D.C. Circuit Sinks FERC Hydro License for Failure to Adequately Consider Past Environmental Harm

Last Friday, the D.C. Circuit torpedoed a hydroelectric license issued in 2013 to Alabama Power Company because the Federal Energy Regulatory Commission (FERC) and the U.S. Fish and Wildlife Service (USFWS) “declined to factor in the decades of environmental damage already wrought by exploitation of the waterway for power generation and that damage’s continuing ecological effects.” In doing so, the court rejected FERC’s attempt to follow its longstanding practice of limiting environmental review of past impacts by using existing conditions and operations as the environmental baseline.

The decision—American Rivers v. FERC—uses unusually sharp language to chastise FERC and USFWS for sloppy analysis, relying on weak or non-existent data, and failing to properly explain their reasoning. But it remains to be seen how far this case will shift the law regarding the use of environmental baselines under the Federal Power Act (FPA), the National Environmental Policy Act (NEPA), and the Endangered Species Act (ESA). Are the shortcomings in FERC’s analysis easily fixable on remand, or does this represent a fundamental shift in how the courts will view the relicensing of dams constructed long before enactment of the environmental safeguards of the 1970s and 80s?

In this advisory, we explain the court’s reasoning and highlight the decision’s uncertain—but likely important—implications for FERC relicensing going forward.