Energy Advisory Bulletin
Ninth Circuit Affirms FERC’s Relicensing of Mid-Snake Hydro Projects
By James B. Vasile and Brian R. Gish
[July 2006]
In a memorandum decision released by the U.S. Court of Appeals for the Ninth Circuit on July 12, 2006 in Idaho Rivers United and American Rivers v. FERC (No. 05-72513), the court affirmed the Federal Energy Regulatory Commission’s (FERC’s) issuance of new licenses for five of Idaho Power Company’s hydro projects located on the middle reach of the Snake River in Idaho. Two environmental groups raised issues on appeal challenging the adequacy of mitigation measures in the licenses for endangered snail species and white sturgeon. Specifically, appellants argued that operating all of the projects in a “run-of-river” mode, as opposed to a load-following operation, is necessary to provide adequate protection to the snails and sturgeon. The court disagreed, rejecting the assertions that FERC’s order violated sections of the Federal Power Act (FPA) and Endangered Species Act (ESA), and upholding FERC’s orders relicensing the projects.
Certain snail species located in parts of the project areas are listed as endangered under the ESA. FERC was accordingly required by law to consult with the U.S. Fish and Wildlife Service (FWS) as to whether relicensing the projects would jeopardize the continued existence of the snails. Relatively little is known about the habitat requirements of these particular species and the extent to which the project operations affect them. After the resource agencies initially urged FERC to operate all of the projects as run-of-river for snail and sturgeon protection, Idaho Power and the FWS negotiated a Snail Settlement Agreement (“Settlement”). It provides for a six-year study period designed to learn more about the snail species and how river flows affect them, after which Idaho Power will report to FERC. As a result of the revised operations in the Settlement for two of the projects, FWS was able to issue a Biological Opinion (BiOp) finding that relicensing the projects would “not jeopardize” the continued existence of the listed species. FERC accepted this finding in its relicensing orders.
On the white sturgeon issue, FERC’s EIS found that there would be only modest benefits to rearing life stages of sturgeon by changing the operation of the largest project from load-following to run-of-river operation. FERC also identified large economic costs of lost electric capacity in changing the project to run-of-river operations, and therefore FERC relicensed that project as load-following. FERC also required Idaho Power to submit recommendations within a year related to an ongoing effort to develop a comprehensive sturgeon conservation plan for a larger stretch of the Snake River.
On specific issues appealed, the court held that (i) FERC sufficiently explained its departure from the resource agencies’ FPA Section 10(j) recommendations for sturgeon mitigation; (ii) FERC’s cost-benefit analysis treated fishery values equally with power values; and (iii) even though FERC did not impose specific sturgeon mitigation pending completion of the comprehensive conservation plan, its extensive evaluation complied fully with the precedents requiring that FERC not defer its consideration of significant issues until after license issuance.
On the appellants’ challenge to the FWS BiOp finding of “no jeopardy” to listed snail species, the court examined whether FERC’s reliance on the BiOp was arbitrary and capricious. The court gave “substantial deference” to the FWS as the expert agency for this species under the ESA. Despite the appellants’ argument that the FWS reached a different conclusion in the final BiOp than was in the draft BiOp, the court found that the FWS’s “change” did not render its conclusions faulty in the final BiOp. The court stated there was a reasonable explanation for the change, which in this case was the intervening Snail Settlement Agreement. Because there was requisite substantial evidence to support the FWS’ “no jeopardy” finding in the BiOp, the court held that it was neither arbitrary nor capricious for FERC to rely on that finding.
Accordingly, the court affirmed the new license orders for Idaho Power’s Mid-Snake projects in all respects. DWT assisted Idaho Power in negotiating the Snail Settlement Agreement with the FWS, in obtaining FERC approval of the Settlement Agreement, and in intervening and submitting a brief to the Ninth Circuit Court of Appeals in support of the FERC order.
Please direct questions about this DWT Energy Advisory to:
This Advisory is a publication of the Energy Department of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent developments in energy law. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations.
Copyright © 2006, Davis Wright Tremaine LLP.
return to Advisory Bulletins main page
|
