ELR Citation: ELR 21494
No(s). s. 93-1787, -1788 (7th Cir. Aug 19, 1994)

The court upholds the Federal Energy Regulatory Commission's (FERC's) authority under the Federal Power Act (FPA) to include "reopener" clauses in water power project licenses that allow the agency to require licensees to construct and maintain fishways that the Secretary of the Interior might prescribe in the future. The court notes that the heart of petitioners' claim is that it is unfair to require them to decide whether or not to proceed with their water power projects when the reopener clauses prevent them from knowing, before they undertake the activity, what their costs will be and, therefore, whether the activity will be commercially viable. The court rejects this argument, holding that the FPA cannot be read to require FERC to protect the economic viability of all hydroelectric projects. Moreover, FPA §18 specifically provides for a reservation condition such as the one applied here. Further, the reservation of authority to impose a future requirement seems an appropriate measure to protect the public interest. The court notes that although the potential impact of a fishway's costs on the economics of a relatively marginal power generating project may be a significant issue, profitability is at risk from a number of variable factors, and values other than profitability require appropriate consideration. There can be no guarantee of profitability of water power projects under the FPA. The court holds that neither Congress nor FERC has acted unreasonably by adding to the natural contingencies that must attach to any project envisioning operating over a long period of years a requirement for the construction of a fishway. Finally, the court holds that FERC's construction of the FPA does not conflict with certain requirements of the Administrative Procedure Act. Congress has delegated to the Secretary of the Interior the authority to determine when and if a fishway may become necessary, and FERC can hardly be expected at the present time to make a finding that would be meaningful with respect to an uncertain future event.

Counsel for Petitioner
Michael Fischer
Foley & Lardner
Firstar Ctr.
777 E. Wisconsin Ave., Milwaukee WI 53202
(414) 289-3749

Counsel for Respondent
Eric Christensen
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Rm. 300, Washington DC 20426
(202) 208-0177

Before BAUER and CUDAHY, Circuit Judges, and GRANT, District Judge.^*