Kleppe Conditionally Declares New River a Scenic River

On March 12, following an unprecedented request by the State of North Carolina, Interior Secretary Thomas S. Kleppe designated a 26.5 mile stretch of the New River in North Carolina as a component of the National Wild and Scenic Rivers system. The decision, however, included the caveat that it could not take precedence over a Federal Power Commission (FPC) license previously granted to the Appalachian Power Company (Appalachian) to construct a large pumped-storage hydroelectric facility, called the Blue Ridge project, on the New River, should the license survive judicial review in a case pending before the United States Court of Appeals for the District of Columbia Circuit.

Secretary Kleppe's designation came hard on the heels of a concerted media effort by American Electric Power Company, Appalachian's parent corporation, to convince the public of the worth of the Blue Ridge project.¹ Coming roughly one week before the North Carolina primary, it reinforced prior speculation that the Administration timed the decision to advance President Ford's chances in the primary.² The Secretary's astute move served both to placate North Carolina and conservationists who had strenuously lobbied to protect the New River, and to hold out to Appalachian the promise that its project could yet be revived.

The Ancient New River and the FPC

The New River's name belies its true nature, for it is geologically the oldest river in North America and ranks in age second only to the Nile.³ The prevailing land uses along the New River's North Carolina portion are pasture and cultivation, interspersed among spectacular rock outcroppings and rapids. In addition, theNew River Gorge below the Bluestone Dam in West Virginia offers sometimes treacherous whitewater canoeing, and has itself been the subject of separate efforts at preservation.⁴

The battle over FPC licensing of the Blue Ridge project has raged for 13 years. As originally conceived in 1963, the $140 million project would have created two [6 ELR 10078] reservoirs of about 3000 and 17,000 acres to provide conventional and pumped storage hydroelectric power generating capacity of about one million kilowatts. The Federal Water Pollution Control Administration of the Interior Department objected to the initial proposal on the grounds that its 30 foot reservoir draw downs would be too small to dilute downstream pollution. In 1968 the power company came back to the FPC with an expanded project proposal to create reservoirs 14,000 and 26,000 acres in size with a capacity to generate 1.8 million kilowatts of electricity at a then-estimated cost of $300 million.

Folliowing NEPA's passage, the FPC filed an environmental impact statement on the project in 1971. Further proceedings were delayed by the 1972 decision in the Greene County case,⁵ after which the FPC directed the Blue Ridge impact statement to be revised with public opportunity for cross-examination of the FPC staff.

On June 14, 1974, the FPC granted a license to Appalachian to construct the project, but — in an act that may have a crucial bearing on the effect of Secretary Kleppe's designation — delayed the license's effective date until January 2, 1975.⁶ As approved, the Blue Ridge would inundate 40,000 acres of land, flood 40 miles of river, dislocate 2,800 people, and create periodic shoreline "mud flats" through upper and lower reservoir drawdowns of 12 and 30 feet respectively. The FPC order provoked a flurry of lawsuits seeking to overturn the license,⁷ a request by the North Carolina governor to include the New River in the national wild and scenic rivers system, and eventually a stay order from the District of Columbia Court of Appeals.⁸

Environmental Restrictions on the FPC

Pumped storage projects, like the Blue Ridge, seem to evoke more than their share of environment-related controversy. The $162 million (in 1965 dollars), two million kilowatt Storm King plant at issue in the Scenic Hudson cases⁹ was stopped in 1974 by concern for lowly fish eggs and larvae: the AEC's discovery that the Hudson River was an alternating current tidal estuary rather than a free-flowing river indicated that the eggs and larvae would be quadrupally rather than singly endangered by Storm King's intake pipes.¹⁰ Also, the landmark NEPA decision in Greene County arose out of a one million kilowatt pumped storage project located 40 miles southwest of Albany, New York.¹¹ Those concerned with energy conservation point out that while pumped-storage facilities help meet peak demand without the need for additional generating plants, they are net energy wasters, requiring four units of energy for every three they return.

Nor is protracted litigation over hydroelectric licenses unfamiliar to the FPC. From an environmental perspective, most of these controversies seem to revolve around the FPC's unwillingness to use its power to deny licenses where they would not improve "beneficial public uses, including recreational purposes."¹² In Scenic Hudson I, this phrase was construed to impose a duty on the Commission to consider "the totality of a project's immediate and long-range effects, and not merely the engineering and navigational aspects,"¹³ including the recreation purposes of "conservation of natural resources, the maintenance of natural beauty, and the preservation of historic sites."¹⁴ This approach was approved by the Supreme Court in Udall v. FPC, in which the question was whether the Commission had properly granted licenses for private hydroelectric development:

The grant of authority to the Commission to alienate federal water resources does not, of course, turn simply on whether the project will be beneficial to the licensee. Nor is the test solely whether the region will be able to use the additional power. The test is whether the project will be in the public interest. And that determination can be made only after an exploration of all issues relevant to the "public interest," including future power demand and supply, alternate sources of power, the public interest in preserving reaches of wild rivers and wilderness areas, the preservation of anadromous fish for commercial and recreational purposes, and the protection of wildlife.¹⁵

Scenic River Designation

In addition to judicially-construed environmental limitations on the FPC, the Wild and Scenic Rivers Act prohibits licensing "the construction of any dam, water conduit, reservoir, powerhouse, transmission line, or other project works under the Federal Power Act, as amended, on or directly affecting any river" included in the wild and scenic river system or being studied for inclusion in the system.¹⁶ Even though touted in its inception as an anti-dam-building measure,¹⁷ the Act's very designation process leaves the nagging doubt that potential scenic rivers will be sacrificed if enough political pressure from the power lobby can be brought to convince Congress that a particular river ought to be flooded rather than protected.

A river can be designated as part of the wild and scenic river system in four ways: (1) immediate inclusion [6 ELR 10079] in the original Wild and Scenic Rivers Act;¹⁸ (2) an independent act of Congress;¹⁹ (3) inclusion as a "study" river and subsequent designation by Congress;²⁰ or (4) approval by the Secretary of Interior of a governor's request to include a state-administered river in the national system.²¹ To date, 10 rivers have been designated under procedures (1) and (2), and 56 rivers have been accorded temporary protection as "study" rivers under procedure (3).²² North Carolina's request for scenic river designation of the New River represents the first instance in which the fourth procedure has been invoked to secure protection for a threatened river.

New River Designation Chronology

The North Carolina action came after nearly a year of congressional attempts to include the New River in the wild and scenic rivers program. A section of the 1974 Rivers and Harbors Authorization Act would have included the New as a study river, but the provision was deleted in conference.²³ In 1975, a bill directly designating the New as a study river passed the Senate,²⁴ and had a majority of the House behind it, but failed to win discharge from the Rules Committee,²⁵ and so expired at the end of the 93d Congress. It is worth noting, however, that it was the FPC's recognition of this strong congressional sentiment favoring New River designation which caused the agency to postpone the effective date of the Blue Ridge project's license until January 2, 1975.²⁶

With the project approval date looming on the horizon, December 1974 became a month of high drama for the New River. On the 12th, North Carolina Governor Holshouser submitted to the Interior Department a management plan for a 4.5 mile segment of the New that designated is as a scenic river under North Carolina law²⁷ to be included in the national system. On the 16th, the state petitioned the FPC for a stay of the license pending a decision as to its validity in the courts; the petition was denied on the 31st. Meanwhile, on the 18th, the state filed suit in federal district court for North Carolina to enjoin the project, but that court held that § 313(b) of the Federal Power Act²⁸ gave the courts of appeals exclusive jurisdiction over appeals from FPC orders.²⁹ Finally, on the 23d, North Carolina petitioned the U.S. Court of Appeals for the District of Columbia Circuit for a stay of the license on the grounds that the FPC had violated the National Environmental Policy Act and the Federal Water Pollution Control Act Amendments of 1972 in issuing it.³⁰ The stay was granted on January 31, 1975.

Having thus gained a little breathing space, North Carolina in May 1975 amended its scenic river designation to include 22 more miles of the New River.³¹ This was done in response to an Interior Department reply to the State's management plan submission in December 1974 that a 4.5 mile segment was too short for possible national designation. On March 12, 1976, Secretary Kleppe granted the state's request for designation of this expanded segment.

Crucial Pending Litigation

While significant as the first administrative designation under the Wild and Scenic Rivers Act, Secretary Kleppe's action serves to emphasize the importance of the pending D.C. Circuit case for the future of the New River. If the court rules that the license must be vacated and remanded for reconsideration because the FPC impact statement fails to satisfy NEPA or the project violates the FWPCA, then the Secretary's designation would invalidate any further FPC licensing of the Blue [6 ELR 10080] Ridge project affecting the New River in North Carolina. Of course, the court might uphold the validity of the license date and merely remand the impact statement for revision, a result that would in effect negate the Interior Secretary's decision.

The court has before it several crucial issues of interpretation. The petitioner, North Carolina, has alleged that the FPC's final impact statement fails to discuss in sufficient detail the alternatives to the Blue Ridge project. Specifically, the petitioner points to a letter from the Council on Environmental Quality criticizing the FPC for devoting only two sentences to discussion of the benefits of scenic river designation³² — particularly since the Environmental Protection Agency in comments on the draft impact statement specifically requested a detailed analysis of the scenic river alternative.³³ North Carolina also asserts that appalachian's real motivation for expanding the Blue Ridge project is to augment streamflow for water quality control, in violation of the FWPCA's later-enacted prohibition against such practices.³⁴

Wild and Scenic Rivers Act Issues

The practical effect of the court's decision, however, depends on its interpretation of the Wild and Scenic Rivers Act in light of the controversy's chronology. In order for the Act's dam prohibition provision to apply, the New River's designation must precede the effective date of the FPC license. But the Act does not specify at what point an administrative designation becomes effective, although it sets out a three-step process for such designations: state legislative designation and assumption of the expenses of river management, a finding by the Interior Secretary upon a gubernatorial application that the river meets the statutory criteria for inclusion, and Secretary's approval.³⁵ In view of this deliberate approval process, it could be argued that Congress wished to delay the effective date of an administrative designation until all three steps had been taken.

More plausible, however, in view of the anti-dam purpose of the Act and its clear concern for state participation, is that Congress intended to protect potentially-included rivers immediately upon designation by a state. Preserving the status quo upon a state designation request is analogous to protecting the river once it is included as a "study" river for later congressional designation, a protection clearly accorded by the statute.³⁶ Instructive in this regard, is Parker v. United States,³⁷ which prohibited logging in primitive areas contiguous to wilderness areas. In Parker, the Tenth Circuit held that permitting destruction of a potential wilderness area would foreclose the presidential and congressional choice of formally including the area within the national wilderness system. A water resources project, like the Blue Ridge facility, that was approved between the time of state designation and secretarial approval would moot the Secretary's consideration, and thus subvert congressional intent to guarantee an alternate strategy for scenic river designation that complements the normal congressional designation.

Another factor to be taken into account by the court is that the scenic river designation applies only to the portion of the Blue Ridge project that is physically inside North Carolina's borders. The upper reservoir of the project as proposed would have over half its surface area in Virginia but over half its shoreline in North Carolina.³⁸ If this reservoir were reduced to flood only Virginia land, then the FPC would have to notify the Interior Secretary of its intention to pursue the project as modified, after which the Secretary would have 60 days to determine whether the project, though not inundating the scenic river area in North Carolina, would "reasonably diminish the scenic, recreational, and fish and wildlife values present in the area on October 2, 1968."³⁹ Invoking this procedure would presumably delay even a smaller Blue Ridge project for several more months. It seems doubtful, however, that the energy and economic return from such a truncated project would justify its construction. Nor could the unstated pollution dilution benefits, if any, be obtained from a smaller project.

Depending on the Court of Appeals' decision, the New River scenic river designation may become either the first example of a potentially powerful application of the Wild and Scenic Rivers Act or a glorious might-have-been for natural rivers advocates. For many years, the Scenic Rivers Act was a law in search of a test case; now it seems to have found one.

1. New York Times, Jan. 9, 1976; Washington Post, Jan. 20, 1976, at A8-A9. The latter advertisement appeared one day after a Post story chronicling the New River-Blue Ridge controversy. See id., Jan. 19, 1976, at A1, Col. 1. A point-by-point response to the American Electric Power Company ad appears in Painter, Debunking Madison Avenue, 8 Environ. Action, No. 20 at 8 (Feb. 28, 1976). It is reported that the advertisements backfired by fostering a wave of pro-New River editorials and articles nationwide. Washington Post, Mar. 16, 1976, at C1, col. 1. The Blue Ridge advertising is not the first time AEP has launched a media campaign to further its policies. See Comment, Tall Stacks Versus Scrubbers: $3.5 Million Publicity Campaign Fails to Discredit Emission Reduction Technology, 5 ELR 10009 (Jan. 1975).

2. Newsweek, Feb. 16, 1976, at 18. It should be noted that Republican presidential aspirant Ronald Reagan also favored scenic river status for the New River. Washington Post, Mar. 12, 1976, at A1, col. 2.

3. A more detailed description of the New River area and its inhabitants appears in Laycock, New River, Old Problem, 77 Audubon 58 (Nov. 1975).

4. Hearings on H.R. 8773 Before a Subcomm. of the Senate Comm. on Appropriations, 94th Cong., 1st Sess. 2333-82 (1975).

5. Greene County Planning Bd. v. FPC, 455 F.2d 412, 2 ELR 20017 (2d Cir. 1972). See Comment, Delegation of the Drafting of Environmental Impact Statements: Greene County Planning Board v. Federal Power Commission, 2 ELR 10153 (June 1972).

6. Opinion No. 698 (FPC, June 14, 1974).

7. See text accompanying notes 28-30 infra.

8. North Carolina v. FPC. No. 74-1941 (D.C. Cir. Jan. 31, 1975).

9. Scenic Hudson Preservation Conference v. FPC, 354 F.2d 608, 1 ELR 20292 (2d Cir. 1965), 453 F.2d 463, 1 ELR 20496 (2d Cir. 1971), cert. denied, 407 U.S. 926, 2 ELR 20436 (1972).

10. Hudson River Fishermen's Ass'n v. FPC, 498 F.2d 827, 4 ELR 20446 (2d Cir. 1974). See Comment, More on Consolidated Edison's Storm King Project, 4 ELR 10093 (July 1974).

11. See note 5 supra.

12. 16 U.S.C. § 803(a). See Namekagon Hydro Co. v. FPC, 216 F.2d 509 (7th Cir. 1954).

13. Scenic Hudson Preservation Conference v. FPC, 354 F.2d 608, 1 ELR 20292. 20296 (2d Cir. 1965).

14. Id., 354 F.2d at 614, 1 ELR at 20294.

15. Udall v. FPC, 387 U.S. 428, 450, 1 ELR 20117, 20122 (1967).

16. 16 U.S.C. § 1278(a), (b), ELR 41425.

17. Tarlock & Tippy, The Wild and Scenic Rivers Act of 1968, 55 Cornell L. Rev. 707 (1970). The title of the Act, 16 U.S.C. § 1271, ELR 41421, states in part:

The Congress declares that the established national policy of dam and other construction at appropriate sections of the rivers of the United States needs to be complemented by a policy that would preserve other selected rivers or sections thereof in their free-flowing condition to protect the water quality of such rivers and to fulfill other vital national conservation purposes.

18. 16 U.S.C. § 1274(a)(1)-(8), ELR 41422. Eight rivers were included in the Act as originally enacted. P.L. 90-452, 82 Stat. 907.

19. 16 U.S.C. § 1273(a)(i), ELR 41421. Two rivers have been added to the national system by this method. See 16 U.S.C. § 1274(a)(9), (10), ELR 41422.

20. 16 U.S.C. § 1275(a), ELR 41422-23.

21. 16 U.S.C. § 1273(a)(ii), ELR 41421.

22. 16 U.S.C. § 1276(a), ELR 41423-24.

23. H.R. 10203, 93d Cong., 1st Sess. (1973).

24. S. 2439, 120 Cong. Rec. S9077 (May 28, 1974).

25. See 120 Cong. Rec. H-12261-68, 12290-91 (Dec. 18, 1974).

26. Opinion No. 698 at 55-57 (FPC, June 14, 1974). The North Carolina congressional delegation has adamantly pursued scenic river designation for the New River. See S. 158, H.R. 780, 781, 782, 783 (1975).

27. N.C. Gen. Stat. § 113A-35.1 (1975) states:

That segment of the New River which extends from the confluence of the north and south forks of the New River in Ashe County through Ashe and Alleghany Counties to the Virginia line shall be a scenic river are and shall be included in the North Carolina Natural and Scenic Rivers System.

28. 16 U.S.C. § 825/(b) provides:

Any party to a proceeding under this chapter aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the United States Court of Appeals … by filing in such court, within sixty days after the order of the Commission upon the application for rehearing, a written petition praying that the order of the Commission be modified or set aside in whole or in part…. Upon the filing of such petition such court shall be exclusive, to affirm, modify, or set aside such order in whole or in part….

29. North Carolina v. FPC, 393 F. Supp. 1116 (M.D.N.C. 1975). An appeal has been taken to the 4th Circuit Court of Appeals, which has held its decision in abeyance pending the outcome of North Carolina v. FPC in the D.C. Circuit, note 30 infra.

30. North Carolina v. FPC, No. 74-1941 (D.C. Cir., filed Dec. 23, 1974). The case has been argued and is awaiting decision. A petition for review of the FPC denial of rehearing was filed on October 7, 1974. See Opinion No. 698-A (FPC, Aug. 12, 1974).

31. N.C. Gen. Stat. § 113A-35.1, as amended by H.B. 789, eff. May 22, 1975, states in part:

That segment of the south fork of the New River extending from its confluence with Dog Creek in Ashe County downstream through Ashe and Alleghany Counties to its confluence with the north fork of the New River and the main fork of the New River in Ashe and Alleghany Counties downstream to the Virginia State line shall be a scenic river area and shall be included in the North Carolina Natural and Scenic Rivers System.

Should the Governor seek inclusion of the said river segment in the National System of Wild and Scenic Rivers by action of the Secretary of Interior, such inclusion shall be at no cost to the federal government, as prescribed in the National Wild and Scenic Rivers Act, and therefore shall be under the terms described in this section of the North Carolina Wild and Scenic Rivers Act and in the management plan developed pursuant thereto.

32. Federal Power Commission, Final Environmental Impact Statement, Modified Blue Ridge Project No. 2317-North Carolina/Virginia 73-74 (June 1973) [hereinafter referred to as FEIS], says:

No action on the application would result in preservation of the existing resources: the river, farmlands, forests, the hills, wildlife, species of stream-habitat fish, and other aquatic organisms, in a condition quite similar to that which exists. It would preserve the river for possible selection in the future as a wild or scenic river.

33. Id. at 330-31. But see Environmental Defense Fund v. Corps of Engineers, 470 F.2d 289, 297, 2 ELR 20740, 20743 (8th Cir. 1972), which dismissed a challenge to the Corps' Gillham Dam project which charged that possible scenic river designation of the Cossatot River was inadequately considered under NEPA:

Defendants have devoted thirty-seven pages of the 200-page impact statement to the discussion of alternatives, among them, total abandonment of the project. Particular attention is given to the suggestion that the Cossatot be preserved as a scenic river under the National Wild and Scenic Rivers Act, 16 U.S.C. § 1271 et seq. The economic benefits and environmental impact of each alternative are developed in great detail.

34. 33 U.S.C. § 1152(g)(6) prohibits the FPC from licensing any project intended for pollution dilution if the EPA Administrator disapproves of such purpose. The EPA Administrator made such a finding for the Blue Ridge project. See FEIS, supra note 32, at 335.

35. 16 U.S.C. § 1273(a)(ii), ELR 41421.

36. See note 20 supra and accompanying text.

37. 448 F.2d 793, 1 ELR 20489 (10th Cir. 1971).

38. FEIS, supra note 32, at 38.

39. 16 U.S.C. § 1278(a), ELR 41425.