The D.C. Circuit Holds that Hydroelectric Facilities May Not Ignore Historic Impacts In Relicensing

Earlier this month, the D.C. Circuit Court of Appeals issued a decision that is a must-read for anyone who will be needing at some point to relicense an existing hydroelectric facility.  The short version is the status quo may no longer be good enough and dam operators may have to improve on existing conditions in order to succeed in relicensing.  At a minimum, facility operators will have to take the cumulative impacts of dam operation into account in performing environmental assessments under NEPA required for relicensing.

The case involves a series of dams on the Coosa River operated by the Alabama Power Company.  The licenses were due to expire in 2007.  Alabama Power timely applied to renew the licenses.  FERC duly issued an environmental assessment and issued a FONSI, a Finding of No Significant Impact.  Later, in 2012, the Fish & Wildlife Service, issued a biological opinion that relicensing would not “jeopardize” any threated or listed species.  In 2013, FERC issued a new license.  In response to a request from Alabama Power, FERC granted a request by Alabama Power to loosen a critical condition in the license concerning the maintenance of dissolved oxygen levels.  The litigation followed.

It’s a long and complicated opinion.  Here are the highlights.

First, with respect to the biological opinion, FWS “acknowledged the precarious state of certain species in the area.”  Nonetheless, FWS “failed to incorporate the environmental baseline into its jeopardy analysis.”  The Court concluded that this was a no-no:

Even where baseline conditions already jeopardize a species, an agency may not take action that deepens the jeopardy by causing additional harm.

It did not help that the Biological Opinion predicted 100% mortality for certain listed species.  Notwithstanding this conclusion, the court held that BiOp failed to “explain how a one hundred percent incidental take for multiple species is not likely to result in jeopardy.”

FERC’s NEPA environmental assessment did not fare any better; the Court concluded that it was “rife with flaws.”  In its analysis of fish passage issues, the Court could not resist this pithy summary:

The Commission’s acceptance, hook, line, and sinker, of Alabama Power’s outdated estimates, without any interrogation or verification of those numbers is, in a word, fishy. And it is certainly unreasoned.

The most important aspect of the Court’s decision probably concerns its discussion of cumulative impacts, because it is the one that may be more broadly applicable to other relicensing proceedings.  The Court made clear that cumulative impacts include “all past impacts of the dams’ construction and operation, including the enduring or ongoing effects of past actions.”  Because the analysis of the Coosa River dams failed to do so, the Court concluded that it violated NEPA.

These cases are fact-intensive and what the Court found here may not be applicable in other situations.  I don’t see the Supreme Court thinking that it needs to hear this case.  Thus, whatever one might think of it on the merits, it’s going to be an important case in this area for some time.

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