On Friday, the D.C. Circuit Court of Appeals ruled that applicants for licenses under the Federal Power Act may not reach private agreements with states to circumvent the FPA requirement that states act on water quality certification requests under § 401 of the Clean Water Act within one year.
The facts are important here and somewhat convoluted. The short version is that PacifiCorp operates a number of dams on the Klamath River. In 2010, PacifiCorp reached a settlement with California, Oregon, and a number of private parties – not including the Hoopa Valley Tribe, the plaintiff here – to decommission certain dams and relicense others. However, the decommissioning was dependent on certain third party actions, including, apparently, federal funding. Part of the settlement required California and Oregon to “hold in abeyance” their § 401 certificate reviews. Specifically, each year, PacifiCorp:
sent a letter indicating withdrawal of its water quality certification request and resubmission of the very same . . . in the same one-page letter . . . for more than a decade.
The Court was not pleased.
Such an arrangement does not exploit a statutory loophole; it serves to circumvent a congressionally granted authority over the licensing, conditioning, and developing of a hydropower project. … There is no legal basis for recognition of an exception for an individual request made pursuant to a coordinated withdrawal-and-resubmission scheme, and we decline to recognize one that would so readily consume Congress’s generally applicable statutory limit.
The Court limited its holding to the facts of this case; it does not apply, for example, to applications that are substantively amended and resubmitted. It only applies to what PacifiCorp and the states unabashedly did here – reach a private agreement to get around the explicit provisions of the statute.
Nonetheless, it’s an important decision. Based on data reported in the opinion, it may have a significant impact on a number of FERC licensing proceedings, where similar agreements may also be in place.
The decision also highlights an issue with these types of permitting deadlines. These provisions follow a fairly well-trod path. Some agency is slow in responding to permit applications. A legislature responds by demanding that approvals be issued within a certain period of time. The regulated community is happy. Then, life moves on and, in the real world, parties realize that, for one reason or another, strict adherence to the statutory deadline is infeasible, impractical, or just plain not in anyone’s best interest. They thus do what creative people do – they find a way around the deadline that was supposed to be protecting them. Or, they try to do so until a court says no, no, no.
Be careful what you wish for.