Petition for Writ of Certiorari — PUD No. 1 of Jefferson Cty. v. Washington Dept. of Ecology

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IN THE

Supreme Court of the Huitep States

OCTOBER TERM, 1992

PUD No. 1 oF JEFFERSON COUNTY

AND THE CITY OF TACOMA,

Petitioners,

STATE OF WASHINGTON, DEPARTMENT OF ECOLOGY,

DEPARTMENT OF FISHERIES AND

DEPARTMENT OF WILDLIFE

Petition for a Writ of Certiorari to the

Supreme Court of the State of Washington

PETITION FOR A WRIT OF CERTIORARI

ALBERT R. MALANCA HOWARD E. SHAPIRO

KENNETH G. KIEFFER Counsel of Record

GORDON, THOMAS, MICHAEL A, SWIGER

HONEYWELL, MALANCA, GaRY D. BACHMAN

PETERSON & DAHEIM VAN NEss, FELDMAN & CURTIS

2200 First Interstate Plaza A Professional Corporation

1201 Pacific Avenue 1050 Thomas Jefferson St., N.W.

Tacoma, WA 98402 Seventh Floor

(206) 572-5050 Washington, D.C. 20007

WILLIAM J. BARKER (202) 298-1800

MARK L. BUBENIK Attorneys for Petitioners

3628 South 35th Street PUD No. 1 of Jefferson

P.O. Box 11007 County and the City of

Tacoma, WA 98411 Tacoma

(206) 593-8218

June 1, 1993

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON. D.C. 20001

QUESTIONS PRESENTED

1. Whether the State of Washington, Department of

Ecology, exceeded its authority under § 401 of the Clean

Water Act (“CWA”), by conditioning a water quality

certificate for a proposed hydroelectric project subject to

the Federal Power Act (“FPA”) on instream flows for

fish habitat that are concededly in excess of requirements

necessary for the protection of water quality?

2. Whether Congress intended § 401 of the CWA

to repeal the FPA’s reservation to the Federal Energy

Regulatory Commission of comprehensive responsibility

for determining in the FPA licensing process all relevant

fish and wildlife, and other environmental conditions ex-

cept those contained in state-issued water quality certifi-

cates pertaining to the abatement and control of the dis-

charge of pollutants?

(i)

TABLE OF CONTENTS

QUESTIONS PRESENTED ...00..........-ccccccccccocseceeeeeseeeens

STII sccrnisterccccenennssenessnsnessevnscsoescessasvensevseuses

crc enecnrtnennneensennsccnsetansenensessecssavessesee

EEE SEE IESE ED

A. Statutory and Regulatory Background ................

1. The Federal Power Act 2000000000000...

2. The Clean Water Act ...................0...0.0000.000..0....

a. The § 401 Certification Requirement........

b. The EPA’s Role in Establishing Water

Quality Standards for § 401 Certifica-

c. Washington’s Requirements Reineeten

Water Quality Standards and Stream

ESE

B. The Elkhorn Hydroelectric Project ........ Se

1. Administrative Action —.....................0-0...........

2. Judicial Proceedings .......0..........cccccccceceeeceee

a. Superior Court .........................::c0000.00.... ae

b. Washington Supreme Court .................

REASONS FOR GRANTING THE PETITION ..........

I. THIS COURT SHOULD RESOLVE THE IM-

PORTANT FEDERAL QUESTION CON-

CERNING THE SCOPE OF A STATE'S

CERTIFICATION AUTHORITY UNDER

§ 401 OF THE CLEAN WATER ACT ............ .

(iii)

crv wo @

TABLE OF CONTENTS—Continued

Il. STREAMFLOW QUANTITIES FOR FISH

HABITAT ARE NOT AUTHORIZED UNDER

§ 401 WATER QUALITY STANDARDS ..........

III. SECTION 401(d)’s PROVISION FOR CONDI-

TIONING WATER QUALITY CERTIFI-

CATES ON “ANY OTHER APPROPRIATE

REQUIREMENT OF STATE LAW” AU-

THORIZES ONLY STREAMFLOW CONDI-

TIONS APPROPRIATE TO THE WATER

QUALITY LIMITATIONS AND STANDARDS

ENUMERATED IN § 401 200s

IV. WASHINGTON’S EXPANSIVE READING

OF §401 WOULD SUBVERT THE FPA’S

COMPREHENSIVE LICENSING SCHEME...

CONCLUSION ......0......... saseastaneietens iamnagmntniaies snes

Page

TABLE OF AUTHORITIES

CASES Page

Arcadia v. Ohio Power Co., 498 U.S. 73, 111 S. Ct.

I 24

Arnold Irrig. Dist. v. Department of Envtl. Qual-

ity, 79 Or. App. 136, 717 P.2d 1274, review de-

nied, 301 Or. 765 (1986) . 26

Bangor Hydro-Electrie Co. v. ~ Board ‘of ‘Envt'l.

Protection, 595 A.2d 438 (Me. 1991) —............... 22

California v. FERC, 877 F.2d 743 (9th Cir.)

affirmed, 495 U.S. 490, 110 S.Ct. 2024 (1990). passim

City of Tacoma v. Taxpayers of Tacoma, 357 U.S.

A fa ee 29

Cleveland v. United States, 329 U.S. 14 ( 1946) . 24

deRham v. Diamond, 295 N.E.2d 763 (N.Y. 1973). 17

EPA v. California, 426 U.S. 200 (1976) ..... ..... 19, 25

Federal Maritime Comm'n v. Seatrain Lines, Inc.,

RSENS Mem eres aera mee eae 24

First lowa Hydro-Elec. Coop. v. FPC, 328 U.S. 152

(1946) . me

FPC v. Oregon, 349 US. 435 (1955) biateet ccaiidiialaiies 4,29

Georgia Pacific Corp. and Simpson Paper (Ver-

mont) Co. Inc., Vt. Sup. Ct. No. 91-530, Sep-

I eas 16

Hughey v. United States, 495 USS. 411, 110 S.Ct.

IE Ee Re er eee 24

International Paper Co. v. Ouellette, 479 U.S. 481

SCS eee ae ee ee “27

Keating v. FERC, 927 F.2d 616 (D.C. Cir. 1991). 14

Morton v. Mancari, 417 U.S. 525 (1974)... ae! 28

New England Power Co. v. New Hampshire, 455

U.S. 331 (1982) .

Niagara Mohawk Power Corp. 1 v. . New York State

Dept. of Env. Cons., 187 A.D. 2d 7, 592 N.Y.S.2d

FB FS EE 17, 22

Pacific Gas & Elec. Co. v. State Energy Resources

Conservation & Dev. Comm., 461 U.S. 190

(1983) _.... 29

Pennsylvania Dept. of Envtl. Resources v. City of

Harrisburg, 578 A.2d 563 (Pa. 1990) 17

TABLE OF AUTHORITIES—Continued

Page

In re Power Auth. v. Williams, 457 N.E. 2d 726

I I 17

Proffitt v. Rohm & Haas, 850 F.2d 1007 (3rd Cir.

1988) _........ oe ata Aad Se i Ie nn SE 14

Roosevelt Campobello Int'l. Park Comm’ nv. EPA,

684 F.2d 1041 (1st Cir. 1982) 000. 14

Simpson Paper (Vermont) Co. v. Department of

Envtl. Control, No. 92-1012 00000 3

Summit Hydropower v. Commissioner of Envtl.

Protection, CV91-050-26-43, 1992 Conn. Super.

LEXIS 2177, 1992 WL 175241 (Conn. Super.

FE ll ee 17

United States v. Marathon Dev. Corp., 867 F.2d

ff SE 14

Watt v. Alaska, 451 U.S. 259 (1981) 000000... 28

ADMINISTRATIVE DECISIONS

Carez Hydro, 52 FERC © 61,216 (1990) 6,17

Central Main Power Co., 52 FERC ‘ 61,033

EL Si i eA SN ADE SERENE ae 6, 14, 16

Rock Creek Ltd. Partnership, 38 FERC ‘ 61,240

rehearing denied, 41 FERC ‘ 61,198 (1987)... 11

Town of Summersville, 60 FERC © 61,291 (1992)

reh’g denied, 63 FERC { 61,087 (1993) .......... 6,17

STATUTES

Clean Water Act of 1977, P.L. 95-217, § 64, 91

I a 25

Water Quality Improvement Act of 1970, P.L. 91-

224, §21(b), 84 Stat. 108 20 24

Water Pollution Control Act Amendments of 1972,

P.L. 92-500, 86 Stat. 816 0. 25

Natural Gas Act, 15 U.S.C. §§ 717 et seq. (1988). 14

Federal Power Act, 16 U.S.C. §§ 791-828 (1988)

§ 4(e), 16 U.S.C. § 797(e) 8,4

§10(a) (1),16 U.S.C. § 808(a) (1)... aos 4

§ 10(j), 16 U.S.C. § 803(j) 0. ...5, 15, 29

§ 10(j) (2), 16 U.S.C. § 808(j) (2) 29

vii

TABLE OF AUTHORITIES—Continued

§ 15(a) (2)-(3), 16 U.S.C. § 808(a) (2)-(3) ..

§ 28(b), 16 U.S.C. § B17 0.2... nc ecceceeeceeeeeeee es

Clean Water Act (“CWA”), 33 U.S.C. § 1251-2623

(1988)

> 8 0 fC) aa

§ 101 (a), 38 U.S.C. § 1251 (a) ............................

§ 101(g), 33 U.S.C. 1251(g) ................. eas

§ 102(b) (6), 33 U.S.C. § 1252(b) (6) ..............

§ 301(b) (1) (C), 33 U.S.C. § 1311(b) (1) (C).

A xy

§ 303 (c) (2), 33 U.S.C. § 1313(c) (2) ................

§ 303(c) (2) (A), 33 U.S.C. § 1313(c) (2) (A)...

I, TI ns cnccsiensnsenenenocnnnnenneel

5 dk ce

ft 5 aaa

§ 401 (a), 33 U.S.C. § 1341 (a) ........ BBA LE

§ 401(a) (1),33 U.S.C. § 1341(a) (1) ......

§ 401(d), 33 U.S.C. § 1841 (d) 00...

I I vinrincnssncsnsenccsececercancssecneon

§ 502(6), 33 U.S.C. § 1862(6) 0. sl

§ §02(12), 33 U.S.C. § 13862(12) .... on

§ §02(16), 33 U.S.C. § 1862(16) _.....................

§ §502(19), 33 U.S.C. § 1362(19).~.......................

Lk en

REE ee

Wash. Rev. Code (“RCW”)

RCW 4.94.20 ........

RCW 35.9% .050 _....

RCW 35.92.280-310 = |

RCW’ 90.22.010 .......... ebenininniiensintnten recmnesiiinaniiaed :

2.) | EE nenne

RCW 90.54. "20(3) (a) .

Washingtu.. Administrative Code ( “WAC”)

WAC § 173-201 ‘a ) aa

WA © PTB GI]... ..200-ccceccccececesccccccrscceseccosesee

passim

7,18

viii ix

TABLE OF AUTHORITIES—-Continued TABLE OF AUTHORITIES—Continued

Page Page

WAC § 178-202-046 once eeeeceeceeeeeeeeeeeeeeeeees 8 Conf No. 830, 95th Cong., Ist Sess. at

WAC § 173-201-045(1) (a) and (b) (iii)... 8 wy > yraahematensedoentnnts wiheetaecalee 26

WAC § 173-201-045 (1) (0) o..----occceeosereree 8 Washington Pollution Control Hearings Board,

WAC § 173-201-080 (82) oe 8 Transcript, December 17, 1987 p. 72-78 .......... 15

REGULATIONS S. Conf. Rep. No. 1236, 92nd Cong., 2d Sess. at

ls | TY aes secicesidladies 5 138 (1972) aneananereamapreerepeanae--=-eragiaaaar “td CiaaT GEE 25

18 CFR § 4.38(a) .................. Breen aan 9 Special Supplement 1992 Edition, Hydrowire,

I fe | 5 BOG, BARE BIT .nncc.cecceveccesscecescscecscescccccssocnsosess 4, 16

18 CFR §§ 380.1-380.14 ee Si Coie ee | 5 52 Fed. Reg. 23,340, 23,342 ..................... yh Naataenleaia’ 9

18 CFR § 380.3(c) (1) ...... Wt’ DeLee oe te 5

40 CFR § 181.2 0000. ne AiR - PL ee —— >

40 CFR § 181.3(b) 000. RPE E ER ess OPE ee 8,19

a a itemise 19

ETRE an nena Ph ARTETA 7 7

40 CFR § 181.6(a) .............. eeSRc 6. £8 Ba ae iE oc os 7,19

SA ea ecient 19

FE EER a A a ®

ECE Ce eS ao 19

TE a Er 19

RET REE RN SEE ee eee 19

MISCELLANEOUS

Electronic Consumers Protection Act, Pub. L. No.

99-495, 100 Stat. 1243 (1986) 20000. 29

Electric Power Research Institute, Lessons

Learned in Hydro Relicensing (1984-1989):

Trends, Costs, and Recommendations 2-1 (May

RRR nna Et CRY SERS Sea ee <a 4

Federal Energy Regulatory Commission, Hydro-

electric Project Relicensing Handbook 1 (April

RSS MCCA Ry Save wen eo ee en 3

Federal Water Pollution Control Act Amendments

of 1972, H.R. Rep. No. 911, 92nd Cong., 2d Sess.

— RERUN Sas SS 25

Hydropower Disputes: A Battle of the Endan-

gered Salmon, Cogeneration & Resource Recov-

ery, May/June 1991 at 22 00. 3,4

Richard T. Hunt & Judith Mohsberg, Relicensing

Entanglements, Independent Energy, January

a I circa biennale enieatinn 4

IN THE

Siyrene Court of the United Siates

OCTOBER TERM, 1992

No.

PUD No. 1 OF JEFFERSON COUNTY

AND THE CITY OF TACOMA,

¥. Petitioners,

STATE OF WASHINGTON, DEPARTMENT OF ECOLOGY,

DEPARTMENT OF FISHERIES AND

DEPARTMENT OF WILDLIFE

Petition for a Writ of Certiorari to the

Supreme Court of the State of Washington

PETITION FOR A WRIT OF CERTIORARI

PUD No. 1 of Jefferson County and the City of

Tacoma (hereinafter, jointly, “Tacoma”) petition for a

writ of certiorari to review the judgment of the Supreme

Court of the State of Washington in this case.’

1PUD No. 1 of Jefferson County is a public utility district

organized under Wash. Rev. Code (“RCW”) 4.04.020. The City of

Tacoma operates a municipal electric system under RCW 35.92.050.

They are authorized to jointly construct, own and operate electric

utility properties by RCW 35.92.280-310.

OPINIONS BELOW

The opinion of the Supreme Court of the State of

Washington (“Washington Supreme Court”), No. 58272-6

filed April 1, 1993 (App. 3a), is reported at 121 Wash.

2d 179. The “Findings of Fact, Conclusions of Law and

Final Judgment” of the Superior Court of the State of

Washington in and for the County of Thurston (“Superior

Court’’) were filed on August 14, 1991 (App. 29a). The

Superior Court’s Memorandum Opinion was filed May 8,

1991 (App. 37a). The “Revised Final Findings of Fact,

Conclusions of Law and Order” of the State of Wash-

ington Pollution Control Hearings Board (“PCHB” or

“Board” ) were issued January 25, 1989 (App. 46a).

The PCHB’s “Order Granting Cross Motion For Sum-

mary Judgment” was issued April 10, 1987 (App. 74a)

and its “Order Denying Second Motion for Summary

Judgment” was issued December 9, 1987 (App. 70a).

The letter order of the State of Washington Department

of Ecology granting request for water quality certifica-

tion was issued June 11, 1986 (App. 82a). The deci-

sions of the Superior Court, the PCHB and the Depart-

ment of Ecology are unreported.

JURISDICTION

The opinion of the Supreme Court of Washington filed

on April 1, 1993 (App. 3a) became the decision termi-

nating review in that court, and therefore its judgment, on

April 21, 1993 (App. la). The jurisdiction of this Court

is invoked under 28 U.S.C. 1257.

STATUTES INVOLVED

Sections 301, 302, 303, 306, 307, 401 and 510 of the

Clean Water Act, also known as the Federal Water Pollu-

tion Control Act, 33 U.S.C. 1311, 1312, 1313, 1316,

1317, 1341 and 1370; and 4(e), 10(a)(1), 10(j) and

15(a)(2)-(3) of the Federal Power Act, 16 U.S.C.

797(e), 803(a)(1), 803(j) and 808(a)(2)-(3) are re-

produced at App. 86a-146a.

STATEMENT

This case involves a water quality certificate issued

by the State of Washington, Department of Ecology

under § 401 of the Clean Water Act, for Tacoma’s pro-

posed Elkhorn Hydroelectric Project on the Dosewallips

River in the State of Washington. The certificate pre-

scribes minimum streamflow quantities to be maintained

for fish habitat purposes. The Washington Supreme

Court rejected Tacoma’s contention that minimum stream-

flows for fish habitat must be determined under the com-

prehensive balancing process in Part I of the Federal

Power Act, not by state-imposed conditions under § 401

of the CWA.’

A. Statutory and Regulatory Background

1. The Federal Power Act

Under the FPA, FERC has exclusive authority | to

issue licenses for the vast majority of new and existing

hydroelectric projects. FPA §§ 4(e), 23(b), 16 U.S.C.

797(e), 817 (1988). This authority includes original

licenses of the kind sought by Tacoma, and license re-

newals, known as “new licenses,” which must be ob-

tained when an original license term expires. FPA § 15,

16 U.S.C. 808 (1988).°

2 A case presenting substantially similar issues is now pending

on petition for a writ of certiorari to the Supreme Court of

Vermont. Simpson Paper (Vermont) Co. v. Department of Envtl.

Control, No. 92-1012, order inviting the views of the United States

issued March 8, 1993.

3 Between 1991 and the year 2000, FERC anticipates the re-

licensing of about 320 hydropower projects, or fully 17 percent of

the facilities currently under its jurisdiction. Federal Energy

Regulatory Commission, Hydroelectric Project Relicensing Hand-

book 1 (April 1990); Hydropower Disputes: A Battle of the

Q The FPA requires that projects licensed by FERC be

best adapted to a comprehensive plan” for improving or

developing the waterway, taking into account such poten-

tially competing factors as the need for the project's

power, energy conservation, navigation, irrigation, flood

control, water supply, fish and wildlife protection rec-

reational opportunities, and other aspects of enviorn-

mental quality. FPA §§ 4(e), 10

797(e), 803(a)(1) (1988), 18 USC

Congress’ intent in enacting the Federal Wa

Act of 1920, the FPA’s predecessor statute, noe —.

cure a comprehensive development of national resources”

First lowa Hydro-Elec. Coop. v. FPC, 328 US. 152

181 (1946). The Court has observed that the key to

that rational development is centralization of licensing

authority in one federal administrative body which would

— a consistent and comprehensive planning role.

- at 164, 182. Absent an express and exceptional

delegation to the States of authority to impose require-

ments on this process, FERC’s pervasive jurisdiction over

the licensing of hydroelectric projects is exclusive. FPC

v. Oregon, 349 U.S. 435, 446 ( 1955).* These principles

recently were reconfirmed in California v. FERC, 495

US. 490, 110 S. Ct. 2024 (1990). ,

aoe are Cogeneration & Resource Recovery, May/June

. , “More than half of these lice i ire i

1993."). Between 1990 and 1993 we ty yell

93 alone, the licenses f

oe plants are due to expire, representing peg mod

ate — ee capacity. Electric Power Research

. ons Learn in Hydro Relicensing (1984-19

-1989):

aoe pend = Aeraatnggremtee 2-1 (May 1991); Richard :

rs) rg, Relicensing Entanglements Ind

pe January 1991, at 48. Most of these are the eer as

a . ons now pending at FERC. Special Supplement 1992 Edi-

ton, Hydrowire, §§ 7-9, August 1992.

* The state water quality certificate

authority def i

of the CWA is an example of such a delegation. pit an

Before issuing a license under the FPA, FERC must

weigh potential environmental impacts of a proposed

projector, in the case of a license renewal, impacts of

continued operation. FERC assesses potential impacts

on water quality, fish, wildlife and botanical resources,

historic and archeological resources, recreational re-

sources, land management, and aesthetics.” Under

§ 10(j) of the FPA, 16 U.S.C. 803(j), FERC must

include in licenses conditions for the protection and en-

hancement of fish and wildlife, and must adopt conditions

recommended by federal and state fish and wildlife agen-

cies, unless it expressly finds those recommendations to

be inconsistent with the purposes and requirements of ihe

FPA or other provisions of applicable law.

2. The Clean Water Act

a. The § 401 Certification Requirement. Section 401

(a)(1) of the CWA, 33 U.S.C. 1341(a)(1) (1988),

requires an applicant for a federal license or permit for

any activity which may result in a discharge into naviga-

ble waters of the United States to obtain a certification

(or waiver thereof) from the state in which the discharge

originates. The state must certify that the discharge will

comply with applicable sections of the CWA specifically

enumerated in § 401(a). Each of the enumerated sec-

tions addresses discharges of pollutants. Section 301 con-

cerns effluent limitations; it makes unlawful the discharge

of any pollutant except in compliance with specified pro-

visions of the CWA. Section 301(b)(1)(C) requires,

inter alia, achievement of limitations established under

federal law, including CWA water quality standards, and

limitations established under state law no less stringent

than federal requirements (as authorized by § 510). Sec-

tion 302 sets standards for effluent limitations. Section

518 C.F.R. 380.1-380.14 (1992). The types of information FERC

must consider are set forth in FERC’s regulations establishing

requirements for license applications. 18 C.F.R. Parts 4, 16. See

18 C.F.R. 380.3(c) (1).

303 governs state water quality standards and imple-

mentation plans. Section 306 prescribes national stand-

ards of performance for the control of discharges. Sec-

tion 307 sets effluent pretreatment standards and pro-

hibits the discharge of certain effluents.

Section 401(d) of the CWA, 33 U.S.C. 1341(d)

(1988), authorizes states to condition water quality cer-

tificates issued pursuant to § 401(a)(1) on specified

water quality factors. It directs that state certifications

shall impose limitations and monitoring requirements nec-

essary to ensure compliance with:

any applicable effluent limitations and other limita-

tions, under section [301] or [302] of this title,

standard of performance under section [306] of this

title, or prohibition, effluent standard, or pretreat-

ment standard under section [307] of this title, and

with any other appropriate requirement of State law

set forth in such certification. . . .

By operation of § 301(b)(1)(C), water quality stand-

ards under CWA § 303 are incorporated into § 401(d).

Any limitations and conditions included by the state in

the certificate, including those based on other State re-

quirements appropriate to § 401, then become conditions

on the FERC license or other federal permit for the

activity. FERC has ruled that it has no authority to

reject or revise conditions in a state water quality certifi-

cation, even if such conditions are outside the scope of

§ 401, because only the state courts may review such

certifications.°

b. The EPA’s Role in Establishing Water Quality

Standards for § 40] Certifications. Section 401 (a) ex-

*Town of Summersville, 60 FERC 61,291 at 61,990 (1992),

reh’g denied, 63 FERC ‘ 61,037 (1933) ; Carex Hydro, 62 FERC

61,216 at 61,770-771 (1990) ; Central Maine Power Co., 52 FERC

f 61,083 at 61,172 (1990),

; i

pressly includes § 303.' Section 303 requires a state

establish waier quality standards to be approved by the

United States Environmental Protection Agency (“EPA”).

Under EPA regulations, state water quality —

have as their purpose “to protect public health or wel-

fare, enhance the quality of water and serve the ~yamery

of the Clean Water Act... .,” which include water 4

ity for the protection and propagation of fish. 40 C A

131.2 (1992). Pursuant to CWA § 303(c)(2)(A), z

U.S.C. 1313(c)(2)(A), the regulations provide t .

“(a] water quality standard defines the water quality r $

of a water body, or portion thereof, by designating the

use or uses to be made of the water and by setting criteria

necessary to protect the uses.” 40 CFR 131.2 (1992).

Section 303(c)(2)(A) and the regulation result in a two-

step format for state water quality standards. The =

step requires the state to designate the uses desired or

a particular body of water. The second step involves

establishment of “criteria”—objective, scientifically ascer-

tainable standards—the implementation of which should

ensure attainment of water quality sufficient to achieve

and protect the designated uses.

“step regulation, 40 CFR 131.6(a) (1992),

tom : ion . bait for EPA approval water quality

standards which establish “use designations” pursuant to

CWA § 303(c)(2). The second-step regulation, 40 CFR

131.6(c) (1992), directs that the state's standards must

include “[wJater quality criteria sufficient to protect the

designated uses.” The criteria are defined as elements

of State water quality standards, expressed as constituent

concentrations, levels, or narrative statements, represent-

ing a quality of water that supports a particular use.

When criteria are met, water quality will generally pro-

Section includes it because

, 401(d) does not enumerate § 303, but inc

§$ 401(d) requires compliance with § 301, which in turn incorporates

water quality standards under the CWA through the provisions

of §301(b) (1) (C).

tect the designated use.” 40 CFR 131.3(b) (1992).

These criteria must be s.pyorted by information sufficient

to ensure the “adequacy of the scientific basis of the

standards.” 40 CFR 131.6(f) (1992).

c. Washington's Requirements Concerning Water

Quality Standards and Streamflows. The Department

of Ecology administers the State of Washington's pro-

grams under the federal CWA, and decides whether to

grant, grant with conditions or deny § 401 certifications.

RCW 90.48.260 (Supp. 1992). In accordance with

CWA § 303 and RCW 90.48.260, the Department has

established “water quality standards for surface waters

for the State of Washington”. WAC Ch. 173-201."

The standards comply with EPA’s requirements con-

cerning the scope and structure of state water quality

standards under § 303. They classify Washington’s

waters into use and criteria classes. WAC 173-201-045.

Class AA waters are deemed to be “extraordinary” be-

cause they “markedly and uniformly exceed the require-

ments for all or substantially all uses,” including, but not

limited to, “fish migration, rearing, spawning and harvest-

ing”. WAC 173-201-045(1)(a) and (b) (iii).

The Dosewallips River is an unappropriated perennial

stream with populations of steelhead trout, and coho and

chinook salmon (App. 4a, 31a, 48a). It and its tribu-

taries are classified as Class AA. WAC 173-201-080

(32). Class AA waters are also subject to specific water

quality criteria which define values for ascertainable fac-

tors such as fecal coliform organisms, dissolved oxygen,

dissolved gas, temperature, pH, turbidity, and toxic, radio-

active or deleterious material. /Jd.; WAC 173-201-045

(1)(c).

By separate statute, Washington also requires that

perennial streams “shall be retained with base flows nec-

® The Washington Administrative Code (“WAC”) is a compilation

of administrative regulations.

i i ildlife, fish, scenic,

ssary to provide for preservation of wi , ‘

end acsthatle and other environmental values, and navi

gational values.” RCW 90.54.020(3) (a).

B. The Elkhorn Hydroelectric Project

The Elkhorn Hydroelectric Project is a new facility

which the City of Tacoma proposes to construct on the

Dosewallips. It would operate in a run-of-river ~_* ’

i.e., it would divert, but not impound water (App. 4a,

31a, 75a). The project would consist of a low (10-foot)

diversion weir in the river, a 9-foot diameter tunnel run-

ning 1.2 miles downstream and a powerhouse ne

two hydro-powered generating units rated at 8.9 MW

4.4 MW at a head of 295 feet. The project would divert

some 50 to 600 cubic feet per second (“cfs”) from the

river flow, depending on seasonal flows. 52 Fed. Reg.

23342 (June 19, 1987).

The area between the diversion portal and the project's

tailrace (where diverted waters return to the river) Is

known as the bypass reach. This reach would be located

in a canyon. Several fish species populate the reach. The

river’s flows down the five percent gradient of the pro-

posed reach are fed by snowmelt and glacial runoff that

turn the reach segment into a torrent of cascading water,

except during low flow periods in August, September and

October (App. 61a).

On March 18, 1986, Tacoma applied to the FERC for

an original major project license. Notice of the applica-

tion was published on June 19, 1987. ‘52 Fed. Reg.

23340, 23342. As part of the federal application a.

Tacoma consulted with the Washington Departments 0

Ecology, Fisheries and Wildlife, the interested federal

agencies (U.S. Fish and Wildlife Service and the National

Marine Fisheries Service), and an Indian tribal organiza-

tion, the Point No Point Treaty Council. 18 C.F.R. es

(a). Processing of Tacoma’s application at the FER

has been delayed pending final resolution of the disputed

streamflow conditions in the state § 401 certificate at

issue.

C. Proceedings Below

1. Administrative Action

In preparing to file its license application with FERC,

Tacoma considered water quantity issues affecting fish

habitat in the by-pass reach. Tacoma accepted the rec-

ommendation of the agencies and tribes that it undertake

an instream flow study using the Instream Flow Incre-

mental Method (IFIM).’ On the basis of the study,

Tacoma proposed base flows ranging between 65 and 155

cfs. The interested state and federal agencies and tribes

recommended minimum flows between 100 and 200 cfs,

depending on the month (App. 5a). Tacoma also applied

to the state for a § 401 certificate. The Department of

Ecology granted Tacoma’s water quality certification re-

quest by a letter order dated June 11, 1986 (App. 82a).

It imposed the flow quantities recommended by the agen-

cies and tribes, although it expressly ruled that such quan-

tities were not required to maintain water quality in the

bypass reach.” It explained:

While these flows are in excess of those required to

maintain water quality in the bypass region, they

are the flows recommend [sic] by the resource agen-

cies and tribes for maintaining sufficient flows for

the fishery resource. They are included herein as a

matter of cooperation with these other agencies

(App. 83a-84a).

®IFIM uses a computer modeling study “to determine ‘weighted

usable area’ in a given length of river when flows are varied. The

weighted usable area is an indicator of fish habitat and hence fish

production” (App. 49a).

1 A Washington statute, RCW 90.22.010 (Supp. 1992), requires

the Department of Ecology to establish flows to protect fish and

wildlife when requested to do so by the State departments of fish

or wildlife, or when it determines that such flows are necessary

to preserve water quality. It is not an EPA-approved water quality

standard.

In addition, the certification imposed discharge condi-

tions specifically related to construction of the project,

and a requirement that Tacoma obtain a state water

right permit prior to commencing construction (App. 84a).

Tacoma appealed the letter order to the PCHB. It

moved the Board to grant it summary judgment on the

ground that the base flow quantities were not justified by

water quality standards or effluent limitations under the

Clean Water Act. The Department of Ecology did not

take issue with this (App. 77a). The Board concluded

that the flow quantities were “not supported by, nor

intended to be supported by, water quality standards”

(App. 78a). It ruled, however, “that a Section 401 water

quality certificate may include limitations to enforce all

water quality—telated statutes and rules including, but

not limited to, water quality standards.” (App. 79a).

The Board subsequently denied Tacoma’s second motion

for summary judgment, which contended that the state-

imposed flow quantities were preempted by the FPA

(App. 70a)."

The Board then conducted an evidentiary hearing. It

concluded that the Department of Ecology's streamflow

quantities were intended to be the optimum flows for the

purpose of enhancing the fishery, and that such flows did

not satisfy provisions of state law requiring a balancing

of competing beneficial uses (App. 70a). It vacated the

§ 401 certificate and remanded with directions that a

new certificate be issued containing Tacoma’s recom-

mended base flow quantities.

2. Judicial Proceedings

a. Superior Court. The State of Washington Depart-

ments of Ecology, Fisheries and Wildlife petitioned the

Superior Court for review of the PCHB ruling. In a

1 Tacoma cited Rock Creek Ltd. Partnership, 38 FERC { 61,240,

rehearing denied, 41 FERC © 61,198 (1987), affirmed, California v.

FERC, 877 F.2d 743 (9th Cir. 1989) affirmed, 495 U.S. 490, 110

S.Ct. 2024 (1990).

May 8, 1991 memorandum opinion, the court held that

because FERC had made no determination as to the

appropriate instream flow, California v. FERC (supra

n.11) was inapplicable (App. 37a). The court then

entered formal Findings of Fact, Conclusions of Law

and Final Judgment (App. 29a). It affirmed the PCHB’s

decision that the minimum flow condition required by the

Department of Ecology was not preempted by federal

law, reversed the Board’s ruling that the Department’s

minimum flow regime was an enhancement under state

law, and reversed the Board’s conclusion that state law

does not permit an enhancement flow condition in the

circumstances (App. 35a).

b. Washington Supreme Court. The Supreme Court

of Washington granted Tacoma’s motion for direct review

and affirmed the Superior Court’s judgment. (App. 5a,

28a). It held that the streamflow conditions in the § 401

certificate were necessary to assure compliance with the

State’s water quality standards because those standards

prohibit degradation of the state’s waters and particularly

degradation of fish habitat and spawning in the Class

AA Dosewallips (App. 7a-8a). Citing the definition of

pollution in the CWA,” the court also held that “man-

induced alteration of streamflow level is ‘pollution’ ”

(App. 8a). Finally, the court rejected Tacoma’s con-

tention “that water quality standards are limited to pol-

lution and discharges, as opposed to streamflow levels”

(App. 9a). It invoked precedents from other states hold-

ing that designated uses, including fish habitat, are an

integral part of water quality standards (App. 8a-10a).

12 “The term ‘pollution’ means the man-made or man-induced alter-

ation of the chemical, physical, biological, and radiological integrity

of water.” 33 U.S.C. 13862(19).

13 The court cited a letter written to the FERC by an assistant

administrator of the EPA to the effect that “ ‘[p]rotection of water

quality involves far more than just addressing chemistry .. .

relevant water quality issues include the diversity and compensation

of the aquatic species .. . [and] habitat loss... .’” (App. 8a).

In addition, the court held that application of RCW

90.54.020(3)(a) (Supp. 1992), requiring retention of

base flows in perennial streams necessary to preserve fish

and wildlife, was authorized by CWA § 401(d)’s pro-

vision permitting states to condition water quality cer-

tificates on “any other appropriate requirement of State

law” (App. 10a-14a). The court rejected Tacoma’s

contention that this phrase refers only to water quality

standards. The court observed that § 401(d) expressly

lists $§ 301, 302, 306 and 307 of the CWA as sources

for the limitations in § 401 certificates, but that § 303

relating to water quality standards, is not expressly listed.

It then concluded that Congress must have intended the

phrase “any other appropriate requirement of State law”

to refer broadly to all state water quality-related laws,

not just to § 303 state water quality standards (App. 13a).

The court also rejected Tacoma’s contention that the

FPA preempted the streamflow conditions in the § 401

certificate (App. 14a-22a). Finally, it held that the

Department of Ecology’s instream flows were not an

enhancement of the fishery in the Dosewallips (App.

22a-27a).

REASONS FOR GRANTING THE PETITION

I. THIS COURT SHOULD RESOLVE THE IMPOR-

TANT FEDERAL QUESTION CONCERNING THE

SCOPE OF A STATE’S CERTIFICATION AUTHOR-

ITY UNDER § 401 OF THE CLEAN WATER ACT

This case involves another attempt by a state to extend

the carefully defined water quality certification authority

delegated to the states by § 401 of the CWA. The

certificate imposes stream flow quantities on operation

of a hydroelectric project that is subject to comprehensive

licensing and oversight by the FERC.

The flow quantities required by Washington were con-

ceded to be “in excess of those required to maintain

water quality in the bypass region .. . .” (App. 83a).

They were imposed as a metter of i

: cooperation with state

resource agencies and Indian tribes which had recom-

mended maintenance of such flow. for the fishery resource

in the project’s bypass reach (App. 84a).

Under § 401(d), a state water quality certification

becomes a condition to any original or renewed hydro-

electric license (as well as to other federal licenses or

permits )."* Neither FERC nor the federal courts have

authority to review the certification’s requirements, even

if they exceed the scope of the state’s delegated authority

under § 401." The only remedy lies in the state courts

and ultimately this Court. The state courts are in con-

flict concerning the scope of § 401.

The FERC has recognized that “[i]t is possible for a

state, certifying agency to, in effect, veto a project by

denying a section 401 certification request and, if chal-

lenged, have that decision sustained by state courts shes

It has also asserted that it does not “believe that a state

should be permitted to use its water quality certification

authority to impose conditions that are unrelated to

water quality and that conflict with the Commission’s

licensing decisions.” '" Because “review of the appro-

priateness of water quality certification conditions is the

purview of siate courts,” * review by this Court is peti-

14 Section 401 certificates must be obtained

power licenses, but all other federally ies cleans a

construction or operation may result in the discharge of pollutants

€.g., gas pipelines licensed under §7 of the Natural Gas Act 15

U.S.C. 717, that cross rivers and wetlands; and water om I

projects requiring dredge and fill permits under § 404 of the CWA.

S See n.6 supra; see also e.g., Roosevelt Cam ,

; 9, pobello Int'l. Park

pa n. v. EPA, 684 F.2d 1041, 1056 (1st Cir. 1982); Keating v

RC, 927 F.2d 616, 622 (D.C. Cir. 1991): United States »

Marathon Dev. Corp., 867 F.2d 96, 102 (1st Cir. 1989) ; Proffitt .

Rohm & Haas, 850 F.2d 1007, 1009 (3rd Cir. 1988).

1 Central Maine Power Co., 52 FERC 9 61,033 at 61,172 (1990)

17 Jd. at 61,173. |

18 Jd. at 61,172.

tioners’ only remedy. As Tacoma asserted below, the

minimum flows prescribed in this case reduce the eco-

nomics of the project to infeasible levels (PCHB Tr.

December 17, 1987 p. 72-73), and thus veto the project

as effectively as an outright denial of the certificate.

The Washington Supreme Court concluded that “man-

induced alteration of streamflow level is ‘pollution’ ”

under the CWA (App. 8a), and that state law and state

water quality standards under the CWA require the

prescribed streamflows in order to prevent degradation

of fish habitat and spawning in the Dosewallips (App.

Ja-8a). These holdings are not within the scope of § 401.

They are contradicted by the plain language and history

of that provision, which limits states to assuring that

discharges into navigable waters will comply with re-

quirements for the abatement and control of pollutants

in such discharges.

Moreover, the ruling fails to harmonize CWA § 401

with the FPA’s carefully balanced scheme for federal

licensing of hydroelectric projects. It erroneously ascribes

to Congress an intent to substitute state conditioning

authority for FERC’s comprehensive planning and licens-

ing responsibilities. Under the court’s reasoning, § 401(d)

grants the 50 states virtually unlimited authority to re-

strict the operation of hydroelectric projects based on

any state requirement related to uses of a navigable water-

way. Congress, however, confined states’ certificate au-

thority to water quality standards and other limitations

regulating the discharge of pollutants expressly enumer-

ated in § 401. Section 401 conditions based on other

state requirements must be appropriate to these standards

and limitations. Congress did not intend § 401 to undo

the basic scheme of the FPA by authorizing unrestrained

intervention by the states into the licensing process. See

FPA § 10(j), 16 U.S.C. 803(j); cf. California v. FERC,

495 US. 490, 110 S.Ct. 2024 (1990), First lowa Hydro-

Elec. Coop. v. FPC, 328 U.S. 152 (1946).

If Washington and other states are permitted to extend

their § 401 authority beyond its intended limits, the

economic and environmental consequences will be wide-

spread and serious. An unnecessary, duplicative and ex-

pensive layer of State hydropower regulation will be

superimposed on an already complex federal licensing

scheme. Burdensome operating restrictions will prevent

construction of proposed hydroelectric facilities like the

Elkhorn Project and reduce capacity or force the shut-

down of numerous existing projects.” In addition, clean,

renewable hydropower lost through misuse of § 401 will

have to be replaced by other sources. In the Pacific

Northwest, and in most other areas of the country, this

will likely be power from air-polluting fossil fuel sources.

Washington is not alone. Other states have attempted

to use the § 401 certification process to encroach on

FERC’s licensing jurisdiction. The Supreme Court of

Vermont recently upheld a § 401 condition requiring

spillage flows over a dam in order to render the dam site

aesthetically pleasing.” In recent licensing proceedings,

the FERC has noted numerous conditions in state water

quality certifications which are unrelated to water quality

and which pose actual or potential conflicts with the

Commission’s license. These have included, for example:

subjecting project operations to state approval;*' requir-

ing that a portion of project revenues be deposited in a

special account for fish and wildlife enhancement and

19 There are almost 200 hydroelectric projects now in the FERC

relicensing process, including at least 5 in Washington alone, as

well as scores of others that must be relicensed in this decade.

Special Supplement 1992 Edition, Hydrowire §§ 7-9, August 1992.

*° Georgia Pacific Corp. and Simpson Paper (Vermont) Co. Inc.,

Vt. Sup. Ct. No. 91-530, September 14, 1992, petition for a writ of

certiorari pending, Simpson Paper (Vermont) Co. v. Department

of Envt’l. Control, No. 92-1012, order inviting the views of the

United States issued March 8, 1993.

21 Central Maine Power Co., 52 FERC § 61,033 at 61,172 (1990).

water quality management; and ordering the project

owner to build angler’s access paths and low-water step-

ping stone bridges that raise serious safety concerns.”

The several state courts which have considered the

scope of § 40i are divided. Courts in Connecticut, New

York and Pennsylvania have properly interpreted § 401

to preclude denial of certification or imposition of condi-

tions for reasons other than protection of water quality

from polluting discharges. The Washington Supreme

Court and Supreme Court of Vermont have ruled to the

contrary.”

This Court should settle the important federal question

presented by the need to harmonize § 401 of the CWA

and Part I of the FPA. If the issue is not resolved now,

other states will join Washington, Vermont, Maine,”

22 Carer Hydro, 52 FERC { 61,216 at 61,768 (1990).

28 Town of Summersville, 60 FERC § 61,291 at 61,990-91 (1992),

reh’g denied, 63 FERC © 61,037 (1993).

“4 Summit Hydropower v. Commissioner of Envtl. Protection,

CV91-050-26-43, 1992 Conn. Super. LEXIS 2177, 1992 WL 175241

(Conn. Super. July 20, 1992) (minimum spill requirement based on

subjective aesthetic impact beyond the scope of state agency’s § 401

authority), appeals pending Supreme Court of Connecticut Nos.

SC14618 and 14619, argued May 4, 1993; Pennsylvania Dept. of

Envtl. Resources v. City of Harrisburg, 578 A.2d 563 (Pa. 1990)

(state water quality agency exceeded its authority under § 401 by

examining the impact of physical changes in the river on aquatic

resources resulting from construction of a hydroelectric project

and the project’s effect on wetlands and fish migration); Niagara

Mohawk Power Corp. v. New York Dept. of Env. Cons., 187 A.D.

2d 7, 592 N.Y.S.2d 141 (NY App. Div. 1993), motion for leave to

appeal granted, NY Ct. App. May 11, 1993; In re Power Auth. v.

Williams, 457 N.E. 2d 726 (N.Y. 1983) (state certificating agency

limited to determining whether hydroelectric project would meet

applicable water quality standards, and was not empowered to base

its decision on a balancing of need for the project against adverse

environmental impacts under state energy law and master plan) ;

see also deRham v. Diamond, 295 N.E.2d 763 (N.Y. 1973) (New

York’s high court interpreting § 401’s predecessor provision).

25 See supra n.20.

26 See supra nn.21-22.

West Virginia and others in using the CWA § 401

process to encroach on FERC’s licensing authority dur-

ing this critical decade, when hundreds of the nation’s

project licenses must be considered for renewal. To

postpone resolution of the problem while non-water quality

conditions are tested in numerous state courts can only

reduce the economic use and environmental benefits of

hydroelectric power. A uniform interpretation of § 401

is essential to achieve the water quality purposes of

the state certification requirement, without undermining

FERC’s central responsibility under the FPA to evaluate

and balance all aspects of a project prior to licensing

or relicensing.

II. STREAMFLOW QUANTITIES FOR FISH HABITAT

ARE NOT AUTHORIZED UNDER § 401 WATER

QUALITY STANDARDS

The Washington Supreme Court was mistaken in hold-

ing that because a goal of the state’s water quality stand-

ards as approved by EPA includes the protection of fish,

any man-induced changes in a river’s quantity of flow

that impacts fish habitat may violate water quality stand-

ards under the CWA. (App. 8a). This ruling reflects

a fundamental misunderstanding of the federal-state rela-

tionship created by § 303 of the CWA (33 U.S.C. 1313

(1988)) and implemented in federally-approved state

water quality standards mandated by the CWA.

A state water quality standard (“WQS”) must under

CWA § 303(c)(2)(A) “consist of the designated uses

of the navigable waters involved and the water quality

criteria for such waters based upon such uses” (emphasis

added). Propagation of fish and wildlife is an element to

be taken into account in such standards, because it is

among “designated uses”. /d. EPA’s regulations govern-

ing approval of state WOS under CWA § 303 impose a

three-part framework on state standards: designation of

27 See supra n.23.

uses (40 CFR 131.2, 131.6(a), 131.10 (1992)); pro

tection of each designated use through adoption of one

or more criteria (40 CFR 131.2, 131.3(b), 131.6(c),

131.11(a) (1992)); and prevention of degradation of

existing water levels. Management goals, such as the

promotion of fish and wildlife “values” and “uses” are to

be achieved through implementation of specific, quantifi-

able “criteria.” See 40 CFR 131.2, 131.5, 131.6, 131.10,

131.11. These criteria provide objective standards for

abating and controlling the discharge of pollutants.

The management goals are not themselves enforceable

water quality requirements, but rather are expressions of

the ends to be promoted by specific water quality criteria.

Thus, while “uses” are part of a state’s WQS, including

uses for aesthetics, fish and wildlife protection, and recre-

ation, such uses must be promoted under the CWA

through specific state water quality criteria for the control

of pollutant discharges.

The Supreme Court of Washington erroneously obliter-

ates § 303(c)(2)(A)’s careful distinction between “desig-

nated uses” and “criteria.” The criteria are the operative

water quality factors dischargers must satisfy to achieve

the state’s designated uses. 40 C.F.R. 131.2, 131.6({c).

This distinction is patent on the face of the water quality

certificate issued in this case, for the certificate concedes

that the streamflow requirements imposed are in excess

of levels needed to preserve water quality, and that they

are intended to satisfy the fish protection goals of the

various resource agencies and tribes (App. 83a-84a).

The purpose of the Clean Water Act is to “restore and

maintain the chemical, pfiysical, and biological integrity

of the Nation’s waters.” 33 U.S.C. 1251 (1988). As

the terms “chemical, physical and biological” imply, that

purpose is to be achieved by the abatement and control

of scientifically ascertainable pollutants found in dis-

charges into navigable waters. /d.”~ The Washington

*8 See EPA v. California, 426 U.S, 200, 202-208 (1976).

Supreme Court’s holding that any man-made alteration

of stream-flow is pollution, and that a state requirement

may be included in a § 401 certificate so long as it is

related to the use of water, is contrary to § 401's limita-

tion to discharges of pollutants and state requirements

appropriate to control of such discharges. Alteration of

streamflows—in this case, diversion of water for later

return unchanged some 1.2 miles downstream—is not a

discharge of a pollutant. Sections 502(16) and (12) of

the CWA expressly define and limit the term “discharge”

to the addition of any pollutant to navigable waters from

a point source.”

These definitions also restrict state conditioning au-

thority under § 401(d) to the imposition of requirements

necessary to ensure that the project’s discharge complies

with requirements for the abatement and control of pol-

lutants. Under § 401(a)(1), “[a]ny applicant for a

Federal license or permit to conduct any activity includ-

ing, but not limited to, the construction or operation of

facilities, which may result in any discharge into the

navigable waters,” must obtain from the State in which

the discharge will originate a certificate “that any such

discharge will comply with the applicable provisions of

sections [301, 302, 303, 306 and 307 of this Act]”. 33

U.S.C. 1341(a)(1). Each of the referenced sections in

§ 401(a) also pertains to the abatement or control of

the discharge of pollutants.” Nor does the term “pol-

29 Section 502(16) and (12) of the CWA, 33 U.S.C. 1362(16) and

(12) provide respectively: “[t]he term ‘discharge’ when used with-

out qualification includes a discharge of a pollutant, and a discharge

of pollutants”; [t]he term “discharge of a pollutant” and the term

“discharge of pollutants” means (A) any addition of any pollutant

to navigable waters from any point source... .”

8° Sections 301 and 302 set standards for effluent limitations.

Section 303 governs State water quality standards and implementa-

tion plans. Section 306 sets national standards of performance for

the control of discharges. Section 307 sets effluent pretreatment

standards and prohibits the discharge of certain effluents,

lutant” include alteration of stream flow—it refers only

to substances artificially added to water and changes in

its temperature.” CWA § 502(6), 33 U.S.C. 1362(6).

Thus, under the plain meaning of § 401, the require-

ments in a water quality certification pertain to’ com-

pliance with applicable standards governing a discharge

of a pollutant or pollutants.

Examples of such requirements are found in Tacoma’s

§ 401 certificate itself, which sets forth a number of con-

ditions to prevent specified pollutants from entering the

water during construction activity, ¢.g. petroleum products,

paint, chemicals such as creosote, dredge spoils, leachates

and sanitary waste. (App. 84a).

The Supreme Court of Washington's conflation of

“criteria” and “designated uses” led it to conclude that

fish protection goals under its water quality standards

(WAC 173-201-010) are “appropriate requirement{s|”

of State law under § 401(d) that support streamflow

conditions in the state’s § 401 certificates. But such goals,

even though appropriate under § 303, are not the opera-

tive criteria regulating discharges to which § 401(d)

applies. The regulation of streamflow for fish protection

at a hydroelectric facility is reserved to the federal licens-

ing process.

As the Appellate: Division of the New York Supreme

Court recently ruled, environmental requirements not

directly related to water quality, i.e., beyond narrative

and numerical criteria required by EPA, are reserved by

the FPA for determination at the federal level—dam

safety, general balancing of economic and other concerns,

—-- = a

*! Section 502(6), 33 U.S.C. 1362/6) provides:

(6) The term “pollutant” means dredged spoil, solid waste,

incinerator residue, sewage, garbage, sewage sludge, muni-

tions, chemical wastes, biological materials, radioactive mate-

rials, heat, wrecked or discarded equipment, rock, sand, cellar

dirt and industrial, municipal, and agricultural waste dis-

charged into water.

the effect on wildlife, recreational opportunities and the

like. Niagara Mohawk Power Corp. v. New York State

Dept. of Envt'l. Conservation, 187 A.D. 2d 7, (N.Y. App.

Div. 1993), motion for leave to appeal granted, NY Ct.

of App. May 11, 1993.

The Washington Supreme Court's citation of a letter

to the FERC from an Assistant EPA Administrator pro-

vides no support for its ruling. The letter simply describes

EPA’s position that “[p]rotection of water quality in-

volves far more than just addressing water chemistry”

(App. 8a). It does not support the court’s holding that

because designated uses and the prevention of the degra-

dation of water quality are part of a state’s water quality

standards under $401, they automatically displace

FERC’s comprehensive authority under the FPA.”

Ill. SECTION 401(d)’s PROVISION FOR CONDITION-

ING WATER QUALITY CERTIFICATES ON “ANY

OTHER APPROPRIATE REQUIREMENT OF

STATE LAW” AUTHORIZES ONLY STREAMFLOW

CONDITIONS APPROPRIATE TO THE WATER

QUALITY LIMITATIONS AND STANDARDS

ENUMERATED IN § 401

Independently of its reliance on the state’s water quality

standards, the Washington Supreme Court erroneously

concluded that § 401(d)'s grant of authority to the states

to condition water quality certificates on “any other ap-

propriate requirement of state law” authorizes stream-

flow conditions based on RCW 90.54.020(3)(a) (Supp.

1992). That statute provides that “[pJerennial rivers and

*2 The court also mistakenly relied on Bangor Hydro-Electric

Co. v. Board of Envt'l. Protection, 595 A.2d 488 (Me. 1991). That

case held that a state certifying agency may require an applicant

for a § 401 certificate to produce information relating to the state's

designated uses. The Maine Supreme Court carefully ruled, how-

ever, that “[wje need not decide in this appeal to what extent the

Board may condition water quality certification upon measures

designed to promote the future attainment of designated uses”,

because that issue was not before the court. 595 A.2d at 443,

streams of the state shall be retained with base flows

necessary to provide for preservation of wildlife, fish,

scenic, aesthetic and other environmental values, and

navigational values.”

The court based its holding on its construction of the

term “appropriate” in § 401(d), which it construed as

having a breadth equivalent to the CWA’s purpose,

as stated in the Act's Declaration of Goals and Policy,

“to restore and maintain the chemical, physical, and

biological integrity of the Nation’s waters.” 33 U.S.C.

1251(a). This reliance on the general preamble of the

CWA, rather than the specific terms in § 401(d), ignores

the context and relationship of the phrase “other appro-

priate requirement of state law” to the other provisions

enumerated in § 401.

Section 401(d) sets forth specific requirements that

limit the conditions a state may include in its certification

of compliance with discharge requirements. The certifica-

tion must set forth effluent limitations and monitoring

requirements to assure compliance with the effluent limi-

tations and standards under §§ 301 and 302, discharge

controls under § 306, pretreatment standards under § 307,

“and with any other appropriate requirement of State

law set forth in such certification. . . .” Water quality

standards under § 303, which are specifically enumerated

in § 401(a), are included in § 401(d) by its enumera-

tion of § 301, which incorporates § 303 through sub-

section 301(b)(1)(C).

For the purposes of water quality standards, the “other

appropriate requirement” clause in § 401(d) is not open

to any other requirement relating to uses of the waterway,

as the Washington Supreme Court held. Its context re-

quires that it be confined to requirements appropriate to

the abatement or control of the discharge of pollutants,

i.e., appropriate to compliance with the other sections of

the CWA specifically enumerated in §§ 401(a) and (d),

including § 303.

It is a familiar principle of statutory construction that

when general words like “other appropriate requirement”

follow specific terms, then “under the ejusdem generis

rule of construction the general words are confined to

the class and may not be used to enlarge it.” Cleveland

v. United States, 329 US. 14, 15 (1946). By relying

on the broad goals of the Act, rather than the specific

terms associated in § 401(d), the state court has given

the phrase “any other requirement of state law” a breadth

that swallows what precedes it, leaving § 401(d) limited

only by the requirement that conditions thereunder be

related in some way to water. Cf. Arcadia v. Ohio Power

Co., 498 U.S. 73, 111 S. Ct. 415, 419 (1990)." The

sweep of this construction effectively transfers to the

Department of Ecology of the State of Washington com-

prehensive authority over the operational flows of a hydro-

electric project to be licensed under the FPA in order

to achieve state policies under RCW 90.54.020(3)(a)

concerning wildlife, fish, scenic, aesthetic and other en-

vironmental values, and state navigational values as well.

The court attempted to buttress its construction by

asserting that the term “appropriate” could not have been

limited by water quality standards in § 303 because that

term is not enumerated in § 401(d). As shown above,

however, this view is mistaken. Section 301—which is

specifically enumerated—-expressly incorporates, through

subsection 301(b)(1)(C), water quality standards under

the CWA, i.e., under § 303.

The legislative history of § 401(d) confirms this read-

ing. Section 401 traces its origins to §21(b) of the

Water Quality Improvement Act of 1970, P.L. 91-224,

84 Stat. 108. This statute imposed a new requirement

that applicants for federal licenses or permits for activi-

ties which could result in a discharge must obtain a state

% See also Hughey v. United States, 495 U.S. 411, 110 S.Ct. 1979,

1984 (1990); Federal Maritime Comm'n v. Seatrain Lines, Inc.,

411 U.S. 726, 734 (1978).

certificate that the activity will not violate applicable

state water quality standards. At the time, water quality

standards, not restrictions on the discharge of pollutants,

represented the primary safeguard against pollution.” In

the Water Pollution Control Act Amendments of 1972,

P.L. 92-500, 86 Stat. 816, Congress revamped the na-

tion's pollution control program to establish the current

system. That system focuses on the discharge of pollu-

tants, and controls them through effluent limitations,

water quality standards, standards of performance and

toxic and pretreatment effluent standards embodied in

$§ 301, 302, 303, 306 and 307 of the present Clean

Water Act. What had been § 21(b) of the 1965 Act—

which focused only on water quality standards—was ex-

panded in § 401 “to assure that [state water quality

certification authority] conforms and is consistent with the

new requirements ... .”™ Section 401 of the 1972

Act, however, did not enumerate § 303—water quality

standards—among the relevant limitations and require-

ments for state water quality certificates. It was unneces-

sary to do so because § 301(b)(1)(C) expressly incor-

porated such standards. Nevertheless, in the ensuing ad-

ministration of the Act, confusion developed as to Con-

gressional intent concerning state conditioning authority.

Congress therefore included in the Clean Water Act of

1977," an amendment making clear that compliance with

state water quality standards was a required element of «

§ 401 certificate. It provided:

Section 401 of the Federal Water Pollution Control

Act is amended by inserting “303,” after “302,” in

the phrase “sections 301, 302, 306, and 307 of this

™% The Clean Water Act developed by legislative accretion begin-

ning in 1948. See EPA v. California, 426 U.S. 200, 201 n.2 (1976).

5 Federal Water Pollution Control Act Amendments of 1972,

H.R. Rep. No. 911, 92nd Cong., 2d Sess. at 121-124 (1972). See

also Conference Report to accompany $2770, S. Rep. No. 1236,

92nd Cong., 2d Sess. at 138 (1972).

5¢ Clean Water Act of 1977, Pub. L. No. 95-217, § 64, 91 Stat. 1599.

Act,” and in the phrase “section 301, 302, 306 or

307 of this Act”, each time these phrases appear.

This concise formulation, however, had the effect of

omitting § 303 from § 401(d). because in subsection (d)

the sequence of the enumerated sections was interrupted

by words describing those sections (App. 139a).

The omission was without significance. In the

Conference Report on the 1977 amendments, the

Committee explained that the omission of § 303 from

other sections where sections 301, 302, 306 and 307

“are listed is in no way intended to imply that 303 is not

included by reference to 301 in those other places in the

Act, such as sections 301, 309, 402 and 509 and any

other point where they are listed. Section 303 is always

included by reference where section 301 is listed.”

Thus, contrary to the Washington Supreme Court, the

omission of § 303 from § 401(d) did not reflect a legis-

lative purpose to make the state’s ability to condition

water quality certificate under § 401(d) broader than its

authority to deny it under § 401(a).

The Washington Supreme Court's failure to limit the

phrase “any other appropriate requirement of state. law”

to the provisions enumerated in § 401(d), including

§ 303, and conditions appropriate to those limitations,

has no basis either in the language or history of § 401(d).

The same error is reflected in the case on which it prin-

cipally relied: Arnold Irrig. Dist. v. Department of Envtl.

Quality, 79 Or. App. 136, 717 P.2d 1274, review denied,

301 Or. 765 (1986).

In Arnold Irrigation, the court concluded that viola-

tion of the sections enumerated in § 401(a)(1) or of

State regulations issued thereunder, is the only basis on

which the state may deny a water quality certificate. 717

P.2d at 1278. The court nevertheless ruled that the state

could adopt as conditions under § 401(d) requirements

57 Conference Report to accompany H.R. 3199, H. Rep. No. 830,

95th Cong., Ist Sess. at 96 (1977).

that would not justify a denial under § 401(a)(1). Jd.

It reasoned, as does the Washington Supreme Court

(App. I la-13a), that the conditioning power in § 401(d)

is broader than the denial power under § 401(a)(1) be-

cause conditions in state certificates must assure compli-

ance not only with enumerated sections but also “with

any other appropriate requirement of State law”, a phrase

that does not appear in § 401(a)(1). This reasoning ts

illogical and inconsistent with the statutory scheme.

There would be no purpose to limiting denials under

§ 401(a)(1) to enumerated factors if § 401(d) condi-

tions may be based on additional factors. As a practical

matter, states would be able to veto the construction of

projects for reasons not authorized by § 401(a)(1)

simply by imposing § 401(d) conditions that render the

projects infeasible. That is precisely what the Washing-

ton Department of Ecology has attempted to do with

Tacoma’s Elkhorn Hydroelectric Project. Washington

may impose conditions under § 401(d) based on “any

other appropriate requirement of State law” that is, under

$510, more stringent than federal standards for the

abatement and control of pollutants. It may not, how-

ever, require water quality standards incompatible with

the Act. Cf. International Paper Co. v. Ouellette, 479

U.S. 481, 497 (1987).

IV. WASHINGTON’S EXPANSIVE READING OF § 401

WOULD SUBVERT THE FPA’S COMPREHENSIVE

LICENSING SCHEME

The Washington Supreme Court's holding leaves no

limitation whatever on state conditioning authority un-

der § 401(d) except that the condition be “water-quality

related.”” Congress did not intend § 401(d) to have this

effect. Instead, it carefully limited the state’s conditioning

authority to compliance with the effluent limitations,

water quality standards and monitoring provisions set

forth in §$ 401(d), and state law requirements appro-

priate to such limitations.

The heart of the federal licensing scheme in Part I

of the FPA is regulation of the use of water in navigable

streams, and the balancing of hydroelectric uses with the

many other purposes served by such streams. FERC must

carefully consider energy conservation, navigation, irriga-

tion, flood control, water supply, fish and wildlife pro-

tection, recreational opportunities and other aspects of

environmental quality as well as power needs. A state’s

“water quality-related” requirements, under the Wash-

ington Supreme Court’s interpretation, may involve any

of these purposes. Thus, Washington’s expansive reading

of § 401 allows the states to subvert—indeed to completely

preempt—the federal licensing scheme set forth in the

FPA by shifting to the states the federal determination

as to how water will be used. Except for requirements

related to the discharge of pollutants under § 401, how-

ever, Congress left such determinations with FERC under

Part I of the FPA.

Washington’s broad reading of § 401 as applied to

hydroelectric projects amounts to a partial repeal of the

FPA by implication. Repeals by implication are dis-

favored. To the maximum extent possible, courts must

read related statutes together in order to give effect to

each; only when the sense and purpose of each cannot be

preserved by such a reading is implied repeal recognized.

Watt v. Alaska, 451 U.S. 259, 267 (1981) (citing Morton

v. Mancari, 417 U.S. 525, 549 (1974)). Limiting “any

other appropriate requirement of State law” by the pollu-

tion discharge factors enumerated in $$ 401(a) and (d)

gives effect to the sense and purpose of both § 401 and

the FPA.

Over 40 years ago the Court in First Jowa rejected a

state’s attempt to impose a broad state permitting require-

ment on a hydroelectric project under the jurisdiction of

the Federal Power Commission (“FPC”). The Court

stated that requiring the applicant to secure a state permit

would “‘vest in [state authorities] a veto power over the

federal project” that could “destroy the effectiveness of

the Federal Act” and “subordinate to the control of the

State the ‘comprehensive’ planning” with which the FPC

was charged. First lowa Hydro-Elec. Coop. v. FPC, 328

U.S. 152, 164 (1946). The validity of the First lowa

holding has been reaffirmed by the Court on numerous oc-

casions.** Its significance here is that state-imposed con-

ditions outside the scope of § 401(d) of the CWA have

the same adverse impact on the scheme of the FPA as

conditions imposed solely under the state law.

This Court recently rejected an attempt by a state to

undermine FERC’s primary role by imposing streamflows

for fish protection under § 27 of the FPA. That pro-

vision, like § 101(g) of the CWA (33 U.S.C. 1251(g)),

reserves certain authority to the states regarding pro-

prietary water rights. California v. FERC, 495 U.S. 490

(1990). The Court pointed out that Congress, in its

1986 amendments to the FPA,” had the opportunity to

alter FERC’s role vis-a-vis the States, but chose instead

“to elaborate and reaffirm First Jowa’s understanding that

the FPA establishes a broad and paramount federal regu-

latory role.” 495 U.S. at 499.

Among the 1986 amendments, enacted some fourteen

years after § 401 of the CWA, was § 10(j) of the FPA,

16 U.S.C. 803(j). It requires FERC to adopt conditions

recommended by states to protect fish and wildlife, but

permits FERC to reject any such recommendation when-

ever it finds that it “is inconsistent with the purposes and

requirements” of Part I. FPA § 10(j){2). Congress

38 Pacific Gas & Elec. Co. v. State Energy Resources Conservation

& Dev. Comm., 461 U.S. 190, 223 n.34 (1983); New England

Power Co. v. New Hampshire, 455 U.S. 331, 338-39 n.6 (1982) ;

City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320, 334 (1958) ;

FPC v. Oregon, 349 U.S. 435, 444-45 (1955).

89 Electric Consumers Protection Act, Pub. L. No. 99-495 (100

Stat. 1243) (1986) (“ECPA”).

would not have added this provision if the states already

had the authority to impose, as a water quality condition,

mandatory streamflow quantities for the purpose of pro-

tecting a fishery.”

Washington’s base flow statute, RCW 90.54.020(3) (a),

requiring minimum flows for fish and wildlife, scenic and

aesthetic, and other environmental values and naviga-

tional values, unquestionably would fall under the FPA

preemption analysis reaffirmed in California v. FERC.

Yet the Washington Supreme Court’s expansive reading

of CWA § 401 would permit the State to impose the same

base flow requirement through the § 401 water quality

certification process. This is contrary to Congress’ view

of FERC’s role as set forth in California v. FERC.

The present case is a clear example of the consequences

of allowing a state water quality agency, with a relatively

narrow focus and agenda, to usurp FERC’s comprehen-

sive planning role by imposing an unreasonable and

burdensome § 401 condition which FERC and the federal

courts are powerless to revise. If the cleanest form of

energy—hydroelectric power—is denied development with-

out the balancing of all the relevant considerations the

FPA requires, neither the objectives of the CWA nor

the FPA will be served.

CONCLUSION

The petition for writ of certiorari should be granted.

40 Compare § 102(b) (6) of the CWA, 33 U.S.C. 102(b) (6), which

assigns control of “storage for regulation of streamflow for the

purpose of water quality control” at hydroelectric facilities to the

Administrator of EPA, not to the FERC or the states. FERC may

impose a license condition for such purposes only if the Adminis-

trator of EPA so recommends.

ALBERT R. MALANCA

KENNETH G. KIEFFER

GORDON, THOMAS,

HONEYWELL, MALANCA,

PETERSON & DAHEIM

2200 First Interstate Plaza

1201 Pacific Avenue

Tacoma, WA 98402

(206) 572-5050

WILLIAM J. BARKER

MARK L. BUBENIK

3628 South 35th Street

P.O. Box 11007

Tacoma, WA 98411

(206) 593-8218

June 1, 1993

Respectfully submitted,

HOWARD E. SHAPIRO

Counsel of Record

MICHAEL A. SWIGER

GarkY D. BACHMAN

VAN NEss, FELDMAN & CuRTIS

A Professional Corporation

1050 Thomas Jefferson St., N.W.

Seventh Floor.

Washington, D.C. 20007

(202) 298-1800

Attorneys for Petitioners

PUD No. 1 of Jefferson

County and the City of

Tacoma

APPENDICES

APPENDIX A

THE SUPREME COURT OF WASHINGTON

No. 58272-6

Thurston County No, 89-2-00413-2

STATE OF WASHINGTON, DEPARTMENT OF ECOLOGY,

DEPARTMENT OF FISHERIES and

DEPARTMENT OF WILDLIFE,

Respondents,

PUD No. | oF JEFFERSON COUNTY and

City oF TACOMA, DEPARTMENT OF PUBLIC UTILITIES,

Appellants.

MANDATE

THE STATE OF WASHINGTON TO: The Superior

Court of the State of Washington in and for Thurs-

ton County.

This is to certify that the opinion of the Supreme

Court of the State of Washington filed on April 1, 1993,

became the decision terminating review of this court in

the above entitled cause on April 21, 1993. This cause is

mandated to the superior court from which the appeal

was taken for further proceedings in accordance with the

attached true copy of the opinion.

Pursuant to Rule of Appellate Procedure 14.3, costs

are taxed as follows: No cost bills having been timely

filed, costs are deemed waived.

[SEAL]

IN TESTIMONY Wueretor, | have hereunto set

my hand and affixed the seal of said Court at

Olympia, this 3rd day of May, 1993.

/s/ C. J. Merritt

C. J. Merritt

Clerk of the Supreme Court,

State of Washington

—

APPENDIX B

IN THE SUPREME COURT

OF THE STATE OF WASHINGTON

No. 58272-6

STATE OF WASHINGTON, DerpaRTMENT OF ECOLOGY,

DEPARTMENT OF FISHERIES and

DEPARTMENT OF WILDLIFE,

Respondents,

PUD No. | ov Jerrrerson County and

City oF TACOMA, DEPARTMENT OF PUBLIC ' TILITIES,

Appellants.

EN BANC

Filed Apr. 1, 1993

GUY, J.—This case arises as a result of plans of the

City of Tacoma and the Jefferson County Public Utility

District | (hereinafter Tacoma) to build a hydroelectric

facility on the Dosewallips River. Federal law requires

Tacoma to obtain a certificate from the Washington

State Department of Ecology (Ecology) before beginning

construction. Ecology granted the certificate but condi-

tioned it upon Tacoma maintaining a certain minimum

streamflow in the affected portion of the river. Tacoma

argues that federal law preempts Ecology from setting

this streamflow requirement, and that Ecology acted out-

side its authority because the requirement was designed

to enhance the Dosewallips fishery rather than preserve

it. We hold that there is no federal preemption and that

setting the streamflow requirement was within Ecology's

authority.

Facts

The Dosewallips River is a glacial stream that origi-

nates in the eastern Olympic Mountains. It flows east

through the Olympic National Park, a national wilder-

ness area, national forest land, and then private land

before it empties into Hood Canal. The river is in pris-

tine condition and supports populations of salmon, steel-

head, and trout.

In 1982, Tacoma began planning to construct a hydro-

electric power plant on the Dosewallips River just outside

the Olympic National Park near the Elkhorn Camp-

ground. The “Elkhorn project”, as it is called, will di-

vert water from the river, use that water to run tur-

bines to generate electricity, then return the water to the

river 1.2 miles downstream. This will result in a reduc-

tion in the streamflow in the “bypass reach”, which is

the length of river between the initial diversion and where

the water is returned downstream.

Federal law requires that Tacoma obtain a license

from the Federal Energy Regulatory Commission (FERC)

before beginning construction. In addition, section 401

of the federal Clean Water Act (Act), 33 U.S.C. § 1341,

requires as a part of the licensing process that Tacoma

obtain a water quality certificate from the State of Wash-

ington.

Tacoma applied to Ecology for the section 401 cer-

tificate in 1983. As part of the section 401 application

process, Tacoma conducted a 2-year study of the effect

of the Elkhorn project on fish habitat in the Dosewallips

bypass reach. This study was performed in consultation

with Ecology and other agencies, including the Wash-

ington State Departments of Fisheries and Wildlife, the

United States Fish and Wildlife Service, the National

Marine Fisheries Service, and the Point No Point Treaty

Council. At the conclusion of the study, Tacoma pro-

posed to maintain minimum instream flows of between

65 cubic feet per second (cfs) and 155 cfs, depending

on the month. Ecology eventually issued the section 401

certificate, but conditioned it upon Tacoma maintaining

instream flows of between 100 cfs and 200 cfs.

Tacoma appealed Ecology's instream flows require-

ment to the Pollution Control Hearings Board (Board).

The Board ruled that Ecology acted within its authority

in placing base flow conditions within the section 401

certificate in order to preserve the Dosewallips fishery

resource. The Board then held another hearing to con-

sider Tacoma’s argument that Ecology exceeded its au-

thority because its flow regime for the Dosewallips was

designed to enhance rather than merely preserve the

fishery. Two of the three Board members agreed with

Tacoma’s argument and so reversed the flow rates set

by Ecology. The third Board member dissented on the

basis that Ecology's flow rates would not enhance the

fishery.

The parties cross-appealed to the Thurston County Su-

perior Court, which ruled that Ecology is not preempted

from setting minimum streamflows, that the Board erred

in finding Ecology's flows would enhance the Dosewallips

fishery, and that in any case Ecology has the authority

to require such an enhancement. The trial court there-

fore reinstated Ecology's streamflow rates. We granted

Tacoma’s motion for direct review.

Ecology's Authorization under the Clean Water Act

Tacoma argues that the Federal Power Act (FPA),

16 US.C. $79la et seq., preempts Ecology from con-

ditioning a section 401 certificate upon the maintenance

of a minimum streamflow. Ecology contends the pre-

emption doctrine does not apply because it was acting

under the authority granted to it by the Clean Water Act,

33 U.S.C. § 1251 et seq.

We begin by addressing whether the Clean Water Act

authorized Ecology to include base flow requirements

in the section 401 certificate it issued to Tacoma. We

conclude that it did.

State Water Quality Standards

Section 401 of the Clean Water Act generally requires

any applicant for a federal license to obtain a state water

quality certificate if the applicant's operations may result

in a discharge into a waterway, 33 U.S.C. $ 1341. The

parties agree that Tacoma was required to obtain a 401

certificate from Ecology. The controlling provision here

of section 401 is subsection (d), which provides:

Any certification provided under this section shall

set forth any effluent limitations and other limita-

tions, and monitoring requirements necessary to

assure that any applicant for a Federal license or

permit will comply with any applicable effluent limi-

tations and other limitations, under section 1311 or

1312 of this title [section 301 or 302 of the Act],

standard of performance under section 1316 of this

title [section 306 of the Act], or prohibition, effluent

standard, or pretreatment standard under section

1317 of this title [section 307 of the Act], and with

any other appropriate requirement of State law set

forth in such certification, and shall become a con-

dition on any Federal license or permit subject to

the provisions of this section.

33 U.S.C. § 1341(d). Thus, under section 401(d), the

state is required to include whatever conditions are

“necessary to assure” compliance with specific provisions

of the Act, as well as with “any other appropriate re-

quirement_of State sw". The parties agree that state

water quality standards qualify as appropriate require-

ments of state law for purposes of section 401(d), and

so may serve as the source for conditions imposed in the

section 401 certificate. Ecology contends that the stream-

flow conditions in the 401 certificate issued to Tacoma

were necessary to assure compliance with Washington's

water quality standards. We agree.

The stated purposes of Washington's water quality

standards include the goal of establishing such standards

as are “consistent with public health and public enjoy-

ment thereof, and the propagation and protection of fish,

shellfish, and wildlife’. (Italics ours.) WAC 173-201-010.

This purpose is consistent with the Environmental Pro-

tection Agency's (EPA) declaration that state water

quality standards “should, wherever attainable, provide

water quality for the protection and propagation of fish.

40 C.F.R. § 130.3 (1991). The standards define an

antidegradation policy for the state’s waters, as required

under federal regulations. WAC 173-201-035(8) (im-

plementing 40 C.F.R. § 131.12(a) (1991)). That policy

includes the principle that “[e]xisting beneficial uses shall

be maintained and protected and no further degradation

which would interfere with or become injurious to exist-

ing beneficial uses will be allowed.” WAC 173-201-035

(8)(a). The Dosewallips River is specifically identified

as a “Class AA” river. WAC 173-201-080(12). The

characteristic uses of a Class AA river include “fish

migration, rearing, spawning, and harvesting.” WAC 173-

201-045(1) (b) (iit).

In short, section 401 requires states to certify compli-

ance with state water quality standards. Washington's

standards prohibit the degradation of the state’s wafers,

and prohibit the degradation of fish habitat and spawning

in the Dosewallips in particular. Therefore, section 401

required Ecology to certify that the Elkhorn project

would not degrade fish habitat and spawning in the Dose-

wallips. Given that Ecology's fisheries biologists deter-

mined that the instream flows urged by Tacoma risked

such degradation. Ecology therefore could not issue the

401 certificate without imposing more protective instream

flow conditions. Absent such a condition, Ecology could

not assure compliance with state water quality standards.

We also note that the concept of pollution in the Clean

Water Act is extremely broad. Section 502(19) of the

Act, 33 U.S.C. § 1362(19), reads: “The term ‘pollu-

tion means the man-made or man-induced alteration of

the chemical, physical, biological, and radiological integ-

rity of water.” Under this broad definition, man-induced

alteration of streamflow level is “pollution”. We further

note a letter written by an EPA assistant administrator

to the Secretary of FERC. The letter takes issue with

an assertion in a FERC report that conditions related to

a an Mp sora and recreation are inappropriate

in section certificates needed to obtain li

FERC. The letter states: a

[P]rotection of water quality involves far more than

just addressing water chemistry. Rather, protection

of water quality includes protection of multiple ele-

ments which together make up aquatic systems in-

cluding the aquatic life, wildlife, wetlands and other

aquatic habitat, vegetation, and hydrology required

to maintain the equatic system. Relevant water

quality issues include . . . the diversity and composi-

tion of the aquatic species . . . [and] habitat loss .. .

Brief of Respondent, at 94 (letter from LaJuana Wilcher,

Assistant Administrator of the EPA, to the Honorable

Lois D. Cashell, Secretary of FERC).

Finally, other states also have water quality standards

that make reference to fish and wildlife concerns, and

such concerns have been held properly to require instream

flow conditions in section 401 certificates. For example,

in Bangor Hydro-Elec. Co. v. Board of Envtl. Protec.,

595 A.2d 438 (Me. 1991), a section 401 certificate ap-

plicant argued that the Maine Board of Environmental

Protection had exceeded its authority in asking for in-

formation about the project’s effect upon fish habitat.

The Maine Supreme Court rejected this argument and

explained that under Maine’s water quality standards,

the “designated uses” of the affected river included fish

habitat. The court stated that because these designated

uses are an integral part of the state water quality stand-

ards, the Board’s information request was proper. 595

A.2d at 443. Similarly, in Hi-Line Sportsmen Club v.

Milk River Irrig. Dists., 241 Mont. 182, 786 P.2d 13

(1990), the Montana Board of Health and Environ-

mental Sciences issued~a section 401 certificate for the

construction and operation of a “siphon scheme” at a

hydroelectric dam that would have raised the water tem-

perature in the effected river. The court upheld the dis-

trict court ruling that the record failed to show the

project would not violate state water quality standards,

which included provisions regarding the use of the river

for fish habitat. 241 Mont. at 187-88. See also Georgia-

Pacific Corp. v. Vermont Dep’t of Envtl. Conservation,

35 Env’t Rep. (BNA) 2046 (Vt. Super. Ct. Oct. 4,

1991), aff'd, 35 Env’t Rep. (BNA) 2052 (Vt. Sup. Ct.

Sept. 14, 1992) (water quality standards recognized as

appropriately concerning aesthetics, recreation, and wild-

life).

Tacoma argues that water quality standards are limited

to pollution and discharges, as opposed to stream flow

levels. It is true that the standards include provisions

regarding pollution discharges. See e.g., WAC 173-201-

045(1)(c)(vii) (criteria for concentrations of toxic,

radioactive, and deleterious materials in Class AA

waters). However, as explained above, the standards’

explicitly-stated antidegradation policy and classification

of specific bodies of water in terms of characteristic uses,

as well as the standards’ broad purpose, all demonstrate

10a

a broad concern for water quality, not just with pollu-

tion discharges. See Bangor Hydro-Elec. Co. v. Board of

Envil. Protec., supra (water quality standards would be a

nullity if state could not consider designated uses).

Section 401’s Integration of

“Any other Appropriate Requirement of State Law”

. Ecology also maintains that the streamflow condition

it imposed in Tacoma’s section 401 certificate was an

appropriate measure to carry out RCW 90.54.020(3) (a),

which provides that “[pJerennial rivers and streams of

the State shall_be_retained with base flows necessary to

provide for preservation of wildlife, fish, scenic, aesthetic

and other environmental values, and navigational values.”

Tacoma, joined by a group of utilities acting as amicus

curiae, argues that the phrase “any other appropriate

requirement of State law” refers only to state water qual-

ity standards. The Board ruled that the phrase refers to

all State water quality-related statutes and rules, includ-

ing, but not limited to, the water quality standards the

state has adopted as required by section 303 of the Clean

Water Act, 33 U.S.C. § 1313, and that Ecology’s stream-

flow conditions were necessary to assure compliance with

RCW 90.54.020(3)(a). We agree with the Board’s in-

terpretation.

We are required to interpret the words of a statute in

accordance with their usual and ordinary meaning. Peo-

ple’s Org. for Wash. Energy Resources vy. Utilities &

Transp. Comm’n, 104 Wn.2d 798, 825, 711 P.2d 319

(1985). The phrase “any other appropriate requirement

of State law” contains no language to suggest its refer-

ence should be limited only to state water quality stand-

ards. Its meaning is not restricted to specific statutory or

regulatory provisions, but only to those requirements of

state law that are “appropriate”’.

i a ee ere ee Ce ee eee Sm

Pe ee ee ee

OER. de Oe

lla

The phrase’s context within the Clean Water Act offers

guidance as to its meaning. Most generally, Congress's

broad purpose in enacting the Clean Water Act was “to

restore and maintain the chemical, physical, and biologi-

cal integrity of the Nation’s waters.” 33 U.S.C. § 1251

(a). This broad purpose suggests that what state laws

qualify as “appropriate” for purposes of section 401(d)

should also be understood broadly. In addition, section

401(d) expressly lists sections 301, 302, 306, and 307 of —

the Act as sources for the limitations in section 401 cer-

tificates. Thus, where Congress intended to refer to a spe-

cific provision, it did so. In contrast, section 303 (33

U.S.C. § 1313)—the section requiring states to adopt

water quality standards—is not listed in section 401. If

Congress intended to refer only to state water quality

standards, it could have specifically referred to them.

That Congress did not do so is evidence that it intended

the phrase “any other appropriate requirement of State

law” to refer broadly to all state water quality-related

laws, not just to state water quality standards adopted

pursuant to section 303.

The scope of “any other appropriate requirement of

State law” was directly addressed in Arnold Irrig. Dist.

v. Department of Envtl. Quality, 79 Or. App. 136, 717

P.2d 1274, review denied 301 Or. 765 (1986). There,

the Oregon Department of Environmental Quality had

denied a request for a section 401 certificate on the

ground that the applicants failed-to provide a statement

that the hydroelectric project was compatible with the

country’s comprehensive plan and land use ordinances.

The applicants objected, saying that only water quality

standards could be considered. The court rejected this

on the basis explained above: if Congress had intended

to make the section 303 standards the exclusive water

quality criteria states may use in placing limitations in

section 401 certificates, then Congress could have specifi-

cally mentioned those standards in section 401(d). 79

Or. App. at 142. The court therefore held that any

12a

water quality related state law qualifies as an “ i-

ate requirement of State ioe” ts purposes of pin

401(d). 79 Or. App. at 142. See also Mobil Oil Corp.

v. Kelley, 426 F. Supp. 230, 234 (S.D. Ala. 1976)

(holding section 401(d) allows state to condition cer-

tification upon compliance with any requirement the state

deems appropriate under state law). But see Niagara

Mohawk Power Corp. v. New York Dep’t of Env’l Con-

servation, A.D.2d , 992 N.Y.S.2d 141 (1993)

(interpreting phrase within Clean Water Act in light of

The legislative history of section 401(d) furth -

ports this interpretation. In particular, ~ the

ment Congress gave sections 401(a) and 401(d) in a

1977 amendment is revealing. Generally, section 401 (a)

identifies specific provisions of the Clean Water Act and

provides that noncompliance with any of those provisions

enables a State to deny certification; section 401(d) con-

fers authority on states to condition certification. As

originally enacted in 1972 as part of the Federal Water

Pollution Control Act Amendments ( FWPCA), section

401(a) did not list section 303. Pub. L. No. 92-300

§ 2, 86 Stat. 816, 877.79 (1972). Five years later when

Congress substantially supplemented the FWPCA by en-

acting the Clean Water Act, Congress amended section

401(a) to include reference to section 303. Pub. L. No

95-217, § 64, 91 Stat. 1566, 1599 (1977). A Senate

report submitted at the time explained that the purpose

of the amendment was to follow the original congres-

sional intent and to clarify that consideration of state

water quality standards was part of the certification proc-

ess under section 401(a). S. Rep. No. 370, 95th Cong

Ist Sess. 72-73, reprinted in 1977 US. Code Cong. &

Admin. News 4326, 4397-398. In so amending section

ta on Congress failed to amend section 401

in the same way. As two c iti

this subject have fe er eee

ste ak rae sl —

ee ee

13a

[bJecause of this omission, it seems clear that Con-

gress did not mean to restrict conditions on certifica-

tions only to those necessary to assure compliance

with section 303 water quality standards. Rather,

Congress recognized a difference between the au-

thority it provided in section 401(a)(1) to deny

certification and that which it conferred in section

401(d) to condition certification. It intended that

the broader power contained in section 401(d) would

allow the states to condition certification on compli-

ance with state law provisions other than water qual-

ity standards adopted pursuant to section 303.

(Some italics ours.) Ransel & Meyers, State Water Qual-

ity Certification and Wetland Protection: A Call to

Awaken the Sleeping Giant, 7 Va. J. of Nat. Resources

L. 339, 355 (1988).

We conclude that the phrase “any other appropriate

requirement of State law” in section 401(d) does not re-

fer only to state water quality standards. We agree with

the Arnold court that the phrase is a congressional au-

thorization to the states to consider all state action re-

lated to water quality in imposing conditions on section

401 certificates. 79 Or. App. at 142.

We hold that the streamflow conditions Ecology in-

cluded in the 401 certificate it issued to Tacoma were

an appropriate measure to assure compliance with Wash-

ington’s water quality standards. We also hold that a

section 401 water quality certificate may include condi-

tions to enforce all state water quality-related statutes and

rules, including but not limited to, state water quality

standards. Inasmuch as issues regarding water quality

are not separable from issues regarding water quantity

and base flow, we further hold that RCW 90.54.020(3)

(a) qualifies as an “appropriate requirement of State

law” for purposes of section 401(d), and therefore that

Ecology’s base flow limitation in the 401 certificate was

l4a

an appropriate measure to assure compliance with RCW

90.54.020(3)(a) as well as the water quality standards.

Federal Preemption

Having concluded that RCW 90.54.020(3)(a) and

Washington's water quality standards authorize Ecology

to impose streamflow conditions in section 401 certifi-

cates, we next consider Tacoma’s contention that the

FPA preempts Ecology's action. We reject Tacoma’s

preemption argument.

The Threshold Requirement of State Action

The doctrine of federal preemption is based on the

supremacy clause of the United States Constitution, U.S.

Const., art. 6, cl. 2. Application of the doctrine pre-

supposes as a threshold requirement some state action to

be preempted by federal law. See generally L. Tribe.

American Constitutional Law § 6-25 (2d ed. 1988).

Here, several factors persuade us that Ecology’s action in

imposing a base flow condition in the 401 certificate lacks

the character of state action required for federal preemp-

tion to apply.

First, a section 401 certificate is a federal permit re-

quired under the Clean Water Act, 33 U.S.C. § 134],

and in issuing this federal certificate, the state is required

to set forth certain limitations. To the extent that the

state’s role is mandatory in these ways, the state cannot

be said to be acting independently of the federal gov-

ernment.

Second, the sources of the streamflow limitation at is-

sue here are state laws integrated into the Clean Water

Act. In particular, Ecology’s action was appropriate to

assure compliance with RCW 90.54.020(3)(a) and

Washington’s water quality standards, which are inte-

15a

grated into the Act as “appropriate requirements} of

State law” under section 401(d).

Third, federal involvement in the development of state

water quality standards is extensive. Those “‘gorra

are required under the Clean Water Act, 33 USC.

§ 1313. The Act requires states to devise the standards

in accordance with federal regulations and to submit

them to the EPA for approval. 33 U.S.C . $1313. After

the EPA approves the state’s submitted standards, -—

become the water quality standards for the state. 5.

U.S.C. § 1313(c)(3). Washington's water quality stand-

ards, in particular, have been duly adopted by the _

and approved by the EPA. 50 Fed. Reg. 29,761 (1983)

(noting EPA’s approval of Washington's water qualtiy

standards). If a state fails to submit standards to the

EPA, or if the standards it does submit are inconsistent

with the Act, the EPA promulgates its own standards

for the state. 33 U.S.C. § 1313(c)(4), see also 56 Fed.

Reg. 58.477 (Nov. 19, 1991) (to be codified at 40

C.F.R. pt. 131) (proposed rulemaking by EPA to bring

Washington's water quality standards into compliance

with section 303(c)(2)(B) of the Act). This statutory

framework gives water quality standards a hybrid char-

acter: they have the character of state laws insofar as

the states initially promulgate them, but they have a fed-

eral character insofar as the EPA regulates their con-

tent and must formally approve them before they actually

hecome the state’s water quality standards. Indeed. Ly

Arkansas v. Oklahoma, 503 U.S. , 117 L. Ed. 2d

239. 257. 112 S. Ct. 1046 (1992), the Court declared

that state water quality standards “are part of the federal

law of water pollution control” at least insofar as thev

affect issuance of permits in other states. Similarly, the

significant federal involvement in state water quality

standards must be recognized when considering whether

federal preemption applies to prevent a state from acting

to assure compliance with them.

16a

Finally, any conditions imposed in a 401 certificate be-

come part of the federal license for which the certificate

is required. Section 401(d) of the Act provides that any

valid certification issued under section 401 “shall become

a condition on any Federal license” for the activity in

question. “FERC may not alter or reject conditions im-

posed by the states through section 401 certificates.”

United States Dep't of the Interior v. Federal Energy

Regulatory Comm'n, 952 F.2d 538, 548 (D.C. Cir.

1992). FERC itself has recognized that the terms and

conditions included in a section 401 certificate “become

terms and conditions of the license as a matter of law.”

[Apr.-June 1990 Transfer Binder] 51 Fed. Energy Reg.

Comm’n (CCH) € 61,268 at 61,343. Thus, the condi-

tion at the heart of the present controversy—the condi-

tion within the 401 certificate Ecology issued to Tacoma

—will be, as a matter of law, a term of whatever hydro-

electric cperating license FERC eventually issues to Ta-

coma; as such, the condition will be a part of federal law.

By including base flow limitations in the section 401

certificate it issued to Tacoma, Ecology was acting to

fulfill its obligations under federal law. The section 401

certificate must assure compliance with state laws inte-

grated into the Clean Water Act. In particular, the cer-

tificate must assure compliance with water quality stand-

ards, which are regulations the content of which was sub-

stantially determined by the EPA and which assumed

the status of state water quality standards only after the

EPA gave its approval. Finally, the streamflow condi-

tion, as part of the 401 certificate, also becomes a term

of the FERC license by operation of law and as such

a part of federal law. These factors collectively demon-

strate such a significant and pervasive federal involvement

that Ecology's action cannot be fairly regarded as state

action for purposes of the application of federal preemp-

tion. Simply put, federal preemption doctrine does not

apply in a context where a state is acting to fulfill its

ee ii ee

l7a

federally mandated role in the comprehensive federal

scheme embodied in the Clean Water Act.

Preemption Doctrine

Even if the threshold requirement of state action were

met, the well-established principles regarding federal pre-

emption would not support finding preemption in the

present case.

As we recently observed in Inlandboatmen’s Union

of the Pac. v. Department of Transp., 119 Wn.2d 697,

701, 836 P.2d 823 (1992), there are two well-established

ways in which federal law may preempt state law: field

preemption and conflict preemption. Field preemption

may arise from either an explicit or an implicit expression

of Congress’s intent. Absent explicit preemptive lan-

guage, Congress’s intent to supersede state law may be

implied if

(1) a scheme of federal regulation is so pervasive

as to make reasonable the inference that Congress

left no room for the states to supplement it, (2)

if the federal act touches a field in which the fed-

eral interest is so dominant that the federal system

will be assumed to preclude enforcement of state

laws on the same subject, or (3) if the goals sought

to be obtained or the obligations imposed reveal a

purpose to preclude state authority.

Inlandboatmen’s Union, at 701. Conflict preemption may

arise either when compliance with both federal and state

laws is physically impossible, or when state law stands

as an obstacle to the accomplishment and execution of

Congress’s full purposes and objectives. Inlandboatmen’s

Union, at 702.

In the case of either field or conflict preemption, the

essential inquiry is congressional intent. Wisconsin Pub.

Intervenor v. Mortier, 501 US. ——, 115 L. Ed. 2d

532, 542, LLL S. Ct. 2476 (1991). In addition, “[t}here

is a Strong presumption against finding preemption in an

ambiguous case, and the burden of proof is on the party

claiming preemption.” (Footnote omitted.) /nlandboat-

men's Union, at 702.

The basis for Tacoma’s preemption argument is the

FPA, which empowers FERC to license projects designed

to develop power from any stream or other body of

water over which Congress has jurisdiction. 16 U.S.C.

$797(a). The FPA, as amended in 1986 by the Elec-

tric Consumers Protection Act, also directs that in issuing

such licenses FERC must “give equal consideration to

the purposes of energy conservation, the protection, miti-

gation of damages to, and enhancement of, fish and wild-

life (including related spawning grounds and habitat),

the protection of recreational opportunities, and the pres-

ervation of other aspects of environmental quality.” 16

U.S.C. §797(e). Congress further declared that FERC

may not issue a license unless it judges the project to be

“best adapted to a comprehensive plan” advancing these

competing values. 15 U.S.C. § 803(a). In order to en-

sure this, the FPA requires FERC to consider recom-

mendations from state and federal agencies and Indian

tribes. 16 U.S.C. § 803(a)(2). In addition, in order to

protect, mitigate damages to, and enhance fish and wild-

life, the FPA requires FERC to adopt the recommenda-

tions of state and federal fish and wildlife agencies unless

FERC believes such recommendations are inconsistent

with the purposes of the FPA or other applicable law.

16 U.S.C. § 803(j)(1). FERC may reject the recom-

mendations of state or federal fish and wildlife agencies,

but it must publish its findings for doing so and state in

those findings that its own conditions will comply with

the FPA’s standards regarding fish and wildlife protec-

tion. 16 U.S.C. § 803(j)(2).

Tacoma argues that the FPA’s comprehensive scheme

of licensing hydropower projects preempts Ecology from

19a

setting streamflows in the section 401 certificate. The

existence of the Clean Water Act and the authority and

obligations given to the states under it make this argu-

ment unpersuasive.

Considering first field preemption, there is neither an

express nor an implied indication of any congressional

intent to occupy the field so as to preclude states from

exercising their authority and fulfilling their obligations

under the Clean Water Act. When the FPA and the

Clean Water Act are considered together, the compre-

hensive scheme that emerges is one in which Congress

left room for the states to supplement the FPA through -

the section 401 certification process. Enforcement of

state laws is part of the federal scheme inasmuch as

section 401 of the Act requires states to assure compli-

ance with appropriate state laws. The comprehensive

scheme consisting of both the Clean Water Act and the

FPA presupposes rather than precludes the exercise of

state authority. Consequently there is no basis for finding

field preemption here.

As regards conflict preemption, there is no actual con-

flict betwen Ecology's action and the FPA. Compliance

with Ecology's streamflow condition and the FPA is

physically possible, and fulfillment of that condition does

not stand as an obstacle to the accomplishment and ex-

ecution of Congress’s purposes. Indeed, exactly the same

streamflow condition could have been required directly

under the FPA, either by FERC directly or by FERC

adopting recommendations regarding streamflow from

Ecology during the licensing process. Moreover, finding

conflict preemption under circumstances such as those

presented here would have the effect of requiring Ecology

to guess which elements of the 401 certificate might con-

flict with actions FERC might take at a later time, and

then decline to condition the certificate based on this

guess—in violation of Ecology’s mandate under the Act.

We cannot believe Congress could have intended to cre-

ate such an administrative nightmare.

20a

To support its preemption argument, Tacoma relies on

California v. Federal Energy Regulatory Comm'n, 495

U.S. 490, 109 L. Ed. 2d 474, 110 S. Ct. 2024 (1990).

There, FERC issued a license for a hydroelectric project

and, in doing so, set a streamflow requirement in order

to protect the fish in the affected portion of the river.

The California Water Resources Control Board (WRCB)

later issued an order requiring the licenses to conform

to a higher streamflow requirement. 495 U.S. at 496.

The WRCB relied on section 27 of the FPA, which

provides:

Nothing contained in this chapter shall be con-

strued as affecting or intending to affect or in any

way to interfere with the laws of the respective

States relating to the control, appropriation, use, or

distribution of water used in irrigation or for munici-

pal or other uses, or any vested right acquired

therein.

FPA, §27, 16 U.S.C. § 821. The Court rejected the

WRCB’s argument, and held that FERC’s powers as

granted under the FPA preempted the WRCB’s attempt

to set its own streamflow requirements. The Court ex-

plained that under the FPA, FERC’s power is exclusive

unless some power is explicitly reserved for the states,

and that section 27’s reservation of power does not in-

clude the power to set instream flows. According to the

Court, the words of section 27 “are confined to rights

of the same nature as those relating to the use of water

in irrigation or for municipal purposes.” 495 U.S. at

498 (quoting First lowa Hydro-Elec. Coop. v. Federal

Power Comm'n, 328 U.S. 152, 176, 90 L. Ed. 1143,

66 S. Ct. 906 (1946)).

Tacoma argues that Ecology is trying to do precisely

what the WRCB was attempitng to do in California v.

Federal Energy Regulatory Comm'n, namely, set a mini-

mum instream flow rate for a federally licensed power

~~ et oe ee

21a

project, and therefore Ecology is no less preempted by

the FPA than was the WRCB.

The present case is distinguishable from California v.

Federal Energy Regulatory Comm'n on two grounds.

First, in California v. Federal Energy Regulatory

Comm'n, there was an actual conflict between the federal

and state governments. FERC and the California WRCB

had both issued orders regarding streamflow, and those

orders were in conflict. No such conflict exists in the

present case. Second, in California v. Federal Energy

Regulatory Comm'n, the Clean Water Act was not at

issue or even mentioned. The issue was the scope of

what powers had been saved to the states under section

27 of the FPA. The authority for California’s action

was not derived from federal law. Here, the issue is

whether the FPA somehow precludes Ecology from ex-

ercising the authority granted it, and the responsibilities

delegated to it, under the Clean Water Act. The way in

which the Clean Water Act is implicated in the present

case completely alters the legal context and renders un-

tenable Tacoma’s preemption argument. The presumption

against finding preemption in ambiguous cases further

strengthens this conclusion. See Inlandboatmen’s Union,

119 Wn.2d at 702.

In short, whereas California v. Federal Energy Regula-

tory Comm'n presented a straightforward case of a state

acting on its own authority, the present case is one in

which Ecology derives authority for its action directly

from federal law. State law and state action are involved

only to the extent they are integrated into the Clean

Water Act. Our interpretation of Ecology's duties under

the Act, therefore, does not conflict with the United

States Supreme Court's interpretation of the scope of the

power reserved to the states under section 27 of the FPA.

We conclude that Tacoma has not carried its burden

of establishing federal preemption.

22a

The Enhancement Issue

We next consider the Board’s finding that Ecology’s

Streamflow condition for the Elkhorn project enhances

the fishery in the Dosewallip River. The trial court ruled

that this was error. We agree.

Factual Background

To understand the Board’s factual ruling regarding

enhancement, it is necessary to review the nature of the

study conducted to determine the instream flow. After

Tacoma filed its initial application with Ecology for the

section 401 certificate, Ecology asked Tacoma to con-

duct a study to determine what level of water should be

maintained in the bypass reach in order to preserve ade-

quate habitat for fish. Ecology also requested that Ta-

coma perform this study using a method known as “in-

stream flow incremental methodology”, or “IFIM”. Gen-

erally, the IFIM process first involves collecting data

about water velocity and depth, the substrate of the

river, what species of fish inhabit the river, and what

developmental stages the fish go through at what times of

year. The data are then assembled to enable predictions

about how the water depth and velocity will change at

different flow levels, and to show what depths, velocities,

and substrates are most suitable for each life Stage of

each fish species in the river. A computer program

known as “PHABSIM” (for physical habitat simulator )

is then run using this assembly of data. The output of

the PHABSIM program includes a set of charts or tables.

Each chart or table indicates for a given fish species and

a given life stage of that species the “weighted usable

area” available at different flow levels. “Weighted usable

area”, roughly, is how much area of the river the fish

can use as habitat." These are then used by fisheries

? More specifically, “[w]leighted usable area is an index computed

by multiplying the surface area of a portion of a stream by a

23a

biologists to determine the appropriate instream flows for

the river.

In the present case, Tacoma and Ecology worked to-

gether in producing the results of the IFIM study, but

then disagreed as to the appropriate instream flows. Ta-

coma claims that fish production will be preserved using

the flow regime it has proposed, but that the flow regime

Ecology imposed in the section 401 certificate would

actually enhance fish production. The Board agreed with

Tacoma. In its findings of fact, the trial court found

the Board’s conclusion to be clearly erroneous.

Standard of Review

The Board is one of four administrative boards com-

prising the environmental hearings office, which is cre-

ated by RCW 43.21B.005. The members of the Board

are appointed by the Governor with the advice and con-

sent of the Senate. RCW 43.21B.020. When a Board

decision is rendered pursuant to a formal hearing, as was

the case here, judicial review is conducted pursuant to

the Administrative Procedure Act, RCW 34.04 or RCW

34.05. (Because the present case was initiated prior to

July 1, 1989, RCW 34.04 applies. RCW 34.05.902.)

Under RCW 34.04.130(6)(a), the court may reverse an

agency's determination if it was “clearly erroneous in

view of the entire record”. A finding is clearly erroneous

when, although there may be evidence to support it, the

reviewing court on the entire record is left with the firm

and definite conviction that a mistake has been com-

mited. Cougar Mt. Assocs. v. King Cy., 111 Wn.2d 742.

weighting factor that describes the suitability of the stream for

the organism of interest. It displays the surface area of stream

in square feet of optimal habitat per 1,000 linear feet of street.”

Cavendish & Duncan, Use of the Instream Flow Incremental

Methodology: A Tool for Negotiation, 6 Env’t Impact Assessment

Rev. 347, 349 (1986).

24a

747, 765 P.2d 264 (1988). Thus, the proper standard

of review for the trial court to have used in evaluating

the Board’s factual determination was the clearly erro-

neous standard.

Furthermore, this court has stated that “[u]pon appeal

from a superior court’s application of the ‘clearly erro-

neous’ standard, the appellate court applies the same

standard directly to the administrative decision.” Depart-

ment of Ecology v. Ballard Elks Lodge 827, 84 Wn.2d

S51, 555, 527 P.2d 1121 (1974). Therefore, in the

present case we apply the clearly erroneous standard

directly to the Board’s decision. C f. Schub v. Depart-

ment of Ecology, 100 Wn.2d 180, 183-84, 667 P.2d 64

(1983) (applying clearly erroneous standard directly to

agency's determination rather than board’s).

Finally, it is well settled that due deference must be

given to the specialized knowledge and expertise of an

administrative agency. E.g., Schub, 100 Wn.2d at 187.

Here, Ecology was exercising its expertise in judging the

appropriate instream flow rate for the Elkhorn project.

Therefore, in analyzing the Board’s decision under the

clearly erroneous standard, we also give due deference

to Ecology's expertise in this area.

The Board's Assessment

of Ecology’s Preservation Flow

At the hearing before the Board, there was testimony

from six fisheries biologists representing five different

States and federal agencies. These biologists were all

involvec in the IFIM study and in Ecology's setting of

instream flow rates for the Dosewallips. Each expert

testified that his or her intent in setting the flow rates,

or the intent of the agency represented, was to preserve

and protect the fishery in the Dosewallips, not to enhance

25a

it.” In light of this testimony, it is manifestly unreason-

able to believe that the agencies intentionally sought to

enhance the Dosewallips fishery. Moreover, these ex-

perts also testified that in their opinions Ecology's flows.

would not in fact enhance the Dosewallips fishery. The

one expert who testified for Tacoma, Phillip Hilgart, said

that he could not tell whether Ecology's flow would en-

hance the fishery.

In light of this unrefuted testimony, the Board’s con-

clusion that Ecology's flows would enhance the Dose-

wallips fishery is questionable. Apparently the Board

assumed that spawning habitat is the limiting factor in

fish production and then reasoned that Ecology’s flow will

increase fish production because it will provide more

spawning habitat than is available under natural condi-

tions. We find persuasive Ecology’s position, shared by

the trial court as well as the dissenting member of the

3-person: Board, that this reasoning is erroneous.

First, the Board appears not to have adequately con-

sidered the uncertainty inherent in the computer model-

ing of the complex biological systems of the river. For

example, the PHABSIM model uses only three of the

many variables that determine fish habitat. The three

variables PHABSIM uses are water depth, water velocity,

and substrate. There was testimony before the Board,

however, that there are other important flow-related habi-

2 E.g., testimony of Hal Beecher, Department of Wildlife fisheries

biologist, Transcript of Proceedings (Dec. 15, 1987), at 167; testi-

mony of Kenneth Bruya, Department of Fisheries biologist, Tran-

script of Proceedings (Dec. 17, 1987), at 128-39; testimony of

Brad Caldwell, Department of Ecology fisheries biologist, Tran-

script of Proceedings (Dec. 16, 1987), at 104; testimony of Jean

Caldwell, Department of Fisheries biologist, Transcript of Pro-

ceedings (Dec. 17, 1987), at 48; testimony of Stephen Ralph, Point

No Point Treaty Council fisheries biologist, Transcript of Pro-

ceedings (Dec. 17, 1987), at 110; testimony of Elaine Rybak, United

States Fish & Wildlife Service fisheries biologist, Transcript of

Proceedings (Dec. 17, 1987), at 98.

26a

tat variables, including (1) predation, (2)competition

and territoriality, (3) sedimentation and its effect on eggs

and food supplies, (4) the adequacy of flows to prevent

eggs from dehydrating, and (5) the creation of barriers

to migration. Because PHABSIM’s predictions regard-

ing fish habitat are based on this artificial concept of

habitat, Ecology's biologists were conservative in their

estimation of the flows that would best protect the fish-

ery, and there was no evidence that the flows would in

fact enhance the fishery.

The Board also ignored the fact that one of the three

habitat variables the PHABSIM model uses was incom-

plete. In particular, the PHABSIM model is designed

for three measurements regarding water velocity. Because

of the difficulties in getting measuremenis for the Dose-

wallips, however, only one measurement was used in the

IFIM study conducted here. This further underscores the

appropriateness of Ecology's conservative approach to set-

ting minimum instream flows.

Furthermore, the Board assumed that the amount of

fish habitat available under natural conditions can be

reliably measured by reference to the river's “50 percent

exceedence flow.” The 50 percent exceedence flow for a

river is that level of flow at which half the daily flows

during a I-month period are lower and half the daily

flows are higher. The testimony was that for a river like

the Dosewallips, the flow of which changes constantly

and dramatically, the 50 percent exceedence flow may be

meaningless as a measure of normal conditions. In her

dissent, Board member Bendor points out that in 1

month, 210 cfs was the 50 percent exceedence flow

whereas 800 cfs was the average flow.

The Board also erroneously assumed that because the

computer model maximizes for an “optimum” flow regime

for fish, this means that overall fish production will be

increased. The record before us indicates that FHABSIM

optimizes a flow regime only in the sense that for a given

~——~

27a

species and a given life stage of that species, the model

predicts at what flow the largest amount of weighted

usable area of habitat will be present. Even on the

Sanguine assumption that maximizing weighted usable

area is “optimum” for that life stage of that species, the

same flow regime may not be optimum for other life

stages of the same species or for other species.

Finally, the Board overlooked the uncertainty in the

assumption that the limiting factor in fish production in

the Dosewallips is spawning habitat. There was expert

testimony, including testimony from Tacoma’s expert wit-

ness Phillip Hilgert, that it is uncertain whether fish pro-

ductivity in the bypass reach is spawning limited. The

testimony regarding this assumption was at best equivo-

cal. Mr. Hilgert at one point testified that “streams in

Western Washington are rearing limited, and indeed much

of the agencies’ harvest management practice is based

on the assumption of rearing limitations.” (Italics ours.)

Transcript of Proceedings (Dec. 16, 1987), at 33.

Another expert testified he has never believed that the

Dosewallips is spawning limited.

Our examination of the record leaves us with the firm

and definite conviction that a mistake has been made.

Ecology’s intent was clearly to preserve, not to enhance,

the fishery in the Dosewallips, and the Board’s reason-

ing for its view that Ecology’s flows would enhance the

fishery is insupportable. Therefore we hold the Board’s

finding that Ecology's instream flow rates are an enhance-

ment flow is clearly erroneous. Because we so hold, we

need not reach the question whether Ecology has the

authority to enhance the Dosewallips fishery by a base

flow requirement in the section 401 certificate.

28a

Conclusion

We hold that federal law does not preempt

from including minimum streamflow conditions in Ta-

coma’s section 401 certificate, and that the Board erred

in finding that Ecology's flows would enhance the Dose-

wallips fishery. We therefore conclude that the section

401 permit is valid as originally issued by Ecology. The

Superior Court is affirmed.

/s/ Guy, J.

We Concur:

s Andersen, C.J. /s’ Durham, J.

‘s/ Utter, J. s Smith, J.

s Brachtenbach, J. s’ Johnson, J.

2Ya

APPENDIX C

IN THE SUPERIOR COURT

OF THE STATE OF WASHINGTON

IN AND FOR THE COUNTY OF THURSTON

No. 89-2-00413-2

STATE OF WASHINGTON, DepaRTMENTS OF ECOLoGy,

FISHERIES, AND WILDLIFE,

Appellanis,

Vv.

PUD No. 1 or JerrerRson County

and Ciry or Tacoma,

Respondents.

PUD No. | or Jerrrrson County

and Ciry orf TACcoMa,

Appellants,

STATE OF WASHINGTON, DEPARTMENTS OF ECoLocy,

FISHERIES, AND WILDLIFE,

Respondents.

FINDINGS OF FACT, CONCLUSIONS OF LAW

AND FINAL JUDGMENT

(Filed Aug. 14, 1991]

This matter is an appeal of a decision of the Pollution

Control Hearings Board (the Board or PCHB), PCHB

No. 86-118. The PCHB conducted a full evidentiary

hearing in this matter on December 15-18, 1988. In this

proceeding, testimony was taken, and documentary evi-

30a

dence was submitted. The PCHB issued its final decision

on January 25, 1989.

The State Department of Ecology (respondent before

the PCHB), and the State Departments of Fisheries and

Wildlife (intervenors before the PCHB) appealed the

decision of the PCHB to this Court on February 24,

1989. The City of Tacoma and PUD No. | of Jefferson

County cross-appealed the PCHB’s decision to this Court

on March 1, 1989,

Appellant Department of Ecology has appeared in this

matter by Jay J. Manning, Assistant Attorney General.

Appellants Department of Fisheries and Department of

Wildlife appeared by William C. Frymire, Assistant At-

torney General. Cross-Appellants PUD No. 1 of Jeffer-

son County and City of Tacoma appeared by Mark L.

Bubenik, Assistant City Attorney, and Albert R. Malanca

of Gordon, Thomas, Honeywell, Malanca, Peterson &

Daheim for Tacoma.

This Court has reviewed the entire record produced

before the PCHB, the file herein, including both parties’

briefs, and has been presented with oral argument from

all parties. On May 8, 1991, the Court issued a Memo-

randum Opinion. A copy of the Memorandum Opinion

is attached as Exhibit 1 and is incorporated into this

Final Judgment by this reference. Based on all of the

foregoing, the Court makes the following FINDINGS OF

FACT AND CONCLUSIONS OF LAW.

FINDINGS OF FACT

The Court hereby adopts and accepts the PCHB’s

Findings of Fact I-VIII, and X. These Findings of Fact

are set forth below for the convenience of the reader.

o— eee eee a ee ee

ET a ee

— aes

3la

Finding of Fact I

This matter concerns the Dosewalips [sic] River on

the Olympic Peninsula of Washington.

Finding of Fact II

Appellants (hereafter Tacoma) propose to con-

struct a hydroelectric project on the Dosewalips

River. The project would consist of a weir which

would divert water into a pipeline that parallels the

course of the river but initially remains somewhat

level as the river descends downstream. At the down-

stream end of the pipeline, water would fall through

a generator and then be discharged back into the

river.

Finding of Fact III

The effect of Tacoma’s project would be to re-

duce the river flow in the segment of the Dosewalips

River paralleled by the pipeline. That segment of

the river is fairly steep and canyon-like. The natural

flows through this “by-pass reach” are vigorous dur-

ing most of the year. These natural flows are essen-

tially undiminished by appropriation at present.

Finding of Fact IV

Tacoma’s hydroelectric proposal must be licensed

by the U.S. Federal Energy Regulatory Commission

(FERC). Under Section 401 of the Federal Clean

Water Act the respondent, Washington State Depart.

ment of Ecology (DOE), must certify compliance

with state water quality requirements. We have pre-

viously ruled that such a certification may include

base flow limitations in the by-pass reach of the

Dosewalips River pursuant to RCW 90.54.020

(3)(a) of the State Water Resources Act, of 1971.

See “Order Granting Cross Motion for Summary

Judgment” entered April 10, 1987.

32a

Finding of Fact V

The base flows for the by-pass reach of the Dose-

walips, as contained in DOE's Section 401 Water

Quality Certification, were appealed by Tacoma.

The notice of appeal was filed before us on July 11,

1986. Following pre-hearing motions, the issues

remaining for hearing were reduced to the following:

1. Whether the specific base flows imposed by

DOE in this instance are appropriate for the

= of the fishery resource and related

values?

2. What quantity and type of fish inhabit the

waters to be affected by the base flows pre-

scribed by DOE?

Finding of Fact VI

Taking the second issue first, we find that the by-

pass reach is inhabited by steelhead and, to a lesser

extent, both Coho and Chinook salmon. The quan-

tities of these fish are sufficient to justify base flows

tailored to the life cycles of those species.

Finding of Fact VII

As to the first issue, appropriateness of the DOE

flow regime, we find as follows.

Finding of Fact VIII

Instream Flow Incremental Met!.odology. The

respondents urged or required that Tacoma conduct

a study of the by-pass reach using Instream Flow

Incremental methodology (IFIM). This method is

generally agreed to be the “state of the art” method

for analyzing water flow as related to fish habitat.

Under it, a computer modeling study is used to de-

termine “weighted usable area” in a given length of

river when flows are varied. The weighted usable

L,I AC ee Aa. a ll, lll Rt ae

a 4 Se eee

33a

area is an indicator of fish habitat and hence fish

production.

Finding of Fact X

Other factors than those considered in the IFIM

study may affect fish production. Some may be flow

related such a predation, competition, cover and

out-migration. Some are not flow related, such as

overharvest. These factors were not specifically eval-

uated in the setting of the base flows at issue. No

empirical evidence regarding these factors was con-

sidered in setting the base flows.

A 1980 study, by Mathews and Olson, points out

a relationship between stream flow and Coho salmon

production in Puget Sound. Initially, studies showed

a correlation between annual water runoff from

western Washington streams and the commercial

catch of Coho in western Washington. This corre-

lation did not last over time, however. Later a

similar correlation appeared betwcen summer runoff

and the Coho catch. These correlations, changing

over time and global in their application to all

streams of western Washington, do not materially

impair the credibility of the specific IFIM studies

conducted in the by-pass reach showing that flow

reduction there indicates improved spawning habitat

and, therefore, improved fish production potential.

In Findings of Fact IX and XI, the PCHB found that

the minimum flow regime required by the Department

of Ecology in this matter is, in fact, an “enhancement”

flow regime. In effect, the PCHB ruled that the minimum

flow regime required by Ecology would in fact increase

the amount of habitat available in the Dosewallips in the

affected portion of the Dosewallips River and, conse-

quently, fish production in the affected portion of the

river.

34a

In reaching this factual finding, the PCHB made a

number of fundamental errors, First, the PCHB ignored

the bulk of the evidence presented, most of it in the form

of expert testimony presented on behalf of the respond-

ent agencies, which supported the agencies’ position that

the Ecology minimum flow regime was just that, a mini-

mum flow regime. This agency flow regime was designed

and intended to protect and preserve the fishery resource

in the affected portion of the river. The agencies neither

intended nor did they in fact set a flow that would “en-

hance” fish habitat or fish production in the affected por-

tion of the river.

Second, the PCHB mistakenly found a computer

model's output (in the form of tables showing square

feet of useable habitat at various flow levels) to be a

true and accurate representation of actual fish habitat.

As was explained repeatedly to the PCHB, the computer

model's output, referred to as weighted useable area tables,

is simply one indicator of the amount of physical habitat

available which takes into account only three variables

of habitat. The evidence presented to the PCHB strongly

supports the agencies’ position that weighted useable area

is not the equivalent of habitat, but rather is only a crude

indicator of the amount of habitat available.

In sum, after reviewing the entire record, this Court is

left with a definite and firm conviction that the PCHB’s

factual finding that the agency flow regime is an enhance-

ment flow regime is a mistake and is incorrect.

II.

Any Conclusion of Law deemed to be a Finding of

Fact is hereby adopted as such. From these Findings of

Fact, this Court now makes these

CONCLUSIONS OF LAW

The Court set forth its Conclusions of Law in the

May 8, 1991, Memorandum Opinion. The Court hereby

ee ee ee

35a

incorporates that Memorandum Opinion, and in partic-

ular, the Conclusions of Law set forth therein.

Any Finding of Fact deemed to be a Conclusion of

Law is hereby adopted as such.

From these Conclusions of Law, the Court enters the

following: onion

The decision of the PCHB is affirmed in part and re-

versed in part. The PCHB’s decision that the minimum

flow condition required by Ecology in this matter is not

preempted by federal law is hereby affirmed. The PCHB 8

decision that the Ecology-imposed minimum flow regime

is an enhancement flow regime is hereby reversed. Fi-

nally, the PCHB’s conclusion that RCW 90.54,020(3)

does not allow an enhancement flow condition under the

circumstances presented by this case is reversed.

DATED this 14th day of August, 1991.

/s/ Carol A. Fuller

Caro. A. FULLER

Judge

Presented by:

/s/ Jay J. Manning

Jay J. MANNING

Assistant Attorney General

Attorney for Dept. of Ecology

/s/ William C. Frymire

WILLIAM C. FRYMIRE

Assistant Attorney General

Attorney for Dept. of F & W

/s/ Mark L. Bubenik by Albert R. Malanca

Mark L. BUBENIK

Assistant City Attorney

36a

/s/ Albert R. Malanca

ALBERT R. MALANCA

Attorneys for City of Tacoma and

Jefferson County PUD No. 1

OA OU 5 casts,

ae eee

37a

APPENDIX D

IN THE SUPERIOR COURT

OF THE STATE OF WASHINGTON

IN AND FOR THE COUNTY OF THURSTON

No. 89-2-00413-2

STATE OF WASHINGTON, DFPARTMENTS OF ECOLOGY,

FISHERIES AND WILDLIFE,

Petitioners,

Vv.

PUD No. 1 oF JEFFERSON COUNTY and

City oF TACOMA,

Respondents.

PUD No. 1 oF JEFFERSON COUNTY and

City oF TACOMA,

Cross-Petitioners,

Vv.

STATE OF WASHINGTON, DEPARTMENTS OF ECOLOGY,

FISHERIES AND WILDLIFE,

Cross-Respondents.

MEMORANDUM OPINION

This matter came before the Court on cross appeals

from the decision of the Pollution Control Hearings

Board. The petitioners are seeking review of the Board’s

holding that federal law does not pre-empt the actions of

the agencies, while the agencies seek review of the Board’s

holding that the flow levels established by the agencies

38a

constitute an enhanced environment, and, thus, an ultra

vires act.

The facts in this case are as follows. In 1982, the

City of Tacoma and the PUD began planning to con-

struct a hydroelectric project at the Elkhorn site on the

Dosewallips River in Jefferson County. If approved, this

project will be constructed along a 1.2 mile stretch of

the Dosewallips outside the Olympic National Park. It

is estimated that the project will divert up to 600 cubic

feet per second (cfs). The species of fish that would be

affected by the diversion are steelhead trout, and coho

and chinook salmon.

To build this project, the City of Tacoma is required

to obtain a license from the Federal Energy Regulatory

Commission (FERC). FERC, as part of the license ap-

plication process, required Tacoma to obtain a Water

Quality Certificate from the Washington Department of

Ecology.

In acting on the application for this certificate, the

Department found that an Instream Flow, Incremental

Method (IFIM) study would best assist in determining

what part of the natural river flow should remain along

the affected portion of the river in order to protect the

fisheries presently in the river. Tacoma conducted an

IFIM study during the period 1983 to 1985, and as a

result of the study proposed a flow regime ranging from

65 cfs to 155 cfs, depending upon the month.

Several months later, the Department proposed its

own flow regime, ranging from 100 to 200 cfs. In re-

sponse, Tacoma proposed a revised flow regime ranging

from 65 cfs to 170 cfs.

After considering these various proposals, the Depart-

ment issued the water quality certification presently

under appeal. This certification required that the mini-

mum instream flow be maintained in accordance with the

Pe ee eee ee

al Eh el ee

39a

flow regime proposed by the Department, ranging from

100 cfs to 200 cfs, depending on the month.

Tacoma appealed this decision to the Washington State

Pollution Control Hearings Board. The Board held that

the applicable federal statute did not preempt the Depart-

ment’s action in setting the minimum instream flows, but

did hold that the levels set by the Department were de-

signed to enhance the fishery, and, thus, exceeded the

Department’s statutory authority. The parties have cross

appealed on these two issues.

I. Federal Preemption

In arguing preemption, Tacoma relies primarily on

California v. FERC, US. , 110 S.Ct. 2024

(1990) for the proposition that FERC has superior au-

thority to establish minimum stream flows than does the

Washington Department of Ecology, while recognizing

the existence of 33 U.S.C. § 1341(d), the provision relied

on by the Department.

33 U.S.C. § 1341(d) provides as follows:

Any certification provided under this section shall set

forth any effluent limitations and other limitations,

and monitoring requirements necessary to assure that

any applicant for a Federal license or permit will

comply with any applicable effluent limitations and

other limitations, under section 301 or 302 of this

Act [33 USCS § 1311 or 1312], standard of per-

formance under section 306 of this Act [33 USCS

§ 1316], or prohibition, effluent standard, or pre-

treatment standard under section 307 of this Act

{33 USCS § 1317], and with any other appropriate

requirements of State law set forth in such certifica-

tion, and shall become a condition on any Federal

license or permit subject to the provisions of this

section. (Emphasis added)

While 33 U.S.C. §$ 1341(d) would appear, at first read-

ing, to permit state action to protect wildlife, California

40a

v. FERC’s holding that FERC preempts state action set-

ting higher minimum stream flows than FERC must be

examined.

California is a case where the facts are very similar to

those found in the present case. The Rock Creek hydro-

electric project was designed to draw water from the

creek and then return it to the river slightly less than a

mile away. The primary issue was who was permitted to

set the minimum flow rate that must remain within the

bypassed section of the creek. Initially, FERC issued a

license in 1983, which set interim minimum flow rates

after giving consideration to the economic feasibility and

environmental effects of the project. These were set in a

range of 11 cfs to 15 cfs. After study, the applicant rec-

ommended that these be adopted as the permanent rates,

while the California Department of Fish and Game recom-

mended significantly higher minimum flow rates.

In the meantime, in 1984, the state water permits were

issued which set the interim minimum flow rates in con-

formity with the FERC rates, but reserved the right to

impose higher permanent rates. In 1984 the state author-

ity suggested that the permanent minimum flow rates

should be in the range 30 cfs to 60 cfs.

Finally, after an administrative hearing FERC set the

permanent minimum flow rate at 20 cfs throughout the

year. Four days later the state board issued an order

directing the applicant to maintain the flow rates in the

range 30 cfs to 60 cfs.

The Supreme Court held that the California require-

ments for minimum in-stream flows cannot be given

effect:

As Congress directed in FPA § 10(a), FERC set the

conditions of the license, including the minimum

stream flow, after considering which requirements

would best protect wildlife and ensure that the project

ee Se

pene teeirte adi

~_ aes ee a eee

4la

would be economically feasible, and thus further

power development. Allowing California to impose

significantly higher minimum stream flow require-

ments would disturb and conflict with the balance

embodied in that considered federal agency determi-

nation. FERC has indicated that the California re-

quirements interfere with its comprehensive planning

authority, and we agree that allowing California to

impose the challenged requirements would be con-

trary to congressional intent regarding the Commis-

sion’s licensing authority and would “constitute a veto

of the project that was approved and licensed by

FERC.”

California, 110 S.Ct. at 2033.

Federal preemption of state law is governed by the

intent of Congress.

Congressional intent to preempt state law may be

found in three ways. First, Congress may express a

clear intent to preempt state law. Second, the

“scheme of federal regulation [may be] sufficiently

comprehensive to make reasonable the inference that

Congress ‘left no room’ for supplementary state reg-

ulation.” Third, preemption will be found when

there is an actual conflict between federal and state

law where (1) compliance with both the federal and

state law is physically impossible, or (2) the state

law is an ‘obstacle’-to the “full purposes and objec-

tives of Congress.”

In Washington, there is a strong presumption against

finding preemption. Preemption may be found only

if federal law “clearly evinces a congressional intent

to preempt state law”, or there is such a “ ‘direct and

positive’” conflict “that the two acts cannot ‘be rec-

onciled or consistently stand together’.”

Labor & Industries v. Common Carriers, 111 Wn.2d 586,

588, 762 P.2d 348 (1988) (citations omitted).

42a

Under the facts of the California case, the key fact in

the decision was the fact that FERC had issued its deter-

mination of what the minimum instream flow rate would

be prior to the action by the California Water Board.

Under 33 U.S.C. § 1341, California would properly be

found to be preempted. Here, on the other hand, it has

not been shown that FERC has made a decision on what

the minimum instream flow rates should be. Under 33

U.S.C. § 1341 it is clearly recognized that consideration

should be given of state standards. See also 16 U.S.C.

§ 803(j)(1). Therefore, up to the point when FERC has

made its determination, Washington has authority to de-

termine what it considers to be necessary minimum in-

stream flow rates. Since Tacoma has not shown that

FERC has acted, preemption will not be found. The deci-

sion of the Board on this issue will be affirmed.

Il. Minimum Instream Flow Rates

Judicial review of this case is under RCW 34.04.130, in

as much as it was commenced at the administrative level

prior to July 1, 1989. RCW 34.05.902. Under RCW

34.04.130(6),

the court may affirm the decision of the agency or

remand the case for further proceedings; or it may

reverse the decision if the substantial rights of the

petitioners may have been prejudiced because the

administrative findings, inferences, conclusions, or

decisions are:

(a) in violation of constitutional provisions: or

(b) in excess of the statutory authority of jurisdic-

tion of the agency; or

(d) affected by other error of law; or

(e) clearly erroneous in view of the entire record

as submitted and the public policy contained in the

43a

act of the legislature authorizing the decision or or-

der; or

(f) arbitrary or capricious

The Department asserts that the decision of the Board

holding the flow rates proposed by the Department op-

erated to enhance the existing fishery and were, thus, out-

side the Department’s authority is either clearly erroneous

or affected by other error of law.

A decision is clearly erroneous if, having reviewed the

entire record and having considered the public policy be-

hind the legislation, the court is left with the firm and

definite conviction that a mistake has been committed.

Cougar Mountain Assocs. v. King County, 111 Wn.2d

742, 765 P.2d 264 (1988). This result follows even if

there is some supporting evidence for the decision. Johns

v. Employment Security, 38 Wn.App. 566, 686 P.2d 517

(1984).

On the other hand, in reviewing under the error of law

standard, the court will conduct a de novo review and

may substitute its judgment for that of the agency. Inland

Empire v. Utilities & Transportation, 112 Wn.2d 278, 770

P.2d 624 (1989).

Here the primary issue raised by this case is whether

the Board was clearly erroneous in finding that the De-

partment’s proposed flow rates will enhance the natural

fisheries present in the bypass portion of the river. A

secondary issue is whether a flow rate that may enhance

the natural fishery constitute an ultra vires action, in that

it does more than preserve the natural fishery?

With respect to the primary issue, I have reviewed the

entire record in this matter, and have given consideration

to the public policy behind the legislation and to the

arguments of counsel. This record leaves me with a firm

and definite conviction that the Board erred in finding

that the flow rates proposed by the Department constitute

44a

a tate of flow which will enhance the naturally existing

fishery in the Dosewallips. Since the burden of proof was

on Tacoma to prove that the Department's flow rates en-

hanced the fishery, its failure to prove that the Depart-

ment’s flows did more than preserve the potential habitat

existing in the river and, in fact, enhanced the natural

fishery requires that the Board’s decision be reversed.

Having based my decision on the first issue, it is not

necessary to examine the secondary issue. However, I con-

clude that the Board was incorrect in concluding that a

flow rate that may result in an enhancement constitutes

an ultra vires action.

The statute which gives rise to this issue is RCW

90.54.020(3), which provides that

The quality of the natural environment shall be pro-

tected and, where possible, enhanced as follows:

(a) Perennial rivers and streams of the state shall be

retained with base flows necessary to provide for

preservation of wildlife, fish, scenic, aesthetic and

other environmental values and navigational values.

Lakes and ponds shall be retained substantially in

their natural condition. Withdrawals of water which

would conflict therewith shall be authorized only in

those situations where it is clear that the overriding

considerations of the public interest will be served.

of the river, these base flows exceeded the Department’s

authority. In so concluding, the Board limited the ap-

plicability of the prefatory phrase “and where possible,

enhanced” to those situations where “paper water” ex-

isted, or where water rights had been abandoned in rivers

which had been over-appropriated. |

45a

The Department argues that this portion of the statute

is clear and unambiguous, should be given its plain and

ordinary meaning, State v. Theilken, 102 Wn.2d 271, 684

P.2d 709 (1984), and that the conclusion of the Board

limits the language of the Legislature in an unwarranted

manner.

The Court must agree with the Department. While the

situations suggested by the Board may be the most com-

mon situations when enhancement can occur, they are

not the only situations. This river will have portions of

its waters diverted. The question is to what degree. Since

it is possible to fix a base flow that will enhance the fishery

while still permitting development of the river, the Depart-

ment correctly determined that it should fix a base flow

that would optimize all varieties of fish in the river.

Dated this 8 day of May, 199T.

/s/ Carol A. Fuller

Caro. A. FULLER

Judge

46a

APPENDIX E

BEFORE THE

POLLUTION CONTROL HEARINGS BOARD

STATE OF WASHINGTON

PCHB No. 86-118

IN THE MATTER of a Section 401 Water Quality Certifi-

cation granted by Department of Ecology PUD No. |

of Jefferson County and City of Tacoma |

PUD No. 1 oF Jerrerson COUNTY, AND Criry or

TACOMA, DEPARTMENT OF PusLic UTILITIES,

Appellants,

STATE OF WASHINGTON DEPARTMENT OF ECOLoGy

Respondent,

and

STATE OF WASHINGTON DEPARTMENT OF WILDLIFE

DEPARTMENT OF FISHERIES

Intervenors.

REVISED FINAL FINDINGS OF FACT,

CONCLUSIONS OF LAW AND ORDER

This matter is the appeal of base flows contained within

a Water Quality Certification, granted by respondents

with respect to a hydroelectric proposal by appellants.

The matter came before the Pollution Control Hearings

Board, Wick Dufford. Chairman, Lawrence J. Faulk.

Member, and Judith A. Bendor, Member. William A.

Harrison. Administrative Appeals Judge presided.

47a

The hearing was conducted at Lacey, Washington, on

December 15, 16, 17 and 18, 1988.

Appellants appeared by Mark L. Bubenik, Assistant

City Attorney for Tacoma. Respondent, State Depart-

ment of Ecology appeared by jay J. Manning, Assistant

Attorney General. Respondent Intervenors State Depart-

ments of Wildlife and Fisheries appeared by William C.

Frymire, Assistant Attorney General. Reporter, Gene

Barker and Associates provided court reporting services.

Respondent elected a formal hearing pursuant to RCW

43.21B.230.

Witnesses were sworn and testified. Exhibits were

examined. Closing Briefs were filed on February 4, 1988.

From testimony heard and exhibits examined, the Pollu-

tion Control Hearings Board issued a decision on June

29, 1988, with a dissent, following. The respondents

filed a Petition for Reconsideration. Appellants filed a

Memorandum in Opposition. A copy of the transcript

was filed. Board Member Harold S. Zimmerman has re-

viewed the record. After reconsideration, the Board

issues this revised decision:

FINDINGS OF FACT

This matter concerns the Dosewalips [sic] River on

the Olympic Peninsula of Washington.

Appellants (hereafter Tacoma) propose to construct

a hydroelectric project on the Dosewalips River. The

project would consist of a weir which would divert water

into a pipeline that parallels the course of the river but

initially remains somewhat level as the river descends

downstream. At the downstream end of the pipeline,

water would fall through a generator and then be dis-

charged back into the river.

48a

The effect of Tacoma’s project would be to reduce the

river flow in the segment of the Dosewalips River paralled

by the pipeline. That segment of the river is fairly steep

and canyon-like. The natural flows through this “by-

pass reach” are vigorous during most of the year. These

natural flows are essentially undiminised by appropria-

tion at present.

Tacoma’s hydroelectric proposal must be licensed by

the U.S. Federal Energy Regulatory Commission

(FERC). Under Section 401 of the Federal Clean Watet

Act the respondent, Washington State Department of

Ecology (DOE) must certify compliance with state water

quality requirements. We have previously ruled that such

a certification may include base flow limitations in the

by-pass reach of the Dosewalips River pursuant to RCW

90.54.020(3)(a) of the State Water Resources Act, of

1971. See “Order Granting Cross Motion for Summary

Judgment” entered April 10, 1987.

The base flows for the by-pass reach of the Dosewalips,

as contained in DOE's Section 401 Water Quality Cer-

tification, were appealed by Tacoma. The notice of ap-

peal was filed before us on July 11, 1986. Following

pre-hearing motions, the issues remaining for hearing

were reduced to the following:

1. Whether the specific base flows imposed by

DOE in this instance are appropriate for the pres-

ervation of the fishery resource and related vdlues?

2. What quantity and type of fish inhabit the waters

to be affected by the base flows prescribed by DOE?

Taking the second issue first, we find that the by-pass

reach is inhabited by steelhead and, to a lesser extent,

49a

both Coho and Chinook salmon. The quantities of these

fish are sufficient to justify base flows tailored to the life

cycles of those species.

VII

As to the first issue, appropriateness of the DOE flow

regime, we find as follows,

Vill

Instream Flow Incremental Methodology. The respond-

ents urged-or required that Tacoma conduct a study of

the by-pass reach using Instream Flow Incremental meth-

odology (IFIM). This method is generally agreed to be

the “state of the art’ method for analyzing water flow

as related to fish habitat. Under it, a computer modeling

study is used to determine “weighted usable area” in a

given length of river when flows are varied. The weighted

usable area is an indicator of fish habitat and hence fish

production.

The respondents regard spawning as the limiting fac-

tor in fish production within the by-pass reach. The

IFIM data show that when the natural, vigorous flow

of river in the by-pass reach is decreased, spawning habi-

tat actually improves. The base flows in this matter were

set by selecting, in each month where spawning occurs,

that flow* which produces 100% of the weighted usable

1 The optimum fish flow adopted in this matter was deemed con-

sistent, in testimony from the Department of Wildlife, with the

following Department of Wildlife draft policy on instream flow:

Minimum instream flows are flows which maximize habitat

for flow-dependent fish and wildlife; minimum flows are not

less than optimum flows. Any reduction of flow below minimum

instream flow reduces habitat. Additional flow above minimum

instream flow does not increase habitat. Natural flows are

sometimes less than minimum instream flow, but any pro-

longing of natural, subminimum instream flow will adversely

impact fish and wildlife.

POL IFI, dated June 22, 1984.

50a

area using the IFIM data. This constitutes an optimum

flow regime for fish where, as here, spawning is the fac-

tor limiting further fish production. Moreover, this also

constitutes a flow regime which, for fish, is potentially

superior to that provided by the natural flow of the Dose-

walips River in the by-pass reach.

Other factors than those considered in the IFIM study

may affect fish production. Some may be flow related

such as predation, competition, cover and out-migration.

Some are not flow related, such as overharvest. These

factors were not specifically evaluated in the setting of

the base flows at issue. No empirical evidence regarding

these factors was considered in setting the base flows.

A 1980 study, by Mathews and Olson points out a re-

lationship between stream flow and Coho salmon produc-

tion in Puget Sound. Initially, studies showed a correla-

tion between annual water runoff from western Washing-

ton streams and the commercial catch of Coho in west-

ern Washington. This correlation did not last over time,

however. Later a similar correlation appeared between

summer runoff and the Coho catch. These correlations,

changing over time and global in their application to all

Streams of western Washington, do not materially impair

the credibility of the specific IFIM studies conducted in

the by-pass reach showing that flow reduction there in-

dicates improved spawning habitat and, therefore, im-

proved fish production potential.

Tacoma has proposed base flows, using the same IFIM

data, that were not accepted by DOE. Tacoma’s pro-

posed base flows were selected to equal or exceed the

weighted useable area provided by the natural flow of the

river for all life cycles of the fish species at issue. The

existing, natural flow of the river was deemed by Tacoma

to be the “50% exceedence flow” in the IFIM data. This

Sb et

S5la

is the median daily flow meaning half the time daily flows

are more and half the time daily flows are less. Tacoma's

proposed base flows provide weighted usable area equal-

ing or exceeding that provided by the existing natural

flow as depicted by the 50% exceedence flow. A sum-

mary of pertinent flows is as follows:

DOE Tacoma’s Proposed

ais oe Base Flow_ Base Flow

(50% Exceedence

flow)

(CFS) (CFS) (CFS)

Jan. 340 140 100

Feb. 302 100 a

March 325 200 ae

April 408 200 peo

May 689 200 i

June 738 200 4

July 448 200 , :

Aug. 222 200 170

Sept. 159 150 150

Oct. 149 140 140

Nov. 285 140 Ll

Dec. 897 140 75

Although additional data might present a more nearly

rms th picture, we find that the 50% exceedance

flow is an appropriate indicator of the existing flow con-

ditions in the river. Because reduction in flows improves

fish habitat to a point where further reductions reverse

the trend, the IFIM data shows that existing flow and

Tacoma’s proposed base flows have similar habitat value

while DOE’s base flow has habitat value greater than

either. Respondents have not made any independent de-

termination of existing fish habitat value in setting the

DOE base flow.

f testi-

* Initially proposed as 65 CFS this flow was the subject o

a. at chart during which Tacoma stipulated to the higher

flow proposal to protect egg incubation.

52a

XII

Any Conclusion of Law deemed to be a Finding of

Fact is here by adopted as such. From these Findings

of Fact, the Board makes these

CONCLUSIONS OF LAW

Base flows in perennial rivers of the state are prescribed

and authorized by the State Water Resources Act of

1971, Chapter 90.54 RCW. In pertinent part, that act

provides at RCW 90.54.020 as follows:

90.54.020 General declaration of fundamentals for

utilization and management of waters of the state

Utilization and management of the waters of the

state shall be guided by the following general dec-

laration of fundamentals:

(1) Uses of water for domestic, stock watering,

industrial, commercial, agricultural, irrigation, hy-

droelectric power production, mining, fish and wild-

life maintenance and enhancement, recreational, and

thermal power production purposes, and preserva-

tion of environmental and aesthetic values, and all

other uses compatible with the enjoyment of the

public waters of the state, are declared to be bene-

__ ficial.

(2) Allocation of waters among potential uses

and users shall be based generally on the securing

of the maximum net benefits for the people of the

state. Maximum net benefits shal! constitute total

benefits less costs including opportunities lost.

(3) The quality of the natural environment shall

be protected and, where possible, enhanced as fol-

lows:

53a

(a) Perennial rivers and streams of the state shall

be retained with base flows necessary to provide for

preservation of wildlife, fish, scenic, aesthetic and

other environmental values, and navigational values.

Lakes and ponds shall be retained substantially in

their natural condition. Withdrawals of water which

would conflict therewith shall be authorized only in

those situations where it is clear that overriding con-

siderations of the public interest will be served.

(b) Waters of the state shall be of high quality.

Regardless of the quality of the waters of the state,

all wastes and other materials and substances pro-

posed for entry into said waters shall be provided

with all known, available, and reasonable methods

of treatment prior to entry. Notwithstanding that

standards of quality established for the waters of the

state would not be violated, wastes and other ma-

terials and substances shall not be allowed to enter

such waters which will reduce the existing quality

thereof, except in those situations where it is clear

that overriding considerations of the public interest

will be served. (Emphasis Added.)

Tacoma first urges that base flows may not be set at

levels which provide the optimum flow regime for a

We agree. In Northwest Steelhead and Salmon Council,

et al. v. State Department of Ecology, et. al., PCHB 81-

148 (1983) we concluded that base flows represent a

statutory allocation for the environment to be taken out

before the maximum net benefits formula is applied. [n

that case, however, the base flows adopted by DOE were

below the optimum for fish. We concluded that flows in

excess of the base flow were subject to the maximum

net benefits rule, thereby potentially including flows which

would be the optimum for fish. We held that:

54a

“The maximum net benefits requirement of the

WRA [Water Resources Act] does not guarantee

the optimum flows for fish, nor guarantee that ex-

isting fish habitat will be enhanced. Neither does it

guarantee that all flows in excess of instream [base]

flows shall be -available for diversion. Rather, it

calls for the balancing of competing, beneficial uses.”

Northwest Steelheal, supra, at Conclusion of Law

IX, p. 16. [Brackets added. |

This balancing of competing, beneficial uses applies only

to the marginal flow above the base flow, and not to the

base flow itself. Yet if, as here, the optimum flow regime

for fish is adopted as the base flow, that optimum fish

flow is guaranteed without any portion of it being sub-

jected to the maximum net benefits test. This is not con-

sistent with DOE’s earlier adoption of base flow in North-

west Steelhead, supra, nor with our holding therein.

Moreover, the adoption of optimum fish flows as base

flow leaves barren the Statutory admonition that water

uses, which by RCW 90.54.020(1) includes fish main-

tenance and enhancement, shall be allocated under the

maximum net benefit rule of RCW 90.54.020( 2). While,

as DOE urges, the maximum net benefit rule applies only

to “potential” uses, that limitation would exclude only

certain maintenance flows, such as those adopted by DOE

as base flows in Northwest Steelhead, supra. By contrast,

the optimum fish flows adopted in this case introduce the

potential for enhanced fish use in competition with the

potential hydroelectric use, while impermissibly dispens-

ing with the statutory maximum net benefits test.

The optimum fish flows adopted as base flows by DOE

in this matter are inconsistent with RCW 90.54.020( 2)

in that the incremental portion of these flows constituting

fish habitat enhancement were not subjected to a maxi-

mum net benefit test.

— _ ato.

55a

iit

The optimum fish flows adopted as base ome "Y “~o

are also inconsistent with the statutory authorization

oni flows. Base flows, as authorized at RCW 90.54.020

(3)(a), are those “necessary to provide for preservation

of” fish and related values. The term “preservation is

not specifically defined, nor ambiguous. Words in a stat-

ute should be given their ordinary meaning absent am-

biguity or statutory defiition. Garrison v. State Nursing

Board, 87 Wm. 2d 195, 550 P. 2d 7 (1976). Diction-

aries may be used to ascertain the common meaning of

statutory language. Garrison, supra; East v. King County,

22 Wn. App. 247, 589 P2d 805 (1987). The term “pres-

ervation” means “the act of preserving” while the root

word “preserve’’, means “to keep safe from injury, harm

or destruction”. Webster's Third New International Dic-

tionary, 1974 (1971). The evidence in this matter 1s

that the optimum fish flows adopted as base flows en-

hance fish habitat beyond that provided by the river in its

natural state. This is inconsistent with the statutory plan

that base flows “keep safe” or preserve the fish habitat,

rather than enhance it.

Respondent, DOE, urges that it may enhance fish habi-

tat through base flows because of the prefatory wording

of RCW 90.54.020(3) which states:

The quality of the natural environment shall be

protected and, where possible, enhanced as follows:

... (Emphasis added. )

The “preservation” language for base flows then follows

at RCW 90.54.020(3)(a) as do the requirements for

wastes proposed for entry into the water at RCW 90.54.020

(3)(b). The prefatory wording provides that the en-

vironment shall be “protected” in all cases. The word

56a

“protect” means “to cover or shield form that which would

injure or destroy or detrimentally affect. Webster's, su-

pra, 1822. Thus the term “protected” is kindred in

meaning to the term “preservation” applicable to base

flows. By contrast, the word “enhance” means “ad-

vance, elevate, augment, heighten or increase”. Webs-

ters, supra, 753. The key to understanding this prefa-

tory wording is that while it uses the terms “protected”

and “enhanced”, which are distinguishable from one an-

other, it provides for protection in all cases but provides

for enhancement only “where possible”.

Here it is noteworthy that the Water Resources Act

of 1971, Chapter 90.54 RCW, was enacted relatively

recently in the history of Washington water law. At the

time of its’ enactment, many rivers and streams had long

been subject to appropriations diverting their waters for

various uses. Thus while the base flows were intended to

“protect” all rivers, some were already over-appropriated

to meager flow levels by 1971. In Northwest Steelhead,

supra, summer flows in the Green River had been re-

duced by pre-1971 appropriations to low levels. In that

matter, DOE adopted a base flow which exceeded the

actual flow in the river at low summer levels. The

amount by which base flow exceeds actual flow is some-

times referred to as “paper water” in recogn

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