and we flew down-

stream, past the Claytor Reservoir and past Radford, Virginia,

to a point just downstream from the Federal Bluestone Dam

at Hinton, West Virginia.

While the case was pending before us for decision, important

litigation concerning the requirements of the National Environ-

mental Policy Act (NEPA) was proceeding through the courts.

In January, 1972 the Court of Appeals for the Second Circuit

held in Greene County Planning Board v. F.P.C., 455 F.2d 412

(1972), that NEPA requires that an environmental impact

statement be prepared by our Staff in advance of hearing, and

that such statement be “subject to the full scrutiny of the

hearing process”. On October 10, 1972, the Supreme Court

denied this Commission’s petition for a writ of certiorari.

F.P.C. v. Greene County Planning Board, 409 US. 849.

The Staff had prepared an environmental impact statement

in this case and had filed it on April 21, 1971, but because

hearings had been concluded in December, 1970, that state-

ment had not been subjected to cross-examination. In light of

the Greene County decision, we concluded that an opportunity

for cross-examination must be afforded to the parties to this

proceeding. By our order of November 2, 1972, we thus re-

manded the case yet again, “to permit the further examination

of environmental issues”, and “so that the requirements of the

Greene County decision can be met fully”. We afforded the

Staff an opportunity to modify its prior environmental state-

ment, if it chose.

Additional petitions to intervene followed our remand order,

and we granted ali of them, noting in our order of March 9,

1973, that even though a petition to intervene herein may be

deficient,

. we are disinclined to deny intervention in this pro-

ceeding to any petitioner that may have a genuine in-

terest in it. For our part, we think the public interest will

be best served in this case by our acting with special

generosity upon petitions to intervene. We have so acted

in this case in the past.

Intervention was accorded to Congressman Wilmer D. Mizell

of North Carolina, Mr. Sidney B. Gambill of Crumpler, North

Carolina, the Upper New River Valley Association, the New

River Chapter of the Daughters of the American Revolution,

the New River Chapter of the Izaak Walton League of

America, and Young’s Chapel Baptist Church.

We shall detail the procedures followed in connection with

environmental considerations more fully at a later point in this

Opinion. For purposes of this chronology, it is sufficient to

note that, following our remand order, the Presiding Adminis-

trative Law Judge promptly called a prehearing conference of

the parties, held November 21, 1972, to establish further pro-

cedures. Pursuant to them the Staff on January 23, 1973,

filed and circulated a revised Draft Environmental Impact

Statement; and, following the receipt of comments from parties,

agencies, organizations, and individuals, and following the

modification of the impact statement in light of such com-

ments, the Staff on June 18, 1973, filed and circulated its Final

Environmental Impact Statement (FEIS). That Statement

was admitted into evidence at the outset of the further hear-

ings, held on July 24 and 25, 1973, and the parties were then

afforded the opportunity to cross-examine Staff witnesses with

respect to it. All of the parties had been given until July 13,

1973, to file additional direct testimony for the remanded hear-

ings held later that month, but, except for the Final Environ-

mental Statement of our Staff, none did so. Following further

briefing, Presiding Judge Levy issued his third decision,

denominated Additional Supplemental Initial Decision, on

January 23, 1974.

In his third decision, the Administrative Law Judge again

recommends the licensing of the Blue Ridge project, but the

precise project that he now recommends differs in two major

particulars (and in numerous lesser particulars) from the one

he earlier endorsed. The Modified Blue Ridge Project that now

emerges—and which we license—is one without water quality

control storage, that very controversial issue having been

eliminated as a result of the determination by the Administra-

tor of the Environmental Protection Agency, pursuant to sec-

tion 102(b) (6) of the Federal Water Pollution Control Act,

that “no storage for regulation of streamflow for purposes of

water quality should be included in the Blue Ridge Power

Project”. As a result, the lower reservoir of the project has

been reduced in size. Further, the Administrative Law Judge

recommends that the drawdown of the upper reservoir never

exceed 10 feet. The delay in construction of the project has

resulted in a modification of Appalachian’s power needs at the

time that operations commence, so that this lesser drawdown—

greatly welcomed by most of the parties—is acceptable in

terms of project economics and power benefits.

The exceptions filed to this latest decision are fewer in num-

ber than on previous occasions, but they are no less critical.

The principal opponents of the Modified Project at this time

are the parties that represent those residing in the area of the

project: the State of North Carolina, Congressman Mizell of

North Carolina’s Fifth District, Ashe and Alleghany Counties

in North Carolina, Grayson County in Virginia, and, filing

jointly, the New River Chapters of the Izaak Walton League

and of the DAR, and the Upper New River Valley Association.

Exceptions to more limited aspects of the third decision have

also been filed by the Commonwealth of Virginia and the Staff.

Exceptions filed to the decisions of October 1, 1969, and June

21, 1971, of course remain live, to the extent that they are

directed to issues that themselves remain live, and we shall deal

with them below.

The license application has, we believe, been given not only

protracted, but ample consideration.

On the basis of this extensive record, we conclude that the

Modified Blue Ridge Proiect should be licensed — for the

reasons and on substantially the terms set forth by the Ad-

ministrative Law Judge in his decisio of October 1, 1969, as

modified by his further decisions of June 21, 197 1, and January

23, 1974. To the extent that the license provisions contained

in this Opinion vary in a material way from those contained

in the Administrative Law Judge's decision of Jan ary 23,

1974, we shall explain those changes and our reasons for them

in the pages that follow. As will also appear the effective date

of the license will be January 2, 1975. On that date the license

will be effective, unless an Act of Congress has intervened to

delay or foreclose the project.

(2) DESCRIPTION OF THE LICENSED PROJECT

The Modified Blue Ridge Project would be constructed on

the New River, in southwestern Virginia and northwestern

North Carolina. The New River is in fact very ancient, and

it is widely and rightly regarded as particularly scenic. It rises

in northwestern North Carolina near the Tennessee border,

and flows northeasterly into Virginia, crossing and recrossing

the state line. It is in this upper portion of the New River

that the project would be built. Near Radford, Virginia, the

course of the river turns to flow in a northwesterly direction

into West Virginia. The portion of the river in West Virginia

below the point where the Gauley River joins the main stream

is called the Kanawha River. The Kanawha River then flows

to its confluence with the Ohio River at Point Pleasant, West

Virginia.

The Modified Blue Ridge Project is a oe con-

sisting of an Upper Development, involving a 26,000-acre reser-

voir ae pest storage facilities, and a Lower Development,

with a 12,390-acre reservoir and conventional hydroelectric

facilities. In commenting upon this kind of project, our 1970

National Power Survey states,

Conventional hydroelectric developments use dams and

waterways to harness the energy of falling water in

streams to produce electric power. Pumped storage de-

velopments utilize the same principle for the generating

phase, but all or part of the water is made avilable for

repeated use by pumping it from a lower to an upper pool.

(p. I-7-1)

The ability to start quickly and make rapid changes in

power output makes hydroelectric plants particularly

well adapted for serving peak loads, and for frequency

control and spinning reserve duty. If operating at less

than full load, they are, in most cases, able to respond

very rapidly to sudden demands for increased power. Their

ability to supply starting power to steam-electric plants

following a major power failure has been demonstrated

on several occasions in recent years. (Ibid.)

A pumped storage plant has the same favorable operat-

ing characteristics as a conventional hydroelectric plant—

rapid start-up and loading, long life, low operating and

maintenance costs, and low outage rates. The ability of a

pumped storage plant to accept or reject large blocks of

load very quickly makes it much more flexible than a

steam-electric plant, either fossil-fueled or nuclear, in fol-

lowing the load fluctuations which occur on a minute-to-

minute basis in an electric system. This ability to follow

the changes in the system load so as to furnish a portion

of the peaking requirements permits more uniform and

efficient loading of the fossil-fueled and nuclear units. Also

by pumping in the off-peak hours, the plant factor of the

base load thermal units is improved, thus reducing severe

cycling of these units and improving their efficiency and

durability. (p. I-7-3)

Evidence in this proceeding amply supports the usefulness

from an operating standpoint of the particular pumped storage

project, with conventional hydroelectric facilities, herein pro-

posed by Appalachian. On occasions in the past we have

had the opportunity to explore the operating benefits, as well

as the environmental benefits, of pumped storage projects, and

we have concluded that such benefits are significant and

compelling. (See Scenic Hudson Preservation Conference v.

F.P.C., 354 F.2d 608 (1965) , cert. denied 384 US. 941 (1966) ;

453 F.2d 463 (1971) , cert. denied, 407 US. 926 (1972) .)

The Blue Ridge Upper Development would lie principally

in Grayson County, Virginia, with portions of the reservoir

extending into Ashe and Alleghany Counties, North Carolina.

A dam 300 feet high and 1,500 feet long would be built at

river mile $37.5 (with river mile zero at the Ohio River) , and ;

behind it, with the help of dikes, would lie a reservoir holding,

at its normal maximum elevation (2,652 feet) , 2,010,000 acre-

feet of water. The dam would be 1,100 feet thick at the base.

Of the reservoir surface, about 14,000 acres would lie in Vir-

ginia and about 12,000 acres in North Carolina. About 185

miles of the Upper Reservoir shoreline would lie in Virginia,

about 240 miles in North Carolina. Twenty-six islands would

be created by it.

Under the terms of the license that we herein grant, the

drawdown of the upper reservoir would at no time exceed 10

feet. Between the normal maximum elevation of the upper

reservoir of 2,652 feet, and the permitted drawdown level of

2,642 feet, usable storage for 245,000 acre-feet of water would

be provided. This water would be used for normal power opera-

tions and for spinning reserve capacity to meet emergencies.

Eight tunnels would convey the water to a powerhouse

located near ihe toe of the upper reservoir dam, where they

would connect with eight reversible pump-turbines. These

reversible

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.