ELR Citation: ELR 20735
No(s). 85-1189 (D.C. Cir. Apr 8, 1986)

The court holds that the Wild and Scenic Rivers Act (WSRA) prohibition on licensing projects on or directly affecting a wild and scenic river removes Federal Energy Regulatory Commission (FERC) authority to grant the application of a small hydroelectric plant operator for an exemption from Federal Power Act licensing requirements. The court first holds that petitioners prevented FERC's original grant of an exemption from achieving final status by petitioning for rehearing of conditions to their exemption. Only if the 30-day statute-of-limitations period had lapsed without a challenge would petitioners' exemption, once granted, have become final and unreviewable. The court also holds that petitioners' challenge to the conditions placed upon the exemption authorized FERC to reconsider the entire exemption.

Next, the court rules that §7(a) of the WSRA explicitly prevents FERC from licensing any water projects on or directly affecting wild and scenic rivers, not merely projects adversely affecting scenic values. Petitioners' argument would render superfluous the first clause of §7(a) which, the court rules, imposes additional restrictions on FERC beyond those imposed upon other federal agencies by the second clause, which refers to scenic values. The court rejects in a footnote petitioners' contention that FERC's application of the WSRA in revoking the exemption retroactively destroyed a vested property right. The court holds that petitioners were not entitled under the Due Process Clause of the United States Constitution to a full evidentiary hearing prior to FERC's revocation of its licensing exemption. Petitioners identified no property interest deprived by FERC, as their exemption never attained final status. Petitioners also had adequate notice and opportunity to be heard in the FERC proceedings on the applicability of the WSRA. The court holds that FERC's decision to refer the question of the WSRA's applicability to the Secretary of the Interior did not deprive petitioners of due process; in addition to no deprivation of a property interest, petitioners suffered no prejudice from FERC's decision. The court rules that the WSRA applies to the licensing of construction of any component of a hydroelectric project on or directly affecting a designated river. The court holds that petitioners' installation of new transmission lines for an existing facility is "construction" within the meaning of the WSRA. The Act explicitly prohibits FERC from licensing such transmission lines. The court also holds that petitioners cannot avail themselves of a more lenient provision of §7(a) that allows licensing of projects on a tributary to a wild and scenic river, as petitioners' project is not located on a tributary but on the river itself.

Finally, the court rejects petitioners' procedural objections to FERC's exemption revocation. The court holds that FERC properly granted the California Resource Agency's petition for late intervention to protect fish and wildlife. The court holds that FERC was not required to serve petitioners with a copy of the Resource Agency's request for late intervention. Petitioners' argument that FERC had no authority to reconsider the exemption based on the state Resource Agency's petition fails, as petitioners' own challenge and not the state's late intervention authorized FERC to vacate petitioners' exemption. Also, the court observed, full licensing rather than the expedited Federal Power Act exemption remained available if petitioners preferred more complete rehearing procedures.

Counsel for Petitioners
Cressey H. Nakagawa, Peter C. Kissel, Richard G. Morgan
O'Conner & Hannan
Ste. 800, 1919 Pennsylvania Ave. NW, Washington DC 20006-3483
(202) 887-1400

Counsel for Respondents
Joanne Leveque, William H. Satterfield, Jerome M. Feit
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20002
(202) 357-8000

Before: WALD, SCALIA, and STARR, Circuit Judges.