State ex rel. New York State Dept. of Environmental Conservation v. F.E.R.C., 303

• Citation: 954 F.2d 56
• Decision Date: 13 January 1992
• Docket Number: No. 303,D,303
• Parties: STATE of New York ex rel. NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION and Niagara Mohawk Power Corporation, Respondents. ocket 91-4102.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 56

954 F.2d 56

131 P.U.R.4th 356

STATE of New York ex rel. NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION and Niagara Mohawk Power Corporation, Respondents.

No. 303, Docket 91-4102.

United States Court of Appeals Second Circuit.

Argued Oct. 7, 1991.

Decided Jan. 13, 1992.

Maureen F. Leary, Asst. Atty. Gen., Albany, N.Y. (Robert Abrams, Atty. Gen., Peter H. Schiff, Deputy Sol. Gen., Douglas H. Ward, Asst. Atty. Gen., of counsel), for petitioner.

Joseph S. Davies, Deputy Sol., Washington, D.C. (William Sherman, Gen. Counsel, Jerome M. Feit, Sol., Thomas J. Lane, Atty., of counsel), for respondent F.E.R.C.

Brian K. Billinson, Syracuse, N.Y., for respondent Niagara Mohawk Power Corporation.

John D. Echeverria, Washington, D.C., submitted a brief for American Whitewater Affiliation, amicus curiae.

Before OAKES, VAN GRAAFEILAND and NEWMAN, Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

Enactment of the Federal Power Act in 1920 was the end result of a bitter fight in Congress between private power interests and public conservationists. See Gifford Pinchot, The Long Struggle For Effective Federal Water Power Legislation, 14 Geo.Wash.L.Rev. 9 (1945); see also First Iowa Hydro-Electric Coop. v. FPC, 328 U.S. 152, 180 & n. 23, 66 S.Ct. 906, 919 & n. 23, 90 L.Ed. 1143 (1946). Since that time, federal jurisdiction under the Act has been expanded substantially, due in large measure to broadening of the concept of "navigable waters" as that term is used in the Act. William A. Campbell, Note, Expanding Jurisdiction of the Federal Power Commission and the Problem of Federal-State Conflict, 18 Vand.L.Rev. 1847, 1850 (1965); Richard M. Frank, Forever Free: Navigability, Inland Waterways, and the Expanding Public Interest, 16 U.C.Davis L.Rev. 579, 591-604 (1983). The instant case involves proposed federal licensing of two Niagara Mohawk Power Corporation powerhouses, the Bennetts Bridge Powerhouse and the Lighthouse Hill Powerhouse, both located on the Salmon River in New York State. In holding that no licenses were required for these two projects, 53 F.E.R.C. p 61,329, the Federal Energy Regulatory Commission (FERC) inexplicably departed from the above-described pathway of progress, a pathway forged in the public interest. For the reasons that follow, we set the order aside. ¹

The Salmon River is approximately 50 miles long. It originates in Lewis County and flows in a generally westerly direction through Jefferson and Oswego Counties emptying into Lake Ontario at Port Ontario. A 110-foot waterfall is located approximately 20 miles from the mouth of the river. The Salmon River Reservoir Dam, which serves the Bennetts Bridge Powerhouse, is located approximately one mile above the falls, and a reservoir approximately six miles long is impounded above that dam. The Bennetts Bridge Powerhouse is located approximately 3.5 miles below the dam. The Lighthouse Hill Dam, which impounds a smaller reservoir, and the Lighthouse Hill Powerhouse are located about one mile below the Bennetts Bridge Powerhouse.

In 1972 the Power Commission's Section of Project Analysis was asked to make a Navigation Report of the Salmon River with specific reference to Niagara Mohawk's Power Projects. Researching historical records, a procedure that is legally justified in circumstances such as this, Connecticut Light & Power Co. v. FPC, 557 F.2d 349, 356 (2d Cir.1977), the researchers learned that early settlers had used the Salmon River "extensively for transportation" and that before the opening of passable roads, the river was the "scene of considerable commercial activity". Prominent in this commercial activity during a large part of the nineteenth century was the floating of logs and lumber cut from the surrounding forests. The Section members learned, for example, that a well-known Oswego resident named D.C. Littlejohn erected a sawmill on the Mad River, a tributary of the Salmon about 16 miles above the falls, where he cut large quantities of timber that were floated down into the Salmon River. They also learned that in 1884 the New York Legislature authorized the appropriation of $6,000 "for the purpose of removing obstructions from and otherwise improving the Salmon river and the main branch of the same, known as the Mad river, public highways for the passage of lumber, logs and other timber, in the counties of Oswego and Jefferson." ² Chap. 542 Laws of 1884. The money was to be used for "improving the channel, docking and protecting the banks of said rivers." Id. In its written report dated October 2, 1972, the Project Analysis Section concluded: "The Salmon River can be considered a navigable stream at the Lighthouse Hill and Bennetts Bridge Projects."

Influenced by the Project Analysis Section's report and the New York Legislature's description of the Salmon River as a public highway for the passage of logs and lumber, the Commission's Director of the Office of Hydropower Licensing issued orders on April 22, 1987, directing Niagara Mohawk to obtain federal licenses for its Salmon River hydropower projects.

On December 9, 1988, FERC (the successor to the Federal Power Commission (FPC), 42 U.S.C. §§ 7171(a), 7172(a)), denied Niagara Mohawk's appeal from the Hydropower Licensing Director's order. The Commission found "available references to all the relevant sections [of the river], both above the falls and from the falls to Lake Ontario, being boatable, to rafting on the section from the falls to Lake Ontario, and to the use of bateaux with respect to the Richland area [between Niagara Mohawk's project and the lake]." The Commission took cognizance of a reference in the 1824 Gazetteer of the State of New York that "[t]here is a good harbor at the mouth of Salmon River, for schooners of 50 or 60 tons." The same Gazetteer also stated that "10 to 1,200 barrels, of salmon alone," were taken from the river each year and found a "ready market at 8 to 10 dollars a barrel." John C. Churchill, another historian quoted by the Commission, stated:

Few towns in this country have afforded lumbermen more profitable employment than has Orwell. Its dense forests long contributed millions of logs to the numerous saw mills within its borders as well as to many others operated nearer the lake [Ontario]. At one time the manufacture of lumber and kindred products formed the chief industry of the town, and as late as 1860 sixteen saw mill [sic], as many shingle mills ... were in active operation. The valuable mill sites were early sought and utilized, and the wealth of distant markets flowed into the coffers of the proprietors.

The Commission found "available evidence of significant and substantial use of all the relevant sections, both above and below the falls, for logging." The Commission discussed historical references to the effect that efforts had been made to improve the Salmon River by removing obstructions so that logs could be more easily floated down its waters, notably in 1871, when the Salmon River Improvement Company was incorporated with a capital of $50,000, and that "thenceforth the business of floating logs assumed greater proportions than at any previous date."

The Commission found that the Salmon River "in the reaches from the falls down to Lake Ontario, and even in the reaches above the falls, was used and was suitable for use as a highway for commerce" and that "even if the reach above the falls were not navigable waters, both projects would require licensing because of the location of the powerhouse of the Lighthouse Hill Project on navigable waters." The Commission stated that, while the evidence may not have been superabundant, it was substantial. It concluded:

[T]he Salmon River from its mouth at Lake Ontario, an acknowledged avenue of interstate and foreign commerce, up to and beyond the Salmon River Falls constitutes navigable waters under the FPA. Niagara Mohawk's projects at issue in this proceeding are within the reaches found navigable.

All five members of the Commission concurred in this ruling.

Niagara Mohawk petitioned the Commission for rehearing upon the following three grounds.

1. The evidence cited is not substantial and, in no event, permits an inference to be drawn that goods were ever transported or portaged around the 110-foot waterfalls.

2. Contrary to the assumption in the order on appeal, there is no evidence that the Salmon River has been or could with reasonable improvements be used as a continuous avenue for the transportation of goods in interstate commerce.

3. The order on appeal erred in concluding that evidence of mere boating and rafting in portions of the River during times of high water supports a finding of navigability.

Despite the absence of merit in these grounds, a three-member panel of the Commission, only one member of which was on the original panel, held that the original panel erred, stating that "[t]here is no evidence that logs were floated over the Falls or to the mouth of the river, or that products made from logs were transported by water to or past the mouth of the river."

Thereafter the New York State Department of Environmental Conservation petitioned pursuant to 18 C.F.R. § 385.214 to intervene as a party and for rehearing and reconsideration of the Commission's second ruling pursuant to 18 C.F.R. § 385.713. Another petition for intervention and rehearing was filed by the American Whitewater Affiliation (A.W.A.), a national non-profit organization whose charter purpose was the enjoyment and preservation of American waterways. The Commission at first denied the requests for intervention and rehearing. However, it subsequently granted the intervention petitions but continued to deny the rehearing requests. We address first Niagara Mohawk's asserted requirement that the Salmon River constitute a "continuous avenue" for the transportation of goods and concomitantly that there must be evidence, direct or...