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2	Section 241 of the Energy Policy Act of 2005 Enacted August 8, 2005 as part of omnibus energy legislation General Overview: Provided new opportunities to test factual basis for mandatory license conditions prescribed by Federal resource agencies Provided new opportunity for parties to propose alternatives to prescribed conditions Provided limited and unclear FERC review of conditions
3	Mandatory License Conditions Federal Power Act Sections 4(e) and 18 provide Interior, Agriculture, and Commerce Departments authority to impose conditions to protect Federal “reservations” and prescribe fishways Supreme Court in Escondido case held FERC must include Section 4(e) conditions in license without change, and appeals courts (D.C. Cir. in Bangor; 9^th Cir. in American Rivers) held same for Section 18 fishways
4	Past Resource Agency Practices Prior to Section 241: Resource agencies faced few substantive or procedural limits on their mandatory conditions Little opportunity for license applicant to affect conditions Any legal review had to wait until FERC’s license challenged in court Limited or narrow scope of review
5	New Rights Provided By Sec. 241 All parties to licensing may request trial-type hearing on disputed issues of material fact on mandatory conditions All parties may propose alternatives to mandatory conditions Resource agencies must explain basis for choice to FERC and FERC must determine consistency with FPA
6	Section 241 Requirements for Trial-Type Hearings To be conducted by the relevant resource agency Must include the right to discovery and cross-examine witnesses May last no longer than 90 days Departments of Interior, Agriculture, and Commerce must jointly establish rules for hearings
7	Resource Agency Regulations For Trial-Type Hearings Interior, Agriculture, and Commerce issued joint regulations on 11/17/05 Called “interim final rule;” may be “revised” final rule within 18 months Identical rules for all three Departments Rules establish deadlines and procedures for hearing proceeding and alternative conditions
8	Hearing Events and Timelines
9	Required Components of Request for Hearing List of specific factual statements by agency alleged to be in dispute Basis for opinion that statements are (a) unfounded or erroneous and (b) material Citation (and provision) of studies or documents supporting opinion List of witnesses and exhibits intended to be used at hearing
10	Hells Canyon Complex Project: The First Guinea Pig Through the Maze New license application for Idaho Power Company’s 1,160 MW Hells Canyon Complex on the Snake River in Idaho and Oregon filed in 2003 10/28/05 – FERC issued “Ready for Environmental Analysis” notice 1/26/06 – BLM and FS filed preliminary mandatory terms and conditions: the Sec. 241 hearing process starts
11	HCC Hearing Timeline
12	HCC Hearing Timeline (cont.)
13	HCC Hearing Timeline (cont.)
14	HCC Hearing Timeline (cont.)
15	HCC Hearing Timeline (cont.)
16	HCC Hearing Timeline (cont.)
17	Major First Impression Procedural Issues In HCC Case What threshold of material disputed fact warrants a hearing? Who bears the burden of proof at hearing?
18	What Issues Warrant Hearing? Both BLM and FS moved to dismiss all IPC issues as “not material” because of agencies’ policy discretion in conditions Both ALJs rejected BLM/FS interpretation BLM ALJ Heffernan: "Collectively, BLM's motions seek to nullify a recently enacted statute." "BLM's motions seem to suggest that the proposed conditions filed with FERC were based either on whimsy or, in the alternative, solely on policy grounds with no factual underpinning."
19	Who Has Burden Of Proof At Hearing? Regulations deliberately do not address BOP Both BLM and FS asked that BOP should be on IPC, and both ALJs agreed IPC was viewed by ALJs as proponent or party seeking relief and APA places BOP on proponent This issue may be ripe for reconsideration by other ALJs and should not be considered final
20	Value of Sec. 241 Effort Forces agency to focus on the factual basis for its mandated mitigation, and to limit mitigation imposed to provable project impacts Reduces ability of agency to rely on generalized assertions to impose mitigation for effects not caused by project The prospect of hearings with uncertain outcomes creates incentive for reasonable settlements
21	Examples of Revised HCC Mandatory Conditions Through Sec. 241 Process
22	Examples of Revised HCC Mandatory Conditions Through Sec. 241 Process
23	Concluding Observations Compressed deadlines for hearing process creates hectic, stressful schedule; need to prepare as much as possible in advance of preliminary conditions Hearing process provides good opportunity to clarify vague and ambiguous preliminary conditions Hearing process forces agencies to consider whether their proposed mitigation measures are factually justified Although hearing process can be costly, it can save many times the cost by eliminating unreasonable and unnecessary mitigation measures