President Signs Bill Protecting New River

Concluding, for the moment, a 14-year battle by North Carolina residents — joined by local politicians — and national environmental groups against the nation's largest utility, American Electric Power, President Ford on September 11 signed into law a bill that formally includes a 26.5 mile segment of the New River in North Carolina in the national wild and scenic rivers system.¹ The law effectively vacates a license granted by the Federal Power Commission (FPC) to an American Electric subsidiary, Appalachian Power Company, to build a 40,000-acre pumped storage project that would have flooded 70 miles of the New River, including part of the now-protected portion. Not willing to concede the outcome of the controversy, however, Appalachian has threatened to sue the government for $500 million compensation for the added cost it says is necessary to construct a comparable coal-fired electric plant.²

President Ford's signature confirmed the conditional designation of the New as a scenic river by Interior Secretary Thomas S. Kleppe on April 13.³ The effect of this administrative action, which was proposed on March 12, was placed in doubt by the D.C. Circuit's ruling on March 24 in North Carolina v. FPC⁴ upholding the license against a NEPA challenge by the state. Following the court's decision, the North Carolina congressional delegation introduced several bills to designate the New River under the Wild and Scenic Rivers Act.⁵ In August, Congress passed one of these bills, H.R. 13372, by overwhelming margins,⁶ having rejected amendments that would have left the FPC license undisturbed.⁷

Besides these amendments, proponents of the Blue Ridge pumped storage project raised several serious issues of law and policy in opposition to the New River bill. The legal objection to the bill centered around the possibility that invalidating the FPC license would amount to an unconstitutional taking of Appalachian's property without just compensation. Curiously, advocates of this argument never explicitly asserted that Appalachian's license is "property." At best, they were reduced to arguing that the license had "value,"⁸ which is hardly synonymous with property in the constitutional sense.

On its merits, the takings objection is of dubious weight. In the first place, a federal license is not property, but is a grant of governmental permission to do an act that otherwise is illegal.⁹ Therefore, it is settled that Congress may grant, deny, or revoke a license according to the public interest¹⁰ without incurring liability.¹¹ And even if a license had some attribute as a property right, a license to affect navigable waters, of which the New River is part, is governed by the federal government's navigation servitude under the Commerce Clause. Congress has supreme authority to regulate navigable waters,¹² including the power to order removal of privately-owned obstructions without compensation.¹³ In any event, under the terms of Secretary Kleppe's designation, North Carolina — not the federal government — will pay acquisition and administration costs for the New River area, so Appalachian would have recourse only against the state, not Congress, for any land it holds along the river.

The first policy argument against the bill was based on North Carolina's NEPA suit against the license, which is now pending before the Supreme Court.¹⁴ Opponents claimed that Congress was ill-advised to tamper with the litigation, since the Supreme Court was the proper forum for resolution of the controversy. They were thus turning around an argument routinely used against judicial review of environmental controversies: the courts are anti-democratic institutions that ought not to decide policy questions. More to the point, the New River controversy is uniquely suited to congressional resolutions. The argument is between two federal agencies, the FPC and the Interior Department, whose [6 ELR 10220] powers are delegated by Congress, and between two states, Virginia and North Carolina. Congress is the most appropriate forum to adjudicate political disputes of this nature. Moreover, a Supreme Court decision in North Carolina v. FPC would not terminate the dispute. If the license were overturned, a future FPC decision would undoubtedly be challenged again. If the FPC were upheld, future congressional reversal would still be possible, since the court's decision would rest only on the statutory grounds of the FPC's compliance with NEPA.

The other major policy ground advanced by New River bill opponents was that congressional revocation of an FPC license was unprecedented. A careful reading of the new law, however, shows that Appalachian's license is not revoked or cancelled, but only that a project constructed pursuant to the license cannot "invade, inundate, or otherwise adversely affect" the river segment in North Carolina. To be sure, this language effectively voids the project, since Appalachian probably cannot economically justify a smaller Blue Ridge project using only the Virginia portion of the New River.¹⁵

Several analogous laws show that Congress has in the past come close to revoking an FPC license and has in fact withdrawn FPC jurisdiction over navigable waters. The Hell's Canyon National Recreation Act¹⁶ terminated FPC hearings into licensing the High Mountain Sheep Dam Project on the Snake River by designating 68 miles of the river under the Scenic Rivers Act, despite nearly 20 years of effort by the Pacific Northwest Power Company to obtain the license. Similarly, Congress has curtailed FPC jurisdiction over national parks¹⁷ and individual rivers.¹⁸ Indeed, the Wild and Scenic Rivers Act itself precludes the FPC from licensing any project that will affect a part of the scenic rivers system.¹⁹

Even if no direct precedents exist for Congress' action, that fact is no reason for blocking the New River bill. Conspicuously absent from opponents' arguments was the assertion that Congress lacked authority to revoke an FPC license. Several times opponents pointed to § 28 of the Federal Power Act,²⁰ which protects licenses from subsequent modifications. This provision has been construed, however, to protect licenses only from ex post facto laws affecting licensing requirements rather than from the effects of general legislation.²¹ Furthermore, as a general matter, Congress cannot limit the legislative authority of a subsequent Congress without amending the Constitution.²²

The emotional impact of 3000 people to be displaced from their ancestral homes by the project²⁵ contributed as much to the New River bill's passage as did sound legal and policy arguments. If Appalachian carries out its threat to sue for compensation, the controversy will drag on for many more years. For the present, at least, Congress and the President displayed remarkable mettle in deciding that the substantial reasons in favor outweighed the numerous arguments against preserving North Carolina's New River.

1. P.L. 94-407, 90 Stat. 1238. See H.R. Rep. No. 94-1264, S. Rep. No. 94-952, 94th Cong., 2d Sess. (1976). The factual and legal background of the New River controversy are discussed in Comment, Kleppe Conditionally Declares New River a Scenic River, 6 ELR 10077 (Apr. 1976).

2. Washington Post, Aug. 31, 1976, at A8, col. 1.

3. 41 Fed. Reg. 16491 (Apr. 19, 1976). See Comment, supra note 1.

4. 6 ELR 20336 (D.C. Cir. Mar. 24, 1976), appeal docketed, No. 75-1657, 44 U.S.L.W. 3671 (May 14, 1976).

5. 16 U.S.C. §§ 1271 et seq., ELR 41421.

6. The House vote was 311-73. 122 Cong. Rec. H8607 (daily ed. Aug. 10, 1976). The Senate vote was 69-16. Id. S14968 (daily ed. Aug. 30, 1976).

7. Id. S14960-65 (daily ed. Aug. 30, 1976).

8. Id. H8508 (daily ed. Aug. 9, 1976) (remarks of Rep. Butler of Virginia).

9. Alabama Power Co. v. FPC, 128 F.2d 280 (D.C. Cir. 1942).

10. United States v. Appalachian Electric Power Co., 311 U.S. 377 (1940).

11. United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53 (1913).

12. Monongahela Navigation Co. v. United States, 148 U.S. 312 (1893).

13. Willnik v. United States, 240 U.S. 572 (1916) (wharf); Chandler-Dunbar, supra note 11 (power plant); Union Bridge Co. v. United States, 204 U.S. 364 (1907) (bridge).

14. See note 4 supra.

15. See Comment, supra note 1, at 10080.

16. 16 U.S.C. §§ 460gg et seq. (P.L. 94-199, Dec. 31, 1975). The hearings were reopened after the initial project license was overturned by the Supreme Court. Udall v. FPC, 387 U.S. 428, 1 ELR 20117 (1967). See H.R. Rep. No. 94-607, S. Rep. No. 94-153, 94th Cong., 1st Sess. (1975). The Hell's Canyon Act also deauthorized the previously-approved Corps of Engineers Asotin Dam.

17. 16 U.S.C. § 797a, 41 Stat. 1353 (Act of March 3, 1921).

18. 43 U.S.C. § 1555 (Colorado River between Hoover and Glen Canyon Dams); 16 U.S.C. § 460m-11 (Buffalo National River); 16 U.S.C. §§ 460m et seq. (Ozark National Scenic Riverways).

19. § 7(a), 16 U.S.C. § 1278(a) (1970), ELR 41421.

20. 16 U.S.C. § 822 (1970).

21. Scenic Hudson Preservation Conference v. Callaway, 370 F. Supp. 162 (S.D.N.Y. 1973), aff'd 499 F.2d 127, 4 ELR 20530 (2d Cir. 1974).

22. Reichelderfer v. Quinn, 287 U.S. 315 (1932).

23. See Comment, Energy Conservation Through Rate Structure Reform: Electricity Rates Based on Marginal Costs, 6 ELR 10221 (Oct. 1976).

24. 122 Cong. Rec. H8509-10 (daily ed. Aug. 9, 1976).

25. Rep. Taylor (D.-N.C.) described the effect of the Blue Ridge project this way:

This pumped-storage project would not only consume 4 units of electricity for every 3 produced but would flood 40,000 acres, displace 3,000 citizens, submerge 936 homes, 600 farms, 10 industrial buildings, 5 U.S. post offices, 15 churches, and 12 cemetries.

122 Cong. Rec. 8508 (daily ed. Aug. 9, 1976).