ELR Citation: ELR 20121
No(s). 95-1232 (D.C. Cir. Jun 17, 1997)

The court upholds the Federal Energy Regulatory Commission's (FERC's) denial of a license for a proposed hydroelectric dam in the Inyo National Forest in California on the grounds that it was economically infeasible. The court first holds that FERC erred in relying on a U.S. Forest Service evaluation, in a forest management plan, to determine whether the project would be consistent with the purposes for which the national forest was created. Federal Power Act §4(e) directs FERC to consider not simply the purpose of the national forest, but the purpose for which the forest was created or acquired. The Inyo National Forest plan could hardly establish the purpose for which it was created in 1907, because the Forest Service did not adopt the plan until 1988. This is why the Forest Service, when it submitted its comments on the project, told FERC that it had not determined whether the proposed project would interfere with or be inconsistent with the purposes for which the Inyo National Forest was created or acquired. FERC was required to determine for what purpose the Inyo National Forest was created, and whether the project would interfere with or be inconsistent with those purposes. But it failed to do either.

The court, however, upholds FERC's additional and separate ground for denying the license—namely that the project was uneconomical in light of the Forest Service's proposed §4(e) conditions. As construed by the U.S. Supreme Court, §4(e) requires FERC to attach to licenses those conditions thought necessary by the Secretary of the relevant department, which, in this case, is the Forest Service. The validity of the conditions is up to the reviewing court, not FERC. The court rejects the license applicant's argument that the Forest Service failed to consider the conditions necessary for the protection of the purposes for which the national forest was originally created. This portion of §4(e) speaks to the present and to the future. It is the national forest as it exists now, not the forest as it existed years ago that is to be protected and utilized. The court also rejects the argument that the conditions are arbitrary and capricious, because they are different from conditions imposed on the relicense of a different project located on a different stream in a different part of the forest. The license applicant did not demonstrate that the two streams are identical in material respects. One of the last free-flowing streams in the Owens Valley deserves greater protection than a stream already diverted by a hydroelectric plant. Further, the fact that other laws or agencies might place the permit applicant under the same legal obligations as the Forest Service's conditions is no reason to set the conditions aside. Because the applicant only challenged the conditions' validity, and not FERC's conclusion that the project was infeasible in light of the conditions, the court upholds the denial.

[A decision related to this litigation is published at 21 ELR 20692].

Counsel for Petitioner
Gail A. Greely
Law Offices of Gail A. Greely
147 Tynebourne Pl., Alameda CA 94501
(510) 814-6986

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

Before Rogers and Tatel, JJ.