Amicus Curiae Brief — SD Warren Co. v. Maine Bd. of Environmental Protection

No. 04-1527 — a

" = ‘ .

In The NOV 2 5 2005

Supreme Court of the United srates.----

¢

S.D. WARREN COMPANY,

Petitioner,

v.

MAINE DEPARTMENT OF

ENVIRONMENTAL PROTECTION,

Respondent.

6

On Writ Of Certiorari To The

Maine Supreme Judicial Court

+

BRIEF FOR AMICI CURIAE EDISON ELECTRIC

INSTITUTE, THE AMERICAN FOREST & PAPER

ASSOCIATION, THE AMERICAN PUBLIC POWER

ASSOCIATION, THE NATIONAL HYDROPOWER

ASSOCIATION, AND THE UTILITY WATER ACT

GROUP IN SUPPORT OF PETITIONER

¢

JEFFREY L. FISHER

(Counsel of Record)

DANIEL M. ADAMSON

DAVIS WRIGHT TREMAINE LLP

1500 K Street N.W., Suite 450

Washington, D.C. 20005

(202) 508-6600

Counsel for Amici Curiae

HENRI D. BARTHOLOMOT

EDWARD H COMER

EDISON ELECTRIC INSTITUTE

701 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2696

(Of Counsel Listing On Inside Cover)

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

KrIsTY A.N. BULLEIT

HUNTON & WILLIAMS LLP

1900 K Street, N.W., Suite 1200

Washington, D.C. 20006

Counsel for Utility Water Act Group

JAMES H. HANCOCK JR.

BALCH & BINGHAM LLP.

1710 Sixth Avenue North

Birmingham, AL 35203

Counsel for National Hydropower Association

JEFFREY A. LEAHEY

NATIONAL HYDROPOWER ASSOCIATION

1 Massachusetts Avenue, N.W., Suite 850

Washington, D.C. 20001

JERRY SCHWARTZ

RICHARD S. WASSERSTROM -

AMERICAN FOREST & PAPER ASSOCIATION

1111 Nineteenth Street, N.W., Suite 800

Washington, D.C. 20036

TABLE OF CONTENTS

Page

ET NE SIE eishistctestsscitesuinsLecssinnicipenmitanibnenilabneiais 1

SUMMARY OF ARGUMENT. ....00.........c ccc ccceeeseeee scene 3

EE haben stihl tatnicentiieiccsatiiiilit aalidaieabidiiaiinniiinatins 5

I. It Is Vitally Important To The Nation’s Hydro-

power Resources That The Reach Of Section

401 Be Appropriately Circumscribed................

A.

Hydropower Projects Are Important Com-

ponents Of The Nation’s Energy Supply

And Provide Numerous Other Benefits .....

FERC’s Licensing Authority Requires It

Comprehensively To Balance The Public

Benefits Of Non-Federal Hydropower Pro-

NT cissiatidsiasnictedninlesdinbvlasindincdadiaiiaiioadeibadiituaidgnidanidanets

In Recent Years, States Increasingly Have

Applied Section 401 In An Expansive

Manner, Eroding FERC’s Ability To Strike

The Proper Balance Between Energy And

- Environmental Values...................cccsesceeeees

As A Result Of States’ Expansive Use Of

Section 401, Hydropower Project Benefits

Have Diminished And Licensing Costs

II TIIIUIIN..ccctsctiscitnnennliticgepedieibichiessbiiiiamsistiuidiiinn

Section 401 Has Expanded Into FERC’s

Licensing Process Without Guidance From

This Court As To Whether And, If So,

When Existing Hydropower Projects Issue

NEIL. nntetbccnciionteseclendaaduennbiedeevcasciian

12

15

ui ~-

TABLE OF CONTENTS -— Continued

Page

II. The Mere Flow Of Water Through An Existing

Hydroelecric Project Is Not A Discharge Under

Section 401 Of The Clean Water Act................. 16

A. A Discharge Requires The Addition Of A

Substance Or Substances External To The

Navigable Waters ..............ccccsecesccsseeeeseeeeees 17

B. The Mere Flow Of Water Througi: A Hy-

dropower Project Does Not Involve An Ad-

dition To The Navigable Waters................. 20

Ill. The State Court’s “Ownership” Or “Control”

Test Finds No Support In Law Or Logic........... 23

ITY spctesconssesccasecseiusesbecrrscintintineunmuvianeinenies 24

TABLE OF AUTHORITIES

Page

- CASEs:

Alden v. Maine, 527 U.S. 706 (1999)...........cccccceseeeeeeeseeeees 15

American Rivers, Inc. v. FERC, 129 F.3d 99 (2d Cir.

ITED citqniditnittctnriissiiicninipasnastbipebiadiilinniantidaaai einen 10, 12

Catskill Mountains Chapter of Trout Unlimited,

Inc. v. City of New York, 273 F.3d 488 (2d Cir.

Ne a ccinisciiensvnencdeevesecirniaincacnitieiaiikiaie a Maasai eae 19

Conservation Law Found. v. FERC, 216 F.3d 41

ele GID SD cxcnninsininssnniintaisiiconsdeamiimiisaiianiiimmnsiantiineel 9

First Iowa Hydro-Elec. Coop. v. FPC; 328 U.S. 152

(1946)......... sechicinhdtaniirbiptdrgniaaliciaddeibintiaiititadiaeddibiiiondealanaaine 8

Kaiser Aetna v. United States, 444 U.S. 164 (1979)......... 23

Lafayette v. Louisiana Power & Light Co., 435 U.S.

SE CED cnceviiniicnesiincuisinincnpheninieniemniitaedmuaiaaiaiade =

Mobil Oil Corp. v. Kelley, 426 F. Supp. 230 (S.D.

BE Tee sccitvoniiciieesserentehdeniatrinanindsineatieiehcie inci tana naeaiae aaa 14

National Wildlife Fed’n v. Consumers Power Co.,

862 F.2d 580 (6th Cir. 1988) 2.0.00... eceeeeeeeeeeeeeeeeeeeees 22

National Wildlife Fed’n v. Gorsuch, 693 F.2d 156

ay. Ges Cee bencnscivnsiesincmmndiedntereiaiiatanidiininicieasieiiciaai nals 21

North Carolina v. FERC, 112 F.3d 1175 (D.C. Cir.

© SERITED icacadestnepiantensdinibedgedipnisiadsiieemaseipeiaiamainand 16, 18, 20, 21

PUD No. 1 of Jefferson County v. Washington Dep't

of Ecology, 511 U.S. 700 (1994)...............00004 9, 11, 15, 16

South Fla. Water Mgmt. Dist. v. Miccosukee Tribe,

GE We. BP Ce stcncccinssecvectsccsstuninnisdsianbesmmmanaal passim

United States Dep’t of the Interior v. FERC, 952

fA f ): Jas Ee Sa il

iv

TABLE OF AUTHORITIES - Continued

Page

STATUTES:

hE Re a OE AR 6

EE ne ee RT 8

I 8

EEE a NE 14

EFS ne 14

EERE EET Oe SE a NN ORE eT 8

ERE 15

EE ARE a ne ee 9

RE SE 9

ET EN ES 20

TT 6

REE ee ER 17

EEE Ae ee ee 10

ECR ET AR a ED 18, 19

ETSI SER ea a ee 19

EMRE ES A oe SE 18

EES ER ee ee 18

EE RS eae a 15

ETE ec ee eae 9

REGULATIONS:

EIS SR 5 a oe 15

TABLE OF AUTHORITIES - Continued

Page

ADMINISTRATIVE DECISIONS:

Consumers Power Co., 74 FERC J 61,055 (1996)............. 22

Puget Sound Energy, Inc., 107 FERC {61,331

SEIT iisnscpccnsunienitdadcatntindniniquentusttndddidbnbidlinnapeuniateiniiies 14

S.D. Warren Co., 105 FERC 7 61,013 (2003).................... 11

OTHER AUTHORITIES:

Clean Water Amendments of 1995, H.R. 961, 104th

Be Se ennirenntmvncenicttiineseniedatnentnnniiinniees Steen 17

Energy Information Administration, Annual Energy

Review 2004, at 318, available at http://www.eia.

doe.gov/emeu/aer/pdf/aer.pdf ................ccccccceeseeeceeneeeeeeees 7

by Energy Source 2003, available at http://www.

eia.doe.gov/cneaf/electricity/epa/epaxlfile2_2.xls............ 7

FERC, Report On Hydroelectric Licensing Policies,

Procedures, & Regulations, Comprehensive Re-

view & Recommendations Pursuant to Section

603 of the Energy Act of 2000 (May 2001), at

47-48, available at, http://www.ferc.gov/legal/

Gulf Island — Deer Rips Project, Docket No. 2283,

available at http://elibrary.ferc.gov/idmws/docket-

Eo cicciicnesntciiusicanitiiabiaiitemeniicsisetecisimiiadenan 13

vi

TABLF OF AUTHORITIES - Continued

Page

_ Idaho Power Co., Hells Canyon Complex, FERC No.

1971, License Application (July 2003), at Execu-

tive Summary vii — viii (“[T]he Applicant initi-

ated and completed more than 100 relirensing

studies and reports a cost to date of approxi-

mately $45 million.”), available at http//www-ferc.

EELS. SEE TORE OOD

1

INTEREST OF AMICI

Amici (hereafter, the “Hydropower Amici”) represent

hydropower project owners and operators from across the

Nation, as well as others who rely on such projects, all of

whom will be directly affected by this Court’s decision in

this case.’ In particular:

The Edison Electric Institute (“EEI”) is the trade

association of United States shareholder-owned electric

utility companies, international affiliates, and industry

associates worldwide. Its U.S. members serve 71 percent

of all electric utility customers in the Nation and generate

almost 60 percent of the electricity produced by US.

generators. In providing these services, many EEI mem-

bers rely on hydropower, and many own and operate

hydropower projects licensed by the Commission. In fact,

EEI members comprise the largest group of Federal

Energy Regulatory Commission (“FERC” or “Commission”)

hydropower project license holders.

The American Forest & Paper Association (““AF&PA”)

is the national trade association of the forest, paper, and

wood products industry. AF&PA represents more than 200

companies and related associations that engage in or

represent the manufacture of pulp, paper, paperboard and

wood products. The forest products industry accounts for

approximately seven percent of total U.S. manufacturing

output, employs 1.1 million people, and ranks among the

top ten manufacturing employers in 42 states. AF&PA

' Letters of consent have been filed with the Clerk. Pursuant to

Rule 37.6, the Hydropower Amici state that no counsel for any party

authored any part of this brief, and no person or entity, other than

Amici, their members, and their counsel made a monetary contribution

to this brief.

a

member companies represent approximately 84 percent of

the domestic paper, paperboard and market pulp produc-

tion capacity, and they account for more than half of the

solid wood manufacturing capacity. They own a significant

portion of the nation’s commercial forests and annually

plant nearly half of all tree seedlings in the U.S. A signifi-

cant number of AF&PA member company facilities own

and operate hydroelectric dams, which power manufactur-

ing operations at those facilities, making them largely

energy-self sufficient. .

The American Public Power Association (“APPA”) is

the trade association representing the interests of ap-

proximately 2,000 municipal and other state and local

community-owned utilities throughout the United States.

APPA member utilities include state public power agen-

cies, and serve many of the Nation’s largest cities. But the

majority of its members are located in small and medium-

sized communities in 49 states — all but Hawaii. Public

power utilities serve over 14 percent of all electric utility

customers in the nation. Over 21 percent of public power’s

total generating capacity is from hydropower, the largest

percentage based on capacity of all of the utility sectors.

The National Hydropower Association (““NHA”) is a.

non-profit national association dedicated exclusively to

advancing the interests of the U.S. hydropower industry.

NHA represents 61 percent of domestic, non-federal

hydroelectric capacity and nearly 80,000 megawatts

overall in North America. Its membership consists of more

than 140 organizations including public utilities, investor-

owned utilities, independent power producers, equipment

manufacturers, environmental and engineering consult-

ants, and attorneys.

3 om

The Utility Water Act Group (“UWAG”) an unincor-

porated association of 205 individual elect) companies

and four national trade associations repre. nting the

power industry. The individual companies »perate a

variety of electric generating plents, includiig FERC-

licensed hydroelectric farilities, and other facilities that

generate, transmit, and distribute electricity to residen-

tial, commercial, industrial, and institutional customers.

The members of the Hydropower Amici operate and

rely on hydropower projects that FERC has licensed for

energy and other benefits. The Hydropower Amici are

concerned that in recent years, state water quality agen-

cies increasingly have applied section 401 of the Clean

Water Act (“CWA”) so expansively that the state agencies

are impeding hydropower projects’ abilities to provide

these benefits. It thus is essential that this Court make

clear that the mere flow of water through an existing

hydroelectric dam does not trigger section 401 of the CWA.

¢

SUMMARY OF ARGUMENT

Hydropower projects licensed by FERC play a vital

role in our Nation’s energy economy and provide numerous

other benefits on which the Hydropower Amici, their

customers, and communities across the country rely. The

United States derives approximately ten percent of its

electricity from hydropower projects, including projects

licensed by FERC. Hydropower is our Nation’s largest

source of renewable energy. Hydropower projects are

critical to maintaining electric system reliability because

of their ability to adjust quickly to changing grid condi-

tions and their energy storage capability. The projects also

4

provide numerous other benefits, such as drinking and

irrigation water, fish and wildlife habitat, navigation, flood

control, and recreation.

Hydropower projects are extensively regulated to

ensure that ‘heir operations are environmentally sound,

and project owners recognize that they play an important

role as stewards of the resources involved. Part I of the

Federal Power Act (“FPA”) charges FERC with responsibil-

ity for licensing non-federally owned hydropower projects.

FERC must apply a host of statutory requirements, not

only under the FPA but also under numerous other envi-

ronmental and resource laws. In doing so, FERC strives to

~ ensure that the projects produce multiple benefits and

serve the overall public interest.

In recent years, however, state water quality agencies —

agencies with statutory mandates different trom FERC’s —

increasingly have used section 401 of the Clean Water Act

to take control over the hydropower project licensing

process. The water quality agencies often impose expan-

sive license conditions, thereby limiting FERC’s ability to

manage the licensing process and impeding project bene-

fits. Accordingly, this Court should give careful considera-

tion to the applicability of section 401 in the hydropower

licensing context. Hydropower projects should not be

subject to unnecessary and duplicative regulation, particu-

larly when not statutorily authorized.

The Maine Supreme Judicial Court in this case

interpreted section 401 too broadly. Although the state

court correctly construed the phrase “any discharge into”

in section 401 to require an “addition” to the navigable

waters before a state certification is required, the court

erred in concluding that the mere flow of water through a

5

hydropower project creates an “addition” by temporarily

changing the “control” or “ownership” of the water. The

language and structure of the Clean Water Act, as well as

this Court’s decision in South Fla. Water Mgmt. Dist. v.

Miccosukee Tribe, 541 U.S. 95, 106 (2004), dictate that the

mere temporary control or ownership of water is not

enough to “add” something to the navigable waters. An

“addition” must introduce something new into navigable

water. Simply moving water from one part of a water body

to another, Miccosukee made clear, does not add anything

new to the water.

Construing section 401 this way does not, as the state

court erroneously believed, risk equating its scope with

section 402, which is triggered only when a water project

“discharges a pollutant.” Section 401, properly construed,

may still apply in instances when section 402 does not —

namely, when a water project adds a substance to the

water that is not a pollutant. But both statutory sections

require as a precondition that something be added. The

mere flow of water through a hydropower project simply

does not cause any discharge to begin with.

+

ARGUMENT

The statutory interpretation question that this case

presents does not arise in a vacuum, but rather in the

context of a complex regulatory regime that has real,

tangible consequences for those involved in the hydro-

power industry, and the communities and consumers who

rely on hydropower projects. Accordingly, we first describe

that regulatory regime and highlight why maintaining

reasonable limits on the applicability of section 401 is so

6

important. We then turn directly to explain why statutory

text and this Court’s precedent dictate that section 401

does not apply to the mere flow of water through existing

hydropower projects.

I. It Is Vitally Important To The Nation’s Hydro-

power Resources That The Reach Of Section

401 Be Appropriately Circumscribed.

This case presents an issue of substantial importance

to our industry and to the Nation: the operation of the

federal regulatory regime applicable to existing, non-

federally owned hydroelectric projects. Hydropower

projects provide clean, renewable sources of energy and

multiple other public benefits. But in recent years, state

water quality agencies have increasingly applied section

401 of the Federal Water Pollution Control Act, 33 U.S.C.

§ 1341 expansively to existing hydropower projects that do

not add any new substance to water bodies. Such expan-

sive assertions of state authority intrude heavily into

FERC’s ability to use the federal licensing process under

Part I of the FPA, 16 U.S.C. § 791a et seq., to maximize the

overall benefits of such projects. In addition, inappropri-

ately applying section 401 to such projects imposes signifi-

cant extra burdens on the owners of hydropower projects,

the communities who depend on the projects, and others

involved in the licensing process.

A. Hydropower Projects Are Important Com-

ponents Of The Nation’s Energy Supply

And Provide Numerous Other Benefits.

Hydropower projects are critical component. of the

Nation’s energy supply. Hydropower is a clean, domestic

7

“

energy source and our Nation’s single largest renewable

energy source.’ Currently, such projects provide about ten

percent of the nation’s electricity.’

Yet hydropower projects do more than simply generate

electricity. The projects help maintain the national electric

system’s stability; speed recovery when the electric grid is

disrupted; and provide valuable base load and peaking

power, thereby avoiding the need for additional power

plants that rely or increasingly limited natural gas and oil

supplies and other fuels. Hydropower projects also provide

energy to manufacturing facilities that own and operate

such projects, helping to keep our country’s manufacturing

base competitive in world markets. In addition to these

energy-related benefits, hydropower projects provide

numerous other public benefits, including improved air

quality, flood control, navigation, irrigation and drinking

water, fish and wildlife habitat, and recreational opportu-

nities.

_B. FERC’s Licensing Authority Requires It

Comprehensively To Balance The Public

Benefits Of Non-Federal Hydropower Pro-

jects.

Part I of the FPA gives FERC broad licensing author-

ity over most non-federal hydropower projects and charges

FERC with ensuring that the projects can provide these

benefits while fully addressing environmental issues. FPA

* See Energy Information Administration, Annual Energy Review

2004, at 318, available at http://www.eia.doe.gov/emeu/aer/pdf/aer. pdf

* See Energy Information Administration, Existing Capacity by

Energy Source 2003, avaiable at http//www.eia.doe.gov/cneaf/electricity/

epa/epaxifile2_2.xls.

8

section 4(e) requires FERC to give equal consideration to a

host of energy, environmental, and other factors, and

requires FERC to craft licenses that enable projects to

provide energy and many other benefits in the public

interest. 16 U.S.C. § 797(e); see also First Iowa Hydro-Elec.

Coop. v. FPC, 328 U.S. 152, 167-68 (1946) (recognizing the

FPA comprehensive licensing authority and federal pre-

emption of state licensing authority).*

In addition, section 10 of the FPA requires the Com-

mission to consider the recommendations of a variety of

federal and state agencies with respect to a broad spec-

trum of issues related to a hydroelectric project, including

flood control, irrigation, water supply, recreation, and

other beneficial public uses, and to ensure that the project

is best adapted to a comprehensive plan for improving the

waterway. See 16 U.S.C. § 803. In issuing new licenses for

existing projects pursuant to section 15 of the FPA, the

Commission also must consider additional factors to

ensure that the new license is best adapted tu serve the

public interest, including both: (1) the applicant’s plans to

operate and maintain the project in a manner most likely

to provide efficient and reliable service; and (2) the appli-

cant’s need for the electricity generated by the project to

serve its customers. See 16 U.S.C. § 808.

* 16 U.S.C. § 797(e) provides: “In deciding whether to issue any

license under this Part for any project, the Commission, in addition to

the power and development purposes for which licenses are issued shall

give equal consideration to the purposes of energy conservation, the

protection, mitigation of damages to, and enhancement of, fish and

wildlife (including related spawning grounds and habitat), the protec-

tion of recreational opportunities, and the preservation of other aspects

of environmental] quality.”

9

This comprehensive FERC licensing process, in

combination with other applicable environmental laws

such as the Endangered Species Act, 16 U.S.C. §§ 1531-44,

National Environmental Policy Act, 42 U.S.C. §§ 4321-47,

and Coastal Zone Management Act, 16 U.S.C. §§ 1451-65,

ensures that environmental issues are fully addressed.

Furthermore, the licensing process invites robust partici-

pation by state agencies and all other persons interested

in deriving benefits from the projects. FERC requires

license applicants to consult extensively with such agen-

cies, and FERC itself ensures that their views are fully

addressed in the ultimate licenses it issues. At the same

time, “[w]hile the Commission must give ‘equal considera-

tion’ to environmental factors, those factors do not have

‘preemptive force.’ The Commission ‘still is charged with

determi: ~ the “public interest,” i.e., balancing power and

non-pow. ies.’” Conservation Law Found. v. FERC,

216 F.3d 41, 45 (D.C. Cir. 2000) (citation omitted).

C. In Recent Years, States Increasingly Have

Applied Section 401 In An Expansive Man-

ner, Eroding FERC’s Ability To Strike The

Proper Balance Between Energy And Envi-

ronmental Values.

While the FPA requires FERC to balance energy and

environmental values when licensing hydropower projects,

states that invoke their authority under section 401 to

review such projects do not operate under any such ex-

plicit statutory mandate. Accordingly, in the aftermath of

this Court’s decision in PUD No. 1 of Jefferson County v.

Washington Dep't of Ecology, 511 U.S. 700 (1994) — which

upheld conditions that a state agency sought to impose

under section 401 with respect to proposed construction

10

and operation of a new hydropower project where a dis-

charge was assumed to exist - state water quality agencies

have begun setting license conditions for existing hydro-

power projects under section 401 without taking into

account the impacts on power or other developmental

values. In many states, the section 401 process has

evolved from a focused review of compliance with state

water quality standards to a much more expansive paral-

lel state licensing or permitting scheme.

Many section 401 certifications now include conditions

that touch on virtually every aspect of hydropower licens-

ing and project operations, including water flows, water

levels, fish passage, fish habitat, and recreational facilities

and access, as well as provisions that purport to reserve

authority to reopen the certification at any time in order to

require additional measures. Some states have even gone

so far as to require “aesthetic” flows of water as part of a

section 401 certification.’ Furthermore, in addition to

applying water quality standards under section 401, state

agencies assert authority under the “other appropriate

requirement” language in subsection 401(d) to impose an

even broader range of procedural and substantive re-

quirements under other state law. 33 U.S.C. § 1341(d).°

See also American Rivers, Inc. v. FERC, 129 F.3d 99, 107-

08 (2d Cir. 1997) (holding that state agencies need not

* See, e.g., Vermont Water Quality Standards, §§ 3-02 — 3-04 (2000),

available at http://www.state.vt.us/wtrboard/july2000wgqs.htm.

* For example, the Washington State Department of Ecology

requires compliance with the state’s environmental policy act in

connection with a section 401 certification. That act includes additional

procedural! and substantive requirements to “mitigate” impacts to an

extensive array of “elements of the environment.” WASH. ADMIN. CODE

§ 197-11-440 (2005).

11

demonstrate to FERC that 401 conditions are within a

state’s authority or reasonably related to water quality).

The S.D. Warren section 401 certification is typical in

this respect. It contains a host of conditions relating to

water levels and flows, impoundment drawdowns and

refill procedures, eel and fish passage, recreation meas-

ures, and recreational facilities as well as “reopeners” that

purport to permit the state to impose additional or differ-

ent requirements in the future. S.D. Warren Co., 105

FERC. { 61,013 at 61,152 (2003).

Such conditions not only prevent FERC from crafting

reasonable, balanced licenses for existing projects being

licensed, but they also can directly constrain projects from

producing the level of energy and other public benefits

that the projects otherwise could provide. The federal ~

courts of appeals, in the absence of guidance from this

Court, have interpreted conditions that state water quality

agencies impose under section 401 as mandatory condi-

tions that FERC must include in new licenses. See, e.g.,

United States Dep't of the Interior v. FERC, 952 F.2d 538,

548 (D.C. Cir. 1992) (“FERC may not alter or reject condi-

tions imposed by the states through section 401 certifi-

cates.”).’ These courts of appeals have barred FERC from

deleting or modifying any conditions included in a state

401 certification, even if the conditions are completely

" Hydropower Amici believe that these decisions fail to give

appropriate consideration to FERC’s comprehensive authority over

hydropower project licensing, but FERC is following them absent

contrary guidance from this Court. See Jefferson County, 511 U.S. at

722 (leaving open the question whether FERC may override state-

imposed conditions that conflict with FERC’s own assessments concern-

ing what is in public interest).

12

unrelated to any adverse impact of an existing project on

water quality. American Rivers, 129 F.3d at 107-10.

D. As A Result Of States’ Expansive Use Of

Section 401, Hydropower Project Benefits

Have Diminished And Licensing Costs Have

Risen.

As a result of state agencies’ increasingly expansive

use of section 401, FERC has been less able in recent years

to ensure that existing hydropower projects can produce

the full range of energy and other benefits the projects

otherwise would provide. The projects have not been able

to produce as much electricity when needed as they

otherwise could have produced. Also, the projects’ loss of

operational flexibility has diminished their ability to

maintain electric grid reliability and to provide other

valuable benefits. Simply put, project owners and the

public have been less able to rely on the projects for energy

and other benefits when most needed.

Also, in part because of the need to accommodate

parallel state water quality agency proceedings under

section 401, FERC licensing process has grown dramati-

cally more complex, costly, and time consuming. The

licensing process itself — not including the cost of comply-

ing with any of the new requirements agencies impose on

the licensees — often costs millions of dollars. In some

recent cases, the process has cost tens of millions of

dollars."

* FERC, Report On Hydroelectric Licensing Policies, Procedures, &

Regulations, Comprehensive Review & Recommendations Pursuant to

Section 603 of the Energy Act of 2000 (May 2001), at 47-48, available at,

(Continued on following page)

13

Moreover, the licensing process now typically takes

between five and ten years, and sometimes longer, which

delays the implementation of new license conditions aimed

at providing energy, environmental, and other benefits,

including water quality improvements. According to a

FERC staff report to Congress, the primary reason for

delay in the issuance of hydroelectric licenses — the vast

majority of which are for existing projects whose licenses

are being renewed — has been state water quality agencies’

inability to issue 401 certifications on a timely basis.’

Although section 401 requires state agencies to act on a

request for certification within one year, it has become a

common practice for such agencies to request that licen-

sees repeatedly withdraw and re-file such applications,

thereby “restarting” the one-year clock. In one case, a state

imposed such a request thirteen times.” If an applicant

http://www.ferc.gov/legal/maj-ord-reg/land-docs/ortc_final.pdf. See also

Idaho Power Co., Hells Canyon Complex, FERC No. 1971, License

Application (July 2003), at Executive Summary vii - viii (“[T)he

Applicant initiated and completed more than 100 relicensing studies

and reports a cost to date of approximately $45 million.”), available at

http://www.ferc.gov/docs-filing/elibrary.

* Report On Hydroelectric Licensing Policies, Procedures, &

Regulations, supra note 8, at 40. According to the report, the “primary

reason for delay was lack of water quality certification.” Jd. This trend

continues to the present. At the Hydropower Licensing Status Work-

shop that FERC conducted on December 9, 2004, regarding long-

delayed license applications, FERC concluded that of the 22 delayed

projects reviewed, 12 were delayed in part due to lack of water quality

certification. “[T]here are many reasons for delays sometimes in these

licensing proceedings. And that, in many cases, maybe in most cases,

it’s the result of state decisions under water quality certifications.”

Transcript of Hydropower Licensing Status Workshop 2004, at 35,

Docket No. AD04-014-000 (Dec. 9, 2004) (comments of Commissioner

Kelliher).

* See Gulf Island - Deer Rips Project, Docket No. 2283, available

at http//elibrary.ferc.gov/idmws/docketsearch asp. Similarly, the license

(Continued on following page)

14

does not comply with such a request to re-file, it risks the

state agency denying certification. Furthermore, even

- after a state agency issues a section 401 certification,

affected parties sometimes file appeals, which take addi-

tional time. See, e.g., Mobil Oil Corp. v. Kelley, 426

F. Supp. 230, 234-36 (S.D. Ala. 1976) (state courts, not

federal courts, are proper venue for challenging state

issuance of section 401 certification).

All of this is unnecessary because states already have

ample opportunities to participate in the FERC licensing

process. Wholly apart from invoking section 401, states

have multiple opportunities to participate actively in the

FERC licensing process. The licensing process involves

years of consultation with federal and state agencies and

the public aimed at ensuring all concerns are raised and

addressed. Indeed, notwithstanding FERC’s comprehen-

sive licensing authority, the FPA requires FERC to adopt

recommendations from state fish and wildlife agencies

regarding the “protection, mitigation and enhancement” of

fish and wildlife “affected by” a project, unless the Com-

mission finds that such recommendations are inconsistent

with other requirements in the FPA. 16 U.S.C. § 803(j). In

addition, FERC must consider the extent to which licens-

ing a hydropower project is consistent with a state's

comprehensive plan for any waterway that the project may

affect. 16 U.S.C. § 803(a). Finally, states have the ability to

influence the outcome of licensing proceedings by partici-

pating in the environmental review process pursuant to

applicant for the Snoqualmie Falls Hydroelectric Project, FERC Project

No. 2493, “withdrew and refiled its certification application each year

from 1992 through 2003.” Puget Sound Energy, Inc., 107 FERC { 61,331

at 62,542 n. 20 (2004).

15

the National Environmental Policy Act. 42 U.S.C. § 4334.

States can also intervene in FERC hydroelectric license

proceedings, 18 C.F.R. § 385.214, giving them the right to

request rehearing and, subsequently, to request judicial

review in the federal courts of appeals. 16 U.S.C. § 8251.

E. Section 401 Has Expanded Into FERC’s

Licensing Process Without Guidance From

This Court As To Whether And, If So, When

Existing Hydropower Projects Issue “Dis-

charges.”

The explosion of section 401 regulation in the context

of hydroelectric licensing has occurred in the absence of

any guidance from this Court concerning whether and, if

so, when existing hydroelectric projects issue “discharges”

that trigger the requirement for a section 401 certification.

In Jefferson County, this Court considered section 401 in

the context of the issuance of an initial license for a

proposed new hydroelectric project, not the relicensing of

an existing project such as the S.D. Warren project. In that

earlier case, the dam builder “concede[d]” that the project

would result in a “discharge” in part because it would

“release ... dredged and fill material during the construc-

tion of the project.” Jefferson County, 511 U.S. at 711.”

“ The dam builder also conceded that the water that the dam

ultimately would release at the end of its trailrace could “possib[ly]”

“constitute a discharge. 511 U.S. at 711. Even if this concession could be

interpreted to concede that such water would actually constitute a

discharge, it would have been immaterial in that case because the

release of dredged and fill material already rendered section 401

applicable. Furthermore, uncontested legal assumptions in prior

decisions do not in any way foreclose this Court from examining and

rejecting those assumptions in later cases. See, e.g., Alden v. Maine, 527

U.S. 706, 737 (1999).

16

Accordingly, this Court limited itself to addressing the

proper scope of state section 401 authority over the con-

struction of a proposed project “once the threshold condi-

tion, the existence of a discharge, is satisfied.” Id. at 712;

see also Nor... Carolina v. FERC, 112 F.3d 1175, 1188 (D.C.

Cir. 1997) (observing that this Court in Jefferson Cvunty

“never attempted to define a discharge”).

Therefore, this case presents the Court with an open

issue of whether the mere flow of water through an exist-

ing hydroelectric project involves a “discharge” necessary

to trigger section 401 certification requirements.

Il. The Mere Flow Of Water Through An Existing

Hydroelectric Project Is Not A Dischurge Un-

der Section 401 Of The Clean Water Act.

The question before the Court is whether the mere

passage of water through an existing hydropower project

being licensed by FERC involves a “discharge” into navi-

gable waters such that a state water quality certification

is required under section 401. The state court in this case

correctly construed section 401 to require an “addition” to

the navigable waters before a state certification is re-

quired. However, ‘he state court erred in concluding that

the mere flow of water through a hydropower project

creates an “addition” because it temporarily changes the

“control” or “ownership” of the water. S.D. Warren Co. v.

Board of Envtl Protection, 868 A.2d 210, 215-16 (Me.

2005). The language and structure of the Clean Water Act,

together with this Court’s decision in Miccosukee, 541 U.S.

at 106, dictate that a “discharge” must involve an addition

of something new to navigable water. Simply transferring

water from one part of a water body to another, as Micco-

sukee made clear, does not add anything new to the water.

17

Accordingly, Hydropower Amici submit taat the mere

passage of water through a hydropower project does not

involve any “discharge” into water that would trigger the

need for a section 401 certification.

A. Discharge Requires The Addition Of A

Substance Or Substances External To The

Navigable Waters.

Section 401 applies only where a federally licensed

activity “may result in any discharze into the navigable

waters.” 33 U.S.C. § 1341(a)(1) (emphasis added). The use

of the term “discharge” — especially accompanied by the

preposition “into” — suggests that the section applies only

when an activity outside the water body adds something

new into the water body. Had Congress intended section

401 to cover transfers of water within a single body of

water, it would have used more encompassing terms, as it

has in considering amendments to other sections of the

CWA.” But it did not do so.

Other sections of the Clean Water Act confirm that

“discharge” means addition of something new. It is a

cardinal rule of statutory construction that the same word

in different sections of an integrated statutory scheme

should have the same meaning. See, e.g., Lafavette v.

Louisiana Power & Light Co., 435 U.S. 389, 397 (1978).

The term “discharge” appears several times in the Clean

” For instance, ia 1995, the House of Representatives passed the

Clean Water Act Amendments of 1995, H.R. 961, 104th Cong. (1995),

which contained comprehensive proposed amendments to the Clean

Water Act. In section 803(m)(11)(A) of the bill, the House proposed to

expand coverage of section 404 of the act from the current “discharge of

dredged or fill material” to a more expansive “activity in wetlands or

water of the United States.” H.R. Rep. No. 104-112, at 83 (1995).

18

Water Act, and it consistently means an “addition.” For

example, Clean Water Act section 502(11) defines the term

“discharge” as including “discharge of a pollutant” and

“discharge of pollutants,” which section 502(12) defines as

meaning “any addition of any pollutant.” 33 U.S.C.

§§ 1362(11) & (12) (emphasis added). The definitions of

“discharge of a pollutant” and “discharge of pollutants”

thus squarely equate the word “discharge” with an “addi-

tion,” leaving what constitutes a “pollutant” as an entirely

eeparate question. The D.C. Circuit has observed that this

equation of the term “discharge” with “addition” is “the

nearest evidence of the definitional intent of Congress”

with respect to the meaning of “discharze” in section 401.

North Carolina, 112 F.3d at 1187.

Similarly, section 402 of the Clean Water Act, 33

U.S.C. § 1342, requires a National Pollutant Discharge

Elimination System permit for activities that involve a

“discharge of pollutants.” While section 401 may be

broader than section 402 in that the former applies when

there is an “addition” of something, whereas the latter

applies only when a “pollutant” is discharged, both sec-

tions — which sit side-by-side in the Clean Water Act —

require, as a threshold condition, that some kind of “dis-

charge” take place.

In this Court’s recent Miccosukee decision, this Court

squarely held that the word “discharge” in section 402

means ihe “addition” of something new. 541 U.S. at 102.

Miccosukee concerned the question of whether a section

402 permit was required for a pump station that trans-

ferred water from a canal over a dike into a wetland area a

short distance away. There was no dispute that the water

that the pump station conveyed contained “pollutants” (in

that case, phosphorus) as that term is defined by the CWA.

19

Id. Consequently, the sole issue was whether transferring

water by the pumps from the canal into the wetland

constituted a “discharge.” Id. at 103.

This Court concluded that a “discharge” exists only

when the water project at issue causes an “addition” to

navigable water. Jd. at 109. Even more important, this

Court clarified that, when dealing with the mere transfer

of water, an “addition” of “pollutants” from one water body

to another occurs only when the place where the water is

taken and the place where it is deposited are “meaning-

fully distinct water bodies.” Jd. at 112. The Court arrived

at this conclusion because simply passing water from one

part of a water body to another part does not “add” any-

thing to the water body. As the Cou:t further explained:

“‘li]f one takes a ladle of soup from a pot, lifts it above the

pot, and pours it back into the pot, one has not “added”

soup or anything else to the pot.’” Jd. at 110 (quoting

Catskill Mountains Chapter of Trout Unlimited, Inc. v.

City of New York, 273 F.3d 488, 492 (2d Cir. 2001)).

Finally, section 404 of the Clean Water Act, which

concerns “discharge[s] of Gredged or fill material,” 33

U.S.C. § 1344, is triggered only when “dredged or fill

material,” which the Clean Water Act treats as a “pollut-

ant,” is added to the navigable waters. Compare 33 U.S.C.

§ 1344 (requiring permits for discharge of dredged or fill

material) with 33 U.S.C. § 1342 (requiring permits for

discharge of pollutants). While section 401 does not re-

quire the added substance to be dredged or fill mat~~ial, it

does require a “discharge,” once again signifying that at

least some external substance must be added to the water.

20

B. The Mere Flow Of Water Through A Hydro-

power Project Does Not Involve An Addi-

tion To The Navigable Waters.

Pursuant to the plain language of the CWA and this

Court’s decision in Miccosukee, the mere movement of

water within a water body does not constitute an “addi-

tion” and, therefore, does not constitute a “discharge”

under section 401.

This is precisely what occurs with respect to existing

hydropower projects, such as the one at issue in this case,

which pass water through the project works without

adding anything to the water. In this case, the Presump-

scot River flows through the projects without adding

anything to the river. The river segments above and below

the projects are the same body of navigable water. There-

fore, under the reasoning of Miccosukee, no “addition” —

and thus no “discharge into” the river — occurs.”

The D.C. Circuit’s decision in North Carolina v.

FERC, 112 F.3d 1175 (D.C. Cir. 1997), illustrates the

soundness of this analysis. In that case, the court of

appeals held that a hydropower project owner did not need

to obtain a section 401 certification from the State of

North Carolina in order to allow withdrawal of water from

the project reservoir because the intake structure designed

to remove the water would not cause any “discharge.” Id.

at 1188. According to the court of appeals, the intake

" Section 304(f) of the Act identifies structures such as dams that

alter the flow of water as being non-point sources to be addressed

through state-based non-point source programs (which are addressed

under section 319 of the Act), lending further credence to the conclusion

that the mere flow of water through hydropower projects does not

involve a discharge under section 401. 33 U.S.C. § 1314(fXF).

21

would only withdraw water and would not add anything to

the project reservoir or the dam below it. Jd. The court of

appeals concluded that “the word ‘discharge’ contemplates

the addition, not the withdrawal, of a substance or sub-

* stances,” so the withdrawal of water would not result in a

“discharge” for the purposes of section 401. Jd. at 1187.

This reasoning is accurate and sensible, and it warrants

emulation here.

Similarly, in well-settled law, the United States

Environmental Protection Agency (“EPA”) and the federal

courts of appeais have determined that CWA section 402

does not apply to hydropower projects licensed by FERC

absent an addition of external pollutants because the

projects do not involve a “discharge” of pollu ants. In

National Wildlife Fed’n v. Gorsuch, 693 F.2d 156 (D.C. Cir.

1982), the D.C. Circuit determined that section 402 does

not apply to hydropower projects absent the addition of a

pollutant.“ The key issue was whether certain dam-

induced water quality changes, which the plaintiff argued

constituted pollutants, should be considered “discharges”

from the dam. Jd. at 161. The court of appeals upheld

EPA's view that dam-induced water quality changes did

not amount to discharges because such “changes are to

water conditions, not substances added to the water.” Jd at

171 (emphasis added). In other words, the D.C. Circuit

explained that nothing is discharged into water unless

something is added “from the outside world.” Jd. at 175.

“ Even in a case where such a pollutant is added, the section 402

permit is limited to addressing the discharge of that pollutant, not a

more expansive set of conditions of the sort states are imposing under

section 401.

22

Consistent with Gorsuch, the Sixth Circuit subse-

quently held that the operation of a FERC-licensed

pumped storage hydropower project on Lake Michigan did

not involve a “discharge” triggering the application of

section 402." In National Wildlife Fed’n v. Consumers

Power Co., 862 F.2d 580 (6th Cir. 1988), the court of

appeals, just like this Court in Miccosukee, took it as a

given that the substance that the water project was

releasing into the water — there, dead fish and fish re-

mains — were “pollutants within the meaning of the CWA.”

Id. at 583. But the Sixth Circuit held that the dam’s

release of the fish and remains did not constitute a dis-

charge because it did not “add” anything to Lake Michigan

“from the outside world.” Id. at 584.% _

If dams do not “discharge” anything as that term is

used in section 402 of the Clean Water Act, it is inescap-

able that they do not “discharge” anything as that ident-

cal term is used in section 401. However broader section

401 may be in terms of the types of discharged substances

that trigger its provisions, it cannot be any broader in

terms of the requirement of a “discharge” itself.

* A pumped storage project is a hydropower project where water is

pumped from a lower reservoir to an upper one, where the water is

stored until needed to produce electricity.

“ The court of appeals further noted that its decision did not mean

that the problem of the entrainment of fish by the pumped storage

facility “will go unnoticed and unaddressed” because three separate

articles of the FERC license for the project directly addressed the

facility's impact on the fishery resources. Jd. at 590. Indeed, a perma-

nent fish barrier was ultimately installed pursuant to a settlement of

fishery issues that was approved by the Commission. Consumers Power

Co., 74 FERC 4 61,055 (1996).

23

Ill. The State Court’s “Ownership” Or “Control”

Test Finds No Support In Law Or Logic.

- Even though the Maine Supreme Judicial Court

acknowledged that something must be added to water in

order to trigger section 401, it determined that the hydro-

power projects in this case indeed added something new to

the navigable waters because the project owners temporar-

ily take “control” or “ownership” of water as it passes

through the project dams. In the state court’s view, the

water ceases to be U.S. waters as it enters the dams, and

the owner “adds” the water back to the navigable waters

below the projects.

This novel analysis is simply off the mark. Nothing in

section 401 or prior case law interpreting the section

suggests that “ownership” or “control” of water is relevant,

much less determinative, of whether the section applies to

a given activity. Furthermore, this Court in Miccosukee

made clear that moving water from one place in a water

body to another does not constitute a “discharge.” If

temporary ownership or control — that is, temporarily

removing water from a water body — were enough to

constitute a discharge, Miccosukee would have had to come

out the other way. This Court’s “ladle of soup” analogy

would have been impossible to make because it involves

the exercise of control over water.

Moreover the state court’s “ownership/control” test is

based on a faulty premise. In fact, the mere passage of

water through a hydropower project does not involve a

change of “ownership” or “control” sufficient to make the

water an “addition” to navigable waters. See, e.g., Kaiser

Aetna v. United States, 444 U.S. 164, 175 (1979) (stating

that “the running water in a great navigable stream is”

24

[incapable] of private ownership... .”) (quoting United

States v. Chandler-Dunbar Co., 229 U.S. 53, 69 (1913))

(alteration in original).” Thus, the mere flow of water

through a hydropower project does not involve a “dis-

charge” necessary to trigger CWA section 401. The section

does not apply to the licensing of existing projects in such

circumstances.

+

CONCLUSION

For the foregoing reasons, the Court should reverse the

judgment below.

Respectfully submitted,

JEFFREY L. FISHER

(Counsel of Record)

DANIEL M. ADAMSON

DAVIS WRIGHT TREMAINE LLP

1500 K Street N.W., Suite 450

Washington, D.C. 20005

(202) 508-6600

Counsel for Amici Curiae

HENRI D. BARTHOLOMOT

EDWARD H. COMER

EDISON ELECTRIC INSTITUTE

701 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2696

(Of Counsel Listing On Inside Cover)

” Water rights in the West are property interests and subject to

protection under State and U.S. Constitutions, but do not rise to the

level of “ownership” of the water. Such rights are usufructuary — they

include a right to put the water to beneficial use — but the government

retains ownership of the water.