Amicus Curiae Brief — PUD No. 1 of Jefferson Cty. v. Washington Dept. of Ecology

No. 92-1911

IN THE

Supreme Court of the United States

OCTOBER TERM, 1993

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,

Respondents.

On Petition for a Writ of Certiorari to the

Supreme Court of the State of Washington

BRIEF OF AMICI CURIAE AMERICAN FOREST &

PAPER ASSOCIATION, AMERICAN PUBLIC POWER

ASSOCIATION, EDISON ELECTRIC INSTITUTE,

AND NATIONAL HYDROPOWER ASSOCIATION

IN SUPPORT OF PETITION

FOR A WRIT OF CERTIORARI

JOHN R. MOLM

Counsel of Record

WINIFRED D. SIMPSON

JAMES A. LAMBERTH

TROUTMAN SANDERS

Suite 5200, NationsBank Plaza

600 Peachtree Street, N.E.

Atlanta, Georgia 30308-2216

(404) 885-3000

August 6, 1993 Counsel for Amici Curiae

(Additional Counsel Listed on Inside Cover )

SS I ATID CATE SAL EE TRE SP PEI ET IED

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

JEREMY M. METZ

American Forest & Paper

Association

260 Madison Avenue

New York, N.Y. 10016-2499

(212) 340-0600

ALAN H. RICHARDSON

American Public Power

Association

2301 M Street, N.W.

Washington, D.C. 20037

(202) 467-2904

HENRI D. BARTHOLOMOT

Edison Electric Institute

701 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

(202) 508-5622

JONATHAN W. GOTTLIEB

National Hydropower

Association

701 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

(202) 508-4321

QUESTIONS PRESENTED

1. Whether the State of Washington Department of —

Ecology exceeded its authority under section 401 of the

Clean Water Act by requiring minimum stream flows for

fish habitat as a condition of a water quality certificate

issued for a hydroelectric project subject to the juris-

diction of the Federal Energy Regulatory Commission

(“FERC”).

2. Whether the Federal Power Act’s grant of ultimate

authority to FERC to establish hydroelectric license con-

ditions (including conditions that are inconsistent with

state recommendations), after considering recommenda-

tions of state wildlife and other regulatory agencies, re-

stricts a state’s authority to require non-water quality

related minimum flows at hydroelectric projects pursuant

to section 401 of the Clean Water Act.

(i)

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ooo... cceecceeeeeseeeee i

TE GO ERIE OEE ccceccccccccensscsssccsevescszcscencsenece v

INTEREST OF AMICI CURIAE ....WW. 2... 1

SUMMARY OF THE ARGUMENT ......0. 4

EE OR ce D 6

I. THE WASHINGTON SUPREME COURT'S

DECISION IMPROPERLY EXPANDS THE

AUTHORITY GRANTED THE STATES UN-

DER SECTION 401 OF THE CLEAN WATER

ACT AND THEREBY ESTABLISHES A CON-

FLICT BETWEEN STATE AND FERC JU-

RISDICTION OVER THE HYDROELECTRIC

LICENSING PROCESS THAT ONLY THIS

COURT CAN RESOLVE ........................ sadilbiataiiaben 6

A. The Washington Supreme Court’s Decision

Improperly Expands The Authority Granted

The States Under Section 401 Of The Clean

Water Act And Is Inconsistent With This

Court’s Interpretation Of FERC’s Jurisdic-

tion Under The Federal Power Act ........... 6

1. The Washington Department Of Ecology

Exceeded The Authority Granted To The

States Under The Clean Water Act ...... 7

2. The Washington Decision Is Incompatible

With Federal Regulation Of Hydropower

As Interpreted By This Court ............. 8

B. Only This Court Can Resolve The Conflict

Regarding The Scope Of Authority Granted

The States Under Section 401 Of The Clean

aati alii artcninratiats siesieaniiee 13

iv Vv

TABLE OF AUTHORITIES

Page Cases Page

Arnold Irrigation Dist. v. Department of Envtl.

Quality, 79 Or. App. 136, 717 P.2d 1274 (1986). 13

Bangor Hydro-Electric Co. v. Board of Envtl. Pro-

TABLE OF CONTENTS—Continued

1. The Washington Decision Is Only One

Example Of The Confusion Regarding

The Scope Of Authority That Congress

Granted The States Under Section 401... 13

tection, 595 A.2d 438 (Me. 1991) ....0 0... 14

2. A Decision From This Court Is Necessary California v. FERC, 495 U.S. 490 (1990) .......... 4,11,12

Because FERC Has Determined That It First lowa Hydro-Electric Coop. v. FPC, 328 U.S.

Will Not Contest The Scope Of State 401 RET RR er aaa 4,11, 12, 16

Certification, And Federal Courts Defer

To State Courts On This Issue ............... 15

Il. THE FERC HYDROPOWER LICENSING

PROCESS WILL BE EFFECTIVELY PARA-

Georgia-Pacific Corp. v. Department of Envtl.

Conservation, No. 91-530 (Vt. Sept. 14, 1992)... 13, 14

Lake Erie Alliance for Protection of Coastal Cor-

ridor v. U.S. Army Corps of Engineers, 526 F.

®RST 15

LYZED AND THE NATION’S HYDRO- _~.

POWER PROJECTS WILL BE SEVERELY — Se on

AFFECTED IF STATES ARE ALLOWED TO

IMPOSE MINIMUM FLOW CONDITIONS

FOR FISH HABITAT AND OTHER NON-

WATER QUALITY CONDITIONS THROUGH

Niagara Mohawk Power Corp. v. New York State

Dep’t of Envtl. Conservation, 187 A.D.2d 7, 592

N.Y.S.2d 141 (N.Y. App. Div. 1993) —................ 14

Pennsylvania Dep’t of Envtl. Resources v. City of

SECION 401 CERTIFICATIONS ....................... 17 | Harrisburg, 183 Pa. Commw. 577, 578 A.2d 563

AIRES ERIS RUBS eon Sr piore ieee Nero neS a ee Oe 14

CONCLUSION 0... -eeseesnecseeeeseeseneneseesessasensencenenneeneeecs 19 Roosevelt Campobello Int'l Park Comm'n v. U.S.

Envtl. Protection Agency, 684 F.2d 1041 (list

APPENDIX “SAR ate ie eee 15

i aa a a la Summit Hydropower v. Commissioner of Envtl.

Protection, No. CV91-050-26-43, 1992 Conn.

Text of Order, Georgia-Pacific Corp. v. Depart-

Super. LEXIS 2177 (Conn. Super. Ct. July 20,

ment of Envil. Conservation, No. 91-530 (Vt. Sept. lie AR i itt a PE ea 14

14, 1992) nn ceeeeeenen cseoseecnneennnsecanenseneccneeccneecoscs 3a United States Dep’t of Interior v. FERC, 952 F.2d

FO Ee eee 15

Washington Dep’t of Ecology v. PUD No. 1, 121

Wash. 2d 179, 849 P.2d 646 (1993) 0... 12

Administrative Decisions

Central Maine Power Co., 52 F.E.R.C. © 61,033

RETEST SESE SESSA See eeae ly even aor en 16

Noah Corp., 57 F.E.R.C. © 61,170 (1991) 0.0.0... 16

Rock Creek Ltd. Partnership, 38 F.E.R.C. © 61,240

a aia lana al ie ciate 10

vi

IN THE

ee a Supreme Court of the United States

Town of Summersville, 60 F.E.R.C. { 61,291 OcTOBER TERM, 1993

STITT - ssc hn hntech net biehenenehednietiatbaae bind igaeedibaemiaiiatabiadins 15

sae No. 92-1911

The Clean Water Act, 33 U.S.C. § 1251 et seq. 0. 7a"

RUA Ee passim

Electric Consumers Protection Act, Pub. L. No. 99- |

495, 100 Stat. 1243 (1986)... 9, 10, 16 PUD No. | oF JEFFERSON COUNTY

Federal Power Act, 16 U.S.C. §§79la et seq. AND THE CITY OF TACOMA,

aE Shale ae AR aaa an passim . Petitioners,

Federal Water Power Act, 41 Stat. 1063 —............. 8 | '

Wash. Rev. Code § 90.54.020(3) (a) (1991) ......... 12 STATE OF WASHINGTON, DEPARTMENT OF

Miscella EcoLoGy, DEPARTMENT OF FISHERIES

AND DEPARTMENT OF WILDLIFE,

H.R. Conf. Rep. No. 934, 99th Cong., 2d Sess. 21 Respondents.

(1986), reprinted in 1986 U.S.C.C.A.N. 2537 ..... 10

46 Fed. Reg. 55026 (1961) -.................------------------ ° On Petition for a Writ of Certiorari to the

Edison Electric Inst., Statistical Yearbook of the

Electric Utility Industry/1991, No. 59 (EEI, Supreme Court of the State of Washington

Ee 2

National Hydropower Association, Hydro Guide: :

Hydroelectric Resources of the United States BRIEF OF AMICI CURIAE AMERICAN FOREST &

(NHA, Washington, D.C. 1989) —............... 3 PAPER ASSOCIATION, AMERICAN PUBLIC POWER

. , ASSOCIATION, EDISON ELECTRIC INSTITUTE,

AND NATIONAL HYDROPOWER ASSOCIATION

IN SUPPORT OF PETITION

FOR A WRIT OF CERTIORARI

INTEREST OF AMICI CURIAE

The American Forest & Paper Association (“AFPA”),

American Public Power Association (“APPA”), Edison

Electric Institute (“EEI”), and National Hydropower As-

sociation (“NHA”) submit this brief as amici curiae.'

AFPA is the national trade association of the forest, pulp,

1 Letters from counsel for Petitioners and Respondents consent-

ing to the filing of this brief by amici curiae have been filed with

this Court.

2

paper, paperboard, and wood products industry. APPA

and EEI are the national trade associations of the publicly-

owned and investor-owned segments of the nation’s elec-

tric utility industry. Together, APPA and EEI members

generate approximately 85% of all electricity in the

United States and serve approximately 90% of the na-

tion’s ultimate consumers of electricity. NHA is the

national association of hydroelectric project owners, build-

ers, equipment suppliers, and consultants.*

The issues raised by Petitioners in their Petition for

Review involve the interpretation and implementation by

the states of section 401 of the Clean Water Act, and the

impact of section 401 on the licensing of hydroelectric

projects nationwide. Expansion of state regulation of

water flows at hydroelectric projects pursuant to the Clean

Water Act will have a broad-ranging impact on the mem-

bers of AFPA, APPA, EEI, and NHA and on the

development and continued reliance on hydroelectric gen-

erating projects throughout the country. The members of

the amici associations hold the large majority of the more

than 1,000 hydroelectric project licenses issued by FERC

for projects located throughout the United States. Water

flow conditions are an essential component of these li-

censes, directly impacting each project’s energy production

and other benefits created by the project.

Furthermore, the issues in this proceeding have national

implications. Altogether, FERC licensed and other federal

and non-federal hydropower projects represent a signifi-

cant part of America’s present energy supply—providing

nearly 90,000 megawatts of electricity totaling approxi-

mately 12% of the United States’ electric capacity.* Over

150 million consumers in 48 states, including residential,

*The particular interest of each association is more fully de

scribed in the Appendix (A. la-2a).

8 Edison Electric Inst., Statistical Yearbook of the Electric Utility

Industry/1991, No. 59, Table 3, p.8 (EEI, Washington, D.C. 1992).

3

agricultural, commercial and industrial customers, benefit

from the power generated by hydroelectric facilities.‘ The

long, useful life of hydroelectric facilities and their low

operating and maintenance costs place hydroelectric power

among the least expensive sources of electricity, a benefit

that inures directly to electricity consumers.® Hydroelec-

tric generation is a clean, renewable source of energy, the

use of which limits the emissions that would otherwise

result from the burning of fossil fuels. Additionally, the

regulation of water at hydroelectric projects provides rec-

reational opportunities to millions of citizens and benefits

to fish and wildlife. Multi-purpose hydroelectric projects

also support flood control, navigation, irrigation and do-

mestic water supply.

Under authority granted by Congress to FERC in the

Federal Power Act, FERC establishes license conditions

for projects pursuant to its national jurisdiction to protect

and reconcile competing water use demands, such as fish

and wildlife habitat, aesthetics, recreation, water quality,

navigation, power plant capacity and energy output. The

Federal Power Act requires FERC, in licensing and re-

licensing hydroelectric projects, to give equal considera-

tion to power and non-power interests that may affect

interstate water use concerns. By balancing all of these

considerations and tailoring appropriate license terms and

conditions, FERC is able to ensure that the public in-

terest, as a whole, is served.

In contrast, state water quality agencies have a sub-

stantially narrower perspective. Through an overbroad

reading of section 401 of the Clean Water Act, the state

water quality agency in this proceeding is seeking to

usurp FERC’s authority over the licensing process, up-

setting FERC’s ability to weigh power and non-power

4 National Hydropower Association, Hydro Guide: Hydroelectric

Resources of the United States, “Introduction” (NHA, Washington,

D.C. 1989).

5 Id.

4

considerations in crafting workable hydroelectric project

licenses.

As the national voices for all sectors of the hydroelec-

tric industry, amici are vitally interested in ensuring that

federal statutes governing the development of hydroelec-

tric power are consistently interpreted. Such consistent

interpretation will allow state and federal agencies to

perform their intended roles in implementing those

statutes, thereby ensuring FERC’s ability to license projects

in a way that safeguards the overall public interest and

protects the viability of the nation’s hydropower resources.

SUMMARY OF THE ARGUMENT

This Court should grant the petition for writ of cer-

tiorari for four reasons. First, the state agency in this

proceeding exceeded the authority that Congress granted

to it under the Clean Water Act. In upholding the flow

conditions imposed by the Washington Department of

Ecology on the Elkhorn hydroelectric project in Tacoma,

the Washington Supreme Court held that section 401 of

the Clean Water Act grants the State of Washington the

authority to impose non-water quality-based minimum

stream flow conditions to protect fish habitat. The Wash-

ington Supreme Court’s interpretation of the authority

granted to the states under section 401 of the Clean

Water Act conflicts with the express provisions of that

Act. Moreover, the decision below evisceraies provisions

of the Federal Power Act in which Congress expressly

granted FERC ultimate authority over this issue and is

inconsistent with this Court’s opinions in First lowa

Hydro-Electric Coop. v. FPC, 328 U.S. 152 (1946) and

California v. FERC, 495 U.S. 490 (1990), which in-

terpret the scope of FERC’s licensing authority in rela-

tion to the state regulation of water.

Second, state court decisions that interpret the scope

of state authority under section 401 of the Clean Water

Act are divided, causing uncertainty and necessitating

5

guidance from this Court. The Washington Supreme

Court’s opinion merely adds to a confusing array of di-

vergent opinions that interpret the scope of authority that

Congress granted to the states under section 401. These

conflicting state court opinions demonstrate the incon-

sistent application of federal law by various courts and

create substantial confusion among the states, for FERC

and for the hydroelectric industry.

Third, as a result of FERC’s and the federal courts’

determination that they are largely unable to review state

action under section 401 of the Clean Water Act, the

Washington Department of Ecology’s action presents a

federal question that only this Court can resolve. Be-

cause the language of section 401(d) requires FERC to

accept water quality certifications issued by states pur-

suant to section 401, FERC has determined that it lacks

authority to review conditions contained in state certifi-

cations. Additionally, federal courts have deferred to

State courts the issue of the propriety of conditions im-

posed in water quality certifications issued by states.

Therefore, absent a decision from this Court, each state’s

water quality agency and the courts of each state will

remain free to adopt whatever expansive interpretation of

that state’s 401 certifying authority they deem appropriate.

Fourth, the Washington Supreme Court’s decision

threatens to seriously disrupt the FERC hydropower li-

censing process. The practical consequence of the Wash-

ington Supreme Court’s decision regarding the scope of

state authority under section 401 is that individual states

may usurp FERC’s licensing authority. Under the Wash-

ington Supreme Court’s interpretation of section 401 of

the Clean Water Act, a state may impose flow condi-

tions that severely constrain FERC’s ability to establish

reasonable license terms and conditions that are designed

to address a broader range of factors affecting the public

interest. Flow conditions are of primary importance in a

federal hydropower license. They affect not only power

6

production but also project economics, project viability,

recreation, navigation, fish and wildlife habitat, and a

host of other concerns that FERC, but not a state water

quality agency, must consider under the Federal Power

Act. A state water resource agency that has no obligation

to consider the impact of its decisions on energy pro-

duction and the other benefits of hydroelectric projects

can now decide the fate of hydroelectric projects instead

of FERC, the agency to which Congress delegated au-

thority to make those decisions.

Forty-eight states now have federally licensed hydro-

power projects under FERC jurisdiction. Without guid-

ance from this Court, inconsistent decisions regarding the

scope of the states’ authority to impose stream flows un-

related to water quality at a hydroelectric project as a

condition of a section 401 certification will continue to

erode FERC’s authority to establish a national energy

policy and cause uncertainty and delay in the licensing of

hydroelectric projects nationwide.

ARGUMENT

I. THE WASHINGTON SUPREME COURT'S DECI-

SION IMPROPERLY EXPANDS THE AUTHORITY

GRANTED THE STATES UNDER SECTION 401 OF

THE CLEAN WATER ACT AND THEREBY ESTAB-

LISHES A CONFLICT BETWEEN STATE AND

FERC JURISDICTION OVER THE HYDROELEC-

TRIC LICENSING PROCESS THAT ONLY THIS

COURT CAN RESOLVE.

A. The Washington Supreme Court’s Decision Improp-

erly Expands The Authority Granted The States

Under Section 401 Of The Clean Water Act And

Is Inconsistent With This Court’s Interpretation Of

FERC’s Jurisdiction Under The Federal Power Act.

Under the Washington Supreme Court’s interpretation

of section 401 of the Clean Water Act, a state may im-

pose conditions on a FERC license, such as minimum

stream flows to protect fish habitat, that directly conflict

7

with the authority granted FERC under the Federal

Power Act. Congress did not intend for section 401 to

apply so expansively. Rather, in allowing states to con-

dition water quality certificates pursuant to section 401,

Congress provided the states with authority to impose

appropriate conditions based on applicable effluent limi-

tations, water quality standards and other provisions spec-

ified in section 401(d) as well as state law requirements

directly relevant to such factors. The Supreme Court of

Washington’s interpretation of section 401 significantly

exceeds the bounds of this authority and, consequently,

upsets the balance of authority that Congress has estab-

lished between state certification authorities under section

401 and the federal licensing and permitting agencies

that require section 401 water quality certificates.

1. The Washington Department Of Ecology Ex-

ceeded The Authority Granted To The States

Under The Clean Water Act.

Rather than repeat the entire argument made by the

Petitioners regarding the State of Washington’s failure to

act within the parameters of the limited authority granted

to it under section 401 of the Clean Water Act, the amici

adopt those arguments by reference. To summarize, the

Clean Water Act was enacted to regulate the discharge

of pollutants intc the nation’s waters. In section 401 of

the Clean Water Act, Congress provided the Environ-

mental Protection Agency with authority to limit the dis-

charge of pollutants through a permitting process and

through the development of effluent guidelines and water

quality standards that are applied to determine the speci-

fied levels of discharge to be permitted. In addition, pur-

suant to the Clean Water Act, individual states can as-

sume certain responsibility for developing water quality

standards subject to the approval of the EPA. Specifi-

cally, section 401 grants states the limited authority to

certify that federally-licensed projects will comply with

applicable water quality standards and other criteria spec-

8

ified in the Clean Water Act concerning the discharge of

pollutants. Section 401 further provides that states may

condition water quality certificates to ensure compliance

with these requirements and “other appropriate require-

ments of state law” concerning activities that may result

in the discharge of pollutants. This narrow grant of

authority to the states was not intended to override other

areas of responsibility not involving the discharge of pol-

lutants that Congress reserved to federal licensing and

permitting agencies.

In this case, as a condition in the certificate to PUD

No. 1 of Jefferson County and the City of Tacoma

(“Tacoma”), the Washington Department of Ecology es-

tablished month-by-month stream flow requirements for

fish habitat that the Department concedes were in excess

of those required for water quality. Washington’s pub-

lished water quality standards pertain to such matters as

fecal coliform, dissolved oxygen, dissolved gases, and other

micro characteristics. By not limiting the section 401

condition to minimum stream flows designed to ensure

that the project would comply with these water quality

standards and related requirements concerning the dis-

charge of pollutants, the state exceeded the limited au-

thority that Congress granted it under section 401.

Accordingly, the state’s 401 conditions would substantially

diminish, if not eliminate, the diversion of stream flow

necessary to make the Elkhorn Project economically

viable for the generation of electricity.

2. The Washington Decision Is Incompatible With

Federal Regulation Of Hydropower As Inter-

preted By This Court.

In 1920, Congress established the federal licensing pro-

gram for hydroelectric projects in the Federal Water

Power Act, 41 Stat. 1063, later incorporated into the

Federal Power Act in 1935, 16 U.S.C. §§ 791a et seq.

Pursuant to the Federal Power Act, FERC and its pred-

ecessor, the Federal Power Commission, have issued reg-

9

ulations that govern the contents of applications for hy-

droelectric projects and, over time, have made revisions

to those regulations as needed. In 1981, largely in re-

sponse to the National Environmental Policy Act, FERC

revised the regulations once more. See 46 Fed. Reg.

55926, 55929-30 (1981). Among other things, those

regulations require license applicants to prepare the fol-

lowing reports:

Water Use and Quality Report

Fish, Wildlife and Botanical Resources Report

Historic and Archaeological Resources Report

Socio-Economic Impact Report

Recreational Resources Report

As part of the Water Use and Quality Report, license

applicants are required to submit a copy of the state’s

section 401 water quality certificate or a copy of a re-

quest for such certification.

In 1986, more than a decade after enacting the Clean

Water Act, Congress enacted the Electric Consumers Pro-

tection Act, Pub. L. No. 99-495, 100 Stat. 1243 (1986)

(“ECPA”), which amended the Federal Power Act and

required FERC, pursuant to Section 4(e) of the Federal

Power Act, to give “equal consideration” to power and

nonpower values including “the protection, mitigation of,

damage to, and enhancement of, fish and wildlife (includ-

ing related spawning grounds and habitat).” See 16

U.S.C. § 797(e). Section 10(j) of the Federal Power

Act, which was added by ECPA, reaffirmed FERC as the

ultimate decision-maker regarding fish and wildlife-related

concerns. See 16 U.S.C. § 803(j). While section 10(j)

requires FERC to give special deference to recommenda-

tions by state and federal fish and wildlife agencies regard-

ing conditions appropriate for fish and wildlife habitat, it

allows FERC to depart from recommendations that are

10

inconsistent with Part I of the Federal Power Act or other

applicable law. Thus, pursuant to its authority, FERC

independently reviews stream flows and impact on fish

habitat. In addition, in the deliberations which FERC

undertakes pursuant to section 10(a) of the Federal

Power Act, FERC must consider all factors affecting the

public interest in-the-comprehensive development of the

waterway. Therefore FERC is required to weigh and

balance numerous other factors not considered by state

water quality agencies under section 401 of the Clean

Water Act, including the effects of a project on fish

habitat.

During the debates leading to the enactment of ECPA,

the states sought a provision that would have vested in

the states the authority to mandate minimum stream flows

to protect fisheries. See Rock Creek Ltd. Partnership, 38

F.E.R.C. § 61,240 n.8 (1987). After circulating a posi-

tion paper advocating further amendments to the Federal

Power Act that would have granted the states control

over the appropriation, diversion, and use of water by

licensed projects, and, after a Congressional hearing, Con-

gress declined to grant the states any additional authority

to establish minimum stream flows for licensed projects

in ECPA. Instead, Congress reaffirmed FERC’s exclusive

authority to establish minimum stream flows to protect

fish habitat by amending the Federal Power Act to in-

clude section 10(j). 16 U.S.C. § 803(j).

The conference report confirms that while section 10(j)

leaves final decisions to FERC, ECPA did increase the

states’ role in determining minimum flow requirements by

directing FERC to give special deference to the states’

fish and wildlife recommendations. See H.R. Conf. Rep.

No. 934, 99th Cong., 2d Sess. 21, at 23, 25 (1986), re-

printed in 1986 U.S.C.C.A.N. 2537, at 2539, 2541. In-

creasing the states’ authority would have been unnecessary

11

if Congress had previously granted the states authority

pursuant to section 401 of the Clean Water Act to impose

minimum stream flows at FERC licensed projects.

Forty-seven years ago, this Court recognized that the

exclusive nature of the federal hydroelectric licensing

process preempts conflicting state action. In First lowa

Hydro-Electric Coop. v. FPC, 328 U.S. 152 (1946), the

Court rejected the State of Iowa’s efforts to impose a

State permitting requirement on an applicant that was

attempting to obtain a hydroelectric license from the Fed-

eral Power Commission. The Court concluded that al-

lowing the state to impose a permitting requirement would

in effect grant the state veto power over the license and

thereby subvert Congress’ intention to concentrate com-

prehensive hydropower planning authority in the Federal

Power Commission. First lowa, 328 U.S. at 164.

More recently, this Court considered the State of Cali-

fornia’s authority to impose minimum flow requirements

to protect fisheries in California v. FERC, 495 U.S. 490

(1990). In that action, California argued that section

27 of the Federal Power Act, which reserves certain au-

thority regarding proprietary water rights to the states,

provided the state with authority to impose mandatory

flow requirements for fish and wildlife. This Court re-

jected this contention and unanimously held that the flow

requirements mandated by California were preempted by

the federal licensing process. In making this determina-

tion, this Court specifically recognized that the addition of

section 10(j) to the Federal Power Act reaffirmed “First

Jowa’s understanding that the Federal Power Act estab-

lishes a broad and paramount regulatory role” in the

area of fish and wildlife license conditons. See California

v. FERC, 495 US. at 499.

In this proceeding, the Washington Department of

Ecology has imposed minimum flow requirements for

12

the Elkhorn project based upon recommendations made

by state fish and wildlife agencies pursuant to statutes un-

related to the state’s water quality standards. The Wash-

ington Supreme Court upheld the state agency’s decision

by concluding that the phrase “any other appropriate re-

quirement of State law” in section 401(d) does not refer

only to state water quality standards. Washington Dep't

of Ecology v. PUD No. 1, 121 Wash. 2d 179, 849 P.2d

646, 653 (1993). Specifically, the court found the quoted

phrase to be “a congressional authorization to the states

to consider all state action related to water quality in

imposing conditions on Section 401 certificates.” Jd. in

Washington, the very state actions the Washington Su-

preme Court references would include the establishment

of flows to provide for “preservation of wildlife, fish,

scenic, aesthetic and other environmental values, and navi-

gational values.”” Wash, Rev. Code § 90.54.020(3)(a)

(1991). Because FERC believes that it must accept the

terms of the 401 certificate as a part of the license, the in-

clusion of the conditions in the section 401 water quality

certificate makes such conditions mandatory on the Elk-

horn project. As a result, the Washington Supreme Court’s

interpretation of section 401 removes FERC’s authority

to consider other stream flow recommendations for fish

habitat at the Elkhorn project pursuant to section 10(j)

of the Federal Power Act and to balance competing uses

of the water resource as mandated by section 10(a) of

the Federal Power Act.

If the State of Washington had attempted to impose

minimum flow requirements or any other conditions on

the Elkhorn project under any state statute independent

of the Clean Water Act, the state’s action would directly

conflict with the authority granted to FERC under the

Federal Power Act as reaffirmed by this Court in First

lowa and California v. FERC. It is inconceivable that

Congress intended for section 401(d) of the Clean Water

13

Act to provide the states with the very authority that this

Court has found Congress expressly reserved to FERC in

ECPA.

B. Only This Court Can Resolve The Conflict Regard-

ing The Scope Of Authority Granted The States

Under Section 401 Of The Clean Water Act.

1. The Washington Decision Is Only One Example

Of The Confusion Regarding The Scope Of Au-

thority That Congress Granted The States Un-

der Section 401.

Although the scope of authority that Congress granted

the states under section 401 has been scrutinized by a

number of state courts, no clear standards have emerged.

Rather, increasingly divergent decisions by state courts

have created inconsistent legal standards regarding state

authority under section 401. This divergence of opinions

threatens the established licensing process and ultimately

the development of hydraqpower.

The courts of various states have issued opinions that

broadly interpret the authority that Congress granted the

states under section 401. The Vermont Supreme Court,

for instance, has determined that section 401 provides the

Vermont Department of Environmental Conservation with

authority to impose minimum spillage requirements for

aesthetic and recreational purposes. See Georgia Pacific

Corp. v. Department of Envtl. Conservation, No. 91-530

(Vt. Sept. 14, 1992), petition for cert. filed sub nom,

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

Conservation, 61 U.S.L.W. 3504 (U.S. Dec. 14, 1992)

(No 92-1012) (A. 3a-6a). In Oregon, a state appellate

court has stated that section 401 grants the state authority

to condition certification on compliance with ail state

statutes that have a relationship to water quality. Arnold

14

Irrigation Dist. v. Department of Envtl. Quality, 79 Or.

App. 136, 717 P.2d 1274, 1279 (1986). Additionally,

the Maine Supreme Court has held that in the section

401 certification process, the Maine Board of Environ-

mental Protection possesses the authority to demand and

examine information relating to the effect of the proposed

project on fishing, recreation, and fish habitat. Bangor

Hydro-Electric Co. v. Board of Envtl. Protection, 595

A.2d 438 (Me. 1991).

The courts of other states have interpreted the authority

that Congress granted the states under section 401 much

more narrowly. In contrast to the Vermont Supreme

Court’s decision in Georgia Pacific, a Connecticut court

has determined that the Connecticut Department of En-

vironmental Protection is not authorized to mandate mini-

mum stream flows based on subjective aesthetic impact.

See Summit Hydropower v. Commissioner of Envtl. Pro-

tection, No. CV91-050-26-43, 1992 Conn. Super. LEXIS

2177 (Conn. Super. Ct. July 20, 1992). Moreover, a

New York court has decided that the State of New

York may not condition its certification of a hydroelectric

project on compliance with state laws concerning, among

other things, fish and wildlife and recreational op-

portunities. See Niagara Mohawk Power Corp. v. New

York State Dep’t of Envtl. Conservation, 187 A.D.2d 7,

592 N.Y.S.2d 141 (N.Y. App. Div. 1993). Similarly, a

court in Pennsylvania has determined that the Pennsyl-

vania Department of Environmental Resources does not

possess authority under section 401 to consider the effect

of a proposed project on wetlands and fish migration and

to condition certification on compliance with state laws

that concern such matters. Pennsylvania Dep’t of Envitl.

Resources v. City of Harrisburg, 133 Pa. Commw. 577,

578 A.2d 563, 567 (1990).

Each new state court decision interpreting state author-

ity under section 401 further complicates the body of law

governing the licensing process. These conflicting opin-

15

ions not only create inconsistent demands on applicants

but also constrain FERC’s ability to issue hydroelectric

licenses pursuant to its statutory obligation under the

Federal Power Act to weigh all relevant considerations.

A review of the Washington Supreme Court’s decision

would enable this Court to clarify the scope of state au-

thority under section 401 and end the uncertainty and

inefficiency created by conflicting state court decisions.

2. A Decision From This Court Is Necessary Be-

cause FERC Has Determined That It Wili Not

Contest The Scope Of State 401 Certifications,

And Federal Courts Defer To State Courts On

This Issue. ~

Section 401(d) of the Clean Water Act provides that

any water quality certification issued by a state “shall

become a condition on any Federal license or permit”

that is subject to section 401. Because of this mandatory

language, federal courts have prohibited federal agencies

from disallowing water quality certification conditions

even when the agencies -believe such conditions may vio-

late the Act. See United States Dep’t of Interior v. FERC,

952 F.2d 538, 548 (D.C. Cir. 1992) (“FERC may not

alter or reject conditions imposed by the States through

section 401 certificates.”); see also Roosevelt Campobello

Int'l Park Comm'n v. U.S. Envtl. Protection Agency, 684

F.2d 1041, 1056 (1st Cir. 1982); Lake Erie Alliance for

Protection of Coastal Corridor v. U.S. Army Corps of

Engineers, 526 F. Supp. 1063, 1074 (W.D. Pa. 1981),

aff'd, 707 F.2d 1392 (3d Cir.), cert. denied, 464 U.S.

915 (1983); Mobil Oil Corp. v. Kelley, 426 F. Supp.

230, 234 (S.D. Ala. 1976).

Furthermore, FERC has taken the position that it

lacks the authority to review conditions contained in state

certifications. See Town of Summersville, 60 F.E.R.C.

€ 61,291 at 61,990 (1992) (“[S]ince pursuant to Sec-

tion 401(d) of the Clean Water Act all of the conditions

in the water quality certification must become conditions

16

in the license, review of the appropriateness of the con-

ditions is within the purview of state courts and not the

Commission.”); Noah Corp., 57 F.E.R.C. 961,170 at

61,601 (1991) (“[Wle recognize that review of the ap-

propriateness of water quality certification conditions is

a matter for state courts to decide.”); Central Maine

Power Co., 52 F.E.R.C. 961,033 at 61,172 (1990)

(“[R]eview of the appropriateness of water quality cer-

tification conditions is the purview of the state courts.”).

Although FERC has expressed its opinion that certain

state mandated conditions are beyond the scope of water

quality certification under section 401, FERC has main-

tained the position that it is bound by section 401 to

include such inappropriate conditions in the applicant's

license. Central Maine, 52 F.E.R.C. at 61,172.

Because section 401(d) dictates that a state water

quality certification is automatically included in any li-

cense issued by FERC, states currently are free to impose

minimum flows or other conditions in section 401 certifi-

cations, regardless of whether such conditions are in fact

water quality “criteria” related. This results in “[a] dual

final authority, with a duplicative system of state permits

and federal licenses required for each project,” that this

Court found unworkable in First lowa. See First lowa,

328 U.S. at 169. This Court should therefore grant cer-

tiorari and harmonize the authority granted the states

under section 401 of the Clean Water Act with the com-

prehensive authority that Congress granted FERC in the

Federal Power Act as amended by ECPA.

a

17

II. THE FERC HYDROPOWER LICENSING PROCESS

WILL BE EFFECTIVELY PARALYZED AND THE

NATION’S HYDROPOWER PROJECTS WILL BE

SEVERLY AFFECTED IF STATES ARE ALLOWED

TO IMPOSE MINIMUM FLOW CONDITIONS FOR

FISH HABITAT AND OTHER NON-WATER QUAL-

ITY CONDITIONS THROUGH SECTION 401 CER-

TIFICATIONS.

The Washington State Department of Ecology and the

Washington Supreme Court have interpreted section 40i

of the Clean Water Act very expansively. In so doing,

they have directly interfered with the FERC hydropower

licensing process established by Congress in the Federal

Power Act and have impeded the ability of the nation to

rely on hydropower as a source of generating capacity in

planning for and supplying the country’s energy require-

ments.

The absence of a ruling from this Court will continue

to spark disputes over section 401 conditions, causing

substantial delays that will increase project licensing costs

and render ever more: uncertain a project’s economic

viability. This proceeding is an example of this problem.

The license applicants in this case have been forced to

appeal the state’s section 401 conditions through several

levels of administrative and judicial review, taking years

and involving substantial costs. This process also places

demands on the limited resources of the administrative

agencies and the courts. According to FERC’s own rec-

ords, between 1993 and 2010, FERC will be charged with

the task of relicensing 416 hydroelectric projects with a

total power capacity of 26.202 gigawatts. These figures

do not reflect new applications for hydroelectric power

projects. Thus, the potential for litigation and adminis-

trative delays to resolve section 401 disputes is enormous.

Because of the importance of the issues presented by sec-

tion 401 certifications, such disputes are not uncommon

and are likely to continue to arise absent guidance from

18

this Court. The licensing process already is lengthy and

costly—to relicense a project can take six to eight years

Or more and cost millions of dollars. Disputes arising

under section 401 only exacerbate the situation.

If states are allowed to mandate minimum flows for

fish habitat (or any other non-water quality conditions)

under the guise of the Clean Water Act. without appropi-

ate balancing assessments made by FERC, hydroelectric

power and the many benefits it provides to consumers,

communities, and the nation will be severely affected. An

increase in minimum flows at a hydroelectric project—in

this case, for fish habitat—results in lost energy produc-

tion (as water is spilled through the bypass reach thus

avoiding generation) or in the production of energy when

it is uneconomic or not needed. In addition, FERC may

not be able to issue a license for a particular project at

all because under a state’s conditions the project would

not be viable or able to meet other conditions that FERC

considers necessary. In each case, the lost hydropower

must be replaced. To replace the lost power, electric sup-

pliers must turn to other forms of production, particularly

fossil fuel generation with consequent effects on air qual-

ity, cost, diversity of the nation’s energy supply, and other

interstate interests. Furthermore, increased minimum

flows can adversely affect other beneficial uses of the

waterway, including recreation and water supply.

By granting the petition for writ of certiorari in this

case, the Court will have the opportunity to provide clear

guidelines regarding the states’ authority under section

401. A current uniform interpretation of section 401 is

required to achieve the water quality purposes of the

certification process while retaining the careful balance

of state and federal authority that is fundamental to a

rational and comprehensive program for licensing our

nation’s hydroelectric power projects.

etl a ee ee

19

CONCLUSION

The Petition for a Writ of Certiorari should be granted.

Respectfully submitted,

JOHN R. MoLm

Counsel of Record

WINIFRED D. SIMPSON

JAMES A. LAMBERTH

TROUTMAN SANDERS

Suite 5200, NationsBank Plaza

600 Peachtree Street, N.E.

Atlanta, Georgia 30308-2216

(404) 885-3000

Counsel for Amici Curiae

JEREMY M. METz

American Forest & Paper

Association

260 Madison Avenue

New York, N.Y. 10016-2499

(212) 340-0600

ALAN H. RICHARDSON

American Public Power

Association

2301 M Street, N.W.

Washington, D.C. 20037

(202) 467-2904

HENRI D. BARTHOLOMOT

Edison Electric Institute

701 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

(202) 508-5622

JONATHAN W. GOTTLIEB

National Hydropower

Association

701 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

(202) 508-4321

August 6, 1993

APPENDIX

la

APPENDIX

THE AMICI

1. American Forest & Paper Association

American Forest & Paper Association (“AFPA”) is the

national trade association of the forest, pulp, paper, paper-

board, and wood products industry which, as a group, is

the third largest producer of electricity among manufac-

turers in the United States, and is one of the nation’s

leaders in the development and use of hydroelectric

power. AFPA represents approximately 550 member com-

panies and related trade associations (whose memberships

are in the thousands) which grow, harvest and process

wood and wood fiber, manufacture pulp, paper and paper-

board products from both virgin and recovered fiber, and

produce solid wood products. As a single national trade

association, AFPA represents an industry that accounts

for over 7 percent of the total United States manufactur-

ing output and 90 percent of domestic recycled paper

manufacturing capacity.

2. American Public Power Association

American Public Power Association (“APPA”) is the

national organization representing 1,750 of the nation’s

2,000 local public power systems. These systems are

located in every state except Hawaii and range in size

from the largest public power system, the Los Angeles

Department of Water and Power with more than 1.3

million customers, to small towns with fewer than 100

customers. Public power systems own approximately 11.9

percent of the total installed electric utility generating

capacity in the United States. Hydroelectric projects, with

a total installed capacity of 18,426,063 kilowatts, com-

prise nearly 21 percent of public power’s total generation.

There are 90 APPA member utilities with hydroelectric

capacity. Certain of these utilities, such as the New York

Power Authority and the South Carolina Public Service

2a

Authority, market this hyodroelectric power at wholesale

to other publicly owned utilities.

3. Edison Electric Institute

Edison Electric Institute (“EEI”’) is the association of

the nation’s investor-owned electric utility companies.’ Its

members serve 97 percent of the customers of the investor-

owned segment of the industry and 73 percent of all

consumers of electricity in the United States. EEI’s mem-

bers generate 78 percent of all the electricity in the

United States and service 76 percent of the nation’s ulti-

mate customers. A large number of EEI’s members rely,

either directly or through power purchase agreements,

upon hydroelectric power to supply their customers’ needs

and to operate their systems. Over the last eighty years,

investor-owned utilities have developed, operated and

maintained large numbers of hydroelectric projects, and to-

day operate approximately 366 such projects under li-

censes issued by the Federal Power Commission or its

successor, the Federal Energy Regulatory Commission.

These projects serve over 100 million Americans in forty-

one states. As the national representative of the single

largest group of hydroelectric project licensees, EEI has

a vital interest in ensuring that the federal statutes govern-

ing the licensing of hydroelectric projects are interpreted

consistently and implemented properly.

4. National Hydropower Association

National Hydropower Association (“NHA”) is the

non-profit association established in 1983 to be a national

voice for the hydropower industry. NHA has over 100

members from all segments of the hydroelectric industry,

including investor-owned utilities, cooperatives, munici-

palities, private developers, manufacturers, engineers, and

legal, financial and consulting firms from all regions of

the country.

1 Consumers Power Company, a member of EEI, does not join in

this amere: filing.

3a

VERMONT SUPREME COURT

Supreme Court Docket No. 91-530

May TERM, 1992

GEORGIA-PACIFIC CORPORATION

and SIMPSON PAPER (VERMONT) Co., INC.

Vv.

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

and SIERRA CLUB

Appealed From: Washington Superior Court

Docket No. $473-89 WnCa

ENTRY ORDER

In the above entitled cause the Clerk will enter:

Plaintiffs appeal a Washington Superior Court judg-

ment affirming a decision of the Vermont Department of

Environmental Conservation (DEC). They seek to set

aside continuous spillage conditions in a § 401 water

quality certification, or, alternatively, seek a remand to

the DEC for consideration of additional evidence, or a

remand to superior court for de novo review. We affirm.

Plaintiffs’ contention that the court’s denial of their

request to remand to the DEC for additional evidence

and reconsideration was an abuse of discretion is without

merit. A remand to an administrative agency is meant

only as a “safety valve” to be used if justice so requires.

In re Maple Tree Place, 156 Vt. 494, 499 (1991) (quot-

ing State ex rel. Gunstone v. Washington State Highway

ta

Commission, 72 Wash. 2d 673, 674, 484 P.2d 784, 735

(1967)). The court found that plaintiffs had the oppor-

tunity, which they did not take, to present evidence of

their management proposal to the DEC. Further, the

court found that the additional proceedings would be a

waste of time and expense and would most likely not

change the result. These findings are not clearly erro-

neous and amply support the court’s discretionary ruling.

Plaintiffs argue they were entitled to a de novo hearing

on the merits in superior court. Plaintiffs, however,

waived any opportunity for a de novo hearing with the

court, as illustrated by the following exchange at a

pending motions hearing:

The Court: ... It is your position that this is not

a de novo hearing?

Mr. Pearson: My position today is—and if my

feet were held to the fire, I don’t think it is—but I

think on the other hand, an argument could be made

that the Rule 75 does not preclude a de novo hear-

ing. It leaves it to other applicable law to decide

what the hearing is. | think if we really want to

work at it, we could make an argument that in this

context a de novo hearing would be appropriate.

I've yet to convince Washington counsel and my

client one way or the other on that issue. My per-

sonal feeling is I think it probably is not a de novo

hearing, although, as I say, I think an argument

could be made, and I just haven’t convinced them to

forget about that little argument we could make and

get on with the business of just having this heard on

the administrative record.

The Court: [I]t would appear that the only issue

is whether the plaintiff has almost agreed that it’s

not going to be a de novo hearing. The State agrees

that it’s not going to be a de novo hearing? Yes.

Sa

The Court: Do you [Sierra Club]—is it your

position that this is a de novo hearing or is it not?

Mr. Smith: It’s the Club's position that this is a

review of the administrative record.

The Court: Right. I think maybe we have an

agreement.

At no further time was there consideration of whether

review would be de novo. The court was never asked to

rule, nor did it rule, on the de novo issue raised here.

Plaintiffs also argue for the first time on appeal that

denial of a remand to the DEC violated their constitu-

tional rights. These challenges are likewise waived. In

re Quechee Lakes Corp., 154 Vt. 543, 552, 580 A.2d

957, 962 (1990).

Plaintiffs lastly contend that the spillage requirement

was not suppored by the evidence and that it was beyond

the DEC’s authority under federal law to consider aes-

thetic and recreational factors as grounds for a spillage

requirement. The Clean Water Act allows the state to

impose conditions in a § 401 certification to ensure ap-

plicant’s compliance with certain criteria, including “any

other appropriate requirement of State law.” 33 U.S.C.

§ 1341 (d). Vermont's water quality standards promul-

gated in accordance with this Act require that the Con-

necticut River be managed for “water of a quality which

consistently exhibits good aesthetic value . . . and recrea-

tion.” Vermont Water Quality Standards § 3-03. The

DEC spillage requirement was amply supported by the

evidence. Not only were aesthetics and recreation con-

sidered relevant, ease of administration and monitoring

were fostered by the requirement. See in re Sherburne,

154 Vt. 596, 607, 581 A.2d 274, 280 (1990) (added

deference afforded agency determinations in highly tech-

nical fields).

Affirmed.

6a

By THE Court:

s’ Frederic W. Allen

FREDERIC W. ALLEN

Chief Justice

/s/ Ernest W. Gibson III

ERNEST W. GIBSON III

Associate Justice

‘s/ John A. Dooley

JOHN A. DooLey

Associate Justice

‘s/ James L. Morse

JAMES L. Morse

Associate Justice

/s/ Denise R. Johnson

DENISE R. JOHNSON

Associate Justice

~~ —

FF a OO. le eal