Petition for Writ of Certiorari — North Carolina v. Federal Energy Regulatory Commission

; ST ions WV

@& No. @% 836 NOV 191997

OPNCE OF THE GLERK

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1997

STATE OF NORTH CAROLINA,

Petitioner,

Vv.

FEDERAL ENERGY REGULATORY COMMISSION,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

Of Counsel: BERNARD NASH

(Counsel of Record)

MICHAEL F. EASLEY FREDERICK M. LOWTHER

Attorney General of the BETH L. WEBB

State of North Carolina DICKSTEIN SHAPIRO MORIN

ALAN S. HIRSCH & OSHINSKY LLP

Special Deputy 2101 L Street, N.W.

Attorney General Washington, D.C. 20037

MARC D. BERNSTEIN (202) 785-9700

Associate Attorney

General Attorneys for Petitioner

NORTH CAROLINA State of North Carolina

DEPARTMENT OF JUSTICE

P.O. Box 629 November 19, 1997

Raleigh, NC 27602

(919) 716-6000

PRESS OF BYRON S. ADAMS @ WASHINGTON, D.C. @ 1-800-347-8208 >

(i)

QUESTION PRESENTED

Section 401(a)(1) of the Clean Water Act requires a

State water quality certification as a condition precedent to a

federal license authorizing an activity that may result in a

discharge into that State's waters.

Is a license amendment authorizing an activity that alters

an existing discharge, by reducing the flow of water over a

hydroelectric dam, excused from such State certification

requirement merely because the alteration does not involve the

addition of a substance to the water?

(ii)

LIST OF PARTIES AND AMICI

PETITIONERS:

State of North Carolina

Roanoke River Basin Association

RESPONDENT:

Federal Energy Regulatory Commission

INTERVENOR:

City of Virginia Beach, Virginia

AMICI:

The United States

Alabama, Alaska, Arizona, Arkansas,

California, Connecticut, Delaware, Florida,

Hawaii, Idaho, Illinois, Indiana, Iowa,

Kansas, Kentucky, Louisiana, Maine,

Maryland, Massachusetts, Michigan,

Minnesota, Mississippi, Missouri, Montana,

Nevada, New Hampshire, New Mexico, New

York, North Dakota, Ohio, Oklahoma,

Pennsylvania, Rhode Island, South Dakota,

Texas, Utah, Vermont, Washington, West

Virginia, and Wyoming (in support of

Petitioner North Carolina)

Virginia (in support of Respondent Federal

Energy Regulatory Commission )

American Public Power Association

Edison Electric Institute

National Hydropower Association

(iii)

TABLE OF CONTENTS

Page

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LIST OF PARTIES AND AMICI ..........4.... pes eas ii

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Teens isdn Gin nwa eens dees 6 ]

STATEMENT OF JURISDICTION ................... 2

STATUTORY PROVISIONS INVOLVED .............. 2

RPM MUEUE GPE REM GASE ccc cece ccececcececess 3

co PART ee 3

Section 401(a)(1) and the Clean Water Act .............. 5

Tine (Oat OF Appedls DOCION ... 2... occ cece edecne 7

a. pe a 7

b. RS A a 9

THE WRIT SHOULD BE GRANTED BECAUSE

THE COURT OF APPEALS HAS ERRONEOUSLY

DECIDED AN IMPORTANT QUESTION OF

FEDERAL LAW THAT HAS NOT BEEN, BUT

SHOULD BE, DECIDED BY THIS COURT ........... 12

ag con cee sarsatsassecscons 17

APPENDIX

North Carolina v. FERC, 112 F.3d 1175

GR es a eee la

Judgment (D.C. Cir. May 9,1997) .............. 47a

(iv)

eee cor, | 1 ean ee ee

Order Amending Remand Of The Record

Goce 2 eS Pr TP ore rey Teer er ere

Virginia Electric & Power Co., Project

No. 2009-003, 72 FERC { 61,075 (1995) .........

Virginia Electric & Power Co., Project

No. 2009-008, 72 FERC ¥ 61,283 (1995) .........

Virginia Electric & Power Co., Project

No. 2009-010, 77 FERC § 61,138 (1996) ........

Order Denying Petitions For Rehearing

(arbes a ME COED Soe ce cas ek batvaeee

Order Denying Suggestions For Rehearing

In Bane (D.C. Gir. Aug. 21, 1997) ...........65.

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Amici Briefs

Brief of Amztci Curiae States (Dec. 9, 1996) ...... 197a

Addendum to Brief of Amici Curiae States

Ss SD vad oekke ae ee ee ee 224a

Amici Curiae Brief in Support of Suggestion of

State of North Carolina for Rehearing In Banc of

penbes (hunte 28, 8P87 ) ind oe eas 229a

TABLE OF AUTHORITIES

Page

Cases.

American Rivers, Inc. v. FERC,

Nos. 1169, 1170, 1171, 1172,

Dockets 96-41 10L, 96-4112CON,

96-4116CON, 96-4118CON, 1997

WL 691043 (2d Cir. Nov. 5, 1997) ............. 7, haar

City of Fredericksburg, Va. v. FERC,

O76 Fak EA Ce BPE vino ce ctvesesverceesens 17

District of Columbia v. Schramm,

GO Fie Be eee Bs dn 6 kee s ecg eeeseecdscees 7

Keating v. FERC, 927 F.2d 616

(EAs. GAR, BOOED (66d ie veeescesieseeeuasespiaseiaa 7,13

PUD No. 1 of Jefferson County v.

Washington Dep't of Ecology, 511 U.S. 700

(RPWEP 6004s ckececdawrwnieneneatabeennesins 7, 14, 15, 16

Roosevelt Campobello Int'l Park Comm'n v.

United States EPA, 684 F.2d 1041

(Set CAt. SUSE kcucnnen days ece lisesi vuadeiateenus 7

Administrative Orders.

Virginia Electric @ Power Co., Project

No. 2009-003, 72 FERC § 61,075 (1995) ............ 2,4

Virginia Electric @ Power Co., Project

No. 2009-008, 72 FERC § 61,283 (1995) ............ 2,4

(vii)

Page

Virginia Electric & Power Co., Project

No. 2009-010, 77 FERC § 61,138 (1996) ............ 2,5

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(viii)

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In The

SUPREME COURT OF THE UNITED STATES

October Term, 1997

No. 97-

State of North Carolina,

Petitioner,

v.

Federal Energy Regulatory Commission,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

The State of North Carolina petitions for a writ of

certiorari to review the May 9, 1997 decision of the United

States Court of Appeals for the District of Columbia Circuit

holding that the State water quality certification requirement of

Section 401(a)(1) of the Clean Water Act, 33 U.S.C.

§ 1341(a)(1) ("Section 401(a)(1)"), applies only to activities

that would add a substance to the State's waters, and not to

activities that would otherwise affect those waters by altering an

existing discharge.

OPINIONS BELOW

The opinion of the Court of Appeals, published on

May 9, 1997 and reported at 112 F.3d 1175, together with the

Court's judgment entered the same day, is reproduced in the

Appendix at la-48a. The Court's prior orders remanding the

)

2

case to the Federal Energy Regulatory Commission ("FERC"),

dated September11, 1996 and September 19, 1996, are

reproduced at 49a-54a. The Court's August 21, 1997 orders

denying the petitions for rehearing and the Suggestions for

Rehearing In Banc are reproduced at 130a-133a. The FERC

orders under review are reported at Virginia Electric @ Power

Co., Project No. 2009-003, 72 FERC ¥ 61,075 (1995); Virginia

Electric @ Power Co., Project No. 2009-008, 72 FERC { 61,283

(1995); and Virginia Electric Ct Power Co., Project

No. 2009-010, 77 FERC § 61,138 (1996), and are reproduced

at 55a-129a.

STATEMENT OF JURISDICTION

This Court's jurisdiction to review the May9, 1997

decision of the Court of Appeals is invoked pursuant to

28 U.S.C. § 1254(1). This Petition is filed within 90 days of

the Court's August 21, 1997 orders denying rehearing as

required by Supreme Court Rule 13.

STATUTORY PROVISIONS INVOLVED

Section 401(a)(1) of the Clean Water Act, 33 U.S.C.

§ 1341(a)(1), provides, in pertinent part, that

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 discharge into the

navigable waters, shall provide the licensing or

permitting agency a certification from the State

in which the discharge originates or will

originate . . . that any such discharge will comply

with [inter alia, State water quality standards

promulgated under 33 U.S.C. § 1313].... No

license or permit shall be granted until the

certification required by this section has been

obtained or has been waived .... No license or

EN. At inh OD aca. i Ra ny Daler n etn cts eae i nid PT Sais ee

a ai Aire

3

permit shall be granted if certification has been

denied by the State ....

Section 401 (33 U.S.C. § 1341), and the other sections of the

Clean Water Act referred to therein (viz., 33 U.S.C. §§ 1311,

1312, 1313, 1316 and 1317), are reproduced in full in the

Appendix at 140a-189a.

The statutory definitions of the terms "discharge,"

"discharge of a pollutant" and "discharge of pollutants,"

"pollutant" and "pollution" (33 U.S.C. §§ 1362(16), (12), (6)

and (19)) are reproduced in full in the Appendix at 190a-193a.

STATEMENT OF THE CASE

Procedural History

Petitioner, the State of North Carolina, challenges two

orders of FERC that amend an existing hydroelectric project

license. The license is held by Virginia Electric and Power

Company ("VEPCO") and authorizes the operation of the

Roanoke Rapids and Gaston Hydropower Project (the "Hydro

Project"), located on the Roanoke River.’ The Hydro Project

dam creates a large body of water, Lake Gaston, which is

located primarily in North Carolina and partly in Virginia. The

dam and power generating station are located entirely within

North Carolina. The water discharging over the dam and

through the turbines into the Roanoke River is agreed by all

parties, including FERC, to be a "discharge" that "originates"

in North Carolina, as those terms are used in Section 401(a)(1)

of the Clean Water Act.

The FERC license amendment permits the City of

Virginia Beach, Virginia to build an intake structure 300 yards

‘ The license was originally issued to VEPCO by the Federal Power

Commission, FERC's predecessor agency, pursuant to Section 4(¢) of the

Federal Power Act (16 U.S.C. § 797(e) (134a-135a)) on January 24, 1951, as

amended on March 25, 1960 (23 FPC 537 (1960)), for a term of 50 years

(10 FPC 1 (1951)), and expires on January 31, 2001.

4

north of the North Carolina border in a small tributary of Lake

Gaston (in Virginia); reverse the tributary's flow; draw up to

60 million gallons of water per day ("mgd") upstream from the

main body of the lake (in North Carolina); and transport the

water across two river basins through a 76-mile pipeline and

various municipal systems for use mainly in Virginia Beach,

Virginia (the "Pipeline Project"). The water withdrawn will

equal almost ten percent of the river's flow during periods of

low flow, when water quality is at greatest risk. Thus, there will

be a major alteration in the discharge from the Hydro Project in

North Carolina.

VEPCO did not seek or obtain a Section 401(a)(1)

certification from North Carolina that the altered discharge

would comply with its water quality standards. FERC

nonetheless issued the license amendment, over North

Carolina's objection. FERC acknowledged that the discharge at

the dam would be altered, but held that the Pipeline Project

itself did not result in a "discharge" in North Carolina because

it did not add any substance to the water flowing over the dam.

FERC therefore held that the certification open of

Section 401(a)(1) did not apply.’

? FERC initially rendered a decision which "assum[ed], azguendo" that the

amendment was subject to Section 401(a)({1), but held that North Carolina's

Section 401(a)(1) rights were nullified by a FERC regulation (18 C.F.R

§ 4.38(f)(7)(iii) (194a-196a)) limiting State certification rights to

circumstances where FERC finds a "material adverse impact" on water quality

in the discharge. Virginia Elec. Power Co., Project No. 2009-003, 72 FERC

{ 61,075, at 61,393-94 (67a-68a) (1995), reb'g denied, Virginia Elec. &

Power Co., Project No. 2009-008, 72 FERC { 61,283 (1995). After briefing

and oral argument, the panel hearing the case remanded it to FERC for

determination whether the license amendment was in fact subject to

Section 401(a)(1). On remand, FERC found that the amendment was not

subject to Section 401(a)(1) because the alteration in the discharge did not

(Footnote continued)

5

North Carolina petitioned for review of the FERC

decision.? Forty States filed briefs amici curiae in support of

North Carolina's argument that FERC had no authority to issue

the license amendment without a Section 401(a)(1) certification

from North Carolina.* The Court of Appeals affirmed over a

dissent by Circuit Judge Wald, and rehearing was denied.

Section 401(a)(1) and the Clean Water Act

Congress' fundamental purpose in enacting the Clean

Water Act was to "recognize, preserve, and protect the primary

responsibilities and rights of States to prevent, reduce, and

eliminate pollution, [and] to plan the development and use . . .

of land and water resources." 33 U.S.C. § 1251(b) (137a).

Section 401(a)(1) of the Act requires that "[a]ny applicant for a

Federal license or permit to conduct any activity . . . which may

result in any discharge into the navigable waters, shall provide

the licensing or permitting agency a certification from the State

in which the discharge originates or will originate" stating that

the discharge "will comply with the applicable" Clean Water Act

and State water quality standards.°

(Footnote continued)

involve the addition of a substance to the water. Virginia Elec. & Power Co.,

Project No. 2009-010, 77 FERC { 61,138 (1996).

3 North Carolina invoked the jurisdiction of the Court of Appeals pursuant to

16 US.C. § 825Kb), which states that any party aggrieved by a FERC order

issued under the Federal Power Act may obtain a review.

* The States’ briefs are reproduced in the Appendix at 197a-263a.

5 "Discharge," its lesser included terms, "pollutant" and "pollution" are

defined as follows:

The term "discharge" when used without qualification

includes a discharge of a pollutant, and a discharge of

pollutants.

33 U.S.C. § 1362(16).

The term "discharge of a pollutant" and the term

(Footnote continued)

——————<—

6

This requirement of State certification is central to the

Clean Water Act. Through Section 401(a)(1), Congress

conferred upon the States -- not the federal government -- the

primary authority and responsibility to protect the quality of the

nation's waters:

The states remain, under the Clean Water Act,

the "prime bulwark in the effort to abate water

pollution," and Congress expressly empowered

them to impose and enforce water quality

standards that are more stringent than those

required by federal law. . . .

One of the primary mechanisms through

which the states may assert the broad authority

reserved to them is the certification requirement

set out in section 401 of the Act.... Through

(Footnote continued)

"discharge of pollutants" each means (A) any addition of

any pollutant to navigable waters from any point source, (B)

any addition of any pollutant to the waters of the

contiguous zone or the ocean from any point source other

than a vessel or other floating craft.

33 U.S.C. § 1362(12).

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.

33 U.S.C. § 1362(6).

The term "pollution" means the man-made or man-induced

alteration of the chemical, physical, biological, and

radiological integrity of water.

33 U.S.C. § 1362(19).

7

this requirement, Congress intended that the

states would retain the power to block, for

environmental reasons, local water projects that

might otherwise win federal approval.

Keating v. FERC, 927F.2d 616, 622 (D.C. Cir. 1991)

(citations omitted).

Short of blocking a water project, a State may also

impose conditions that must be incorporated in the federal

license or permit. Section 401(d), 33 U.S.C. § 1341(d); PUD

No. 1 of Jefferson County v. Washington Dep't of Ecology,

511 U.S. 700, 707-08, 711-12 (1994); American Rivers, Inc.

p. FERC, Nos. 1169, 1170, 1171, 1172, Dockets 96-4110L,

96-4112CON, 96-4116CON, 96-4118CON, 1997 WL

691043 (2d Cir. Nov.5, 1997).° Thus, Section 401(a)(1)

embodies a principle of federalism established by Congress (see

District of Columbia v. Schramm, 631 F.2d 854, 863 (D.C.

Cir. 1980)), and confers on the States authority which cannot

lawfully be abrogated by a federal court or agency.

The Court of Appeals Decision

a. The majority decision

The panel majority assumed arguendo what the parties

already agreed: that the flow of water through the Hydro

Project turbines in North Carolina is a statutory "discharge."

112 F.3d at 1187 (16a). The majority nonetheless held that

North Carolina had no Section 401(a)(1) rights with respect to

the Hydro Project license amendment authorizing the Pipeline

Project, because the Pipeline Project would not result in the

"addition" of a "substance" to the water. Id. at 1187-89

(16a-20a).

6 A State's exercise of its certification power is not reviewable by a federal

court or agency; review lies only in the courts or agencies of the State. Ey.,

American Rivers, 1997 WL 691043, at *8; Roosevelt Campobello Int'l Park

Comm'n v. United States EPA, 684 F.2d 1041, 1056 (1st Cir. 1982).

8

The majority's analysis relied upon the statutory

definition of "discharge," which states that "'discharge' when

used without qualification includes a discharge of a pollutant,

and a discharge of pollutants." Id. at 1187 (17a). The court

noted that these latter terms are defined by reference to the

"addition" of a "pollutant." Id. The court then concluded

that the general term "discharge" is limited by the definition's

"statement of inclusion":

[A]lthough the focus of the definitional section

is on the regulation of pollutants rather than the

general regulation of project discharges, the

nearest evidence we have of definitional intent

by Congress reflects, as might be expected, that

the word "discharge" contemplates the addition,

not the withdrawal, of a substance or substances.

On the evidence of record, the operation of

the Pipeline Project will not result in the

"addition" of anything to the waters of Lake

Gaston. ... A decrease in the volume of water

passing through the dam turbines cannot be

considered a "discharge"... .

Id. at 1187-88 (17a-18a) (footnote omitted).

The court went on to conclude that alteration of a

discharge that is "already in existence" cannot give rise to

Section 401(a)(1) nghts:

Stating that operation of the Pipeline Project

will "result in an altered discharge" is simply a

way of saying in legalese that operation of the

Pipeline Project will alter the discharge.

However, the existence of certification rights

under Section 401(a)(1) does not depend on

whether a discharge is "altered."

Section 401(a)(1) certification rights vest only if

9

an activity "may result in" a discharge... . The

word "alter" means to change something from

its previous state, WessTEeR's NEw INT'L

Dictionary 63 (3rd ed.1961) ("to cause to

become different"), implying that the thing

changed was already in existence. By contrast,

the word "result" implies causation. See id.

at 1937 ("arise as a consequence"). Obviously,

a subsequent event cannot be the cause of

; something that is already in existence.

Id. at 1188 (18a-19a).

b. The dissent

Circuit Judge Wald dissented, stating that the majority

opinion "ignores the language, structure, and purpose of th:

Act, and wrests away from North Carolina the very power to

make water quality judgments about its own waterways that

Congress expressly meant for that State alone to have."

112 F.3d at 1195 (33a).

The § 401 certification right is an essential

component of the Act's state-oriented regulatory

scheme. Obviously, how courts construe the

Act's language specifying those situations in

which States may wield this powerful weapon

can critically affect their ability to protect the

integrity of their waters in the way Congress

intended. Too stingy an interpretation of

§ 401(a)(1) will severely burden each State's

ability to implement the water quality program

mandated by the Act, and will frustrate

Congress' clear intent to institute a system under

which States carry both the responsibility of

setting their own water quality standards and a

corresponding power to protect those standards

10

from federally-licensed activities that threaten to

undermine them.

Id. (citation omitted).

The dissent finds the majority's conclusion "paradoxical"

in that

it appears that North Carolina will wield a

§ 401(a)(1) certification right in 2001,'7) when

the project's license will expire and VEPCO will

request a new license. Yet the majority reaches

the paradoxical conclusion that FERC may

approve this license amendment, which all

parties concede will alter the North Carolina

"discharge," without requiring any certification

from North Carolina.... Logically, if a State

must consent before a new discharge is

introduced into its waters, then a change in that

discharge must require a new consent.

Id. at 1195-96 (34a-35a) (citation omitted).

The dissent describes the majority's holding as a

"sweeping and arbitrary limitation on State certification rights"

which "badly distorts the definitions section of the Act, and

improperly usurps crucial judgments on water quality that

Congress reserved for the States into which the discharges

flow." Id. at 1196 (35a-36a). The dissent finds the majority's

statutory analysis fundamentally flawed in

its insistence that "nearfer]" evidence of

Congress' "definitional intent" as to what

constitutes a discharge can be found by looking

at the Act's definition of the phrase "discharge

of a pollutant" than by relying on the Act's own

” All parties agree that VEPCO must obtain North Carolina's certification in

order to obtain a new license in 2001, even if the new license does not

authorize any change in the discharge.

11

definition of the very term under discussion --

"discharge." The Act expressly states that the

term "'discharge’ when used without

qualification includes a discharge of a pollutant,

and a discharge of pollutants." 33 U.S.C.

§ 1362(16) (emphasis added). The only

inference I can discern from this clear expression

of nonexclusivity in the definition of "discharge"

is that it was meant to encompass a wider array

of interferences with the navigable waters than

would qualify as "discharges of pollutants."

Id. at 1196-97 (36a-37a).

The dissent also finds the majority's

"'substance-adding'" test to be fundamentally inconsistent with

the structure of the Act and its regulation of "pollution":

Section 304 of the Act "expressly recognizes

that water 'pollution' may result from ‘changes

in the movement, flow, or circulation of any

navigable waters . . . .'" PUD No. 1,

511 USS. at 719-20, 114 S.Ct. at 1913 (quoting

33 U.S.C. § 1314(f)). ...

: The majority's niggardly construction of the

term "discharge" threatens a congressional

policy permeating the general structure of the

Act .... When a federally-licensed activity

would "result in" a "discharge" into the State's

waters, the decision whether that interference

with the State's waters would be tolerated was to

belong solely to the State in which that

discharge originated, not to a federal agency or

to a federal court. . . . Interferences with the

integrity of a waterway need not take the

archetypal form of sludge spewing from an

outfall; other changes can be just as deadly to

12

fish and other wildlife as are toxic chemicals.

For example, alterations that cause _ the

temperature of the water in a discharge to rise,

or that rearrange the spatial distribution of

oxygen, sediment, or minerals in the

downstream water, could be catastrophic from

the perspective of water quality. Yet the effect of

this court's decision will be to bar States in

which altered discharges originate from acting to

protect their waters from such pernicious effects,

whenever the alteration does not "add" any

"substance or substances" to the water. I do not

believe Congress intended to give this court's

essentially ad hoc and inevitably inexpert

_judgments precedence over the expert

judgments of the States' water quality

authorities, in the making of such crucial

determinations.

Id. at 1196-98 (36a-40a) (citation omitted) (footnote omitted).

THE WRIT SHOULD BE GRANTED

BECAUSE THE COURT OF APPEALS HAS

ERRONEOUSLY DECIDED AN IMPORTANT

QUESTION OF FEDERAL LAW THAT HAS NOT

BEEN, BUT SHOULD BE, DECIDED BY THIS COURT

Water resource policy and water quality management are

among the most vital issues of our times. The Court of Appeals

decision fundamentally alters the balance of power between the

States and the federal government, contrary to an express

Congressional determination that the States -- not the federal!

government -- have primary responsibility for ensuring the

quality of water within their borders. Congress further

determined that both State and federally licensed projects must

meet the water quality standards adopted by the States, which

Congress expressly authorized to be more stringent than federal

13

standards. Section 401 is the mechanism through which a State

ensures that a federally licensed project meets that State's

standards. Keating, 927 F.2d at 622.

This broad scope of State authority under Section 401

was reaffirmed by the Second Circuit only two weeks ago in

American Rivers. American Rivers confirms that FERC may

not "second-guess" or "substitute its own judgment for that

of the certifying [State]." 1997 WL691043, at *9.

Acknowledging the "special expertise" of State certifying

agencies, the Second Circuit admonished that FERC " does not

possess a roving mandate to decide that substantive aspects " of

State water quality judgments may be ignored. Id. at *9-*10.

The decision below subordinates the primacy of State

water quality judgments to those of the federal government. If

the decision is allowed to stand, States will be stripped of their

ability to preserve water quality in one of the most critical areas

of environmental concern, i.¢., regulation of the flow of water

over hydroelectric project dams. Regulation of dams is critical

to preservation of our nation's rivers because dams change the

entire character of their host river systems. Changes to the

character of downstream flows (whether changes in quantty,

temperature, timing, velocity or oxygen content) pose

significant risks to water quality and thus to all environmental,

recreational and industrial river uses.

There are more than one thousand hydroelectric dams in

the United States, affecting untold numbers of rivers and

tributaries. The exceptional importance of this issue of State

authority, extending far beyond North Carolina, is shown by

the fact that forty other States have supported North Carolina's

assertion of Section 401(a)(1) rights in this case.

All parties agree that the water flowing over the Hydro

Project dam and into the Roanoke River is a statutory

"discharge" originating in North Carolina, and that the current

characteristics of that discharge will require approval by North

14

Carolina when VEPCO's project is relicensed. The question of

fundamental importance in this case is whether the preeminent

statutory power of the States to protect water quality at the time

of both licensing and relicensing of federal projects is suspended

in the period between those two events. The Court of Appeals

has held that it is, reaching the anomalous conclusion that the

States' power to protect their water quality through certification

continues only where the threat is from the "addition" of a

"substance."

The decision is wrong, because it both misinterprets the

statutory certification requirement and is fundamentally

inconsistent with PUD No.1. First, the Court of Appeals

musreads the statutory language by improperly equating the two

separately defined statutory terms "discharge" and "discharge of

pollutants." The statute expressly negates any such equation by

stating that "discharge" "includes" a "discharge of pollutants."

By requiring that a "discharge" "add" a substance simply

because "discharge of pollutants" requires an addition, the

majority denies the general term "discharge" any meaning of its

own.

Second, the decision below is inconsistent with this

Court's recognition in PUD No. J that a statutory "discharge"

does not require the addition of any substance to water. PUD

No. I is predicated on the premise that "the discharge of water

at the end of the tailrace after the water has been used to

generate electricity" was a statutory "discharge" subject to State

certification under Section 401l(a)(1). 511 U.S. at711l. In

stating this premise, this Court neither expressed nor implied,

nor left room for FERC to impose, any requirement that a

discharge must involve the "addition" of a "substance" to

water.

More fundamentally, this Court explicitly pointed out

that a reduction in water quantity has a water quality effect

which is also subject to State control:

15

[W]ater quantity is closely related to water

quality; a sufficient lowering of the water

quantity in a body of water could destroy all of

its designated uses, . . . . [T]here is recognition

in the Clean Water Act itself that reduced stream

flow, i.¢., diminishment of water quantity, can

constitute water pollution. First, the Act's

definition of poiiution as "the man-made or man

induced alteration of the chemical, physical,

biological, and radiological integrity of water"

encompasses the effects of reduced water

quantity... . Moreover, § 304 of the Act

expressly recognizes that water " pollution" may

result from "changes in the movement, flow, or

circulation of any navigable waters . . ., including

changes caused by the construction of dams."

Id. at 719-20 (citation omitted).

The majority's view that activities which result in "[a]

decrease in the volume of water" cannot be subject to State

certification (112 F.3d at 1188 (18a)) is inconsistent with this

Court's recognition in PUD No. 1 of the relationship between

water quantity and water quality. A reduction in water quantity

will increase the concentration of those substances that are

already in an existing discharge or in the body of water into

which the discharge flows.’ This is scientifically and practically

equivalent to adding substances to water. That is why States

* Although the instant case involves a single water withdrawal project, the

majority's decision would permit FERC to authorize any number of additional

withdrawals from the Hydro Project as well as any number of other

withdrawals from other hydroelectric dams, without regard to the effect on

water quality at and downstream of those dams. Host States would not have

Section 401(a)(1) rights with respect to any of the related license amendments.

It is that prospect that concerns North Carolina and the amici States as much

as the direct impact of the Pipeline Project.

16

commonly impose minimum flow requirements as conditions to

certification of hydroelectric projects, and why States are

concerned about activities (such as withdrawals) that impact the

quantity and flow of water. That is also why PUD No. 1

expressly holds that a State may condition a Section 401(a)(1)

certification for the discharge of water over a hydroelectric

project dam on the maintenance of State-specified minimum

flows.

The majority's conclusion is further undermined by the

statutory definition of "pollutant," which recognizes that

pollutants need not be "substances," and therefore that even a

"discharge of a pollutant" need not result in the addition of a

"substance" to the water. For example, "heat" -- which is a

condition, not a substance -- is defined as a "pollutant,"

because, as Judge Wald noted (112 F.3d at 1198 (39a-40a)),

raising the temperature of water can have the same deleterious

effects on water quality as the deposit of a harmful substance.

The majority's notion that an "altered discharge" cannot

trigger the certification requirement because a discharge "is

already in existence" (td. at 1188 (18a-19a)) is belied by the

statutory language. Section 401(a)(1) refers to "any discharge"

that "originates or will originate." While a discharge that "will

originate" clearly refers to a new discharge, a discharge that

"originates" in the State at the time of certification is equally

clearly a discharge that is already "in existence." Congress' use

of the phrase "amy discharge" further supports the conclusion

that altered discharges, as well as "new" discharges, are subject

to Section 401(a)(1) certification. Clearly, an “altered

discharge" may "result" from a newly authorized activity. As

both the Court of Appeals and FERC have recognized, that is

exactly what has happened in this case: new activities

17

authorized by the license amendment will result in an altered

discharge.”

The majority's failure to recognize _ that

Section 401(a)(1) applies to altered discharges places its

decision squarely in conflict with the result in Czty of

Fredericksburg, Va. v. FERC, 876 F.2d 1109 (4th Cir. 1989).

That case involved the construction of a powerhouse project at

an existing dam. The powerhouse project (which included

authorization to withdraw 1 mgd from the impoundment)

would alter the flow of water over the dam. That alteration

triggered a requirement of certification under Section 401(a)(1)

by the Commonwealth of Virginia. Because a FERC license

was issued in the absence of such a certification, the Fourth

Circuit reversed. Under the majority's decision here, Virginia's

certification would not have been required because the

discharge at the dam was " preexisting" and the powerhouse

project would not "add" a "substance" to the water.

CONCLUSION

The Court of Appeals has decided an important question

of federal law presenting an issue of critical importance to

management of this country's water resources in a manner

inconsistent with controlling precedent. If allowed to stand,

° As the Second Circuit just held, the Clean Water Act explicitly recognizes

that even after a discharge is reviewed and certified, a certifying State has an

interest which must be protected if the circumstances surrounding the

discharge change. American Rivers, 1997 WL 691043. Similarly,

Section 401(a)(3) of the Act permits a State that has issued a Section 401(a)(1)

certification for a federal construction permit nonetheless to block a federal

operating permit for the same discharge by revoking its certification on the

grounds that, inter alia, there are changes in the operation of the facility or in

the characteristics of the waters into which the discharge is made. In contrast,

the majority decision renders a State powerless to deal with fundamentally

changed circumstances that directly affect the quality of the water in and

downstream of the discharge.

18

the decision will fundamentally alter the Congressionally

mandated balance of power between the federal and State

governments, and thereby seriously jeopardize the ability of the

States to ensure the quality of the nation's waters. For these

reasons, the petition for a writ of certiorari should be granted.

November 19, 1997 Respectfully submitted,

Of Counsel: Bernard Nash

(Counsel of Record)

Michael F. Easley Frederick M. Lowther

Attorney General of the Beth L. Webb

State of North Carolina DICKSTEIN SHAPIRO

Alan S. Hirsch MORIN & OSHINSKY LLP

Special Deputy Attorney 2101 L Street, N.W.

General Washington, D.C. 20037

Marc D. Bernstein (202) 785-9700

Associate Attorney General

NORTH CAROLINA Attorneys for Petitioner

DEPARTMENT OF State of North Carolina

JUSTICE

P.O. Box 629

Raleigh, NC 27602

(919) 716-6000

TT I