Amicus Curiae Brief — Simpson Paper (Vermont) Co. v. Department of Environmental Conservation

Q)

Supreme Court, U.@

Fi: €p

FEB 1:

No. 92-1012 12 1993

onan oe

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1992

¢

SIMPSON PAPER (VERMONT) COMPANY,

Petitioner

Vv.

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

and SIERRA CLUB

¢

On Petition for Writ of Certiorari to the

Supreme Court of the State of Vermont

*

BRIEF AMIC/ CURIAE OF

CENTRAL VERMONT PUBLIC SERVICE CORPORATION,

GREEN MOUNTAIN POWER CORPORATION,

VERMONT MARBLE POWER DIVISION OF OMYA, INC.,

CITIZENS UTILITIES COMPANY, VERMONT

INDEPENDENT POWER PRODUCERS ASSOCIATION and

ASSOCIATED INDUSTRIES OF VERMONT

IN SUPPORT OF THE PETITIONER,

SIMPSON PAPER (VERMONT) COMPANY

¢

EDWARD V. SCHWIEBERT

Counsel of Record

Abell, Kenlan, Schwiebert & Hall, P.C.

71 Allen Street

Rutland, VT 05702-0578

Telephone: (802) 773-3300

Continued Attorneys for Amici Curiae

ead iy ——s To.

For Central Vermont Public Service Corporation

Kenneth C. Picton, Esq.

77 Grove Street

Rutland, VT 05701

(802) 773-2711

For Green Mountain Power Corporation

Michael A. Murphy, Esq.

25 Green Mountain Drive

South Burlington, VT 05402-0850

(802) 660-5773

TABLE OF CONTENTS

Page

INTEREST OF AMIC? CURIAE .............2..65-- 1

sy 6

I Og tw ec ee tees 7

NE ES 7

I. DEC’S IMPOSITION OF CONDITIONS _IN

SIMPSON’S WATER QUALITY CERTIFICATE

UNRELATED TO WATER QUALITY INTRUDES

UPON THE JURISDICTION EXPRESSLY AND

EXCLUSIVELY RESERVED TO FERC UNDER THE

a SUR ag ot CR AL Se Ge 7

A. The States’ Role Under the CWA Is Limit-

ed To Preservation Of The Integrity Of

Water And To Consideration Of The Im-

pact Of Discharges On Water.............. 7

B. In The FPA, Congress Has Reserved To

FERC Exclusive Jurisdiction To Consider

And Decide Non-Water Quality Issues And

To Balance All Issues Relating To Hydro-

SRT 11

TABLE OF CONTENTS - Continued

Page

C. DEC Is Preempted By The Exclusive Juris-

diction Of FERC Under The FPA From

Imposing Conditions In Water Quality

Certificates Relating To Non-Water Quality

SS ee ooo os © oe eee cies oe 14

Il. THE DECISION OF THE VERMONT SU-

PREME COURT IN GEORGIA-PACIFIC IS IN

CONFLICT WITH DECISIONS OF THE

COURTS OF OTHER STATES WITH RE-

SPECT TO THE IMPORTANT FEDERAL

QUESTION OF STATE INTRUSION IN THE

EXCLUSIVE JURISDICTION OF FERC UN-

NEUES e500 VA PENRO ee do ee 17

CRU AME TN rites wide OSs eee aie) Salo bie o's da 20

iii

TABLE OF AUTHORITIES CITED

Cases

Arnold Irrigation Dist. v. Department of

Envtl. Quality, 717 P.2d 1274 (Or. App.),

review denied, 726 P.2d 377 (Or. 1986) ......

Bangor Hydro-Elec. Co. v. Board of

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

California v. FERC, 495 U.S. 490, reh’g. denied,

of 0) a rere

Chemehuevi Tribe of Indians v. FPC,

eee

Citizens and §. Nat’l Bank v. Bougas,

i Ap 2. os. Ee # Cre ee

de Rham v. Diamond, 295 N.E.2d 763 (N.Y. 1973)

First lowa Hydro-Elec. Co-Op. v. FPC,

A Ee eee a

Fourth Branch Assoc. v. Department of Envtl. Cons.,

550 N.Y.S.2d 769 (Sup. Ct. 1989) .........

Georgia-Pacific Corp. v. Department of Envtl.

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

International Paper Co. v. Ouellette,

Cok SO Se

Long Lake Energy v. Department of Envtl. Cons.,

563 N.Y.S.2d 871 (App. Div. 1990) ........

Page

iv

TABLE OF AUTHORITIES CITED - Continued

Cases - Continued

Page

Metromedia, Inc. v. City of San Diego,

433 U.S. 450 Gis oi Bo Fase kok) aun 10

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

O62 F.2d SOD. Gs Ce. Tore es i oe ea os a 8

National Wildlife Fed’n v. FERC,

912 F.2G ISTE Ga ee ES eS 13

National Wildlife Fed’n v. Gorsuch,

G93 F.2d 156 GA. Sa, Fe oe eS FE ie 8

Niagara Mohawk Power Corp. v. New York Dep’t

of Envtl. Cons., No. 65306, 1993 WL 2586

(N.Y. Ah. SEN: ae ha arene ae B50 Rhos ocho O% 18

Pennsylvania Dep’t of Envtl. Resources v.

City of Harrisburg, 578 A.2d 563

(Pa. COMMON. THREE cas ee Che FS NS 17

In re Power Auth. v. Williams,

4S7 N.E.26-Fae Ga FS Bees we ha ee ON 17, 18

Roosevelt Campobello Int’! Park Comm’n v. EPA,

GE4 F.26: 1068 ClaeGe, Bee hie eek SORE OSes 3

Save Our Community v. EPA,

O71 F208 1556: Go Ca ee eS ied WHA SG 8

Sayles Hydro Assoc. v. Maughan, No. 91-15934,

1993 WL 17730 (9th Cir. Feb. 1, 1993) ......... 13, 16

Vv

TABLE OF AUTHORITIES CITED - Continued

Cases - Continued

: Page

Scenic Hudson Cons. Conf. v. FPC,

co re 12

Silkwood v. Kerr-McGee Corp.,

EE ee 15

Springfield, Town of v. Vermont Envtl. Bd.,

ee Oe, OR, RED ey whe Sis 4 viele, o 0 dies 16

Summit Hydropower v. Comm’r of Envtl. Protection,

No. CV91050 26 43, 1992 WL 175241

EE ie ON EE ee ee 17

ee ee OE Wis Fe CIPO E DN ik i be tree voce wea ne 12

United States v. Marathon Dev. Corp.,

Ce a 12

| Statutes

FEDERAL Power ACT, 16 U.S.C. § 792 et seq. (1985 & Supp.

1992)

RS © ae Oe a a ee a r

Oe Oe es PPO oc ie rc cee ows 6, 10, 12

ORs OED cb se ccc ro ceecses 10, 12

§ 10(j), 16 U.S.C. § 803 G)(1)-(2) «1. ee ee ee eee 13

vi

TABLE OF AUTHORITIES CITED - Continued

Statutes - Continued

Page

CLEAN WATER ACT, 33 U.S.C. § 1251 et seq. (1986 & Supp.

1992)

O00, Se Ue, BRO ee ee 3,8

Rs er Wri RUUD oe oxic ce nee 0 ev os 8

Bo mp Be Bae 2 rr aie are 8

fol Sik fea | GR reer are 3, 8, 14

§ 401(a)(1), 33 U.S.C. § 1341(a)(1) ........-0.. 3, 12

§ 401(d), 33 U.S.C. § 1341) ............008. 9-11

SP Oe Mies COU Sa c'c ce Behe Sees be 8

Fo eS a ee rr 8

Ss ee ARs RED vw elec evs secas 8

Ss a UID oi ewe ee ee ae 8

Bo eR S|. re 8

Vt. Stat. Ann. tit. 10, § 1004 (Supp. 1992) ............ 3

Vii

TABLE OF AUTHORITIES CITED - Continued

Other Authorities

Memorandum from J.S. Duckworth, Chief, Eng’g Section

East Branch, FERC, Fossil Fuel Generation

Equivalents and Pollutants (Dec. 3, 1992) ........... 5

In re Petition of Twenty-Four Vermont Utilities,

Pub. Serv. Bd. No. 5330, order (Oct. 12, 1990),

modified Jan. 7, 1991, and aff'd, 3 VT. L.W. 285

RE ee oe ee 4

VERMONT DEpP’T OF PUBLIC SERVICE, VERMONT

COMPREHENSIVE ENERGY PLAN (1991) ............ 3,4

VERMONT Dep’T OF Econ. DEv., ANNUAL REPORT (1991) .. 3

Water Quality Certificate (P.L. 92-500, Section 401):

In re Vermont Marble Company,

Center Rutland Hydroelectric Project, Vt. Dep’t of

Envtl. Conservation, November 20, 1992 ........... 4

wi

No. 92-1012

¢

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1992

¢

SIMPSON PAPER (VERMONT) COMPANY,

Petitioner

Vv.

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

and SIERRA CLUB

*

On Petition for Writ of Certiorari to the

Supreme Court of the State of Vermont

¢

BRIEF AMICI CURIAE OF

CENTRAL VERMONT PUBLIC SERVICE CORPORATION,

GREEN MOUNTAIN POWER CORPORATION,

VERMONT MARBLE POWER DIVISION OF OMYA, INC.,

CITIZENS UTILITIES COMPANY, VERMONT

INDEPENDENT POWER PRODUCERS ASSOCIATION and

ASSOCIATED INDUSTRIES OF VERMONT

IN SUPPORT OF PETITIONER,

SIMPSON PAPER (VERMONT) COMPANY

¢

INTEREST OF AMICI CURIAE

Amici curiae represent interests that are affected directly and

adversely by the decision of the Vermont Supreme Court in

2

Georgia-Pacific Corp. v. Department of Envtl. Cons., Vermont

Supreme Court, No. 91-530 (Sept. 14, 1992). Central Vermont

Public Service Corporation ("CVPS)', Green Mountain Power

Corporation ("GMP“)’, Vermont Marble Power Division of

OMYA, Inc. ("VMPD")’, Citizens Utilities Company ("CU"),

and the members of Vermont Independent Power Producers

Association ("VIPPA")* are owners and operators of hydroelectric

generation projects located in Vermont that are subject to the

licensing requirements of the Federal Power Act ("FPA"), 16

' CVPS is the largest electric utility in the State of Vermont, serving 132,000

customers, and, through a subsidiary, 10,000 customers in New Hampshire.

CVPS’ customers include residential consumers as well as industrial and

commercial customers who are engaged in interstate and foreign commerce.

CVPS operates 20 hydroelectric projects that provide approximately 6% of the

supply of electricity needed to meet the requirements of CVPS’ customers. Ten

of the CVPS projects presently are at various stages of relicensing.

? GMP is the second largest utility in Vermont, serving approximately 77,000

residential, industrial and commercial customers in Vermont. Approximately 10%

of the energy demand required by GMP’s customers is served by eight hydroelec-

tric generation projects located in Vermont. One of those projects presently is

engaged in relicensing.

> VMPD Sine alaciniaiy tp inlesk pectdeatel and ial

customers located in the Towns of Proctor and Pittsford, Vermont and to its own

industrial operations, which are engaged in energy intensive mineral processing in

competition with entities from around the United States and from foreign nations.

VMPD's electrical load is the fifth largest in the State of Vermont. Of its several

hydroelectric projects, VMPD’s Center Rutland Project (FERC No. 2445)

presently is involved in relicensing. That Project has been operated by VMPD

since 1898 and is the smallest of the hydroelectric projects operated by VMPD,

which together account for 40% of its electrical requirements.

* CU, which is headquartered in Connecticut, supplies electricity to over

18,000 industrial, commercial and residential customers in Vermont. CU owns

one hydroelectric project in Vermorit that presently is engaged in relicensing.

* VIPPA represents the interests of non-utility gencrators of hydroelectric

energy. VIPPA’s approximately four dozen members produce, in the aggregate,

approximately 50 megawatts of hydroelectric power, or about 5% of the total

electric load in Vermont.

3

U.S.C. § 792 et seq. (1985 & Supp. 1992), and to review under the

Clean Water Act ("CWA"), 33 U.S.C. §§ 1251, 1341 (1986 &

Supp. 1992).° Collectively, CVPS, GMP, VMPD and CU supply

electricity to over eighty percent of the population of Vermont’,

including the members of Associated Industries of Vermont

("AIV")*.

In Georgia-Pacific, the Vermont Supreme Court affirmed the

Department of Environmental Conservation of the Vermont Agenc?’

of Natural Resources ("DEC")® imposition of conditions in a water

quality certificate unrelated to water quality as part of the licensing

* Applicants for a federal license for an activity that may result in a discharge

into the navigable waters of the United States must provide the federal agency with

a certification from the state in which the discharge originates that such discharge

will comply with applicable provisions of the CWA. CWA § 401(a)(1), 33 U.S.C.

§ 1341(a)(1). Throughout this brief, such a certification from a state will be called

a "§ 401 certification” or a “water quality certificate".

” Hydroelectricity supplies 44 % of the electric energy consumed in Vermc nt.

Just under 9% of Vermont's electric energy is generated by in-state hydroelectric

projects. VERMONT DEP’T OF PuB. SERV., VERMONT COMPREHENSIVE ENERGY

PLAN 72 (1991). The cost of energy is of significant concern to economic

development in Vermont. VERMONT DEP’T OF ECON. DEV., ANNUAL REPORT 15

(1991).

* AIV is a trade association representing over 500 manufacturers and

industrial employers located in the State of Vermont that are supplied electricity

by the other amici curiae. AIV'’s membership represents 20% of the annual

demand for electrical energy consumed in Vermont. Any loss of and any

increased cost of producing electricity would be borne te a great extent by the

members of AIV. Such an impact would have serious ramifications for AIV's

members, not only with regard to the costs encountered by each, but also on their

ability to compete interstate and worldwide.

% The Agency of Natural Resources, which contains the Department of

Environmental Conservation, is the certifying agent for the State of Vermont for

purposes of § 401 of the CWA. VT. STAT. ANN. tit. 10, § 1004 (Supp. 1992).

Review of state action in issuing a § 401 certification is through the state courts

and, ultimately, this Court. Roosevelt Campobello Int'l Park Comm'n v. EPA, 684

F.2d 1041, 1056 (ist Cir. 1982).

4

of a federally regulated hydroelectric project.” If the decision of

the Vermont Supreme Court is allowed to stand, similar conditions

undoubtedly will be imposed on amici curiae who operate hydro-

electric projects in Vermont.'' Such conditions imposed on the

projects owned by CVPS, GMP, VMPD and CU and the members

of VIPPA will cause adverse economic and environmental conse-

quences.’? Similar conditions imposed on only those hydroelectric

projects of CVPS, GMP, VMPD and CU presently engaged in

'© While the conditions approved by the Vermont Supreme Court in Georgia-

Pacific based on aesthetic and recreational factors may be socially desirable, they

are not directly related to “water quality" and they exceed the authority of the

States under the CWA.

"' DEC has indicated to CVPS that it intends to impose, in its projects’ water

quality certificates, spillage requirements similar to, or in excess of, those imposed

upon Simpson for aesthetic, recreation, habitat enhancement and similar non-water

quality specific reasons. GMP and CU have received from DEC requests to

undertake studies relating to recreation and the aesthetic impact of water spilling

over their dams and DEC has indicted that it will seek spill requirements similar

to those imposed on Simpson. On November 20, 1992, DEC issued a § 401

certification to VMPD that included the requirement to spill water over the face

of the Center Rutland dam at all times during the period April 1 through October

31 in order, inter alia, to afford a “meaningful visual attraction" for public

viewing and recreational use in the project area. DEC also included requirements

to submit a plan for downstream fish passage, in the event future fishery

management necessitates such passage, and to provide a canoe portage around the

dam together with fishing and other public access. Water Quality Certificate (P.L.

92-500, Section 401) In re Vermont Marble Company, Center Rutland Hydroelec-

tric Project, Vt. Dep’t of Envtl. Cons., Nov. 20, 1992.

'2 The purchase of replacement power from alternate sources, presently

available from fossil-fueled thermal or nuclear generation facilities, would have

adverse environmental effects in comparison to hydroelectric projects, including

global warming effects, acid deposition from various oxide emissions, thermal

discharges, airborne contaminants as well as effects on human health. VERMONT

COMPREHENSIVE ENERGY PLAN at 10-18. The Vermont Public Service Board

recently determined that, “(with the exceptions of biomass and cogeneration at sites

with existing steam loads) hydroelectricity, is the best environmental choice for

Vermont." In re Petition of Twenty-Four Vermont Utilities, Pub. Serv. Bd. No.

5330, order at 161 (Oct. 12, 1990), modified Jan. 7, 1991, and aff'd, 3 VT. L. W.

285 (Oct. 2, 1992).

5

relicensing will cause an annual energy loss of 12,769,000 kilowatt

hours, annual cost of replacement power of $1,039,000 and annual

emission of 48 tons of oxides of nitrogen, 104 tons of sulphur

dioxide and 12,300 tons of oxides of carbon.” Those effects do

not include the costs and impacts of other non-water quality specific

conditions."

Amici curiae, their customers, investors and members are

directly and adversely affected by the Vermont Supreme Court’s

decision in Georgia-Pacific. Furthermore, amici curiae are

representative of the thousands of hydroelectric generation projects,

and millions of customers and ratepayers throughout the country

who will suffer if state agencies are permitted to usurp the compre-

hensive authority granted by Congress to the Federal Energy

Regulatory Commission ("FERC") under the FPA. While state

agencies have been granted authority to administer appropriate

water quality requirements under the CWA, Congress has required

that FERC, and not the states, undertake the balancing of interests,

including recreation and aesthetic values, necessary to the compre-

hensive development of this Nation’s water-power resources. By

permitting DEC to regulate recreational and aesthetic values,

unrelated to water quality, through conditions imposed in the water

quality certificate issued to Petitioner, Simpson Paper (Vermont)

Company ("Simpson"), the Vermont Supreme Court has acted

'S Calculations based upon Memorandum dated December 3, 1992 from J. S.

Duckworth, Chief, Eng’g Section East Branch, FERC, Fossil Fuel Generation

Equivalents and Pollutants (Dec. 3, 1992).

‘* Georgia-Pacific raises additional concerns for VIPPA. The hydroelectric

projects operated by VIPPA's members sell electricity on a fixed-price basis over

contract terms extending as long as 30 years. Accordingly, the financial viability

of those projects would be adversely affected by the loss of revenues resulting

from the imposition of conditions in § 401 certifications that require additional

spillage of water.

Tide 1! eee. ee OB gt oy We i ee ed ot he ys ree | 4 ee ee eee

6

contrary to the express language and intent of the CWA and its

decision threatens the uniform, federally managed licensing of

hydroelectric projects under the FPA.

Amici curiae respectfully submit the following brief in support

of Petitioner. Written consent to the filing of this brief has been

granted by counsel for all parties and the originals of such consents

accompany this brief.

SUMMARY OF ARGUMENT

The impacts of Georgia-Pacific on amici curiae compel them to

support Simpson’s Petition, but it is the conflict between the

Vermont Supreme Court’s decision and federal law, as expressed

in the FPA and the CWA and as interpreted by the courts of other

states, that requires review by the Court. The Vermont Supreme

Court’s decision in Georgia-Pacific confers on DEC broad powers

to condition or even to deny water quality certificates for hydroelec-

tric projects in furtherance of goals or objectives unrelated to water

quality thereby effectively denying the federal license. Amici curiae

do not contend that non-water quality issues, including recreation

and aesthetics, are not within the general ambit~of the state’s

regulatory authority. Non-water quality issues cannot, however, be

regulated by states within the context of the FPA and the CWA

because Congress has vested in FERC the exclusive authority to

license hydroelectric generation projects in connection with a

comprehensive, coordinated national program "for the development

. . . Of power . . . from, or in any of the streams or other bodies

of water over which Congress has jurisdiction. . . ." FPA § 4(e),

16 U.S.C. § 797(e) (Supp. 1997). Under the CWA, Congress

assigned to the states a decision-making role in the licensing

process, but that role is limited to the issuance, conditioning or

denial of water quality certificates under § 401 of the CWA based

7

upon water quality standards. Under the FPA, the states may make

recommendations on non-water quality issues, but it is FERC that

must make the licensing decisions.

The Vermont Supreme Court’s decision in Georgia-Pacific

exceeds the limited authority of the states under the CWA, intrudes

upon the authority that Congress reserved to FERC under the FPA

and is in conflict with decisions of courts of other states that have

determined that actions by state regulatory authorities, essentially

similar to those approved in Georgia-Pacific, encroach upon and are

preempted by the exclusive jurisdiction of FERC.

STATEMENT OF THE CASE

The case is as stated by Petitioner.

ARGUMENT

I. DEC’S IMPOSITION OF CONDITIONS IN SIMPSON’S

WATER QUALITY CERTIFICATE UNRELATED TO

WATER QUALITY INTRUDES UPON THE JURISDIC-

TION EXPRESSLY AND EXCLUSIVELY RESERVED

TO FERC UNDER THE FPA.

A. The States’ Role Under The CWA Is Limited To

Preservation Of The Integrity Of Water And To

Consideration Of The Impact Of Discharges On Water.

Contrary to the decision in Georgia-Pacific, it is impermissible

for DEC to incorporate into Simpson’s water quality certificate

conditions unrelated to the chemical, physical and biological

integrity of water. The CWA, by its express terms, is concerned

with the discharge of pollutants and the restoration and maintenance

of “the chemical, physical, and biological integrity of the Nation’s

waters." CWA § 101(a), 33 U.S.C. § 1251(a). The states have

primary responsibility to prevent "man-made . . . alteration of the

chemical, physical, biological, and radiological integrity of water."

CWA §§ 101(b), 502(19), 33 U.S.C. §§ 125106), 1362(19) (1986).

Section 301 of the CWA specifically makes it unlawful for any

person to "discharge . . . any pollutant" except in compliance with

that and other sections of the Act. CWA § 301, 33 U.S.C. §

1311(a) (1986)."* Water quality certificates are required only in

instances where a federally licensed hydroelectric project may result

in a discharge into the navigable waters."° CWA § 401(a), 33

U.S.C. § 1341(a).

By the very language of the CWA, the states have primary

responsibility for the integrity of water and the impact on water

quality of discharges from a federally licensed activity. The CWA

'S The CWA defines “discharge of a pollutant" and “discharge of pollutants"

as “any addition of any pollutant to navigable waters from any point source . . .

-" CWA § 502(12), 33 U.S.C. § 1362(12) (1986) (emphasis added). A “point

source” means “any discernable, confined and discrete conveyance . . . from

which pollutants are or may be discharged." CWA § 502(14), 33 U.S.C. §

1362(14) (Supp. 1992). When used without modifier, a “discharge” includes a

“discharge of a pollutant, and a discharge of pollutants." CWA § 502(16), 33

U.S.C. § 1362(16) (1986). The term "pollutant" means “dredged spoil, solid

waste, incinerator residue, sewage, garbage, sewage sludge, munitions, chemical

wastes, biological materials, radioactive materials, heat, wrecked or discarded

equipment, rock, sand, cellar dirt and industrial, municipal, and agricultural waste

discharged into water." CWA § 502(6), 33 U.S.C. § 1362(6) (1986).

"© In National Wildlife Fed’n v. Gorsuch, 693 F.2d 156 (D.C. Cir. 1982), the

court held that five elements must be present for a “discharge” to be found under

the CWA: "(1) a pollutant must be (2) added (3) to navigable waters (4) from (5)

a point source." Id. at 165 (emphasis in original). An “addition from a point

source occurs only if the point source itself physically introduces a pollutant into

water from the outside world." Jd. at 175. See also National Wildlife Fed’n v.

Consumers Power Co., 862 F.2d 580, 585 (6th Cir. 1988). “The existence of

discharge is critical. . . . On the face of the statute, it is the requirement for

statutory coverage." Save Our Community v. EPA, 971 F.2d 1155, 1163 (Sth Cir.

1992).

9

affords the states no opportunity to impose conditions in water

quality certificates that are unrelated to water quality. In Georgia-

Pacific, the Vermont Supreme Court relied solely on the clause in

§ 401(d) of the CWA that permits a water quality certificate to

contain effluent limitations necessary to assure compliance with

specified limitations or standards "and with any other appropriate

requirement of State law set forth in such certification... ."

CWA § 401(d), 33 U.S.C. § 1341(). App. 3a.'? The Vermont

Supreme Court undertook no analysis of Congress’ inclusion of the

word “appropriate” preferring instead an interpretation of § 401(d)

that would deem any requirement contained in a state’s water

quality standards to be appropriate regardless whether it relates to

the integrity of water or to a discharge of pollutants.

What is an “other appropriate requirement of State law" under

§ 401(d) must be determined in the context of the CWA." The

requirements to which § 401 of the CWA refers are the state’s

"technology-based standards and water-quality based standards.”

International Paper Co. v. Ouellette, 479 U.S. 481, 490 (1987).

An “other appropriate requirement” must be based upon, limited to

and of the same nature as technology-based and water-quality based

standards for water. While aesthetics, recreation and scenic beauty

not based on water quality may be appropriate values subject to

regulation under the general police powers of the states, they are

') References are to the Appendices to the Petition.

'S A similar phrase, relating to the role of the states under the FPA, has been

interpreted by this Court in context to mean “other [requirements] of the same

nature." See California v. FERC, 495 U.S. 490, 498, reh’g denied, 497 U.S.

1040 (1990); First Iowa Hydro-Elec. Co-op. v. FPC, 328 U.S. 152, 175-76

(1946); Chemehuevi Tribe of Indians v. FPC, 420 U.S. 395, 403 (1975) ("The

terms that precede ‘other project works,’ . . . indicate a congressional intent to

limit the breadth of that general phrase . . . .")

10

not "technology-based standards and water-quality based stan-

dards"'® subject to regulation under the CWA or “appropriate” to

condition water quality certificates under § 401(d). The inappropri-

ateness of such non-water quality based standards is particularly

evident under the FPA where Congress has given to FERC the

exclusive jurisdiction and discretion to evaluate and balance against

competing public interests the recreational and aesthetic impacts of

hydroelectric projects. FPA §§ 4(e), 10(a), 16 U.S.C. §§ 797(e),

803(a) (Supp. 1992). Congress expressly has limited the states’

involvement in the recreational and aesthetic impacts of such a

project to making "recommendations" of proposed license condi-

tions for FERC’s consideration. FPA §§ 10(a)(3), 16 U.S.C. §

803(a)(3).

The power to condition is the power to deny. Georgia-Pacific

opens the door to the imposition by DEC of non-water quality

related conditions sufficiently onerous to constitute a denial of a

license by FERC.” The court below ignored the intent of the

CWA and of the FPA thereby exceeding the bounds of the CWA

and intruding upon FERC’s exclusive jurisdiction to determine a

project’s impacts on recreation and aesthetics. The Court should

'9 The Vermont Supreme Court alludes to the “added deference afforded

agency determinations in highly technica] fields” in support of its conclusion that

omar nro oe “other appropriate requirement of State

" App. 4a. Conditions imposed in a water quality certificate relating to the

cootoie iaproniees of pele. Aad 4 dae: « Kage Yad eueetens

values of canoeing are subjective socia] values, not “highly technical” issues

related to the chemical, physical and biological integrity of water. Vermont's

water quality standards do not include any standards for, or definition of,

aesthetics, recreation or scenic beauty much less their relationship to the impact

of discharges on water. “Such esthetic [sic] judgments are necessarily subjective,

defying objective evaluation . . . .". Metromedia, Inc. v. City of San Diego, 453

U.S. 490, 510 (1981).

® Such conditions “shall become . . . condition[s]" of the FERC license.

CWA § 401(d), 33 U.S.C. 1341(d).

11

grant certiorari to resolve the important federal question of the limit

of the authority of the states under the CWA and the FPA and to

prevent other states from interfering with FERC’s exclusive

jurisdiction and comprehensive role in the management and

utilization of this Nation’s water resources.

B. In The FPA, Congress Has Reserved To FERC Exclu-

sive Jurisdiction To Consider And Decide Non-Water

Quality Issues And To Balance All Issues Relating To

Hydroelectric Projects.

It is appropriate that Congress, in enacting the CWA, reserved

to the states the authority to protect the health and safety of their

citizens from the discharge of pollutants and recognized the states’

authority to adopt and implement water quality standards to achieve

those ends. Where Congress has established a process for the

uniform and comprehensive development of the Nation’s water

resources, however, it is equally appropriate that Congress

conferred exclusive jurisdiction in FERC to undertake the more

subjective process of balancing social issues, such as aesthetics,

recreation and other environmental values not based on the

chemical, physical and biological integrity of water.

Under the CWA, the states have primary responsibility for the

integrity of water and the determination whether discharges of

pollutants from a federally licensed activity will comply with

applicable water quality requirements. If a state determines that

compliance will be achieved, it will issue a § 401 certification, with

conditions if appropriate, which then become part of the federal

license. CWA § 401(d), 33 U.S.C. § 1341(d). If a § 401 certifi-

12

cation is denied, the federal license shall not be issued. CWA §

401(a)(1), 33 U.S.C. § 1341(a)(1).”

Under the FPA, FERC has exclusive authority to issue licenses

for the development of power from the waters of the United States

in which FERC must give equal consideration to fish and wildlife,

recreation and the preservation of environmental quality. FPA §

4(e), 16 U.S.C. § 797(e).” Congress has assigned to FERC, and

not to the states, the responsibility to include in licenses conditions

as in the judgment of FERC will achieve those public interests.

FPA § 10(a), 16 U.S.C. § 803(a) (emphasis added).

In Georgia-Pacific, the Vermont Supreme Court has delegated

to the state precisely what Congress has delegated to FERC.

Congress specifically has left to FERC the authority to oversee the

regulation and development of water power and to balance such

development against recreational, habitat, and other aspects of

environmental quality implicated by the development. In Califor-

nia, this Court determined that a California law relating to stream

flow was preempted by the FPA and held:

By directing FERC to consider the recommendations of

state wildlife and other regulatory agencies while

2! Some courts have said that the Clean Water Act gives states a "veto" over

the grant of federal licenses for activities potentially affecting a state’s water

quality. See, e.g., United States v. Marathon Dev. Corp., 867 F.2d 96, 99-100

(ist Cir. 1989). If any such veto exists, it exists only with respect to the

protection of a state’s water quality and must be narrowly construed. See infra

part Il.

22 FERC must balance the public interest and give consideration to "recre-

ational purposes" under the FPA including the fisheries, wildlife and the

importance of each in outdoor living and commerce. Udall v. FPC, 387 U.S. 428,

437-44, 450 (1967); see also Scenic Hudson Cons. Conf. v. FPC, 354 F.2d 608,

613, 624 (2d Cir. 1965) (FERC must consider the impact of a hydroelectric project

on the natural beauty of the site).

13

providing FERC with final authority to establish license

conditions (including those with terms inconsistent with

the States’ recommendations), Congress has amended

the FPA to elaborate and reaffirm First lowa’s under-

standing that the FPA establishes a broad and para-

mount federal regulatory role. See 16 U.S.C. §§

803(a)(1)-(3) [16 U.S.C.S. §§ 803(a)(1)-(3)] (FERC to

issue license on conditions that protect fish and wildlife,

after considering recommendations of state agencies),

as amended by the Electric Consumers Protection Act

of 1986; 16 U.S.C. §§ 803(j)(1)-(2) [16 U.S.C.S. §§

803(j)(1)-(2)]... .

California, 495 U.S. at 499-500. The Court recognized, as it did

in First Iowa, that Congress had limited the states’ authority under

the FPA to avoid establishing “divided authority over any one

subject." California, 495 U.S. at 502 (quoting First Iowa, 328

U.S. at 174). In Georgia-Pacific, the Vermont Supreme Court has

created divided authority over subjects not based on water quality.

While FERC must consider state concerns and recommendations

for the protection of the environment, FERC is not required to

adopt those recommendations. FPA § 10(j), 16 U.S.C. § 803(j)

(Supp. 1992); National Wildlife Fed’n v. FERC, 912 F.2d 1471,

1482 (D.C. Cir. 1990). By allowing DEC to determine non-water

quality based subjects, the Vermont Supreme Court effectively has

made FERC’s role under FPA 10(j) redundant and meaningless.

"There would be no point in Congress requiring the federal agency

to consider the state agency recommendations on environmental

matters and make its own decisions about which to accept, if the

state agencies had the power to impose the requirements them-

selves." Sayles Hydro Assoc. v. Maughan, No. 91-15934, 1993

WL 17730, *4 (9th. Cir. Feb. 1, 1993). Amici curiae recognize

14

that the states have the power to ensure the integrity of water and

that state water quality standards are complied with, but state

authority with regard to non-water quality matters is limited to

making recommendations to FERC.”

The Vermont Supreme Court erred in its determination that DEC

had the authority to impose conditions in a water quality certificate

that are not based on water quality. The result is a divided

authority over non-water quality specific matters contrary to the

intent of Congress. Such an intrusion into FERC’s jurisdiction

raises an important federal question that must be decided by this

Court.

C. DEC Is Preempted By The Exclusive Jurisdiction Of

FERC Under The FPA From Imposing Conditions In

Water Quality Certificate Relating To Non-Water

Quality Issues.

By the clear provisions of the FPA, FERC must consider the

impact of a proposed development on environmental quality and

must balance that impact against the development of water power.

The states have an advisory role with regard to such considerations.

Under the CWA, however, the states may deal only with the

integrity of water and with water quality specific concerns arising

from a discharge of pollutants. In Georgia-Pacific, the Vermont

Supreme Court has affirmed DEC’s invasion of FERC’s jurisdiction

> The most recent amendment to § 401 of the CWA was in 1977. See 33

U.S.C. § 1341. Congress was aware of § 401 certification requirements when it

passed the 1986 amendments to the FPA. Had Congress desired the states’

authority under § 401 certification to be as broad as the decision below proclaims,

Congress would not have added the environmental protection provisions to FERC’s

authority. The fact that Congress gave that authority to FERC demonstrates

Congress’ intent not to allow the states to exercise the same authority. California,

495 U.S. at 499-500; see international Paper Co., 479 U.S. at 494.

a eee

15

by approving the imposition of conditions in a water quality

certificate in excess of the limited role reserved by Congress to the

states in the CWA.

Under Georgia-Pacific, the states, in the guise of § 401 of the

CWA, could "veto" projects on the basis of, or could establish

conditions with regard to, fish and wildlife, the protection of

recreational opportunities and the preservation of other aspects of

environmental quality not based on water quality and without taking

into consideration the balancing of interests under the FPA, all of

which have been reserved exclusively to FERC. The states then

could do indirectly, under the CWA, what they cannot do directly

under the FPA. See International Paper Co., 479 \!.S. at 495, 497

("It is unlikely--to say the least--that Congress intended to establish

such a chaotic regulatory structure.").

With the exception of the limited authority given to the states in

§ 401 of the CWA, "the detailed provisions of the {| FPA] providing

for the federal plan of regulation leave[s] no room or need for

conflicting state controls." First Jowa, 328 U.S. at 181. Under

Georgia-Pacific, DEC is placed in direct conflict with the authority

of FERC under the FPA and stands as an obstacle to the balanced

review of water power projects that is in the exclusive jurisdiction

of FERC. "A state measure is pre-empted to the extent it actually

conflicts with federal law, that is, when it is impossible to comply

with both state and federal law, or where the state law stands as an

obstacle to the accomplishment of the full purposes and objectives

of Congress.’" California, 495 U.S. at 506 (quoting Silkwood v.

Kerr-McGee Corp., 464 U.S. 238, 248 (1984)); International Paper

Co., 479 U.S. at 494.

The Ninth Circuit Court of Appeals has rejected as contrary to

FPA California’s efforts to require a hydroelectric project to under-

16

take studies to assure that the project would comply with state

concerns regarding aesthetics, recreation, sport fishing and cultural

resources. Sayles, 1993 WL 17730. The court held "[t}he state

process itself would be an obstacle to the accomplishment of the full

purposes and objectives of Congress in authorizing [FERC] to

license the project to proceed." Jd. at *4.™

The decision in Georgia-Pacific affirms DEC’s consideration of

non-water quality based aesthetics and recreation thereby upsetting

the balance intended by Congress between the FPA and the CWA.

Vermont is preempted when it ventures beyond the express provi-

sions of § 401 and imposes an obstacle to the balancing of compet-

ing pub!i- interests that Congress left exclusively to FERC. The

Court should grant the Petition to deal with the important federal

question presented by state action inconsistent with the full purposes

and objectives of Congress.

* Similarly, an attempt to exert jurisdiction under Vermont’s environmental

law to evaluate environmental impacts relating to the relocation of a highway and

the development of a recreation area in connection with a hydroelectric project

raised an important federal question of intrusion upon the exclusive jurisdiction

given to FERC. Town of Springfield v. Vermont Envtl. Bd., 521 F.Supp. 243 (D.

Vt. 1981). The Vermont Environmental Board was preempted in view of “a clear

Congressional intent to bring all aspects of the hydroelectric project within the

purview of the federal regulatory scheme." /d. at 249. While neither Sayles nor

Springfield involved the issuance of a water quality cer’\ icate, the preemptive

scope of federal law here is the same as in those two cases. International Paper

Co., 479 U.S. at 499 n.20 ("[T}he pre-emptive scope of the CWA necessarily

includes all laws that are inconsistent with the ‘full purposes and objectives of

Congress.’") (emphasis in original, citations omitted).

17

Il. THE DECISION OF THE VERMONT SUPREME

COURT IN GEORGIA-PACIFIC IS IN CONFLICT WITH

DECISIONS OF THE COURTS OF OTHER STATES

WITH RESPECT TO THE IMPORTANT FEDERAL

QUESTION OF STATE INSTRUSION IN THE EXCLU-

SIVE JURISDICTION OF FERC UNDER THE FPA.

Courts of other states, presented with the issue of the scope of

the state’s authority under § 401 of the CWA with regard to

hydroelectric projects subject to licensing under the FPA, have

determined that the state’s role is narrow and carefully limited. The

decision below is in conflict with those of other states. Summit

Hydropower v. Comm’r of Envtl. Protection, No. CV91050 26 43,

1992 WL 175241 (Conn. Super., July 26, 1992); Pennsylvania

Dep’t of Envtl. Resources v. City of Harrisburg, 578 A.2d 563 (Pa.

Commonw. 1990); Long Lake Energy v. Department of Envtl.

Cons., 563 N.Y .S.2d 871 (App. Div. 1990); Fourth Branch Assoc.

v. Department of Envtl. Cons., 550 N.Y .S.2d 769 (Sup. Ct. 1989);

Arnold Irrigation Dist. v. Department of Envtl. Quality, 717 P.2d

1274 (Or. App.), review denied, 726 P.2d 377 (Or. 1986); In re

Power Auth. v. Williams, 457 N.E.2d 726 (N.Y. 1983). In

Williams, the highest court of New York held:

The certification referred to in the Federal Clean Water

Act . . . is simply of compliance with section 303 of

the Federal statute... . To extend that process, as the

order of the Appellate Division would do, to consider-

ation of countervailing energy and environmental

interests . . . would be to countenance both a failure by

the commissioner to perform the function reserved to

him under [the CWA] and an intrusion by him in the

area of responsibility pre-empted for the Federal

agency.

18

457 N.E.2d at 730 (citation and footnote omitted).~ To extend

the process, as the Vermont Supreme Court has done, is an

intrusion in the area of responsibility preempted for FERC.

Following Williams, the New York Supreme Court, Appellate

Division, affirmed a lower court ruling that federal preemption

precluded the Department of Environmental Conservation of that

state from requiring a project subject to § 401 certification to

undergo sweeping review of such items as disturbance of stream

beds, dam construction, dam safety, reservoir releases and other

environmental matters. Niagara Mohawk Power Corp. v. New York

Dep’t of Envtl. Cons., No. 65306, 1993 WL 2586 (N.Y. App. Div.

Jan. 7, 1993). The Appellate Division held "to allow [environ-

mental and conservation factors of concern to a state] to serve as a

predicate for a state ‘veto’ of the project is indefensible for it would

effectively undermine the intent of Congress." /d., slip op. at 4

(citations omitted). It is indefensible for the Vermont Supreme

Court to undermine the intent of Congress by allowing DEC to

condition a water quality certificate on non-water quality bases.

Maine has recognized that, while it may be reasonable to request

information relating to matters not limited to compliance with

numerical standards for water chemistry, there is a point beyond

which a state’s action may exceed its jurisdiction. Bangor Hydro-

= The Williams court relied heavily upon de Rham v. Diamond, 295 N.E.2d

763 (N.Y. 1973), which examined the predecessor to § 401, and determined that

the FPA "“pre-empts all State licensing and permit functions” with respect to

hydroelectric projects relinquishing only one element to the states, that being the

“narrow question” whether the federal project would violate applicable water

quality standards. de Rham, 295 N.E.2d at 767-68. The state’s narrow, defined

role did not include consideration of the safety of a nearby aqueduct, appearance

of the shoreline and protection of the river's fish, aside from effect that injury to

fish, by the introduction of waste or pollutants, may have on the water quality

standards. Id.

Oe Be a ae eerie

19

Electric Co. v. Board of Envtl. Protection, 595 A.2d 438, 440 (Me.

1991). While Maine did not face the question of at what point

a state may exceed its jurisdiction, it is that question that is before

this Court. The Vermont Supreme Court did not consider just

information requests in Georgia-Pacific; rather it approved the

imposition of conditions in a § 401 certification on the basis of

aesthetics and recreation, both of which exceed the jurisdiction of

the state and are within the jurisdiction of and preempted for

FERC.

The decision by the Vermont Supreme Court in Georgia-Pacific

clearly and directly conflicts with the determination of the courts of

other states on the important federal question of state intrusion in

FERC’s exclusive jurisdiction under the FPA. This Court will

grant certiorari to resolve such conflicts. Citizens and S. Nat'l

Bank v. Bougas, 434 U.S. 35, 37 (1977). Granting certiorari in the

instant case would enable the Court to resolve the existing conflict

over the role of the states in § 401 certification and to prevent

further uncertainty and confusion as to the extent of that authority.

6 In Bangor Hydro, the Supreme Judicial Court of Maine stated: "Because the

Board has had no opportunity to set any conditions of certification, the question

w i e its jurisdiction u 401(d), 33 U.S.C. § 1341(d), is

not before us." Id. at 443 (emphasis added).

20

CONCLUSION

For the reasons stated above, amici curiae support and respect-

fully request that the Petition for Certiorari be granted because of

the important federal questions raised.

DATED: February 1993.

Respectfully submitted,

Edward V. Schwiebert

Counsel of Record

Abell, Kenlan, Schwiebert & Hall, P.C.

71 Allen Street

Rutland, VT 05702-0578

Telephone: (802) 773-3300

Attorneys for Amici Curiae

Central Vermont Public Service Corporation,

Green Mountain Power Corporation,

Vermont Marble Power Division of

OMYA, Inc., Citizens Utilities Company,

Vermont Independent Power Producers

Association and Associated Industries

of Vermont

For Central Vermont Public Service Corporation

Kenneth C. Picton, Esq.

77 Grove Street

Rutland, VT 05701

(802) 773-2711

For Green Mountain Power Corporation

Michael A. Murphy, Esq.

25 Green Mountain Drive

So. Burlington, VT 05402-0850

(802) 660-5773