ELR Citation: ELR 20692
No(s). 90-1080 (D.C. Cir. Mar 8, 1991)

The court holds that the Federal Energy Regulatory Commission (FERC) improperly dismissed petitioner's application for a hydroelectric power plant license on the grounds that petitioner did not have the necessary state certification covering water quality standards under Federal Water Pollution Control Act (FWPCA) §401. Petitioner, desiring to build a small hydroelectric power plant on streams in California, filed a request for state certification with a division of the California State Water Resources Control Board (Board). While that request was pending, petitioner submitted an application to FERC for a construction and operation license under §4(e) of the Federal Power Act (FPA) and an application to the Corps of Engineers for an FWPCA §404 dredge and fill permit. In October 1986, the Board which was then considering petitioner's project, granted a blanket state certification, authorizing the activities set out in 26 Corps nationwide permits, one of which included petitioner's §404 permit application. In April 1987, the Board denied petitioner's application for certification, claiming that petitioner had failed to submit all environmental documentation required by state law. FERC asked the Board to clarify whether the Board's denial of certification was a revocation of the Board's earlier blanket certification of the Corps nationwide permits. The Board responded that its denial vitiated the earlier blanket certification, and FERC concluded that it was powerless to act on petitioner's application until petitioner could produce an unclouded state certification. Subsequently, FERC dismissed petitioner's §4(e) application and petitioner brought this appeal.

The court holds that FERC was not justified in refusing to recognize the state certification underlying the Corps nationwide permit as valid and sufficient for purposes of petitioner's subsequent application for an FPA §4(e) license. FERC, as a matter of federal law, has the authority to decide whether the state's purported revocation of its prior certification satisfied the terms of FWPCA §401(a)(3). The court notes that under FWPCA §401(a)(1), no federal license or permit may be granted absent the requisite state certification indicating that no state water quality standards will be violated by the proposed project. Congress thereby intended that states would retain the power to block, for environmental reasons, local water projects that might otherwise win federal approval. However, the certification power of the states under FWPCA §401 is not unbounded, and under FWPCA §401(a)(3), Congress created a presumption that a state certification issued for purposes of a federal construction permit will be valid for purposes of a second federal license related to the operation of the same facility.

The court holds that the state's claim of a general reservation of discretionary authority to revoke prior blanket certification of particular projects at any time, and apparently for any reason, cannot be squared with Congress' purpose in FWPCA §401(a)(3). If a state could revoke prior certification at any time and for any (or no) reason, §401(a)(3) would be rendered meaningless. Under §401(a)(3), state revocation of prior certification is permitted only if the state has notified the relevant federal licensing agency of its intention to revoke within 60 days, or if circumstances have changed since issuance of the construction license or permit certification. Since there is no claim that the state's objection to FERC was untimely, or that the state's purported revocation came because of changed circumstances, FERC must consider these issues on remand.

Counsel for Petitioner
Robin L. Rivett
Pacific Legal Foundation
2700 Gateway Oaks Dr., Ste. 200, Sacramento CA 95833
(916) 641-8888

Counsel for Respondent
Joel M. Cockrell
Federal Energy Regulatory Commission
825 N. Corcoran St. NE, Rm. 3000, Washington DC 20426
(202) 208-0177

Before MIKVA, Chief Judge, EDWARDS and THOMAS, Circuit Judges.