No ‘coordinated scheme’ behind California’s hydroelectric project reviews

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  • Agency found California engaged in ‘coordinated scheme’ to extend Clean Water Act deadline
  • 9th Circuit says California simply allowed license applicants to follow a common practice

(Reuters) - States do not lose their right to impose conditions on federally licensed hydroelectric projects by allowing the applicants to withdraw incomplete proposals shortly before the state’s window to act on them expires, a federal appeals court held.

The 9th U.S. Circuit Court of Appeals overturned three orders of the Federal Energy Regulatory Commission, which had found California had waived its one-year right to impose conditions – known as a Section 401 certificate – by engaging in a “coordinated scheme” with applicants seeking to replace their expired licenses for hydroelectric power projects along the Yuba, Bear and Merced rivers.

Even assuming that a state could waive its Section 401 rights by “coordination” rather than a formal agreement, the 9th Circuit said there was no evidence of coordination in this case.

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Withdrawal-and-resubmission is a common industry practice, the court said; and unlike FERC, the panel found nothing nefarious about California’s acceptance of the practice, or regulations or emails that mentioned it.

“Because the default term of a federal license is forty years, a state’s waiver could result in a hydroelectric project’s being noncompliant with a state’s standards for decades,” Circuit Judge Michelle Friedland wrote for the three-judge panel. “Considering those dramatic consequences, FERC’s coordination findings cannot rest on such thin evidence as a simple courtesy email reminding an applicant of an impending deadline.”

Jackie Carpenter, a spokeswoman for the California State Water Resources Control Board, called the decision “an important vindication of the state's role under the Clean Water Act in protecting state water resources.”

At the time FERC decided these cases, state law barred the board from acting on an incomplete application. While that law changed in 2020, the 9th Circuit’s decision will affect many projects that were in the licensing pipeline as well as “other states' certifications around the country,” Carpenter said.

FERC spokeswoman Mary Driscoll said the agency does not comment on legal matters. Attorneys for the license applicants – the Nevada Irrigation District, Yuba County Water Agency, and Merced Irrigation District – had no immediate comment.

FERC’s orders were also challenged by the South Yuba River Citizens League, California Sportfishing Protection Alliance, Friends of the River, the Sierra Club and two of its chapters. The groups hailed the opinion in a joint statement, while Andrew Hawley of the Western Environmental Law Center said it ends “FERC’s string of illogical rulings errantly waiving states’ rights to enforce their environmental laws under the Clean Water Act.”

The lead case is California State Water Resources Control Board v. Federal Energy Regulatory Commission, 9th U.S. Circuit Court of Appeals No. 20-72432

For California State Water Resources Control Board: Jennifer Kalnins Temple, Eric Katz, and Adam Levitan, Office of the Attorney General of California

For South Yuba River Citizens League, California Sportfishing Protection Alliance, Friends of the River, and Sierra Club and its Mother Lode and Tehipite Chapters: Julie Gantenbein of the Water and Power Law Group and Andrew Hawley of the Western Environmental Law Center

For the Federal Energy Regulatory Commission: Jared Fish and Robert Solomon of FERC

For respondent-intervenor water agencies: Michael Swiger of Van Ness Feldman (for Nevada Irrigation District and Yuba County Water Agency); Thomas Berliner of Duane Morris and Phillip McMurray of Merced Irrigation District

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