ELR Citation: ELR 20505
No(s). s. 83-7444 et al (9th Cir. May 7, 1985)

While rejecting other challenges to the Federal Energy Regulatory Commission's (FERC's) decision to grant a small-scale hydropower project an exemption from federal licensing procedures under the Energy Security Act of 1980, the court holds that FERC erred in preparing neither an environmental assessment nor an environmental impact statement (EIS) for the project. The court begins by examining FERC's ruling that anadromous-fish-protecting conditions imposed on the permit by the National Marine Fisheries Service (NMFS) are non-mandatory and waivable by FERC. Though FERC has not yet actually waived any of the conditions, the court holds that it has jurisdiction to review FERC's decision on the point of law since it was final and had an irreparable effect on the NMFS' ability to protect anadromous fish resources, and the court's review would not unduly invade the province of the agency. The court then holds that FERC was correct. Though Congress required FERC to include conditions imposed by some fish and wildlife agencies, it omitted NMFS, and there is no indication that it was an oversight. In a footnote, the court holds that FERC properly ignored its own regulations that required compliance with conditions imposed by NMFS in this context.

The court next holds that the applicant's failure to describe its proposed modifications in detail does not bar FERC from granting the exemption. The initial application, made before plans were final, satisfied the regulatory requirements. Though the applicant should have submitted an amended application after its plans became final, FERC has discretion to waive or relax filing requirements, and it had the opportunity to review detailed plans for the modifications at a hearing before it issued the final exemption order, as did all the parties to this litigation. The court also holds that the project is located at an existing dam, even though the applicants plan to build a new concrete dam flush against the existing wooden dam.

Lastly, the court examines the National Environmental Policy Act issues. FERC's failure to prepare an environmental assessment was inexplicable, and it must prepare one. Further, FERC's conclusory statement of reasons for not preparing an EIS is deficient. The agency must supply a convincing statement of reasons why potential effects are insignificant, from which the court must be able to see that the agency took a hard look at the environmental evidence. FERC may not rely on recommendations of the Fish and Wildlife Service and state agencies, but must independently assess the environmental consequences of a project. Environmental mitigation measures may justify an agency's decision not to prepare an EIS, but here FERC has failed to explain how conditions it imposed on the permit would mitigate environmental impacts of the project. In a footnote, the court explains that, though FERC may waive the NMFS' conditions, it may not ignore them without a hard look at and explanation of whether they are necessary to prevent adverse impacts. Finally, FERC improperly relied on a stipulation that the hydropower project and the dam modifications are independent of each other and so wrongly did not consider the dam modifications in deciding whether to prepare an EIS.

Counsel for Appellants
Joshua Z. Rakach
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20426
(202) 357-5200

Stephen T. Janik
Ball, Janik & Novak
One Main Pl., 101 SW Main St., Portland OR 97204
(503) 228-2525

R. Keith Guthrie
Van Ness, Feldman, Sutcliffe, Curtis & Levenburg
Seventh Fl., 1050 Thomas Jefferson St. NW, Washington DC 20007
(202) 331-9400

Counsel for Appellees
Allen L. Johnson, Bill Kloos
Sullivan, Josselson, Johnson & Kloos
915 Oak St., Suite 101, Eugene OR 97401
(503) 687-1004

David C. Shilton
Department of Justicce
10th & Constitution Ave. NW, Washington DC 20001
(202) 633-5580

Before Alarcon and Norris, JJ.