328 F.2d 165 (9th Cir. 1964), 18427, Portland General Elec. Co. v. Federal Power Commission

Docket Nº:18427, 18432.
Citation:328 F.2d 165
Case Date:February 07, 1964
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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328 F.2d 165 (9th Cir. 1964)

PORTLAND GENERAL ELECTRIC COMPANY and Publishers' Paper Company, Petitioners,






Nos. 18427, 18432.

United States Court of Appeals, Ninth Circuit.

February 7, 1964

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[Copyrighted Material Omitted]

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Phillips, Coughlin, Buell & Phillips, Clarence D. Phillips, and H. H. Phillips, Portland, Or., and Willard W. Gatchell, Washington, D.C., for petitioners Portland Gen. Elec. Co. and Publishers Paper Co., in 18427.

Philip S. Ehrlich, Jr., San Francisco, Cal., for petitioner Crown Zellerbach Corp. in 18432.

John C. Mason, Deputy General Counsel, Richard A. Solomon, General Counsel, Howard E. Wahrenbrock, Sol., Thomas M. Debevoise, Asst. General Counsel, Joseph B. Hobbs, and Josephine H. Klein, Attorneys, Federal Power Commission, Washington, D.C., for respondent in 18427 and 18432.

Robert Y. Thornton, Atty. Gen., for the State of Oregon.

Roy C. Atchison, Asst. Atty. Gen., Portland, Or., for intervenor State of Oregon, By Its Fish and Game Commissions in 18427 and 18432.

Before MADDEN, Judge of the Court of Claims, and HAMLEY and JERTBERG, Circuit Judges.

HAMLEY, Circuit Judge.

These are proceedings to review an order of the Federal Power Commission granting to petitioners, jointly, a license for hydroelectric project works at Willamette Falls (Falls) in the Willamette River, Oregon. The petitioners, Portland General Electric Company (Portland), Publishers' Paper Company (Publishers'), and Crown Zellerbach Corporation (Crown), applied for such a license but are not satisfied with some of the provisions of the license tendered.

The license was granted pursuant to the Federal Power Act (Act) § 4(e), as amended, 49 Stat. 840, 16 U.S.C. § 797(e) (1958) and § 15, 41 Stat. 1072, 16 U.S.C. § 808 (1958). 1 This court has jurisdiction under section 313(b) of the Act, as added 49 Stat. 860, as amended, 16 U.S.C. § 825l(b) (1958).

Portland is a public utility and operates hydroelectric power facilities on its own lands in and adjacent to the Willamette River at the Falls. 2 In 1888, Portland leased to Crown certain other lands on the west side of the river, and on an island adjacent to the Falls. In 1908, Portland leased to Publishers' other lands on the east side of the river, and on an island adjacent to the Falls. Crown and

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Publishers' individually constructed and now operate on their respective leaseholds facilities for the development of hydroelectric power and industrial plants for the manufacture of paper and paper products.

The Willamette River is a stream over which Congress has jurisdiction under the Commerce Clause, within the meaning of section 4(e) of the Act. However, the Falls in its natural and present state, constitutes a complete barrier to navigation.

Power development at the Falls was apparently started in the first half of the nineteenth century. In 1873, Portland constructed a canal and locks on the west bank of the river for passage of general river traffic. In 1913, the Government purchased these navigation facilities. From time to time the War Department granted permits under section 10 of the River and Harbor Act of 1899, 30 Stat. 1151, 33 U.S.C. 403 (1958), for construction in the river adjacent to the Falls.

Shortly after passage of the Federal Water Power Act, 41 Stat. 1063, on June 10, 1920, Crown applied for a license thereunder covering proposed additional dam construction and a planned increase in the power installation at the company's plant. A disagreement arose between Crown and the Commission as to the terms and conditions of the license to be issued. Before this disagreement was resolved and without waiting for the issuance of a license, the proposed construction was undertaken, and was completed in 1921.

On June 13, 1923, Portland filed an application for a minor part license covering the portion of the dam and the power installation constructed in 1920 to 1921. With these two applications before it the Commission, on March 2, 1925, tendered a joint major license to Portland and Crown covering the project works already constructed and in existence and which were to be thereafter constructed or acquired at this site, the license to terminate on December 31, 1954. Portland and Crown declined to accept this license, objecting to the prelicense cost as determined by the Commission's accountants. The companies indicated that they desired a license for a minor part of the complete project works, rather than a major license covering all project works.

On August 1, 1929, upon the advice of the War Department that the structures built in 1920 to 1921 were illegal, the Commission rescinded its March 2, 1925 authorization for a license. Portland and Crown were, at the same time, given ninety days to show cause why their pending license application should not be denied. The Commission thereafter modified its position, however, and on November 27, 1929, voted to issue a minor part license covering the 1920 to 1921 construction. The companies indicated their acceptance and, on January 8, 1930 the minor part license for works designated as Project No. 38 was issued with a termination date of December 31, 1954. 1930 F.P.C. Annual Report, pages 62, 82 and 84. 3

On September 27, 1954, which was three months before expiration of the minor part license, Portland applied for a renewal of the minor part license. The Commission indicated, however, that it would not grant any further minor part license, and requested that petitioners apply for a major license covering all the project works. Portland, proceeding under sections 4(e) and 15 of the Act, filed such an application on July 5, 1957, and sometime later Crown and Publishers' joined as applicants.

In this application the history of the project was summarized, it being stated that, as of 1913, the capacity of Portland's

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major power installation at the project, station B, was 8,000 kilowatts. 4 It was further stated that a redevelopment of the station B power plant had been accomplished in 1952, thereby increasing the capacity of this installation to 15,400 kilowatts. No authorization, license or approval of the Commission had been sought or secured for this redevelopment.

The Commission's order now under review, granting a joint major license to the three companies, effective as of January 1, 1955, for a period of fifty years, was entered on June 21, 1960. 23 F.P.C. 831. The project works as proposed to be licensed were embraced within what was designated Project No. 2233.

In July, 1960, each of the companies petitioned for a rehearing, requesting that Articles 9 and 10 of the tendered license be deleted. 5 These articles, pertaining to navigation facilities, were inserted upon the purported authority of section 11 of the Act, 41 Stat. 1070, 16 U.S.C. § 804 (1958). 6 On August 18, 1960, the Commission entered an order granting a rehearing confined to conditions relating to navigation facilities.

Such a hearing was held before an examiner on September 15, 1961. 7 During this hearing the Commission staff took the position that if Articles 9 and 10 were found to be invalid, then the question of whether a license should be issued ought to be re-examined.

The examiner rendered his decision on August 8, 1962, ruling as a matter of law that section 11 of the Act does not apply to any project works constructed before the issuance of the license covering them. He accordingly decided that Articles 9 and 10 should be stricken from the license granted petitioners. The examiner also

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held that reconsideration to determine whether the license should issue (without Articles 9 and 10) is not justified. 28 F.P.C. 929.

On exceptions filed by the Commission staff, the Commission, on December 3, 1962, issued its opinion and order reversing the examiner. The Commission ruled that section 11 is applicable to project works constructed before the issuance of the license covering it, providing such construction was subsequent to the June 10, 1920 enactment. The Commission denied the request for modification of the tendered license by deletion of Articles 9 and 10 thereof. 28 F.P.C. 924.

Petitioners again petitioned for rehearing, once more requesting the Commission to delete Articles 9 and 10 from the tendered license. These applications were denied on January 21, 1963. 29 F.P.C. 126.

Portland and Publishers', acting jointly, and Crown, acting individually, filed timely petitions to review the order of June 21, 1960, and the subsequent orders as described above, granting the joint major license with Articles 9 and 10 included, and denying motions to delete these articles.

In these petitions for review, objection is also taken to Article 20 of the tendered license, relating to the construction, maintenance and operation of fish ladders, fish screens, or other fish protective devices. 8 Petitioners assert that inclusion of Articles 9 and 10 is not authorized by statute. They further contend that inclusion of Articles 9, 10 and 20 under the circumstances described above is not, and could not be, supported by requisite findings of fact, constitutes an abuse of discretion, and deprives petitioners of due process of law as guaranteed by the Fifth Amendment. 9

We will first consider problems involving the inclusion of Articles 9 and 10 in the tendered license.

At the outset the Commission suggests that, insofar as Article 9 of the tendered license is concerned, we may not have a justiciable controversy ripe for judicial review. Article 9, the Commission asserts, imposes no immediate...

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