Petition for Writ of Certiorari — FPL Energy Maine Hydro LLC LLC v. Maine Department of Environmental Protection (No. 07-570)
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» Supreme Court, U.S.
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te a ae 07-570 Gi 24 2U0/
a es OFFICE OF THE CLERK
In The
Supreme Court of the Anited States
¢
FPL ENERGY MAINE HYDRO LLC,
Petitioner,
V.
MAINE DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
Respondent.
On Petition For A Writ Of Certiorari
To The Maine Supreme Judicial Court
¢
PETITION FOR A WRIT OF CERTIORARI
MATTHEW D. MANAHAN
(Counsel of Record)
NICHOLAS D. LIVESAY
PIERCE ATWOOD LLP
One Monument Square
Portland, Maine 04101
(207) 791-1100
Counsel for Petitioner
FPL Energy Maine Hydro LLC
QUESTION PRESENTED FOR REVIEW
Is a state certifying agency’s authority to issue a
binding water quality certification decision under
Section 401 of the Clean Water Act limited to the one-
year period following the certification request?
li
PARTIES BELOW AND
CORPORATE DISCLOSURE STATEMENT
The parties to the appeal before the Maine Su-
preme Judicial Court were Petitioner FPL Energy
Maine Hydro LLC, Respondent Maine Department of
Environmental Protection, and Intervenors Maine
Rivers, Trout Unlimited, Appalachian Mountain Club,
and Natural Resources Council of Maine.
FPL Energy Maine Hydro LLC states that its
parents, subsidiaries, and affiliates that have issued
shares or debt securities to the public are:
FPL Group, Inc.
Florida Power & Light Company
FPL Group Capital Inc
FPL Energy Maine Hydro LLC is a Delaware
limited liability company whose parent is White Pine
Hydro, LLC, whose parent is White Pine Hydro
Holdings, LLC, whose parent is White Pine Hydro
Portfolio, LLC, whose parent is White Pine Hydro
Investments, LLC, whose parent is FPL Energy
Maine, Inc., whose parent is FPL Energy, LLC, whose
parent is FPL Group Capital Inc, whose parent is
FPL Group, Inc., which is a publicly traded company
located at 700 Universe Boulevard, Juno Beach,
Florida, 33408.
FPL Group, Inc. indirectly owns 10% or more of
FPL Energy Maine Hydro LLC’s stock.
ill
TABLE OF CONTENTS
Page
QUESTION PRESENTED FOR REVIEW. ............ i
PARTIES BELOW AND CORPORATE DISCLO-
RF CEPR RITE, cesinsceeccctsindsaserivlneerenivencertstess ii
SP GEE ertbreisecectecievesxicossensttincsenores lil
TABLE OF AUTHORITIEG.......00:.cccccsesocecssecsessessees vi
PETITION FOR WRIT OF CERTIORARI............. 1
Se ee HY oa icccicrvksessenesvhpenaiasieieieecmunkestantes 1
Pe IIE vidcacisabiustusicascdintsscnpcmmmneesveenieetinais 2
STATUTE FEO VION ce vvicsescccececcesscecereesoesorsces 2
STATEMENT OF THE CASE .........cccccoscessonsceseseres 3
I. Section 401 and State Water Quality
ANU sci ccchinivinisciduicisniacecnseninapabaatcadetane 3
II. FPL Energy’s Request for Water Quality
Certification and DEP’s Agency Action ....... 4
III. Judicial Review by the Maine Courts.......... 6
A. Tie BROCE CEG orvscvncsecsi ci cecccccceeviveiss 6
B. The Supreme Judicial Court ................. 7
REASONS FOR GRANTING THE WRIT.............. 8
I]. Background: The Prominence of State
Water Quality Certification in the Federal
Licensing Proceedings and the Signifi-
cance of the One-Year Deadline for State
TO sists visiesteabcieiaepcdeacaaccilestidmpemiiialgcecaccambisk 9
iv
TABLE OF CONTENTS - Continued
Page
II. Courts Outside of Maine Recognize that
Section 401 Requires the Certifying
Agency to Take Final Action Within One
Year After the Request for Certification...... 16
A. The Puerto Rico Sun Oil Decision......... 17
1. Case Background: The Certifying
Agency Issued Final Certification
More Than One Year After the Re-
quest for Certification...................00+ 17
2. The Court’s Analysis: The Certify-
ing Agency Waived its Certification
Right by Failing to Issue Final Cer-
tification Within One Year................ 18
B. The Airport Communities Coalition
SOUR sik cuiientsicsicsniiccencusesinngnenisttents 20
1. Case Background: The Timely
Granted Certification was Amended
by an Agency Appeals Board After
the Expiration of the One-year
| REAR RE aN RODE area te oO 20
2. The Court’s Analysis: The Action of
the Agency Appeals Board After the
One-year Deadline was Not Binding
on the Federal Licensing Agency ..... 22
III. The SJC’s Decision is Inconsistent with
Existing Circuit Court Case Law and Sets
& Dangerous PIecedent .......cccessccsssscovesseesess 25
aes
TABLE OF CONTENTS -— Continued
Page
A. The SJC Departed from Existing Case
Law that Establishes that Action After
the One-year Deadline is Inconsistent
WEEE: FCIIONE GE issiscssactcisheteavstisxescedirense 28
B. Even if Section 401 Does Not Require
Final Agency Action Within One Year,
Action Taken Within One Year Cannot
DO CIES esticsntettitnnoneaioudan 31
C. The SJC’s Interpretation of Section
401 Renders the Waiver Provision
Meaningless, Destroying the Federal/
State Balance it was Intended to En-
IG oes ci cicscvcaduaratiniaseiisamaeie 33
CB IIUE iaiiniesédiscivaiac nce 34
APPENDIX
Maine Supreme Judicial Court Decision —
FPL Energy Maine Hydro LLC v. Depart-
ment of Environmental Protection, 2007 ME
OT, 926 A.B LIST (RO. BOOT. csvscacsesesceneceonesecseress A-1
Maine Superior Court Order — FPL Energy
Maine Hydro, LLC v. Department of Envi-
ronmental Protection, No. AP-04-50 (Me. Su-
per. Ct., Ken. Cty., May 25, 2006) ...........cccccecees A-30
Statutory Provision Involved .................cccceeeeeees A-31
vi
TABLE OF AUTHORITIES
Page
FEDERAL CASES
Airport Communities Coalition v. Graves, 280
F. Supp. 2d 1207 (W.D. Wash. 2003).............. passim
American Rivers, Inc. v. FERC, 129 F.3d 99 (2d
E _ } SRR Ree ena M NEE ON CS ee ene 10, 32
California v. FERC, 495 U.S. 490 (1990)............ 12, 13
First lowa Hydro-Electric Cooperative v. FPC,
re SO CRD contexvnscsicasiicnwctasininieets 11, 12,13
Puerto Rico Sun Oil Co. v. U.S. Envtl. Prot.
Agency, 8 F.3d 73 (1st Cir. 1993)... passim
U.S. v. Marathon Dev. Corp., 867 F.2d 96 (1st
an EE aia susconsetctceussevecanbbecdesenianeruacunrendibaesaamiicasnnets 8
STATE CASES
de Rham v. Diamond, 295 N.E.2d 763 (N.Y.
FPL Energy Maine Hydro, LLC v. Dep't of
Envtl. Prot., No. AP-04-50 (Me. Super. Ct.,
Beets. Cly., ERY BB, DOGG? on cscccccesectevscescousencesisess a ¢
FPL Energy Maine Hydro LLC uv. Dep't of
Envtl. Prot., 2007 ME 97, 926 A.2d 1197 (Me.
SMT TEN isis ssldiasinashia cum anapaiadedecamiualeasibecmseaiaeeaa passim
Niagara Mohawk Power Corp. v. New York
State Dept. of Envtl. Conservation, 624
Pe ee GEE Ws SI iceciscnsccnnnsnnciertcitcousvcnuciniaiieen 12
Power Auth. of New York v. Williams, 357
PRD EAE AEE, Ge Bi iccocésevesnevcscctkencmmteconmastn 12
Vill
TABLE OF AUTHORITIES — Continued
Page
S.D. Warren Co. v. Bd. of Envtl. Prot., 2005 ME
27, SEB A.2d 210 (Me. 200B) ...0cccicccesscoscececsseseessacors 27
S.D. Warren Co. v. Me. Bd. of Envtl. Prot., 126
Bh Sy RO RIE bic csdnchcncuiinisendcinipinipuctisahynidbounectsns 27
S.D. Warren Co. v. Me. Dep't of Envtl. Prot., No.
AP-03-70, 2004 Me. Super. LEXIS 115 (Me.
Super. Ct., Cum. Cty., May 4, 2004)......... ee eeceeeee 27
FEDERAL STATUTES
Ba ee NN OI siirivdcinciecdsnstebioanicaanetuaaanians 11
Be re Se Mitrchincicicsievites entuveteiceaidahibtienpsivialeunitiabacoinats 12
Sa RA, Oe fii erased tnd asccdeamnadaeenidassonntmnciatal 12
- ie | oe gl.) SRR e eee enenres i piisiebeinaieleiiaaoaca aes 2
Be ae ae iiss is scieasiticensadaccinensstevnbuedsansiaindeniate 10
eee A ee ee Or NG soshcrsasinnvdiouabendeienoaniecteanion 2
35S 2k | | SRE ete semecemnnnernretprepeoras passim
Be ee Be I ih tdiicenicesansesvacescciovieantsnouaclomseiaes 10, 17
ee i iiiincisccicissiainnaceussancssauiaircaiondeetimmeduantonen 10
re OF Pt iiantrisiiaicsishonencidtapuaicckdsuanidddetiglenia 17
STATE STATUTES
ME. REv. STAT. ANN. tit. 5, § 11001(1).................ccceeneee 2
ME. REV. STAT. ANN. tit. 5, § 11008(1)........0.... eee 2
ME. REV. STAT. ANN. tit. 38, § 341-A(2)...................0000 4
Vill
TAs. 5 OF AUTHORITIES —- Continued
Page
RULES
Bs Bie BD wkiesevcovsivossesianiniitiebivomedeiaigdalciameataa 9g
BE IE ses SUD cicacicecscectinicceantabcsethiodethbechianaambanmemeaa 9
LEGISLATIVE HISTORY
115 Conc. REc. (April 16, 1969)...............c0008 14, 15, 30
H.R. 4148, 91st Cong. § 14(b) (1969)... eeeeeee 14
H.R. Conr. REP. No. 91-940 (1970)...............ccccceeeees 16
WERE. TEMP. PEC, Ge Ca osikiccesccsisoceccsaneecntuncsecvieeeas 12
S, 7, Glak Coma. & 6} CEGGBD .cccenevccsscicncicsecssecszerniocs 14
AGENCY DOCUMENTS
Central Vermont Public Service Co., 113 FERC
TE Fe Cee wrvcieicasncaneviveisvesvioccssestcdioaneied 26, 27
FPL Energy Maine Hydro LLC, 108 FERC
Te OE ek Ce sistiditctsnicnictenmenmnpecsananennrs 26
FPL Energy Maine Hydro LLC, 111 FERC
SF Oh FE te iareticctinccusintidinncaadaneneaen 26
1
PETITION FOR WRIT OF CERTIORARI
Clean Water Act (“CWA”) Section 401, 33 U.S.C.
§ 1341, provides that a state wishing to issue (or
deny) a water quality certification must act on a
request for certification within a reasonable time,
which shall not exceed one year. FPL Energy Maine
Hydro LLC (“FPL Energy”) petitions for a writ of
certiorari to review the decision of the Maine Su-
preme Judicial Court (“SJC”), which ruled that the
State of Maine, through its Department of Environ-
mental Protection (“DEP”), acted in accordance with
Section 401 even though DEP failed to take final
action to deny FPL Energy’s request for water quality
certification until more than one year after the re-
quest.
*
OPINIONS BELOW
DEP issued two orders associated with FPL
Energy’s request for water quality certification. Both
are unreported. First, by an order dated November
13, 2003, the Commissioner of Environmental Protec-
tion (the “Commissioner”) issued the requested
certification. By subsequent order, dated July 15,
2004, the Board of Environmental Protection (the
“Board”) overturned the Commissioner’s decision and
denied FPL Energy’s request without prejudice. The
Maine Superior Court’s decision, which upheld the
Board’s order and found that the Board’s action was
consistent with CWA Section 401, FPL Energy Maine
2
Hydro, LLC v. Department of Environmental Protec-
tion, No. AP-04-50 (Me. Super. Ct., Ken. Cty., May 25,
2006), is unreported but is reprinted in the Appendix,
beginning at A-30. The SJC’s opinion upholding the
Superior Court’s decision, entered July 26, 2007, is
reported at FPL Energy Maine Hydro LLC v. Depart-
ment of Environmental Protection, 2007 ME 97, 926
A.2d 1197 (Me. 2007), and is reprinted in the Appen-
dix, beginning at A-1.
<
JURISDICTION
The SJC exercised jurisdiction over FPL Energy’s
appeal pursuant to ME. Rev. Stat. ANN. tit. 5,
§§ 11001(1) and 11008(1). The order of the SJC was
entered on July 26, 2007. This Court’s jurisdiction
rests upon 28 U.S.C. § 1257(a).
*
STATUTORY PROVISION
At issue in this case is the Federal Clean Water
Pollution Control Act, 33 U.S.C. §§ 1251 et seq. (the
“Clean Water Act” or “CWA”), in particular Section
401, 33 U.S.C. § 1341. The relevant portion of Section
401 is reprinted in the Appendix, beginning at A-52.
¢
3
STATEMENT OF THE CASE
I. Section 401 and State Water Quality Cer-
tification
Clean Water Act Section 401 requires an appli-
cant for a federal license authorizing any activity that
may result in any discharge to navigable waters to
comply with state water quality standards. Certifica-
tion of compliance must be obtained from the state in
which the discharge will originate. Until such certifi-
cation is granted or waived, the federal licensing
agency is prohibited from issuing a license. Further,
any conditions attached to state water quality certifi-
cation must become conditions of the federal license.
Appendix (“App.”) A-52 through A-54.
Section 401 provides for waiver of states’ certifi-
cation rights, as follows:
If the State .. . fails or refuses to act on a re-
quest for certification, within a reasonable
period of time (which shall not exceed one
year) after receipt of such request, the certi-
fication requirements of this subsection shall
be waived with respect to such Federal ap-
plications.
App. A-53.
In Maine, the State’s authority to issue or deny
water quality certifications rests with DEP. App. A-9.
DEP consists of the Commissioner and the Board:
“The department shall consist of the Board of Envi-
ronmental Protection ... and of a Commissioner of
4
Environmental Protection.” ME. REv. Stat. ANN. tit.
38, § 341-A(2); App. A-9.
II. FPL Energy’s Request for Water Quality
Certification and DEP’s Agency Action
FPL Energy owns and operates the Flagstaff
Storage Project (the “Project”), which consists of a
dam (the Long Falls Dam), a reservoir (Flagstaff
Lake), and appurtenant facilities. App. A-2. Operation
of the Project requires a license issued by the Federal
Energy Regulatory Commission (“FERC”). App. A-2.
Prior to the December 31, 1997 expiration of the
FERC license for the Project, the then owner, Central
Maine Power Company (“CMP”),’ commenced license
renewal activities, including filing the required
application with FERC and a request for Section 401
water quality certification with the State. App. A-2
through A-3. CMP submitted its first request to the
State for water quality certification in 1995 by filing
with the Maine Land Use Regulation Commission.
DEP Record Item “R.” 76. In 1996, CMP re-filed its
request, which then was transferred to DEP as a
result of a reshuffling of certification authority among
State agencies.’ R. 102; see also App. A-3.
' FPL Energy acquired the Project from CMP in 1999. App.
A-3.
* In 1996, the Governor of Maine, by Executive Order,
reallocated jurisdiction among State agencies for water quality
certifications. R. 262.
5
Because a state waives certification if it does not
act on an application within one year (App. A-3), at
DEP’s request, CMP, and subsequently FPL Energy,
withdrew and re-filed the application for certification
each year from 1997 through 2002. App. A-3. FPL
Energy filed its final request on November 15, 2002.
App. A-3. The Commissioner granted water quality
certification (the “Certification”) 364 days later, on
November 14, 2003. App. A-3.
Maine Rivers, Trout Unlimited, the Appalachian
Mountain Club, and the Natural Resources Council of
Maine (collectively, the “non-governmental organiza-
tions,” or “NGOs”) sought additional DEP considera-
tion by appealing the Certification to the Board. App.
A-4. Although the Project itself does not discharge
anything into the water (see App. A-27 through A-28
(noting that this point was not contested)), the NGOs
argued that the way FPL Energy would draw down
the water level of the Flagstaff Lake impoundment
would not comply with EPA-approved state water
quality standards for protection of aquatic life. See
App. A-4.
To ensure that operation of the manmade lake
complied with water quality standards, earlier in
2003 the Maine Legislature had adopted a resolve
stating that Flagstaff Lake should be compared to a
similar impoundment. App. A-20 through A-21.
Because prior to the Legislature’s 2003 resolve the
DEP staff had compared manmade impoundments to
natural lakes, and because EPA did not approve the
Legislature’s 2003 resolve, the NGOs argued that it
6
was improper for the Commissioner to issue a certifi-
cation based on the impoundment-to-impoundment
comparison called for by the Maine Legislature. The
Board agreed with the NGOs. See App. A-4 through
A-5.
On July 15, 2004, nine years after the filing of
the first request for certific ition with the State and
more than one and one-half years after FPL Energy
filed the final certification request with DEP, the
Board reversed the Commissioner’s decision and
denied FPL Energy’s request for water quality certifi-
cation, without prejudice. App. A-4.
The DEP’s denial of the certification reflected the
Board’s objection to the Commissioner’s use of the
legislatively mandated impoundment-to-impoundment
comparison without first obtaining EPA’s approval.
App. A-5.
Ill. Judicial Review by the Maine Courts
A. The Superior Court
On August 9, 2004, FPL Energy timely filed with
the Maine Superior Court a petition for review of the
DEP’s action. App. A-6, A-33. Among the questions
raised by FPL Energy was whether the agency’s
action taken more than one year after FPL Energy’s
request for water quality certification was consistent
with the CWA Section 401 requirement that the State
certifying agency must act on a certification request
within one year. FPL Energy argued that DEP
7
waived its certification rights by failing to take final
action within the one-year deadline, or, alternatively,
that only the agency action taken within the one-year
deadline — the Commissioner’s order — was effective
pursuant to Section 401. App. A-39 through A-40.
Ultimately, the Superior Court determined that
final agency action taken after the one-year deadline
is consistent with the requirements of Section 401.
App. A-49.
B. The Supreme Judicial Court
FPL Energy appealed the Superior Court deci-
sion to the Maine SJC. Among the issues presented
on appeal, FPL Energy questioned the Superior
Court’s interpretation of Section 401. The SJC ob-
served: “Since the Board’s decision was issued more
than one year after the application was filed, FPL
argues that the Department waived certification or,
in the alternative, that the Board’s actions after the
one-year deadline are ineffective.” App. A-9.
Noting that Section 401 “does not define ‘act on’,”
the SJC, found it “unclear from the plain meaning of
the statute whether the requirement is one of some
action or final action.” App. A-10 (emphasis added).
The SJC ultimately determined that the former —
some action ~ is all that is required by Section 401.
App. A-13. The SJC rejected FPL Energy’s alternative
argument, stating that “we conclude that the Board
complied with the [Section 401] requirement that it
act on the application within one year.” App. A-10. By
8
finding that DEP acted in accordance with Section
401, the SJC’s decision is that DEP’s final action —
the denial — is binding on the federal licensing
agency, FERC.
REASONS FOR GRANTING THE WRIT
Section 401 of the Clean Water Act ensures that
states play a central role in protecting their water
resources. Any activity that may result in a discharge
into navigable waters and that requires a federal
license or permit first must be subject to state water
quality certification. Therefore, in what otherwise is a
federal licensing process, states have veto authority if
they determine that the proposed activity will violate
water quality standards; the denial of a request for
certification means denial of the federal license. U.S.
v. Marathon Dev. Corp., 867 F.2d 96, 99-100 (1st Cir.
1989) (“The legislative history of section 401 of the
Act (‘Certification’) confirms that Congress intended
to give the states veto power over the grant of federal
permit authority for activities potentially affecting a
state’s water quality.”).
The SJC’s decision means there is no limit on the
time within which states must exercise their veto,
contrary to the express provision of the CWA. Under
the SJC’s reasoning, a state can toll the one-year
deadline in Section 401 simply by taking some action
within the year following a request for water quality
certification, while delaying final action until some
9
future date, or perhaps never taking action at all.
Thus, in addition to being able to veto a federal
permit application on the grounds that the proposed
activity would result in a violation of water quality
standards — the purpose behind Section 401 — the
SJC decision opens the door for states to passively
kill projects, not on water quality grounds, but
through simple delay or incomplete action.
The SJC’s decision sets a dangerous precedent
and calls for an interpretation of Section 401 that
stands in stark contrast to that applied by both the
U.S. Court of Appeals for the First Circuit and by a
U.S. District Court in the Ninth Circuit. To resolve
the conflict between the Maine SJC and these federal
courts, and to resolve this important issue of fed-
eral/state jurisdiction in federal permitting proceed-
ings, FPL Energy respectfully requests that the Court
grant this petition. S. Cr. R. 10(b)-(c).
{
I. Background: The Prominence of State
Water Quality Certification in the Federal
Licensing Proceedings and the Signifi-
cance of the One-Year Deadline for State
Action
Numerous activities in and around water bodies,
whether the water body is a stream, river, pond, lake,
ocean, or wetland, require federal licenses or permits
and otherwise trigger the need for state water quality
10
certification.’ The result is that each state plays an
important role in protecting its waters. As noted
above, Section 401 prohibits any federal agency from
issuing a license for an activity that may result in
any discharge until the state has certified the activity
or waived certification. App. A-53. And any conditions
imposed on the activity in the state water quality
certification must be included as conditions in the
federal license. App. A-53 through A-54; American
Rivers, Inc. v. FERC, 129 F.3d 99, 111 (2d Cir. 1997)
(stating that the federal licensing agency “does not
possess a roving mandate to decide that substantive
aspects of state-imposed conditions are inconsistent
with the terms of Section(s) 401”).
While Section 401 provides states considerable
power in the federal permitting process through their
ability to impose conditions on projects or to veto
them altogether on water quality grounds, it does not
> Clean Water Act Section 402, 33 U.S.C. § 1342, requires a
permit for any activity that may result in a discharge of a
pollutant to navigable waters. The U.S. Environmental Protec-
tion Agency oversees that permit program. CWA Section 404, 33
U.S.C. § 1344, requires a permit for the discharge of dredged or
fill materia] into navigable waters. The U.S. Army Corps of
Engineers oversees that permitting program, which plays a
central role in the protection of wetlands. Under Section 10 of
the Rivers and Harbors Act, 33 U.S.C. § 403, the Army Corps
must issue permits for structures with the potential to impede
navigation. All of these permits are other examples of the type of
federal permits (in addition to FERC hydropower licenses? that
trigger the need for state water quality certification under CWA
Section 401.
11
provide states with unilateral authority to dictate the
timing of the federal process or, potentially, to allow a
project to die on the vine by failing to take final
action within a reasonable period of time.
Federal licensing programs generally reflect the
belief by Congress that, with regard to the licensed
activity, the public interest is best served through a
single, uniform regulatory system. This is the case
with the Federal Power Act (“FPA”), 16 U.S.C.
§§ 791a et seg., which grants FERC primary authority
to license hydropower projects and which was the
“outgrowth of a widely supported effort of the conser-
vationists to secure enactment of a complete scheme
of national regulation which would promote the
comprehensive development of the water resources of
the Nation.” First Iowa Hydro-Electric Cooperative uv.
FPC, 328 U.S. 152, 180 (1946).* The FPA:
provide[s] “a method by which the water
powers of the country, wherever located, can
be developed by public or private agencies
under conditions which will give the neces-
sary security to the capital invested and at
the same time protect and preserve every le-
gitimate public interest.... The problems
are national, rather than local; they tran-
scend State lines and cannot be handled
adequately except by or in conjunction with
national agencies.”
* The Federal Power Commission (“FPC”) was the predeces-
sor agency to FERC.
12
Id. at 180 n.23 (quoting statement of David F. Hous-
ton, Secretary of Agriculture, H.R. Rep. No. 66-61, at
5 (1919)).
While “the FPA establishes a broad and para-
mount federal regulatory role” in the licensing of
hydropower projects and the management of national
hydropower resources, California v. FERC, 495 U.S.
490, 499 (1990), at the same time the FPA is a “highly
complex and long-enduring regulatory regime” that
also respects states’ interests in protecting their
water resources. Jd. at 500. For example, Section 27
of the FPA, 16 U.S.C. § 821, reserves to the states
authority over “the control, appropriation, use or
distribution of water used in irrigation or for munici-
pal or other uses,” while Section 10(a), 16 U.S.C.
§ 803(a), provides an avenue for states to raise con-
cerns about a project’s impact on fish and wildlife and
authorizes FERC to address those concerns through
the adoption of state-proposed conditions.
Section 401 of the CWA provides an additional
role for states in the licensing of hydropower projects,
but it is not intended to disrupt the balance of federal
and state authority otherwise struck in the FPA.
Niagara Mohawk Power Corp. v. New York State
Dept. of Envtl. Conservation, 624 N.E.2d 146, 148
(N.Y. 1993) (FPA establishes comprehensive scheme
for regulation of hydropower projects, and a state’s
role under CWA Section 401 is limited to reviewing
whether the projects meet water quality standards);
Power Auth. of New York v. Williams, 357 N.E.2d
726, 730 (N.Y. 1984) (certifying agency is limited to
13
determining whether applicable ‘water quality stan-
dards are met and is not authorized to engage in a
comprehensive environmental review and balancing
of interests); de Rham v. Diamond, 295 N.E.2d 763,
767-78 (N.Y. 1973) (certifying agency has authority
only to determine whether there is reasonable assur-
ance that the activity will not violate water quality
standards).
The balance of federal/state authority achieved
by federal licensing programs is delicate, with the
potential for natural tension between the federal
licensing agency and the state. Time has proven this
tension exists under the FPA. For example, First
Iowa Hydro-Electric Cooperative v. FPC, 328 U.S. 152
(1946), and California v. FERC, 495 U.S. 490 (1990),
both involved disagreements between FERC and the
state in which a project was located over the scope of
the role each was to play in the permitting of those
hydropower projects.
Recognizing this tension, and aware of concerns
by those subject to federal permitting that states
could use the certification process to indefinitely
delay or passively kill projects, Congress sought to
ensure that the certification process would not unduly
interfere with federal permitting programs, such as
the one created under the FPA, by requiring that
states act on a request for certification within a
reasonable period of time, not to exceed one year.
The legislative history of Section 401 makes this
clear. When the language that ultimately became
14.
Section 401 first was proposed as part of the Water
Quality Improvement Act of 1969, neither the initial
Senate bill nor the House bill amending the CWA
contained a provision requiring the certifying state or
appropriate agency to act on a request for certifica-
tion within a reasonable period of time. S. 7, 91st
Cong. § 14(b) (1969); H.R. 4148, 91st Cong. § 14(b)
(1969). That language came later, in an amendment
to the House bill offered by Representative
Edmondson. 115 Cona. REc. 9264 (April 16, 1969).
The amendment provided that the certification re-
quirements shall be waived if the federal licensing
agency determined that the certifying entity failed to
certify or refused to certify within a reasonable period
of time.” Jd. Language specifying that a reasonable
period of time could not exceed one year was not
included in Rep. Edmondson’s amendment; the fed-
eral licensing agency had discretion to determine
what was reasonable.
The purpose of the amendment was to avoid
delaying the certification process. As Rep. Edmondson
explained, while states are not pressured by the
> The amendment provided:
If an affected State or interstate water pollution control
agency or the Secretary, as the case may be, fails to act
to certify or refuse to certify within a reasonable period
of time as determined by the licensing or permitting
agency after notification of such application, the certifi-
cation requirements of this subsection shall be waived
with respect to such State, agency, or Secretary, as the
case may be, with respect to such application.
115 Conc. REc. 9264.
15
amendment to grant certification, they are “put in the
position with this amendment to do away with dalli-
ance or unreasonable delay and to require a ‘yes’ or
‘no’” within the period of time deemed reasonable by
the federal licensing agency. Jd. “The failure by the
State to act in one way or the other within the pre-
scribed time would constitute a waiver of the certifi-
cation required as to that State.” Jd. (statement by
Rep. Edmondson); see also id. at 9265 (Rep. Holifield
speaking in favor of the amendment: “[T]his amend-
ment guards against a situation where the water
pollution control authority in the State in which the
activity is to be located, or possibly in some other
state, simply sits on its hands and does nothing. ...
[I]t has to take affirmative action to consider the
matter and to decide to withhold the certificate if it
wants to defeat a proposed project.”).
The House bill, including Rep. Edmondson’s
amendment, formed the basis for the legislation that
emerged from conference. A notable difference, how-
ever, is that the discretion of the federal licensing
agency to determine the length of time that qualifies
as a reasonable period within which the certifying
state must grant or deny certification was limited;
Congress determined that in no instance could action
taken after one year be “reasonable.” The Conference
Report made this clear:
In order to insure that sheer inactivity by
the State ... will not frustrate the Federal
application, a requirement, similar to that
contained in the House bill is contained in
the conference substitute that if within a
16
reasonable period, which cannot exceed one
year, after it has received a request to certify,
the State ... fails or refuses to act on the re-
quest for certification, then the certification
requirement is waived.
H.R. Conr. Rep. No. 91-940 (1970), reprinted in 1970
U.S.C.C.A.N. 2712, 2741.
Thus, while Section 401 ensures that states play
a central role in the federal permitting of projects
with the potential to impact water quality, Section
401 also seeks to ensure that state certification is
focused on the preservation of water quality and does
not become a means for states to disrupt federal
permitting programs or unduly delay federal permit
applications. This balance is struck by requiring
states to act on a request for water quality certifica-
tion — either by granting or denying the certification —
within one year of the request. The SJC’s decision in
this case destroys that balance.
II. Courts Outside of Maine Recognize that
Section 401 Requires the Certifying
Agency to Take Final Action Within One
Year After the Request for Certification.
The U.S. Court of Appeals for the First Circuit
and a U.S. District Court in the Ninth Circuit both
have recognized the significance of the one-year
deadline in Section 401 and have found that agency
action taken beyond that deadline is inconsistent
with that section.
17
A. The Puerto Rico Sun Oil Decision
1. Case Background: The Certifying
Agency Issued Final Certification
More Than One Year After the Re-
quest for Certification.
In Puerto Rico Sun Oil Co. v. U.S. Envtl. Prot.
Agency, 8 F.3d 73 (1st Cir. 1993), the First Circuit
addressed Sun Oil’s appeal of a federal pollutant
discharge license, issued by the U.S. Environmental
Protection Agency (“EPA”), that incorporated the
conditions of a Section 401 water quality certification
issued by the Puerto Rico Environmental Quality
Board (“EQB”).° The court found that EPA acted
arbitrarily and capriciously in the manner in which it
incorporated EQB’s water quality certification into
the final waste discharge license. In the course of its
analysis, the First Circuit addressed a procedural
claim by Sun Oil that, because EQB’s certification
was issued beyond the Section 401 one-year deadline,
“Puerto Rico’s final certification came too late and
therefore could not furnish the basis for EPA’s own
final permit.” Jd. at 79.
* CWA Section 402, 33 U.S.C. § 1342, requires the licensing
of al] activities that may resuJt in the discharge to navigable
water of a pollutant from a point source. All activities requiring
a discharge license under Section 402 also must obtain state
certification under Section 401. For the purpose of the CWA,
Puerto Rico is treated as a state. Puerto Rico Sun Oil, 8 F.3d. at
74 (referencing 33 U.S.C. § 1362(3)).
18
Sun Oil had submitted its application for a
discharge license to EPA on May 27, 1988. On Octo-
ber 31, 1988, EPA forwarded the application to EQB
and requested water quality certification. EQB issued
a draft certification in January 1989, within one year
of the October 31, 1988 request. EQB did not issue
final certification, however, until July 24, 1990, more
than one and one-half years after certification had
been requested by EPA. Id. at 74-76 (setting out the
timeline).
2. The Court’s Analysis: The Certify-
ing Agency Waived its Certification
Right by Failing to Issue Final Cer-
tification Within One Year.
The First Circuit conducted a two-step analysis
in its review of Sun Oil’s claim. First, the court asked
whether EQB acted in accordance with Section 401’s
one-year deadline even though EQB did not take final
action within the year following the request for
certification. This is the same issue presented in this
Petition.
The First Circuit found that EQB’s action was
untimely and inconsistent with the deadline in
Section 401. The court noted: “EPA was entirely free,
once Puerto Rico had ignored the clear deadlines for
a final certification, to treat the Commonwealth as
an interested bystander with no further veto author-
ity.” Id. at 78 (emphasis added). The court added:
“Under the statute ... , the price of failing to meet
19
the deadlines is that the state agency waives its right
to dictate permit terms that go beyond what [the
federal licensing agency] would do on its own.” /d. at
79.
In short, according to the First Circuit, final
agency action is what is required by Section 401
within the one-year certification deadline. Not only is
this evident from the language quoted above, but also
from the fact that EQB had issued a draft permit
within the one-year deadline — a fact that clearly
evinces “some action” — and the court found that
action insufficient to meet the Section 401 deadline.
Also evident from the court’s decision is that any
action taken by the certifying agency after the one-
year period is not binding on the federal licensing
agency.
The First Circuit then proceeded, in the second
step of its two-step analysis, to address whether,
consistent with Section 401, the federal licensing
agency may exercise some level of discretion and
accept certification conditions issued after the one-
year deadline. The court determined that, while a
certifying agency waives its certification right by
failing to take final action within one year after a
request for certification - meaning that after the one
year period lapses the federal agency is free to treat
the certifying agency as a bystander — the federal
licensing agency (in that case EPA) may, in some
situations, choose to accept certification conditions
issued after the one-year deadline. Jd. at 79-80.
20
Because the Board decision here did not seek to
impose conditions on the federal agency’s license, but
instead purported to deny the certification entirely,
this second step in the Puerto Rico Sun Oil analysis is
not directly relevant here. Rather, this petition fo-
cuses on the first step in the Puerto Rico Sun Oil
analysis, and the authority of a state certifying
agency to issue a binding water quality certification
decision after the one-year deadline. As explained
more fully below, the SJC’s decision here directly
conflicts with that portion of the First Circuit’s deci-
sion in Puerto Rico Sun Oil.
z
B. The Airport Communities Coalition Deci-
sion
1. Case Background: The Timely
Granted Certification was Amended
by an Agency Appeals Board After the
Expiration of the One-year Deadline.
Airport Communities Coalition v. Graves, 280
F. Supp. 2d 1207 (W.D. Wash. 2003) (“A.C.C.”), in-
volved a challenge brought by a group of cities and
other municipal government bodies (the “Coalition”)
to a federal dredge and fill permit issued by the U.S.
Army Corps of Engineers (the “Corps”). The Corps
permit authorized the filling of wetlands in order to
expand the Seattle-Tacoma International Airport;
state water quality certification was required prior to
the issuance of the Corps permit. The Coalition
claimed, among other things, that the Corps’s deci-
sion to issue the permit was arbitrary and capricious
21
because “the Corps failed to incorporate into the
permit various conditions placed on the project by the
state Pollution Control Hearing Board (‘PCHB’)” as
part of the state water quality certification process.
A.C.C., 280 F. Supp. 2d at 1214.
In A.C.C., the Corps had published final public
notice of the dredge and fill application on January
17, 2001. The court viewed the date of that final
notice as the start of the one-year period within
which state certification was required by Section 401.
The Washington State Department of Ecology
(“WDE”) issued its certification on September 21,
2001, well within the one-year time period. The
Coalition then appealed WDE’s action to PCHB, an
independent administrative review board that is part
of a separate state agency that hears appeals of
orders and decisions issued by WDE. Id. at 1214
(showing the timeline).
On August 12, 2002, more than one year after the
initial request for certification, PCHB affirmed the
certification issued by WDE, but also added 16 new
conditions. When it issued the dredge and fill permit,
the Corps chose to incorporate only seven of the 16
conditions. Jd. The Coalition’s challenge followed.
2. The Court’s Analysis: The Action of
the Agency Appeals Board After the
One-year Deadline was Not Binding
on the Federal Licensing Agency.
The A.C.C. court, applying the First Circuit’s
reasoning in Puerto Rico Sun Oil, rejected the
22
Coalition’s claim that the Corps erred by not includ-
ing all of the 16 additional conditions in the final
federal license. Jd. at 1217 (citing Puerto Rico Sun Oil
in support of its conclusion). The court found that the
disputed conditions were issued by PCHB more than
one year after the request for certification (id. at
1214), and held that only certification conditions
issued within one year after the request for certifica-
tion meet the waiver deadline established in Section
401. Id. at 1217. Further, the court determined that
administrative appeals of state certifications, heard
at the agency level, must be completed within one
year of the request for certification to be consistent
with the Section 401 deadline. Jd.
Central to the Coalition’s claim was its interpre-
tation of Section 401(d). The Coalition argued that,
pursuant to that provision, all conditions of a state
water quality certification must be made part of the
final federal permit. Jd. at 1215. Section 401(d)
provides, in relevant part:
Any certification provided under this section
shall set forth any effluent limitations and
other limitations, and monitoring require-
ments necessary to assure that any applicant
for a Federal license or permit will comply
with any applicable effluent limitations and
other limitations, ... and shall become a
condition of any Federal license or permit
subject to the provisions of this section.
App. A-53 through A-54. The A.C.C. court, however,
found that the Coalition’s interpretation of Section
293
401(d) “renders the time bar in Section 401(a) super-
fluous.” A.C.C., 280 F. Supp. 2d at 1215.
The court reasoned as follows: “If the time bar is
to mean anything, .. . it must mean that the issuance
of state certification conditions outside the one-year
time period must be treated differently than the
issuance of such conditions occurring within that
period.” Jd. The difference between certifications
issued before and after the one-year deadline, the
court concluded, is that only the former are consistent
with the requirements of Section 401, thus requiring
incorporation of the attached conditions into the
federal permit pursuant to Section 401(d). After the
one-year certification deadline passes, states waive
their certification rights under Section 4061. As a
result, while not barred outright by Section 401,
certification conditions issued after that one-year
deadline have no binding effect on the federal permit-
ting agency. Jd. at 1217 (“Accordingly, the court holds
that Section 401 requires that the Corps incorporate
only those state certification conditions issued within
a year of issuing the notice of the request for certifica-
tion.”).
Notably, in the course of reaching this conclusion
the court addressed whether Section 401 could be
read as merely requiring some action, as opposed to
final action, within the one-year period following a
request for certification. The court also considered
whether agency-level administrative appeals must be
completed within that one-year period. The court
rejected the notion that some action - or, as the
24
A.C.C. court termed it, “some process” — is all that is
needed to satisfy the Section 401 deadline. Jd. at
1215. The court explained:
[T]he time limit was inserted in order to
avoid a state from interminably blocking a
federal permit by stalling the Section 401
certification. Whether a state begins to act
but does not complete the issuance of a certi-
fication or whether the state entirely fails to
act at all, the legislative history of Section
401 makes clear that either of those two
situations was unacceptable to Congress be-
cause both result in delays in issuing Federal
permits.
Id. at 1216.
The court determined that by requiring state
certification to be completed within one year after the
request for certification, Section 401 established that
agency-level administrative appeals, too, must be
concluded within that period to be consistent with
Section 401. The court indicated that states were free
to structure their certification programs as they saw
fit, and if a state was concerned about waiving its
certification authority by failing to take final action
within the one-year deadline, the state could modify
its certification program accordingly. See id. at 1217.
25
III. The SJC’s Decision is Inconsistent with
Existing Circuit Court Case Law and Sets
a Dangerous Precedent.
In its FPL Energy decision, at issue here, the SJC
concluded that so long as some action is taken, pro-
vided that action is taken within one year after the
request for certification, the requirement in Section
401 that a state “act on” a request for certification
“within a reasonable period of time (which shall not
exceed one year),” has been satisfied. The SJC went
on to reason that, once satisfied, the waiver provision
contained in Section 401 ceases to apply and all
subsequent action taken by the state, even if taken
after one year, must be treated as consistent with
Section 401. Thus, according to the SJC, Section 401
does not impose any time constraints on a certifying
agency’s final action, but uses the risk of waiver to
motivate states only to commence the certification
process by taking some initial action within one year
of the certification request. App. A-8 through A-13.
Applying this reasoning to the facts before it, the
SJC concluded that, although the Board did not
issue its denial of certification until more than one
year after FPL Energy’s final request, “the Board
complied with the [Section 401] requirement that it
act on the application within one year.” App. A-10.
The import of this conclusion is that a state certify-
ing agency — despite finally acting more than one
year after the request for certification — does not
waive its right to certify or deny certification for
projects requiring a federal license, notwithstanding
26
the prescribed one-year deadline in Section 401 to
“act on” the certification request. Thus, according to
the SJC, the state agency’s final action, here DEP’s
denial of certification in the form of a Board order, is
binding on the federal licensing agency, here FERC.’
" FERC has adopted a position similar to that of the SJC,
concluding that DEP did not waive certification by failing to
take final action within one year. FPL Energy Maine Hydro
LLC, 108 FERC J 61,261 at 9 7 (2004), reh’g denied, 111 FERC
4 61,104 (2005). FERC initially reasoned that nothing in the
language of Section 401 expressly calls for the state to resolve
all appeals within one year, and therefore that intra-agency
appeals do not need to meet the one-year deadline, even if
completion of such appeals necessarily precedes final agency
action. Jd. On rehearing, FERC backed away from its prior
reasoning, stating instead that “we see nothing in section 401
that gives the Commission any authority to determine the
finality of state-issued certification decisions. Issues concerning
the validity of state actions under section 401 are for state
courts to decide, and federal courts and agencies are without
authority to review these matters.” FPL Energy Maine Hydro
LLC, 111 FERC 7 61,104 at J 8 (2005). In addition to the flaws
in FERC’s initial reasoning (see infra note 9), the implication
that a state certifying agency can toll the one-year requirement
contained in Section 401 is directly at odds with other FERC
decisions. For example, in Central Vermont Public Service Co.,
113 FERC 9 61,167 at 99 15-16 (2005), Vermont's certifying
agency took issue with what it thought was an overly rigid
definition of the term “act” in Section 401 as requiring a denial
or grant of certification within the one-year deadline. The
Vermont agency argued that such an interpretation was incon-
sistent with FERC’s practice of issuing “‘tolling’ orders” to stay
other deadlines. Jd. at J 16 n.15. FERC rejected the agency’s
claim, reasoning — contrary to FERC’s initial reasoning in its
2004 FPL Energy decision — that Section 401 does not allow
states to toll or extend the certification deadline past one year.
(Continued on following page)
27
The SJC’s FPL Energy decision conflicts with
existing case law. This departure appears to be the
result of the SJC brushing aside established prece-
dent in an effort to achieve the desired result — pro-
tecting the State’s cumbersome certification process
so that neither existing state procedural require-
ments, nor the behavior of the certifying agency,
needs to be modified to comport with federal law.’
This ends-driven approach guts the Section 401 one-
year deadline provision. The SJC’s reading of Section
401 allows the very state behavior — inaction and
delay resulting in undue state interference in federal
licensing actions — that Congress sought to prevent.
Id. Granting this petition would help resolve the confusion at
FERC as well as in the courts.
* Although in this case DEP did not take final agency action
within the one-year period established in Section 401, Maine’s
existing water quality certification process does allow sufficient
time for the Commissioner to issue (or deny) a certification and
for that certification decision to be fully reviewed by the Board
within one year. See S.D. Warren Co. v. Bd. of Envtl. Prot., 2005
ME 27, 43, 868 A.2d 210, 213 (Me. 2005), aff’d on alternate
grounds, 126 S. Ct. 1843 (2006) (an example of DEP taking final
agency action on a request for certification, in the form of a
Board order following appeal of the Commissioner’s grant of
certification, within one year); S.D. Warren Co. v. Me. Dep't of
Envtl. Prot., No. AP-03-70, 2004 Me. Super. LEXIS 115, at *2
(Me. Super. Ct., Cum. Cty., May 4, 2004) (noting that the request
for certification was filed on December 20, 2002 and that DEP
took final action in October 2003). In the present case, however,
the Commissioner did not issue certification until the 364th day,
making it impossible for the Board to complete its review, and
thus for DEP to take final agency action, within the statutorily
required, one-year period.
28
It is to resolve this conflict among the courts, and
settle this important issue of federal/state jurisdiction
in federal permitting processes, that FPL Energy
asks this Court to grant this petition.
A. The SJC Departed from Existing Case
Law that Establishes that Action After
the One-year Deadline is Inconsistent
with Section 401.
The SJC’s opinion is directly at odds with First
Circuit’s decision in Puerto Rico Sun Oil and the
similar reasoning applied in A.C.C. While in both of
those cases the court ultimately found that the fed-
eral licensing agency possessed some amount of
discretion to accept certification conditions issued
after the one-year deadline, that conclusion was
predicated on the initial determination — contrary to
the SJC’s determination here — that by failing to act
finally within the one-year deadline in Section 401
states waive their certification right. In both cases,
only because the state certifying agency had waived
its right provided for in Section 401 was it necessary
for the court to consider whether the federal licensing
agencies possessed some level of discretion to accept
late-filed certification conditions. Had the states not
waived their certification right, the issue concerning
the level of discretion possessed by federal licensing
agencies would not have been presented, because,
absent waiver, state action on a request for certifica-
tion must be respected by the federal licensing agency
and any conditions of the certification must be made
29
part of the final federal license, and a denial of certi-
fication bars issuance of the federal license alto-
gether.
The SJC’s opinion appears to have been the
product of a desire to preserve Maine’s water quality
certification process in the face of federal law re-
quirements. For example, the SJC’s claim that the
issue presented by FPL Energy in its appeal is dis-
tinct from the issue addressed in A.C.C., and there-
fore from the issue addressed in Puerto Rico Sun Oil,
has no basis. The court appears either to have chosen
to ignore or to have failed to recognize that the A.C.C.
court, in finding that the Corps did not have to adopt
all the PCHB’s additional conditions, first determined
that PCHB’s action came after Section 401’s one-year
deadline and therefore that PCHB had waived its
certification right. The issue presented in this peti-
tion — is a state certifying agency’s authority to issue
a binding certification decision under Section 401
limited to the one-year period following the certifica-
tion request — is no different than the issue addressed
in A.C.C. and Puerto Rico Sun Oil.
The SJC’s review of the legislative history of
Section 401, explaining Congress’s intent in adding
the requirement that states must act on a request for
certification within one year, does little to dispel the
appearance that the SJC’s decision was erids driven.
The SJC notes with acceptance that:
The legislative history of [Section 401] shows
that Congress intended to prevent states
30
from effectively denying approval of a project
through lengthy delays. In 1969, Congress-
man Edmonson [sic], the sponsor of this pro-
vision, explained that, without the provision,
the state “does not have any particular pres-
sure to compel certification,” but with the
provision the state must “do away with dalli-
ance or unreasonable delay” and vote “a yes”
or “no.” 115 CoNnG. REC. 9259, 9264 (1969).
Congressman Holifield explained that the
provision prevents the state from “simply
sit[ting] on its hands and doling] nothing.”
115 Conc. REc. 9259, 9265.
App. A-10 (emphasis added). Despite recognizing that
Congress intended Section 401 to require a yes or no
determination on a request for water quality certifi-
cation within one year after the request — a clear call
for final agency action within that period — the SJC
interpreted the legislative history as reflecting Con-
gress’s intent that only some agency action is required
by Section 401 within the year following the request
for certification.” App. A-13. Thus, the SJC concluded
* The SJC stated that if Congress had intended that “all in-
state appeals” must be completed within Section 401’s one-year
deadline, Congress would have used specific language to that
effect. App. A-13. However, there is a sizable gap in the SJC’s
logic that it leaves un-bridged. At issue in the present case is
whether DEP “acted on” FPL Energy’s request for certification
within the required one-year period even though the agency did
not take final action until more than one year after the request.
That final action was in the form of the Board’s denial order on
appeal. “All in-state appeals,” which would include appeals to
state court, encompass a much broader group of appeals than
(Continued on following page)
31
that while Congress sought to prevent states from
sitting on their hands and doing nothing in the year
immediately following a request for certification,
Congress was indifferent to such inactivity after that
first year passed.
This curious treatment of the legislative history,
and the cursory effort to distinguish a denial of
certification after the one-year deadline from the
federal agency’s discretion to accept conditions im-
posed by the state after the deadline, creates the
appearance that the SJC was seeking to preserve
Maine’s potentially lengthy certification process in
the face of the language in Section 401 that requires
prompt action by the state.
B. Even if Section 401 Does Not Require
Final Agency Action Within One Year,
Action Taken Within One Year Cannot
Be Disturbed.
Assuming arguendo, as the SJC reasoned, that
the requirement in Section 401 that a certifying
agency “act on” a request for certification within one
the intra-agency appeal that occurred here. Notably, while an
administrative agency has control over its process and how
rapidly it makes decisions, an agency lacks similar control over
state courts. It therefore does not follow, as the SJC contends,
that the absence of specific statutory language in the CWA
requiring that “all in-state appeals” must be completed within
one year means that the words “act on” in Section 401 cannot
mean final agency action.
32
year does not require final agency action, but simply
some action, the SJC still made the wrong decision.
While DEP as the certifying agency did not take
final action within the statutory deadline, the Com-
missioner did take some action, in issuing the certifi-
cation. The SJC concluded that the Commissioner’s
action was sufficient to prevent waiver because the
Commissioner “acted on” the request within the
statutorily allowed time. But, even if that were true,
it does not follow that further agency action beyond
the one-year deadline can have the effect of reversing
the agency action taken within the one-year deadline.
Rather, as contemplated by Section 401, such action
within the one-year deadline is the state’s certifica-
tion decision under Section 401, and it may be sup-
plemented after the one-year deadline only with non-
binding conditions, as discussed in Puerto Rico Sun
Oil and A.C.C.
Pursuant to the SJC’s own reasoning, then, the
DEP’s only legally effective action consisted of the
Commissioner’s certification, not the Board’s post-
deadline denial of certification. That legally effective
Commissioner’s action, taken before the waiver
deadline, in turn must become part of the final fed-
eral license. See American Rivers, Inc. v. FERC, 129
F.3d 99, 111 (2d Cir. 1997) (stating that the federal
licensing agency “does not possess a roving mandate
to decide that substantive aspects of state-imposed
conditions are inconsistent with the terms of Sec-
tion(s) 401”).
33
C. The SJC’s Interpretation of Section 401
Renders the Waiver Provision Meaning-
less, Destroying the Federal/State Bal-
ance it was Intended to Ensure.
The precedent set by the SJC is dangerous.
According to the SJC, so long as a certifying agency
takes some action within one year after the request
for certification, all subsequent action by that agency
is insulated from waiver. This means there is no
deadline by which a certifying agency must take final
action, but rather only a deadline for commencing the
certification process by taking some action. The
practical result is that, so long as state certifying
agencies take some action within one year, federal
licensing agencies must wait, potentially indefinitely,
for final certification.
A state agency thus effectively could deny a
federal permit application or kill a project through
incomplete action. Section 401 does not allow such a
result. As Puerto Rico Sun Oil and A.C.C. demon-
strate, agency action taken more than one year after
the request for certification is inconsistent with
Section 401 and, contrary to the SJC’s holding in FPL
Energy, is not binding on the federal licensing agency.
+
34
CONCLUSION
The balance of federal/state authority achieved
by federal licensing programs is delicate. Whether
Section 401 is allowed to be interpreted so as to
destroy tliat balance is at issue here.
Section 401 of the Clean Water Act ensures that
states, should they choose, may play an important
role in the federal licensing of projects with the
potential to impact water quality. The only constraint
placed on a state’s authority to grant or deny certifi-
cation is the requirement that however the state
chooses to act, it must do so within a reasonable
period of time, which Congress has said may not
exceed one year from the date of the certification
request. A state’s failure to act within a reasonable
time period results in that state waiving its certifica-
tion right.
The courts in Puerto Rico Sun Oil and A.C.C.
recognized the significance of Section 401’s one-year
deadline in preserving the balance of federal/state
authority in federal licensing programs. Those deci-
sions also ensure that the one-year deadline both
promotes and protects reasonable business invest-
ments by requiring completion of state certification
within a reasonable period of time. The Maine SJC’s
FPL Energy decision, however, marks a dangerous
departure from existing precedent and throws open
the door for states to play an unintended, and poten-
tially destructive, role in the federal licensing of
35
projects. FPL Energy asks this Court to grant certio-
rari so that this Court can resolve the conflict among
the courts and ensure that, through the proper inter-
pretation and application of Section 401, the state
water quality certification process functions as Con-
gress intended.
Respectfully submitted,
MATTHEW D. MANAHAN
(Counsel of Record)
NICHOLAS D. LIVESAY
PIERCE ATWooD LLP
One Monument Square
Portland, Maine 04101
(207) 791-1100
Counsel for Petitioner
FPL Energy Maine Hydro LLC
A-1
Reporter of Decisions
MAINE SUPREME JUDICIAL COURT
Decision: 2007 ME 97
Docket: Ken-06-365
Argued: January 17, 2007
Decided: July 26, 2007
Panel: SAUFLEY, C.J., and CLIFFORD,
ALEXANDER, LEVY, and SILVER, J-J.*
FPL ENERGY MAINE HYDRO LLC
V.
DEPARTMENT OF
ENVIRONMENTAL PROTECTION
SILVER, J.
[J1] FPL Energy Maine Hydro LLC appeals
from a judgment entered in Superior Court (Kenne-
bec County, Marden, J.) affirming the Board of
Environmental Protection’s denial of water quality
certification for the Flagstaff Storage Project, owned
and operated by FPL. The Board’s denial reversed
an earlier decision by the Department of Environ-
mental Protection, which certified the Project. FPL
argues that (1) because the Board acted after the
one-year statutory deadline, either the Department
waived certification or the Board’s reversal of the
Department’s determination is ineffective; (2) the
* Justice Howard H. Dana Jr. sat at oral argument and
participated in the initial conference but retired before this
opinion was certified.
A-2
Board applied the wrong standard when analyzing
the water quality; and (3) the Board erred in conclud-
ing that the Flagstaff Project does not meet the Class
C water quality standards of 38 M.R.S.A. § 465(4)
(2001 & Supp. 2003).' Because the Board’s interpreta-
tion of the statute, the statute it is charged with
administering, is reasonable, we affirm.
I. BACKGROUND
({2] This case concerns the Flagstaff Storage
Project, which consists of a dam, known as the Long
Falls Dam, a reservoir, called Flagstaff Lake, and
appurtenant facilities. The Project is located on the
Dead River in Somerset and Franklin counties.
Originally constructed between 1948 and 1950, the
dam was intended to control flooding, enhance log
driving, and generate electricity.
[43] The Federal Power Commission, now
called the Federal Energy Regulatory Commission
(FERC), originally licensed the Project to the Cen-
tral Maine Power Company (CMP) from April 12,
1979, to December 31, 1997. Before expiration of the
' The Legislature has amended this statute several times
since the Department and Board’s judgments in this case. Title
38 M.R.S.A. § 465(4B) (2091) was amended by P.L. 2003, ch.
664, § 1 (effective July 30, 2004) and then repealed and replaced
by PL. 2005, ch. 409, § 2 (effective June 20, 2005). Title 38
M.R.S.A. § 465(4C) (2001) was amended by PL. 2005, ch. 182,
§ 5 (effective Sept. 17, 2005). The current version of the statute
is codified at 38 M.R.S. § 465(4) (2006).
A-3
Project’s license, CMP filed two applications: one with
the Department to obtain water quality certification,
which would allow the Project to continue; and an-
other with FERC requesting a new license for the
Project.’ CMP subsequently withdrew its application
to the Department for water quality certification and
refiled it once each year between 1997 and 1999.° FPL
acquired the Project from CMP in 1999.
[{4] FPL continued to refile the application for
renewal of the Project until November 15, 2002, when
FPL made its final filing. On November 14, 2003, 364
days later, the Department granted water quality
certification for the continued operation of the Pro-
ject. Specifically, when analyzing the aquatic habitat
of Flagstaff Lake, the Department found in relevant
part that, “[t]he available evidence indicates that the
structure and function of the resident biological com-
munity in Flagstaff Lake is the structure and function
that would be expected to exist in a water storage
reservoir with a drawdown of similar magnitude,” and
* Pursuant to 33 U.S.C.S. § 1341(aX1) (2006), no federal
license or permit shall be granted until the State, interstate
agency, or Administrator, as the case may be, has granted or has
waived certification.
* CMP did this at the request of the Department because a
state waives certification if it does not act on an application
within one year. See 33 U.S.C.S. § 1341(aX1).
* The parties agree that in order to determine whether
Flagstaff Lake meets Class C water quality standards, the lake's
resident biological community must be assessed against an
appropriate baseline. The standard employed by the Department,
which compares an impoundment to another impoundment with
(Continued on following page)
A-4
it, therefore, concluded that FPL’s proposal for manag-
ing water levels would be sufficient to meet applica-
ble water quality standards.
[15] Subsequent to the certification, a group of
non-governmental organizations, including Maine
Rivers, Trout Unlimited, Appalachian Mountain Club,
and the Natural Resources Council of Maine, filed a
timely appeal of the order to the Board. The Town of
Eustis, where part of the Dead River is located, also
filed an appeal and requested a public hearing.
(16] On July 15, 2004, the Board issued a
judgment, vacating the Department’s decision and
denying, without prejudice, FPL’s application for
water certification. The Board found that the De-
partment had employed a new standard for assessing
water quality when it used an impoundment-to-
impoundment standard, which compares a storage
reservoir to another storage reservoir with similar
drawdowns. The old standard, referenced by the
Board in its decision, is -a natural lake standard,
which compares a storage reservoir to a natural lake.
similar drawdowns, is referred to by the parties as the “im-
poundment-to-impoundment standard.” The two other possible
baselines, as described by the parties, are a natural lake,
referred to as the “natural-lake standard” or the hydropower
impoundment itself, referred to as the “what-you-see-is-what-
you-get standard.”
* Because the Board reversed the Department’s decision,
the Board found it unnecessary to consider the appeal of the
Town of Eustis from that same decision.
A-5
[17] Having found that the Department used a
new standard for assessing the water quality of the
Project, the Board concluded that in order to obtain
certification for this Project under the impoundment-
to-impoundment standard, either the Department
has to obtain EPA approval for its new standard or
FPL should conduct a use attainability analysis
(UAA), a review conducted when a state seeks to
create a water sub-classification with less stringent
standards. The Board also rejected FPL’s argument
that, regardless of whether an impoundment-to-
impoundment standard applies, the Project meets
Class C standards as a matter of law because it does
not discharge a pollutant, as required by 38 M.R.S.A.
§ 465(4)(C) (2001) and 38 M.R.S. § 361-A (2006).°
* Specifically, the Board made the following finding:
With respect to the applicant’s argument that a
hydropower project would by definition meet the stan-
dards for resident biological community because there
is no discharge of a pollutant, the Board finds that
this reading of the law is too narrow and is inconsis-
tent with a long line of FERC, EPA and DEP interpre-
tations of the applicable laws vested in them. Indeed,
the reason that FERC requires water quality certifi-
cation for the relicensing of this project, and the rea-
son that the Department took action upon it, all as
consistent with other, similar projects across the state
and the nation, stand as testament to the fact that the
law requires certification. The absence of a pollutant
does not ensure certification nor does it constitute
compliance with the aquatic life standard. Rather,
with respect to assessing compliance with the aquatic
life standard, the comparison must be, at a minimum,
(Continued on following page)
A-6
[78] On August 9, 2004, FPL filed a petition for
review of the Board’s judgment to the Superior Court.
On May 26, 2006, the court entered a judgment
affirming the Board’s decision to deny water quality
certification. The Superior Court concluded that the
Board’s interpretation of the standard for water
quality certification is entitled to deference, and thus,
FPL should either obtain EPA approval for its im-
poundment-to-impoundment standard or it should
conduct a UAA to recalibrate the water quality stan-
dards for water storage reservoirs. The court also
concluded that the federal Water Quality Act requires
certification because the Project releases a “dis-
charge,” and is, thus, subject to existing water quality
standards.
[¥9} While certification was pending at the
state level, FERC, the agency in charge of issuing
federal licenses, was also taking action on FPL’s
application for a federal license. On March 30, 2004,
after the Department granted certification, FERC
issued an order granting FPL a new license for the
Flagstaff Project. FPL Energy Maine Hydro LLC, 106
FERC J 62,232 (2004). The Appalachian Mountain
Club filed a request for rehearing, and while the
request was pending, the Board issued its order
denying certification. FPL Energy Maine Hydro LLC,
108 FERC 4 61,261 (2004). On September 21, 2004,
FERC stayed its new license application because of
to a “habitat which is free from the discharge of any
pollutant.”
A-7
the Board’s denial of certification. Jd. FPL filed a
request for rehearing and on April 19, 2005, FERC
denied FPL’s request. FPL Energy Maine Hydro LLC,
111 FERC { 61,104 (2005).
[J10] On June 9, 2006, FPL filed a notice of this
appeal to us.
II. STANDARD OF REVIEW
(¥11} Generally, “[s]tatutory construction is a
question of law, subject to de novo review,” however,
“[w]hen a dispute involves an agency’s interpretation
of a statute it administers, the agency’s interpreta-
tion, although not conclusive, is entitled to great
deference and will be upheld unless the statute
plainly compels a contrary result.” Town of Eagle
Lake v. Comm’r, Dep't of Educ., 2003 ME 37, 7 7-8,
818 A.2d 1034, 1037 (quotation marks omitted). When
the statute is ambiguous, we will “review whether the
agency's construction is reasonable.” /d. J 8, 818 A.2d
at 1037 (quotation marks omitted).
[712] When interpreting a statute, we first look
to the plain meaning of the text, “to discern from the
plain language the real purpose of the legislation,
avoiding results that are absurd, inconsistent, unrea-
sonable, or illogical.” Jd. J 7, 818 A.2d at 1037 (quota-
tion marks omitted). If there is an ambiguity in the
plain meaning, we then look “beyond that language to
the legislative history.” Jd. Finally, we will “consider
the whole statutory scheme for which the section
at issue forms a part so that a harmonious result,
A-8
presumably the intent of the Legislature, may be
achieved.” Jd. (quotation marks omitted).
[{¥13] “When the Superior Court acts in an
intermediate appellate capacity to review an adminis-
trative agency’s decision pursuant to M.R. Civ. P. 80C,
we directly review the agency’s decision for errors of
law, abuse of discretion, or findings not supported by
substantial evidence in the record.” Town of Jay v.
Androscoggin Energy, LLC, 2003 ME 64, 4 10, 822
A.2d 1114, 1117.
[714] When an agency “act[s] as a tribunal of
original jurisdiction, that is, as factfinder and deci-
sion maker, we review its decision directly.” Stewart v.
Town of Sedgwick, 2000 ME 157, 7 4, 757 A.2d 773,
775; see also Aviation Oil Co. v. Dep't of Envtl. Prot.,
584 A.2d 611, 614 (Me. 1990) (reviewing directly the
Board’s decision); 38 M.R.S. §341-D(4\A) (2006)
(“The board is not bound by the commissioner’s
findings of fact or conclusions of law but may adopt,
modify or reverse findings of fact or conclusions of law
established by the commissioner.”). In this case, the
Board made its own findings of fact and conclusions
of law; therefore, we review those findings directly
and grant deference to the Board.
III. DISCUSSION
A. The Requirement that the Board “Act on”
the Application Within One Year
(415) Pursuant to 33 U.S.C.S. § 134l(a\1)
(2001), an applicant for federal licensing of an activity
A-9
that might cause a “discharge” into navigable waters,
must first obtain either water quality certification
that the activity complies with federal and state
water protection laws, or waiver of such certification,
by the state from which the discharge originates. See
S.D. Warren Co. v. Me. Bd. of Envtl. Prot., 126 S. Ct.
1843, 1846 (2006). The state must “act on a request
for certification, within a reasonable period of time
(which shall not exceed one year) after receipt of such
request.” 33 U.S.C.S. § 1341(a)(1). If the state does
not “act on” a request within a year, then “the certifi-
cation requirements... shall be waived.” Jd.
(416) The Department is the agency in Maine
responsible for water quality certifications. S.D.
Warren Co., 126 S.Ct. at 1847. The Department
includes the Board of Environmental Protection and
the Commissioner of Environmental Protection. 38
M.R.S. § 341-A(2) (2006). With the exception of cer-
tain applications described in 38 M.R.S. § 341-D(2)
(2006), the Commissioner makes determinations as to
water quality certification. 38 M.R.S. § 344(2-A)
(2006). An aggrieved party may appeal the Commis-
sioner’s certification judgment to the Board within
thirty days of the filing of the Board’s decision. 38
M.R.S. § 341-D(4).
[417] Since the Board’s decision was issued
more than one year after the application was filed,
FPL argues that the Department waived certification
or, in the alternative, that the Board’s actions after
the one-year deadline are ineffective. We must, there-
fore, address the section 1341 requirement that a
A-10
state “act on” an application within one year. Based
on our analysis of the legislative history and caselaw,
we conclude that the Board complied with the section
1341 requirement that it act on the application
within one year.
[418] Section 1341 does not define “act on” and
it is, therefore, unclear from the plain meaning of the
statute whether the requirement is one of some
action or final action. See 33 U.S.C.S. § 1341. Since
the statute is ambiguous on its face, we must attempt
to discern the legislative intent.
{{419] The legislative history of section 1341
shows that Congress intended to prevent states from
effectively denying approval of a project through
lengthy delays. In 1969, Congressman Edmonson, the
sponsor of this provision, explained that, without the
provision, the state “does not have any particular
pressure to compel certification,” but with the provi-
sion the state must “do away with dalliance or unrea-
sonable delay” and vote “a ‘yes’ or ‘no.’” 115 Conc.
Rec. 9259, 9264 (1969). Congressman Holifield ex-
plained that the provision prevents the state from
“simply sit[ting] on its hands and doling] nothing.”
115 ConG. REc. 9259, 9265.
* In full he said:
[T)his amendment guards against a situation where
the water pollution control authority in the State in
which the activity is to be located, or possibly in some
other State, simply sits on its hands and does nothing.
(Continued on following page)
A-11
[720] We have not had occasion to define what
constitutes “act{ing] on” a request for certification to
meet the one-year requirement. FERC recently
considered and rejected FPL’s waiver arguments in
its federal licensing proceeding for the Flagstaff
Project.* In its order, FERC rejected FPL’s arguments
that the Department had waived certification by
failing to complete the appeal within one year. FPL
Any such dalliance could kill a proposed project just
as effectively as an outright determination on the
merits not to issue the required certificate. Thus while
this bill would still permit one State to make a deci-
sion that would have extraterritorial effect upon an-
other, at least now it cannot do so passively — it has to
take affirmative action to consider the matter and to
decide to withhold the certificate if it wants to defeat
a proposed project.
115 Conc. REc. 9259, 9265 (1969).
* FPL also argues that the FERC decision renders this issue
moot. We find this argument unpersuasive. Despite “rais[ing] a
justiciable controversy at the time the complaint was filed,” an
appeal is moot “if the passage of time and the occurrence of
events deprive the litigant of an ongoing stake in the contro-
versy.” Carroll F- Look Constr. Co. v. Town of Beals, 2002 ME
128, | 6, 802 A.2d 994, 996 (quotation marks omitted). However,
if “sufficient practical effects can flow from the litigation to
justify the use of Jimited judicial resources,” then the case is not
moot. Jd.
In this case, FERC only “stayled] the new license ...
pending the outcome of any appeal of the certification denial,
and reserveld][its) authority to modify the new license as
necessary to incorporate the conditions to any new certification
that is issued.” FPL Energy Maine Hydro LLC, 108 FERC
4 61.261 (2004). Thus, further litigation may have an effect on
the agency’s decision and the issue is not moot.
A-12
Energy Maine Hydro LLC, 108 FERC {7 61,261. The
agency held that “[t]here is nothing in the language of
Section 401 to suggest that a state must not only act
on the certification request but also take action on
any appeals that might subsequently be filed within
one year.” Id.
(421) Although we normally pay deference to an
agency’s interpretation of a statute, a number of
federal courts have held that FERC is not entitled to
deference in its interpretation of the Clean Water Act.
See, e.g., Ala. Rivers Alliance v. FERC, 325 F.3d 290,
296-97 (D.C. Cir. 2003); Cal. Trout, Inc. v. FERC, 313
F.3d 1131, 1133-34 (9th Cir. 2002); Am. Rivers, Inc. v.
FERC, 129 F.3d 99, 107 (2d Cir. 1997). Although we
do not accord total deference, we look to the FERC
decision for cogent analysis.
(¥22] FPL relies on a case from the U.S. Dis-
trict Court for the Western District of Washington,
Airport Communities Coalition v. Graves, 280
F. Supp. 2d 1207, 1214-17 (W.D. Wash. 2003), which
held that where a state board issued a decision on
appeal more than one year after the certification
request, and the board’s decision affirms certification
subject to additional conditions, the federal agency
“need only incorporate such conditions issued after a
year solely in its discretion.” The District Court did
not hold that the agency’s failure to issue a decision
on appeal within a year of the request meant that the
certification was deemed waived. /d.
A-13
[123] We conclude that the Board’s failure to
decide the appeal within a year of FPL initial re-
quest for certification does not waive certification or
render its decision ineffective. Our analysis of the
legislative history indicates a congressional intent
that an agency take action on an application within
one year. There is no indication, however, that Con-
gress intended for all in-state appeals to be completed
within the same one-year deadline. If Congress
intended to impose such extreme time pressure, it
would have used specific language to that effect. We,
thus, agree with the reasoning of FERC and conclude
that the Board’s actions were timely.
B. The Baseline Standard for Class C Water
Quality
1. Deference to the Board’s Interpretation
(124) In this case, the Board concluded that
“[thhe impoundment-to-impoundment comparison,
which compares one disturbed site to a similarly
disturbed site, constitutes a dramatic change in the
[applicable] Class C [water quality] standard and, as
such, legally requires the approval of EPA prior to
implementation in accordance with provisions of the
federal Clean Water Act.” We have held that the
Board is entitled to deference in its interpretation of
the statutes it is charged with administering. See,
e.g., S.D. Warren Co. v. Bd. of Envt'l Prot., 2005 ME
27, 1 5, 868 A.2d 210, 214; Maritime Energy v. Fund
Ins. Review Bd., 2001 ME 45, 7 9, 767 A.2d 812, 814.
Since the Board is charged with administering the
A-14
water quality standards in Maine pursuant to 38
M.R.S.A. § 465 (2001 & Supp. 2003), we must grant
deference to the Board’s interpretation as long as its
construction is reasonable. See Maritime Energy,
2001 ME 45, 7 10, 767 A.2d at 814. “The rationale
underlying our deference to [the Board’s] interpreta-
tions is that the [Board] has greater expertise in
matters of environmental concern and greater experi-
ence administering and interpreting those particular
statutes.” S.D. Warren Co., 2005 ME 27, 9 5, 868 A.2d
at 214. We must, therefore, determine whether the
Board’s conclusion is reasonable and comports with
legislative intent.
2. Plain Meaning of 38 M.R.S.A. § 465(4)
[{25] The first step in statutory interpretation
is to discern legislative intent from the plain meaning
of the statute. DaimlerChrysler Corp. v. Executive
Dir., Me. Revenue Servs., 2007 ME 62, 9 9, 922 A.2d
465, 469. Pursuant to the Clean Water Act and its
implementing regulations, states are required to
designate uses of waterbodies within their borders. 33
U.S.C.S. § 1313 (2001); 40 C.F.R. § 131.10 (2006).
Once such designated uses have been established and
approved by the EPA, states are permitted to adopt
subcategories of use for specific waterbodies, requir-
ing less stringent criteria, provided they conduct a
UAA and obtain EPA approval of any subcategory. 40
C.F.R. §§ 131.10(g), (), 131.20(c) (2006). Class C is
Maine’s minimum EPA-approved water quality stan-
dard for hydropower impoundments and, therefore,
A-15
under federal law, Maine is not permitted to apply a
less stringent standard than Class C to a hydro-
power impoundment unless a UAA has been con-
ducted and EPA approval has been obtained.
See 38 M.R.S.A. § 464(9) (Supp. 1992); 38 M.R.S.A.
§ 465(4)(C); 33 U.S.C.S. § 1313; 40 C.FR. §§ 131.10(g),
(j), 131.20(c).
[26] At the time FPL’s certification was pend-
ing, the Class C water classification standards
provided that “[djischarges to Class C waters may
cause some changes to aquatic life, provided that the
receiving waters shall be of sufficient quality to
support all species of fish indigenous to the receiving
waters and maintain the structure and function of
the resident biological community.” 38 M.R.S.A.
* Title 38 M.R.S.A. § 465(4) (2001 & Supp. 2003) provided:
§ 465. Standards for classification of fresh sur-
face waters
The department shal] have 4 standards for the
classification of fresh surface waters which are not
classified as great ponds.
4. Class C waters. Class C shall be the
4th highest classification.
A. Class C waters must be of such quality
that they are suitable for the designated uses of
drinking water supply after treatment; fishing;
agriculture; recreation in and on the water;
industrial process and cooling water supply; hy-
droelectric power generation, except as prohib-
ited under Title 12, section 403; navigation; and
as a habitat for fish and other aquatic life.
(Continued on following page)
A-16
§ 465(4) (C) (emphasis added). The Class C standards
further provided that the waters “shall be of such
quality that they are suitable ... as a habitat for fish
and other aquatic life.” 38 M.R.S.A. § 465(4)(A).
([{27] The statute creates a hierarchy of stan-
dards, with Class AA standards being the highest and
Class C standards being the lowest. See 38 M.R.S.A.
§ 465. At the time of certification, the statute pro-
vided that Class AA waters “shall be characterized as
B. The dissolved oxygen content of Class C
water may be not less than 5 parts per million or
60% of saturation, whichever is higher, except
that in identified salmonid spawning areas
where water quality is sufficient to ensure
spawning, egg incubation and survival of early
life stages, that water quality sufficient for these
purposes must be maintained. Between May
15th and September 30th, the number of Es-
cherichia coli bacteria of human origin in these
waters may not exceed a geometric mean of 142
per 100 milliliters or an instantaneous level of
949 per 100 milliliters. The board shall promul-
gate rules governing the procedure for designa-
tion of spawning areas. Those rules must include
provision for periodic review of designated
spawning areas and consultation with affected
persons prior to designation of a stretch of water
as a spawning area.
C. Discharges to Class C waters may cause
some changes to aquatic life, provided that the
receiving waters shall be of sufficient quality to
support all species of fish indigenous to the re-
ceiving waters and maintain the structure and
function of the resident biological community.
A-17
free flowing and natural,”” “[t]he aquatic life, dis-
solved oxygen and bacteria content ... shall be as
naturally occurs,”” and “[t]here may be no direct
discharge of pollutants to Class AA waters, except
storm water discharges.” 38 M.R.S.A. § 465(1)A), (B),
(C).
{128} Based on a plain reading of the statute, it
is not clear what baseline was intended for the Class
C standards. However, the Board interpreted the
baseline to be a “natural lake” standard and such a
reading is reasonable based on the language of the
statute. The Legislature created a hierarchy of stan-
dards, with Class AA being the highest and Class C
being the lowest. Since Class AA standards require
“natural” conditions, it is reasonable to read all other
standards as measured against the Class AA base-
line. We must next examine the legislative history
of section 465 to determine whether the Board’s
interpretation is aligned with the Legislature’s intent
and is reasonable pursuant to the statute’s history.
° Title 38 M.R.S. § 466(9) (2006) defines “[nJatural” as
“living in, or as if in, a state of nature not measurably affected
by human activity.”
‘' “As naturally occurs” is defined as “conditions with
essentially the same physical, chemical and biological character-
istics as found in situations with similar habitats free of meas-
urable effects of human activity.” 38 M.R.S. § 466(2) (2006).
A-18
3. Legislative History
[129] FPL contends that there are three events
in the legislative history of 38 M.R.S. § 464, which
demonstrate legislative intent that the baseline
standard for Class C waters be the “impoundment-to-
impoundment” standard, rather than the “natural
lake” standard. FPL points to the March 1992
amendment of the statute, the legislative resolve
passed in May 2003, and Maine’s antidegradation
law. We examine each in turn.
4. The March 1992 Amendment
[{30] In March 1992, the Legislature amended
the water classification laws by enacting 38 M.R.S.A.
§ 464(9) (Supp. 1992) to provide that Maine’s hydro-
power impoundments comply with the certification
standards if “[t]he existing impounded waters are
able to support all species of fish indigenous to those
waters and the structure and function of the resident
biological community in the impounded waters is
maintained.” PL. 1991, ch. 813, § A-1 (effective June
30, 1992). According to the parties, this standard
became known as the “what-you-see-is-what-you-get”
standard because it attempted to maintain the status
quo for Maine’s hydropower impoundments.
[131] On January 14, 1993, the EPA formally
disapproved of 38 M.R.S.A. § 464(9) as amended,
explaining that it is inconsistent with federal re-
quirements because it attempts to create a new
subcategory without requiring a UAA and providing
A-19
for public participation.” As a result of the EPA’s
disapproval, the Legislature amended the statute to
apply the “what-you-see-is-what-you-get” standard to
only one impoundment, the Ripogenus impoundment,
because a UAA had been conducted for that im-
poundment. See P.L. 1993, ch. 344, § 2 (effective Oct.
13, 1993) (codified at 38 M.R.S.A. § 464(9) (Supp.
1992)). The amendments made clear that Class C
water quality standards apply to all other hydropower
impoundments. Jd. Title 38 M.R.S.A. § 464(9), effective
at the time of the Commissioner’s certification in this
” Prior to this formal disapproval, the EPA sent a letter to
the Department on May 19, 1992, communicating its concern
that 38 M.R.S.A. § 464(9) (Supp. 1992), as amended, would not
meet federal requirements. Attached to the letter, the EPA
provided its “[rjeview and [a]nalysis” of the new statute, which
stated:
[The] EPA could approve the legislation if it is
only clarifying that for all existing GPA hydropower
impoundments, including those with significant level
fluctuations, that the Class GPA “natural” aquatic life
criteria are not applicable but that the impoundment
must meet the minimum requirement of the Class C
aquatic life criteria. ... Moreover, Part A may be ac-
ceptable even if it creates a new subcategory of Class
C which goes below the minimum aquatic life criteria
of Class C, provided that the provision is found, by the
State Attorney General, to require the State to follow
the necessary federal procedures before a waterbody
is placed into this new subcategory. ... Under federal
law, before the State can move an impoundment into
this new subcategory, it must first provide the neces-
sary justification (i.e., UAA) and opportunity for pub-
lic participation.
(Emphasis in original.)
A-20
case, contained identical language to the statute as
amended in 1993.
{{32] FPL contends that the 1992 amendments
to section 464 show that the legislative intent has
always been to compare hydropower impoundments
to impoundments rather than natural lakes. We do
not view this history as FPL does. The events in 1992
reflect an attempt by the Legislature to impose lower
standards without following the proper procedures.
The EPA’s express disapproval of the Legislature’s
actions in 1992 shows that such standards were a
departure from the norm. Furthermore, the standard
proposed in 1992, which required a comparison
between an impoundment and itself, is a different
standard from the “impoundment-to-impoundment”
standard at issue now. This history does not under-
mine the Board’s conclusion that the “impoundment-
to-impoundment” standard is a new standard requir-
ing EPA approval.
5. The 2003 Resolve
[733] In May 2003, the Legislature passed a
Resolve, which directed the Department to “adopt
rules” requiring that “the structure and function ...
that must be maintained in a water storage reservoir
is the structure and function that would be expected
to exist in a water storage reservoir with a drawdown
A-21
of similar magnitude.”” L.D. 1059 (121st Legis. 2003).
The Resolve defined water storage reservoir as “an
impoundment associated with a hydropower project.”
'’ The Legislature’s Resolve stated in full:
Sec. 1 Water storage reservoirs; rules.
Resolved: That the Department of Environmental
Protection, Board of Environmental Protection shall
adopt rules under the Maine Revised Statutes, Title
38, section 464, subsection 5 relating to protocols and
procedures for evaluation of the resident biological
community in water storage reservoirs. In adopting
the rules, the Board of Environmental Protection
shall recognize that water storage reservdirs are arti-
ficial and are not natural water bodies, and the rules
must ensure that the existing uses of water storage
reservoirs are maintained and protected. In issuing
licenses, permits and certifications prior to final adop-
tion of the rules, the Department of Environmental
Protection shall recognize that water storage reser-
voirs are artificial and are not natural water bodies
and shall ensure that the existing uses of water stor-
age reservoirs are maintained and protected. The goal
of the rules and any license, permit or certification
must be to require that the structure and function of
the resident biological community that must be main-
tained in a water storage reservoir is the structure
and function that would be expected to exist in a wa-
ter storage reservoir with a drawdown of simular
magnitude. As used in this resolve, “water storage
reservoir” means an impoundment associated with a
hydropower project, as defined by Title 38, section
632, that was in existence prior to November 28, 1975,
was not primarily lacustrine in its natural state, is
classified under Title 38, section 465-A and is man-
aged to store and release water on an annual cycle to
benefit downstream hydropower generation.
A-22
[734] Pursuant to 38 M.R.S. § 342(9) (2006), the
Commissioner of the Department “may submit to the
board new or amended rules for its adoption.” It is the
Board, however, that has final authority to adopt a
new rule pursuant to 38 M.R.S. § 341-D(1-B) (2006).”
Following the passage of the 2003 Resolve, the Com-
missioner drafted an order granting water quality
certification to the Flagstaff Project, using the crite-
ria articulated in the Resolve.
[135] On November 10, 2003, the EPA sent a
letter to the Department disapproving of the Com-
missioner’s use of this standard because “this new
legislation is not in effect for federal law purposes
and cannot be relied upon for [the Clean Water Act]
certification.” The EPA wrote “[the Department] now
asserts that, rather than comparing a storage reser-
voir to a natural lake as it has done since 1995, [the
Department] is now adopting the policy (at least
* Title 38 M.R.S. § 341-D(1-B) (2006) states:
§ 341-D. Board responsibilities and duties
1-B. Rulemaking. Subject to the Maine Admin-
istrative Procedure Act, the board shall adopt, amend
or repeal reasonable rules and emergency rules neces-
sary for the interpretation, implementation and en-
forcement of any provision of law that the department
is charged with administering. The board shall also
adopt, amend and repeal rules as necessary for the
conduct of its business.
(Footnote omitted.)
A-23
orally) that storage reservoirs shall be compared to
other impoundments with similar drawdowns.”
({736] FPL contends that the 2003 Resolve
indicates clear legislative intent that the impound-
ment-to-impoundment standard is, and has always
been, the appropriate standard to determine compli-
ance with Class C water quality standards pursuant
to 38 M.R.S.A. § 465(4). Although we agree with FPL
that the Resolve indicates legislative intent that the
impoundment-to-impoundment standard apply now,
we see no reason why the Legislature would issue a
resolve directing the Commissioner to “adopt rules” if
such a standard already existed. The 2003 Resolve
demonstrates the Legislature’s intention to promul-
gate a new rule. However, because of the EPA's disap-
proval, a new rule was not adopted. "
6. The Antidegradation Law
[137] Also effective in 2003 was Maine’s antide-
gradation law, 38 M.R.S. § 464(4)(F) (2006), which
" Title 38 M.R.S. § 464(4XF) (2006) provides in relevant
part:
4. General provisions. The classification sys-
tem for surface waters established by this article shall
be subject to the following provisions.
F. The antidegradation policy of the State is
governed by the following provisions.
(1) Existing in-stream water uses and the
level of water quality necessary to protect those
(Continued on following page)
A-24
existing uses must be maintained and protected.
Existing in-stream water uses are those uses
which have actually occurred on or after Novem-
ber 28, 1975, in or on a water body whether or
not the uses are included in the standard for
classification of the particular water body.
Determinations of what constitutes an existing
in-stream water use on a particular water body
must be made on a case-by-case basis by the de-
partment. In making its determination of uses to
be protected and maintained, the department
shall consider designated uses for that water
body and:
(a) Aquatic, estuarine and marine life pre-
sent in the water body;
(b) Wildlife that utilize the water body;
(c) Habitat, including significant wetlands,
within a water body supporting existing popula-
tions of wildlife or aquatic, estuarine or marine
life, or plant life that is maintained by the water
body;
(d) The use of the water body for recrea-
tion in or on the water, fishing, water supply, or
commercial activity that depends directly on the
preservation of an existing level of water quality.
Use of the water body to receive or transport
waste water discharges is not considered an ex-
isting use for purposes of this antidegradation
policy; and
(e) Any other evidence that, for divisions
(a), (b) and (c), demonstrates their ecological sig-
nificance because of their role or importance in
the functioning of the ecosystem or their rarity
and, for division (d), demonstrates its historical
or social significance.
(1-A) The department may only issue a waste dis-
charge license pursuant to section 414-A, or approve a
(Continued on following page)
A-25
provides that “[e]xisting instream water uses and the
level of water quality necessary to protect those
existing uses must be maintained and protected.” The
water quality certification pursuant to the United
States Clean Water Act, Section 401, Public Law 92-
500, as amended, when the department finds that:
(a) The existing in-stream use involves use of
the water body by a population of plant life, wild-
life, or aquatic, estuarine or marine life, or as
aquatic, estuarine, marine, wildlife, or plant
habitat, and the applicant has demonstrated
that the proposed activity would not have a sig-
nificant impact on the existing use. For purpose
of this division, significant impact means:
(i) Impairing the viability of the existing
population, including significant impair-
ment to growth and reproduction or an al-
teration of the habitat which impairs
viability of the existing population; or
(b) The existing in-stream use involves use of
the water body for recreation in or on the water,
fishing, water supply or commercial enterprises
that depend directly on the preservation of an
existing level of water quality and the applicant
has demonstrated that the proposed activity
would not result in significant degradation of the
existing use.
The department shall determine what constitutes a
population of a particular species based upon the de-
gree of geographic and reproductive isolation from
other individuals of the same species.
If the department fails to find that the conditions of
this subparagraph are met, water quality certification,
pursuant to the United States Clean Water Act, Section
401, Public Law 92-500, as amended, is denied.
(Footnotes omitted.)
A-26
statute defines an “existing in-stream water use” to
include “[t]he use of the water body for ... water
supply, or commercial activity that depend: directly
on the preservation of an existing level of water
quality.” 38 M.R.S. § 464(4)(F)(1\d). The antidegrada-
tion law requires an applicant seeking protection as
an “existing in-stream use” to “demcnstrate[] that
the proposed activity would not have a significant
impact on the existing use” in order to obtain water
quality certification pursuant to the Clean Water Act.
38 M.R.S. § 464(4)(F)(1-A)(a).
(¥38] We do not interpret Maine’s antidegrada-
tion law as exempting the Project from the require-
ments of the Clean Water Act simply because the
Project is an existing in-stream use. Instead, 38
M.R.S. § 464(4F)(1-A) provides an additional re-
quirement that must be met in order for FPL to
obtain water quality certification pursuant to the
Clean Water Act.
(¥39] This history demonstrates legislative
attempts to change the baseline standard against
which hydropower impoundments are to be judged,
however, it does not support FPL's contentions that
the “impoundment-to-impoundment” standard has
always been the applicable standard. We conclude
that based on the legislative history, the Board's
judgment that the “impoundment-to-impoundment”
standard represents a “dramatic change from past
practice” and, thus requires EPA approval, is reason-
able. We, therefore, defer to the Board’s expertise and
affirm its conclusion.
A-27
C. Compliance with Class C Standards
[740] FPL finally argues that the Project meets
the definition of Class C water quality standards
under 38 M.R.S.A. § 465(4)(C) because the Project
does not discharge pollutants. The Board found this
interpretation of the statute “too narrow” and “incon-
sistent with a long line of FERC, EPA and [Depart-
ment] interpretations of the applicable laws vested in
them.”
[741] The Class C water quality standards
provide that “[djischarges to Class C waters may
cause some changes to aquatic life.” 38 M.R.S.A.
§ 465(4\(C). Title 38 M.R.S. § 361-A(1) (2006) defines
“discharge” to mean “any spilling, leaking, pumping,
pouring, emptying, dumping, disposing or other
addition of any pollutant to water of the State.” Title
38 M.R.S. § 361-A(4-A) (2006) defines “[pJollutant” as
“dredged spoil, solid waste, junk, incinerator residue,
sewage, refuse, effluent, garbage, sewage sludge,
munitions, chemicals, biological or radiological mate-
rials, oil, petroleum products or by-products, heat,
wrecked or discarded equipment, rock, sand, dirt and
industrial, municipal, domestic, commercial or agri-
cultural wastes of any kind.””
* We note that the definition of “(pjollutant” includes “sand
(and) dirt.” Generally the water flowing into hydropower im-
poundments is filled with sand and/or dirt that gets trapped in the
impoundment, thus increasing the levels of these “pollutants” in
(Continued on following page)
A-28
[9142] We once again defer to the Board’s exper-
tise in interpreting this provision. The Board found
FPL’s argument unpersuasive because “this reading
of the law is too narrow and is inconsistent with a
long line of FERC, EPA and [Department] interpreta-
tions of the applicable laws vested in them.” The
Board’s interpretation is reasonable because, without
the discharge requirement, the Class C certification
process for hydropower impoundments would be no
more than rubber stamp approval. See, e.g., S.D.
Warren Co., 2005 ME 27, 9 17, 868 A.2d at 217 (in-
terpreting the term “discharge” in the Clean Water
Act to include the “addition” of water from one body
to another), aff’d, 126 S. Ct. 1843 (2006).
[143] Because we defer to the agency interpre-
tation, and the Board’s findings are reasonable, we
affirm the Board’s decision.
The entry is:
Judgment affirmed.
Attorneys for plaintiff:
Mathew D. Manahan, Esq.
Catherine R. Connors, Esq. (orally)
Pierce Atwood LLP
One Monument Square
Portland, ME 04101
the water. However, since the Department does not make this
argument, we do not address its merits.
A-29
Attorneys for defendant:
G. Steven Rowe, Attorney General
Gerald D. Reid, Asst. Atty. Gen. (orally)
6 State House Station
Augusta, ME 04333-0006
Attorneys for intervenors Maine Rivers, Trout
Unlimited, Appalachian Mountain Club and
Natural Resources Council of Maine:
Andrew A. Cadot, Esq.
Christopher M. Dargie, Esq. (orally)
Perkins Thompson, P.A.
P.O. Box 426
Portland, ME 04112-0426
Attorney for amicus curiae New England Legal
Foundation:
James B. Haddow, Esq.
Petrucelli, Martin & Haddow, LLP
50 Monument Square, 6th floor
Portland, ME 04101
A-30
STATE OF MAINE SUPERIOR COURT
CIVIL ACTION
KENNEBEC, ss. DOCKET NO. AP-04-50
FPL ENERGY MAINE
HYDRO, LLC,
Petitioner
V. DECISION AND ORDER
DEPARTMENT OF
ENVIRONMENTAL
PROTECTION,
Respondent
This matter is before the court on petition of FPL
Energy Maine Hydro, LLC’s (“FPL” or “petitioner”)
for review of final agency action pursuant to M.R. Civ.
P. 80C (2005) and petitioner’s motion to strike, pur-
suant to M.R. Civ. P. 80C(d) and (f).
This case involves the certification of the Flag-
staff Storage Project (“Project”) (which consists of a
dam, reservoir, and appurtenant facilities), and
whether or not clean weter standards for the Project
should be based on cther similar bodies of water (an
“impoundment te imapoundment” standard) or on
“natural” bodies of water. Water quality standards
are implicated because of the large drawdowns hy-
droelectric dams call for in order to produce energy.’
' Hydroelectric dams can deplete reservoirs over 30 feet at a
time, thereby reducing the chance of survival of aquatic life. The
(Continued on following page)
A-31
The parties agree on the facts pertinent to the dis-
pute, but there are numerous procedural and legal
differences between the parties that constitute the
bulk of their dispute.
The petition alleges the following: FPL owns and
operates the Project, which it acquired from Central
Maine Power in 1999. The federal Clean Water Act
requires applicants for a federal license that might
involve a discharge into navigable waters to obtain
certification of water quality from the state in which
the discharge originates. Federal Water Pollution
Control Act (the “Clean Water Act”) § 401, 33 U.S.C.
§ 1341(a)(1) (2005). From December 1996 (when CMP
still owned the Project) to November 15, 2002, an
application for certification was filed and then with-
drawn on an annual basis with Maine’s Department
of Envircnmental Protection (“DEP” or “respondent”),
without the DEP acting on it. FPL filed its requests
for certification with a reservation to challenge the
applicability of the certification requirement. On
November 14, 2003, the DEP Commissioner issued
the certification pursuant to Maine and federal law,
indicating that the continued operation of the Project
would not violate applicable water quality standards,
subject to numerous conditions. See 38 M.R.S.A.
$§ 361-A, 464 (2005); 33 U.S.C. § 1341(a)(1).
Department of Environmental Protection recommends draw-
downs of no more than 11 feet.
A-32
On December 9, 2003, Maine Rivers, Trout
Unlimited, Appalachian Mountain Club, and the
Natural Resources Council of Maine (“the NGOs”)
filed a timely appeal to the Board of Environmental
Protection (“BEP” or “Board”). On July 15, 2004 the
BEP granted the appeal, reversing the Commis-
sioner’s certification of the Project. This petition
followed, sounding in two counts. First, that DEP
exceeded its authority by engaging in the certification
process at all. The Clean Water Act requires clean
water certification only if there is a discharge into
navigable waters and that discharge contains pollut-
ants. See 33 U.S.C. § 1341. Further, the DEP has one
year to act on a certification application, and if it does
not do so, certification is waived. See id. Count I
alleges that DEP’s failure to act in a timely manner,
and DEP’s engaging in the certification process at all
when no discharge or pollutant was involved resulted
in DEP exceeding its mandate.
Second, FPL alleges that the Board committed
errors of law and abused its discretion when it made
conclusions relating to the water quality standards
and procedures for applying those standards (to be
discussed further infra), including granting standing
to the NGOs for filing their appeal in the first place.
The petition for review was filed on August 9,
2004. The certification of the record was disputed by
both parties, culminating in a decision and order of
April 22, 2005, denying the admission of an audio
tape of BEP deliberations, but also denying the
inclusion of a Federal Energy Regulatory Commission
A-33
(“FERC”) decision, which was made after the DEP’s
ruling denying certification, and thus not a decision
that was relied upon by the DEP.
The petitioner’s 80C brief, the DEP’s and inter-
venor NGOs response briefs,’ and the petitioner’s
reply brief were all filed in a timely manner, pursuant
to a scheduling order. An amicus curiae brief in
support of petitioner’s position was filed. The peti-
tioner then filed a motion to strike and respondent
DEP timely filed a reply.
When the decision of an administrative agency is
appealed pursuant to M.R. Civ. P. 80C, this Court
reviews the agency’s decision directly for abuse of
discretion, errors of law, or findings not supported by
the evidence. Centamore v. Dep't of Human Services,
664 A.2d 369, 370 (Me. 1995). “An administrative
decision will be sustained if, on the basis of the entire
record before it, the agency could have fairly and
reasonably found the facts as it did.” Seider v. Board
of Exam’r of Psychologists, 2000 ME 206 7 9, 762 A.2d
551, 555 (Me. 2000) (citing CWCO, Inc. v. Superin-
tendent of Ins., 1997 ME 226, 96, 703 A.2d 1258,
1261 (Me. 1997)). In reviewing the decisions of an
administrative agency, the Court should “not attempt
* Note that the NGOs are seeking to intervene pursuant to
5 M.R.S.A. § 11005 and M.R.C.P. 80C; section 11005 provides
that “all parties to the agency proceeding who wish to partici-
pate in the review shall file a written appearance ... ” Peti-
tioner disputes the intervenors’ claim that they are a party to
the agency proceeding.
A-34
to second-guess the agency on matters falling within
its realm of expertise” and the Court’s review is
limited to “determining whether the agency’s conclu-
sions are unreasonable, unjust or unlawful in light of
the record.” Imagineering v. Superintendent of Ins.,
593 A.2d 1050, 1053 (Me. 1991). The focus on appeal
is not whether the Court would have reached the
same conclusion as the agency, but whether the
record contains competent and substantial evidence
that supports the result reached by the agency.
CWCO, Inc., 1997 ME 226, 703 A.2d 1258, 1261.
“Inconsistent evidence will not render an agency
decision unsupported.” Seider, 762 A.2d 551 (citations
omitted). The burden of proof rests with the party
seeking to overturn the agency’s decision, and that
party must prove that no competent evidence sup-
ports the Board’s decision. /d.“[Petitioner] must prove
that no competent evidence supports the Board’s
decision and that the record compels a contrary
conclusion.” Bischoff v. Board of Trustees, 661 A.2d
167, 170 (Me. 1995).
Factual determinations must be sustained unless
shown to be clearly erroneous. /magineering, 593
A.2d at 1053 (noting that the Court recognizes no
distinction between the clearly erroneous and sub-
stantial evidence in the record standards of review for
factual determinations made by administrative
agencies). “A party seeking review of an agency’s
findings must prove they are unsupported by any
competent evidence.” Maine Bankers Ass’n v. Bureau,
684 A.2d 1304, 1306 (Me. 1996) (emphasis added).
A-35
“When the dispute involves an agency’s interpre-
tation of a statute administered by it, the agency’s
interpretation, although not conclusive on the Court,
is accorded great deference and will be upheld unless
the statute plainly compels a contrary result.” Maine
Bankers Ass'n, 684 A.2d at 1306 (citing Centamore v.
Department of Human Services, 664 A.2d 369, 370
(Me. 1995)).
Petitioner’s Brief
The substantive dispute between the parties
involves which water quality standard to apply to the
Project. Petitioner’s brief outlines the contours of that
debate, stating that between 1995 and 2003, DEP
maintained that the Project’s water quality should
match that of a “natural” lake, while FPL (and CMP
previously) contended that a distinct standard should
apply to water storage reservoirs. The confusion
surrounding the applicable water quality standard
originated in 1986, when water storage reservoirs
were classified as “natural” by the (then) current
legislation, 38 M.R.S.A. § 465-A(1)(A), § 466(9). By
1991, when FERC re-licensed another reservoir
system in Maine (Chesuncook Lake), DEP became
concerned that the large drawdowns of water that
occur in reservoirs meant that those impoundments
would not be able to meet “natural” aquatic stan-
dards. A Maine law was thus passed in 1992 amend-
ing 38 M.R.S.A. § 464(9), to acknowledge that
Chesuncook Lake would have to meet less stringent
water quality standards, but that all other “existing
A-36
impoundments” would have to meet so-called “Class
C” standards.’ Such an amendment of standards
required a Use Attainability Analysis (“UAA”) that
had to be approved by the EPA. FPL maintains that
such approval was granted by the EPA in 1993, and
the Maine legislature amended 38 M.R.S.A. § 464(9)
accordingly.
Prior to 2003, FPL and DEP agreed that Class C
standards applied to the Project, but DEP interpreted
that to mean that the Project had to maintain aquatic
life in the reservoir akin to what would be found in a
“natural” lake. FPL argues that the legislative
amendments discussed supra were adopted precisely
to combat this interpretation. Alternatively, the lower
“what you see is what you get” standard applied to
Chesuncook Lake would not pertain, as that lower
standard was approved only for that particular
project. FPL thus urges the adoption of a “middle
road” — a standard higher than that adopted for
Chesuncook Lake, but one lower than that applied to
“natural” bodies of water. It thus concludes that a
comparison to water storage reservoirs with draw-
downs of similar magnitude would be the most ap-
propriate way to assess whether or not the Project
met acceptable water quality standards.
> Class C standards still require that aquatic life be sus-
tained, but that “some changes” to aquatic life are permissible.
See 39 M.R.S.A. § 46514 C) (2005)
A-37
In 2003, Governor Baldacci signed L.D. 1059,
Resolves 2003, ch. 37 (“Chapter 37”) which stated in
part, “The goal of the rules and any license, permit or
certification must be to require that the structure and
function of the resident biological community that
must be maintained in a water storage reservoir is
the structure and function that would be expected to
exist in a water storage reservoir with a drawdown of
similar magnitude.” There was some dispute at the
state level as to whether or not Chapter 37 triggered
the need for EPA approval, as it could be interpreted
as introducing a new water quality standard. There-
fore, without reference to Chapter 37, the DEP Com-
missioner approved the FPL certification application
on November 14, 2003, essentially embracing the FPL
position on water quality standards by stating that
DEP was interpreting existing standards, not intro-
ducing a new one.
The NGOs then appealed the Commissioner’s
decision to the BEP. The BEP overturned the Com-
missioner’s certification of the FPL Project, stating
that the “impoundment to impoundment” standard
used by DEP was contrary to that which the EPA
approved in 1992, and contrary to how DEP had been
interpreting existing law in recent years. The BEP
urged the DEP to either obtain EPA approval of
the “impoundment to impoundment” standard (em-
bodied in Chapter 37), or conduct a UAA in order to
* Chapter 37 amended 28 M.R.S.A. § 466(10), which defines
“resident biological community.”
A-38
recalibrate the water quality standards for water
storage reserv«®. Ss.
As a threshold matter, petitioner argues over the
standard of review, asserting that reliance on the
Commissioner’s initial decision should outweigh the
importance of the reversal of that decision by the (lay)
BEP. It is the Commissioner, and not the BEP, who
has the requisite expertise to interpret and adminis-
ter relevant statutes. Citing S.D. Warren Co. v. Bd. of
Envtl. Prot., FPL maintains that though BEP is
accorded deference when interpreting federal envi-
ronmental statutes, that deference is due to BEP’s
having greater experience than do courts, not the
Commissioner, in interpreting those statutes. See
2005 ME 27, 9 5, 868 A.2d 210, 214. FPL also asserts
that legislative intent trumps agency interpretation
of a statute when the two conflict. See Cent. Maine
Power Co. v. Maine Pub. Utils. Com., 436 A.2d 880,
885 (1981). As discussed infra, FPL will attempt to
demonstrate that the legislative intent behind
Maine’s water classification standards conflicts with
the DEP’s interpretation of those standards, and thus
the legislative intent should prevail.
As a secondary threshold matter, petitioner
argues that the NGOs did not have standing to have
appealed the Commissioner’s decision to the BEP
because they did not suffer a “particularized injury.”
See Storer v. Dep't of Envtl. Prot., 656 A.2d 1191, 1192
(Me. 1995). According to petitioner, DEP regulations
regarding standing are similar to the test used in
Maine courts, namely whether or not a party has
A-39
suffered a particularized injury as a result of a licens-
ing or other decision. The petitioner asserts that the
NGOs refer to their broad missions of environmental
protection, but do not allege a sufficient harm to
create standing on their behalf or through their
members on their behalf. Petitioner also points out
that only one of the four NGOs participated in the
drafting of the new water certification standards, and
the comments made at that time are in direct conflict
with those made in the subsequent appeal to the BEP.
If the NGOs had no standing to appeal the certifica-
tion of FPL, then the BEP decision supporting that
appeal must be invalidated and reversed.
Next, FPL argues that DEP waived certification
altogether by failing to do so within the one year
deadline established by federal statute. See 33 U.S.C.
§ 1341(a). In the alternative, the BEP decision revers-
ing FPL’s certification was made after the one-year
deadline, and thus should not be upheld. FPL traces
legislative history describing how an Executive Order
of Governor King named the DEP as the water qual-
ity standard certifying agency under FERC regula-
tions. The Commissioner and BEP are part of the
DEP, but it is the DEP and not either one of these
entities comprising it that has certification authority.
Though the DEP Commissioner certified the Project
within one year of FPL’s most recent application, the
BEP decision reversed that certification after that
one-year deadline. The BEP decision was the “final
agency action” and as that final agency action oc-
curred tu) ‘ate, DEP should be viewed as having
A-40
waived certification altogether. FPL’s interpretation
of timelines necessitates that it view section 401 as
requiring “final agency action” when it states “If the
State, interstate agency, or Administrator, as the case
may be, fails to act on a request for certification,
within a reasonable period of time (which shall not
exceed one year) after receipt of such request, the
certification requirements of this subsection shall be
waived with respect to such Federal application.”
Section 401. FPL concedes that a court, pursuant to
an 80C petition for review would be able to overturn a
final agency action after that one year deadline;
however an agency cannot overturn its own decision
outside of that one year deadline, which is what the
BEP did on July 15, 2004. FPL cites a recent Wash-
ington District Court decision — clearly not controlling
authority in Maine — for the proposition that inter-
pretations of deadlines pursuant to section 401 “must
mean that the issuance of state conditions outside the
one-year time period must be treated differently than
the issuance of such conditions occurring within that
period.” See Airport Communities Coalition v. Graves,
280 F. Supp. 2d 1207, 1215 (W.D. Wash. 2003).
FPL’s most substantive argument points to the
Project’s not needing to be certified at all under the
Clean Water Act because it does not discharge any-
thing, let alone pollutants, into navigable waters. The
Law Court has recently determined that a discharge
results when “dams remove water from its natural
course, exercise private control over the water, and
then add the water back into the river.” S.D. Warren
A-41
Co. v. Bd. of Envtl. Prot., 2005 ME 27, J 13, 868 A.2d
210, 216 (emphasis in original).? The Law Court
urged a broad interpretation of “discharge,” to include
releases from a source point that are both polluting
and non-polluting. See id. at J 14, 868 A.2d at 216
(citation omitted). As section 401 applies to dis-
charges into navigable waters, the Law Court has
held that hydroelectric dams and reservoirs release
such discharges, and thus certification by the DEP is
required.
In order to distinguish the FPL Project from the
situation that was under review in Warren (five
contiguous hydroelectric dam projects on the Pre-
sumpscot River in Cumberland County), the peti-
tioner asserts that Warren did not address “the
question of whether Maine Water Quality Law re-
quires the presence of a pollutant to trigger the need
for certification.” Petitioner maintains that this law
unambiguously links “pollutant” with “discharge,”
such that if no pollutant is discharged, no certifica-
tion is required. See 38 M.R.S.A. § 361-A(1) (defining
“discharge” as “any spilling, leaking, pumping, pour-
ing, emptying, dumping, disposing or other addition
of any pollutant to water of the State.”). Petitioner
asserts that it will operate the Project in much the
same manner in which it has been operated for dec-
ades, with “additional environmental enhancements”
> The Law Court decision was affirmed by the United States
Supreme Court on May 15, 2006, No. 04-1527.
A-42
that will not produce any discharge into navigable
waters. See id.
FPL further contends that if certification were
required, federal EPA approval was not necessary
because no new standard was created for the Project.
In its decision reversing the Commissioner’s certifica-
tion of the Project, BEP maintained that her doing so
departed significantly from past DEP practice, creat-
ing a new standard for reservoirs (below Class C) and
doing so would need EPA approval. As discussed
supra, FPL states that the Project should be evalu-
ated based on Class C criteria, which it interprets to
encompass a comparison to other reservoirs, not
“natural” lakes. In addition, FPL asserts that the
Commissioner’s interpretation of the standards does
not change the standards themselves, further negat-
ing the need for EPA approval of the certification.
Drawing its argument to a close, FPL says that
reversing the certification violates the Antidegreda-
tion Law, which states that “existing in-stream uses
‘must be maintained and protected.’” See 38 M.R.S.A.
§ 464(4)(F\(1). Any in-stream use that has been in
effect since 1975 qualifies for such protection, and
FPL does not interpret the statute as prioritizing
preservation of aquatic life over use of a body of water
to generate electricity. See id. By not certifying the
Project, the DEP would be disrupting an established
in-stream use and thus not only violate the Antide-
gredation Law, but also offend Maine’s stated energy
policy goals, which include supporting the continued
use of “indigenous hydro energy resources.”
A-43
Respondent’s Brief
The DEP begins its brief with an overview of the
statutory and regulatory scheme pertaining to the
certification of water quality in Maine. First, it out-
lines the requirements of the Clean Water Act, which
echo FPL’s interpretation of the statute, so will not be
rehashed here. Next, DEP outlines the role of FERC
in issuing new licenses for existing hydropower dams.
Seel6 U.S.C. § 808(a)(2). FERC also requires state
certification of water quality (or a waiver) in order to
issue a federal license. DEP also reviews the intro-
duction of Chapter 37, but clarifies that it could not
be made into law until the EPA approves the new
water quality standard implicit in it, which EPA
informed DEP that it would not do by letter in No-
vember 2003.
DEP next introduces a different spin on the
repeated denials of first CMP’s and then FPL’s certifi-
cation of the Project. DEP contends that since it knew
the Project would not meet the Class C standards in
the years 1996-2002, it encouraged FPL to withdraw
its application to prevent its being rejected. DEP then
recounts how the Commissioner’s decision to certify
excluded a reference to the disapproved Chapter 37,
but used the rational [sic] behind that policy anyway.
DEP thus finds the Commissioner’s contention that
she was merely reinterpreting existing standards,
and not relying on the EPA-disapproved Chapter 37
standards to be disingenuous.
A-44
With regard to the standard of review, DEP
asserts that FPL’s reliance on the fact that the BEP is
a lay board and thus should not be accorded deference
in interpreting statutes is misplaced and also violates
Law Court precedent. DEP cites its enabling legisla-
tion to bolster its assertion that the BEP has both the
responsibility to hear appeals of the Commissioner’s
decisions and that in doing so, it may “adopt, modify,
or reverse the findings of fact or conclusions of law
established by the Commissioner.” See 38 M.R.S.A.
§ 341-D(4)(A). In Warren, the Law Court specifically
addressed the fact that a lay board is due deference,
and that “The standard is whether the subject matter
is beyond the scope of BEP expertise.” 2005 ME 27,
q 6, 868 A.2d 210, 214. DEP states that BEP has the
requisite experience and expertise in interpreting
relevant statutes as evidenced by the appeal it con-
sidered in the Warren case.
DEP then refutes the argument that the NGOs
lack standing by emphasizing that “aggrieved person”
is broadly defined by departmental regulations, as
including any individual, partnership, corporation,
government entity, association or public or private
organization of any character that the Board deter-
mines may suffer particularized injury as a result of a
licensing or other decision. The DEP contends that
the BEP had substantial evidence before it, including
affidavits from members of the NGOs. indicating that
the intervenors met that standard.
DEP then addresses FPL’s contention that DEP
waived certification because final agency action was
A-45
not completed within one year, per section 401 of the
Clean Water Act. A portion of DEP’s argument relies
on a different interpretation of Airport Communities
Coalition v. Graves, the Washington case that FPL
relied upon in its brief, for the proposition that an
agency cannot overturn its own decision outside of
the one-year deadline. DEP contends that Airport
Communities is more properly read to provide the
federal agency with discretion to consider state
agency decisions made outside of the one-year dead-
line. The remainder of DEP’s argument in this section
relies on the FERC decision specifically stricken from
the record by this court, and thus subject to peti-
tioner’s separate motion to strike.” DEP maintains
that the FERC decision dismisses FPL’s arguments
that an agency must act and decide any appeals
relating to that action within a one-year deadline.’
DEP next invokes the Law Court’s Warren deci-
sion in an effort to definitively refute FPL’s conten-
tion that the Project can escape the need for
certification. Until the Supreme Court ruled on the
appeal, the Law Court’s decision from earlier this
* See FPL Energy Maine Hydro LLC, 108 F.E.R.C. 4 61261
(September 21, 2004), 2004 FERC LEXIS 1939, rehearing denied
at 111 FERC { 61104 (April 19, 2005), 2005 FERC LEXIS 1003.
"In its Response to FPL’s Motion to Strike, the DEP
contends that it relies on the FERC decision as persuasive legal
authority, and not as part of the certified administrative record,
from which the FERC decision was excluded by this court.
Because the FERC decision is submitted as part of argument,
the motion to strike must be denied.
A-46
year was controlling law on the matter, and the Law
Court unanimously rejected FPL’s arguments regard-
ing the meaning of “discharge” and the relationship of
that term to the certification process. See S.D. Warren
Co. v. Bd. of Enuvtl. Prot., 2005 ME 27, J 13, 868 A.2d
210, 216. Further, DEP emphasizes that Maine state
law incorporates federal law by reference, the rele-
vant federal law being that which requires states to
certify water quality before federal hydropower
licenses are issued. DEP thus properly participated in
the certification process and it was necessary that it
do so in order to comply with both state and federal
regulations.
As for the anti-degredation policy, DEP agrees
that some sort of balancing test is necessary to weigh
the importance of the competing uses of in-stream
water-sustaining aquatic life versus generating
energy; that balancing test exists in the form of a
UAA. DEP opines that a UAA may indeed determine
that hydro energy generation should be prioritized
over sustaining aquatic life, but until the proper
analysis is performed, the anti-degredation policy
does not in and of itself require certification, or
prioritize the energy-related use.
Finally, DEP argues that the Project does not
meet applicable water quality standards as a matter
of law. Focusing again on the term “discharge,” DEP
takes issue with FPL’s relying on a definition of the
term that necessitates pollutants to be present for
there to be a discharge. As the Project does not involve
pollutants, so FPL argues, there is no discharge, so it
A-47
should be exempt from the certification process. But
as DEP points out, depleting 95% of a reservoir in
order to generate energy substantially degrades the
water quality whether or not pollutants or a dis-
charge are involved. By enacting water quality stan-
dards, it was the Maine’s legislature’s intent to
“restore and maintain the chemical, physical, and
biological integrity of the State’s waters and to pre-
serve certain pristine state waters.” See 38 M.R.S.A.
§ 464(1). The DEP maintains that the major depletion
of the reservoir involved in the Project does not
maintain the “integrity” of the body of water and thus
frustrates the legislative intent behind Maine’s water
classification scheme. Further, DEP notes that there
would not have been a need to introduce Chapter 37,
which attempted to relax the water quality standard
for impoundments, if some type of water quality
standards did not apply to impoundments in the first
place.
Petitioner’s Reply Brief
With regard to the standard of review, FPL
repeats its argument from its petition, agreeing with
the need for the BEP to have expertise in environ-
mental statutory interpretation, but then contending
that a lay board could not possibly have such exper-
tise. But the case FPL cites to support this proposi-
tion, Jsis Dev., LLC v. Town of Wells, concerns a local
zoning board, not the BEP, which is charged with and
has experience in interpreting a complex regulatory
A-48
and statutory scheme. See 2003 ME 149, J 3, n. 4, 836
A.2d 1285.
As for the NGOs lacking standing, FPL dismisses
the significance of the organization members’ affida-
vits, which attest to their personally fishing, canoe-
ing, and hunting waterfowl in the waterways affected
by the Project. FPL maintains that its proposed
operation of the Project will not affect these activities,
and thus without a “particularized injury” the NGOs
had no standing to file their appeal, and it should be
dismissed.
The thrust of the petitioner’s reply hones in on
the interpretation of “discharge,” emphasizing that it
is only hydroelectric facilities that discharge pollut-
ants that are subject to certification; as FPL does not
discharge pollutants, it should be exempt from the
process. FPL also reviews the legislative history and
intent behind the appropriate water quality standard
that should apply to the Project, fine-tuning in detail
the arguments it made in its petition.
An angle that was relegated to footnotes in the
initial briefs, but is given some prominence in the
reply is the notion of whether a denial of certification
would result in an unconstitutional taking of the
Project from FPL. It is worth noting that the BEP’s
denial of certification was without prejudice, however,
and allows for a UAA to determine the appropriate
water quality standards to apply to the Project. Only
then will a final determination be made as to whether
the Project can be operational. Though FPL urges the
A-49
court to interpret statutes to avoid an unconstitu-
tional result (a taking), the BEP’s decision does not
end the process of certification, but extends that
process out to include a UAA.
The court is satisfied the intervenors or NGOs
have standing. While standing is a question of law,
the issue is factually driven. The court accepts the
BEP determination of their qualification as interve-
nors based upon its findings of fact.
The court is satisfied that Airport Communities
Coalition v. Graves stands for the proposition that the
federal agencies are not bound by the decisions when
the state “fails or refuses to act on a request for
certification within a reasonable period of time
(which shall not exceed one year) after receipt of such
request” by decisions issued beyond the one-year
limitation. 280 F.Supp.2nd at 1217; 33 U.S.C.
§ 1341(a)(1). The court finds no jurisdictional implica-
tions for state action affecting the final agency action
of the DEP.
The petitioner asserts that the so-called Chapter
37 Resolve does not change the class C water quality
classification and therefore it may rely upon the 1993
EPA water quality standards and no further approval
by the EPA is necessary. The DEP posits that to the
extent the resolve attempts to change a “natural lake”
standard to a “impoundment to impoundment” stan-
dard, it is a change in the water quality standard
requiring EPA approval. It appears to the court
that whether or not it is a change of standard is a
A-50
technical decision based upon the facts of the science,
clearly a matter within the expertise of the agency
and not subject to decision by this court based upon
the evidence put before it. This deference requires the
court to reject the argument of petitioner to overturn
the agency action based upon the resolve. The court
particularly notes the position of the BEP suggesting
that the DEP either obtain EPA approval of the
Chapter 37 water quality standard or conduct a UAA
to recalibrate the water quality standards for water
storage reservoirs. This court infers that such a policy
statement by the BEP would prevail in the future
actions of the DEP.
The remaining and most substantive issue before
this court is whether or not the certification in ques-
tion is required under the federal Water Quality Act
based upon a jurisdictional requirement of the exis-
tence of a “discharge” and whether the facts of this
case give rise to the existence of a “pollutant” as
defined in that law. The thrust of FPL’s arguments
were disposed of by the Law Court in Warren, and the
affirming decision of the U.S. Supreme Court is
controlling. The Project releases a “discharge” and is
thus subject to existing water quality standards,
which were justly interpreted by the BEP to deny
certification to FPL for the Project.
The entry will be:
Petitioner’s motion to strike respondent’s
extra-record materials referenced in and at-
tached to intervenor’s and respondent’s brief
A-51
is DENIED; the Board of Environmental
Protection Order granting appeal and deny-
ing water quality certification dated July 15,
2004, in the matter of FPL Energy Maine
Hydro, LLC is AFFIRMED.
Dated: May 25,2006 /s/ Donald H. Marden
Donald H. Marden
Justice, Superior Court
A-52
STATUTORY PROVISION INVOLVED
The issue presented involves interpretation of
the Federal Water Pollution Control Act (the “Clean
Water Act”), 33 U.S.C. §§ 1251 et seq., specifically
Section 401 of that Act, 33 U.S.C. § 1341. The perti-
nent text from Section 401 follows.
Clean Water Act
33 U.S.C. § 1341. Certification
(a) Compliance with applicable require-
ments; application; procedures; license sus-
pension
(1) Any applicant for a Federal license or
permit to conduct any activity including, but
not limited to, the construction or operation
of facilities, which may result in any dis-
charge into the navigable waters, shall pro-
vide the licensing or permitting agency a
certification from the State in which the dis-
charge originates or will originate, or, if ap-
propriate, from the interstate water pollution
control agency having jurisdiction over the
navigable waters at the point where the dis-
charge originates or will! originate, that any
such discharge will comply with the applica-
ble provisions of sections 1311, 1312, 1313,
1316, and 1317 of this title. In the case of
any such activity for which there is not an
applicable effluent limitation or other limita-
tion under sections 1311(b) and 1312 of this
title, and there is not an applicable standard
under sections 1316 and 1317 of this title,
A-53
the State shall so certify, except that any
such certification shall not be deemed to sat-
isfy section 1371(c) of this title. Such State or
interstate agency shall establish procedures
for public notice in the case of all applica-
tions for certification by it and, to the extent
it deems appropriate, procedures for public
hearings in connection with specific applica-
tions. In any case where a State or interstate
agency has no authority to give such a certi-
fication, such certification shall be from
the Administrator. If the State, interstate
agency, or Administrator, as the case may be,
fails or refuses to act on a request for certifi-
cation, within a reasonable period of time
(which shall not exceed one year) after re-
ceipt of such request, the certification re-
quirements of this subsection shall be waived
with respect to such Federal application. No
license or permit shall be granted until the
certification required by this section has
been obtained or has been waived as pro-
vided in the preceding sentence. No license
or permit shall] be granted if certification has
been denied by the State, interstate agency,
or the Administrator, as the case may be.
* k *
(d) Limitations and monitoring require-
ments of certification
Any certification provided under this section
shall set forth any effluent limitations and
other limitations, and monitoring require-
ments necessary to assure that any applicant
for a Federal license or permit will comply
A-54
with any applicable effluent limitations and
other limitations, under section 1311 or 1312
of this title, standard of performance under
section 1316 of this title, or prohibition, ef-
fluent standard, or pretreatment standard
under section 1317 of this title, and with any
other appropriate requirement of State law
set forth in such certificatior’, and shall be-
come a condition on any Federal license or
permit subject to the provisions of this sec-
tion.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.