ELR Citation: ELR 20258
No(s). s. 96-4110 et al (2d Cir. Nov 5, 1997)

The court holds that the Federal Energy Regulatory Commission (FERC) is bound by Federal Water Pollution Control Act (FWPCA) §401 to incorporate all state-imposed water quality certification conditions into hydropower licenses, and FERC's authority under the Federal Power Act (FPA) is not impaired by its inability to reject license conditions. FWPCA §401 states that an applicant for a license for any activity that might result in a discharge into navigable waters must provide certification from the state where the discharge originates or will originate, and such certification shall become a condition on the federal license. The court holds that the unequivocal language of FWPCA §401 leaves little room for FERC to argue that it has authority to reject state conditions it finds to be ultra vires. The court also holds that while FWPCA §401(d) restricts the state's authority to impose only conditions that relate to water quality, it is not tantamount to a delegation to FERC of the authority to decide which conditions are within the confines of §401 and which are not. FERC may determine whether the proper state has issued the certification or whether a state has issued a certification within the prescribed period. However, FERC does not possess a roving mandate to decide that substantive aspects of state-imposed conditions are inconsistent with the terms of FWPCA §401. The court then rejects FERC's contentions that certain conditions imposed by the state of Vermont on the licenses conflict with FERC's authority under the FPA. The FPA has a wide preemptive reach, but the FWPCA has diminished this preemptive reach by expressly requiring FERC to incorporate into its licenses state-imposed water quality conditions. The court further notes that if FERC is concerned that the conditions imposed by a state intrude on its authority as authorized by the FPA, there is nothing in the FWPCA to prevent FERC from simply refusing to issue the license as so conditioned. The court also rejects FERC's claim that the FWPCA and the Electric Consumers Protection Act (ECPA) are incompatible. Federal license applicants have the option of challenging state-imposed conditions in the proper court, and FERC may refuse to issue a license containing conditions that conflict with the FPA. In addition, to the extent that states' authority to impose §401 conditions may otherwise conflict with the ECPA amendments, the ECPA is inconsistent with the terms of the FWPCA, thus, making FWPCA §511(a) inapplicable.

Counsel for Petitioners
Richard A. Allen
Zuckert, Scoutt & Rasenberger
888 17th St. NW, Washington DC 20006
(202) 298-8660

Counsel for Respondent
Eric L. Christensen
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20426
(202) 208-0200

Before Jacobs and Parker, JJ.