California v. Federal Energy Regulatory Commission

Citation110 S.Ct. 2024,495 U.S. 490,109 L.Ed.2d 474
Decision Date21 May 1990
Docket NumberNo. 89-333,89-333
PartiesCALIFORNIA, Petitioner v. FEDERAL ENERGY REGULATORY COMMISSION, et al
CourtUnited States Supreme Court
Syllabus

Pursuant to the Federal Power Act (FPA), respondent Federal Energy Regulatory Commission (FERC) issued a license authorizing the operation in California of a hydroelectric project, which draws, and releases a mile later, water from Rock Creek to drive its generators. After considering the project's economic feasibility and environmental consequences, FERC set an interim "minimum flow rate" of water that must remain in the bypassed section of the stream and thus remains unavailable to drive the generators. The State Water Resources Control Board (WRCB) issued a state water permit that conformed to FERC's interim minimum requirements, but reserved the right to set different permanent ones. When WRCB later considered a draft order requiring permanent minimum flow rates well in excess of the FERC rates, the licensee petitioned FERC for a declaration that FERC possessed exclusive jurisdiction to determine the project's minimum flow rates. FERC ordered the licensee to comply with the federal permit's rates, concluding that the task of setting such rates rested within its exclusive jurisdiction. It reasoned that setting the rates was integral to its planning and licensing process under the FPA, and that giving effect to competing state requirements would interfere with its balancing of competing considerations in licensing and would vest in States a veto power over federal projects inconsistent with the FPA, as interpreted in First Iowa Hydro-Electric Cooperative v. FPC, 328 U.S. 152, 66 S.Ct. 906, 90 L.Ed. 1143. WRCB adopted the higher flow requirements and intervened seeking a rehearing of FERC's order. FERC denied the request, concluded that the State sought to impose conflicting license requirements, and reaffirmed its conclusion that it had exclusive jurisdiction to determine the rates. The Court of Appeals affirmed, concluding that FPA § 27—which saves from supersedure state "laws . . . relating to the control, appropriation, use, or distribution of water used in irrigation or for municipal or other uses, or any vested right acquired therein" as construed in First Iowa, did not preserve the State's right to regulate minimum flow rates, and that the FPA pre-empted WRCB's minimum flow rate requirements.

Held: The California requirements for minimum stream flows cannot be given effect and allowed to supplement the federal flow requirements. Pp. 496-507.

(a) Were the meaning of § 27 and the pre-emptive effect of the FPA matters of first impression, the State's argument that the stream flow requirement might relate to a use encompassed by § 27 the generation of power or protection of fish—could be said to present a close question. However, First Iowa has previously construed § 27, holding that it is limited to laws relating to the control, appropriation, use, or distribution of water in irrigation or for municipal or other uses of the same nature, and has primary, if not exclusive, reference to such proprietary rights. Such rights are not implicated in the instant case. California's request that First Iowa § interpretation be repudiated misconceives the deference the Court must accord to longstanding and well-entrenched decisions, especially those interpreting statutes that underlie complex regulatory regimes. There has been no sufficient intervening change in the law, or indication that First Iowa has proved unworkable or has fostered confusion and inconsistency in the law, that warrants a departure from established precedent. First Iowa § limited reading of § 27 has been endorsed, see FPC v. Oregon, 349 U.S. 435, 75 S.Ct. 832, 99 L.Ed. 1215, and the decision has been employed with approval in a range of cases. In addition, Congress has amended the FPA to elaborate and reaffirm First Iowa § understanding that the FPA establishes a broad and paramount federal regulatory role. Pp. 496-500.

(b) First Iowa § narrow reading of § 27 was not dictum, but was necessary for and integral to the Court's conclusion that FPA § 9(b)—which governs submission to the federal licensing agency of evidence of compliance with state law—did not require licensees to obtain a state permit or to demonstrate compliance with the state law prerequisites to obtaining such a permit, but rather merely authorized the federal agency to require evidence of actions consistent with the federal permit. A broad interpretation of § 27 would have "saved" the state licensing requirements and would have created concurrent jurisdiction of state and federal authorities over the same subject matter. Pp. 500-503.

(c) Although California v. United States, 438 U.S. 645, 98 S.Ct. 2985, 57 L.Ed.2d 1018, construed § 8 of the Reclamation Act of 1902—which is similar to, and served as a model for, FPA § 27 in a manner more generous to the States' regulatory powers than was First Iowa § reading of § 27, it bears quite indirectly, at best, upon the FPA's interpretation. In interpreting the Reclamation Act, the Court did not advert to or purport to interpret the FPA, and held simply that § 8 requires the Secretary of the Interior to comply with state laws governing the use of water employed in federal reclamation projects. The purpose, structure, and legislative history of the two statutes show that the FPA envisioned a considerably broader and more active federal oversight role in hydropower development than did the Reclamation Act. Even if the two saving clauses were properly viewed in isolation from the remainder of their respective Acts, § 8 explicitly directs that the Secretary "shall proceed in conformity with such [state] laws," language which has no counterpart in § 27 and which was crucial to the Court's interpretation of § 8. Pp. 503-505.

(d) Section 27's legislative history does not require abandonment of First Iowa § interpretation, because a quite natural reading of the statutory language has failed to displace an intervening decision providing a contrary interpretation; because First Iowa expressly considered the history and found it to support the Court's interpretation of the FPA and § 27; because it is only tangentially related to the issue at hand; and because strong interests support adherence to First Iowa. Pp. 505-596.

(e) The FPA and the federal license conditions established pursuant to the Act pre-empt the California stream flow requirements. The State's requirements conflict with FERC's licensing authority and with the balance struck by the federal license condition. Pp. 506-507.

877 F.2d 743 (CA9 1989), affirmed.

O'CONNOR, J., delivered the opinion for a unanimous Court.

Roderick E. Walston, San Francisco, Cal., for petitioner.

Stephen L. Nightingale, Washington, D.C., for respondents.

Justice O'CONNOR delivered the opinion of the Court.

This case concerns overlapping federal and state regulation of a hydroelectric project located near a California stream. California seeks to ensure that the project's operators maintain water flowing in the stream sufficient, in the State's judgment, to protect the stream's fish. The Federal Government claims the exclusive authority to set the minimum stream flows that the federally licensed powerplant must maintain. Each side argues that its position is consistent with the Federal Power Act, ch. 285, 41 Stat. 1063, as amended, 16 U.S.C. § 791a et seq. (1982 ed.), and, in particular, with § 27 of that Act. We granted certiorari to resolve these competing claims.

I

The Rock Creek hydroelectric project lies near the confluence of the South Fork American River and one of the river's tributaries, Rock Creek. Rock Creek runs through federally managed land located within California. The project draws water from Rock Creek to drive its generators and then releases the water near the confluence of the stream and river, slightly less than one mile from where it is drawn. The state and federal requirements at issue govern the "minimum flow rate" of water that must remain in the bypassed section of the stream and that thus remains unavailable to drive the generators.

In 1983, pursuant to the Federal Power Act (FPA or Act), the Federal Energy Regulatory Commission (FERC) issued a license authorizing the operation of the Rock Creek project. Keating, 23 FERC ¶ 62,137. Section 4(e) of the FPA empowers FERC to issue licenses for projects "necessary or convenient . . . for the development, transmission, and utilization of power across, along, from, or in any of the streams . . . over which Congress has jurisdiction." 16 U.S.C. § 797(e) (1982 ed.). Section 10(a) of the Act also authorizes FERC to issue licenses subject to the conditions that FERC deems best suited for power development and other public uses of the waters. 16 U.S.C. § 803(a) (1982 ed.). Congress' subsequent amendments to those provisions expressly direct that FERC consider a project's effect on fish and wildlife as well as "power and development purposes." Electric Consumers Protection Act of 1986, Pub.L. 99-495, 100 Stat. 1243, 16 U.S.C. §§ 797(e), 803(a)(1). FERC issued the 1983 license and set minimum flow rates after considering the project's economic feasibility and environmental consequences. In part to protect trout in the stream, the license required that the project maintain interim minimum flow rates of 11 cubic feet per second (cfs) during May through September and 15 cfs during the remainder of the year. 23 FERC ¶ 62,137, at 63,204. The license also required the licensee to submit studies recommending a permanent minimum flow rate, after consulting with federal and state fish and wildlife protection agencies. Ibid. In 1985, the licensee submitted a report recommending that FERC adopt the interim flow rates as permanent rates. The California Department of Fish and Game (CDFG)...

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