Brady v. Federal Energy Regulatory Com'n, 04-1058.

• Decision Date: 08 July 2005
• Docket Number: No. 04-1058.,04-1058.
• Citation: 416 F.3d 1
• Parties: Mike BRADY and Cheryl Creekmore, Petitioners v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. The Grand River Dam Authority, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1

416 F.3d 1

Mike BRADY and Cheryl Creekmore, Petitioners v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent The Grand River Dam Authority, Intervenor.

No. 04-1058.

United States Court of Appeals, District of Columbia Circuit.

Argued March 4, 2005.

Decided July 8, 2005.

On Petition for Review of Orders of the Federal Energy Regulatory Commission.

Paul M. Flynn argued the cause and filed the briefs for petitioners.

Judith A. Albert, Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With her on the brief were Cynthia A. Marlette, General Counsel, and Dennis Lane, Solicitor.

John P. Coyle and Gregg D. Ottinger were on the brief for intervenor.

Before: RANDOLPH and ROBERTS, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge ROBERTS.

Concurring opinion filed by Senior Circuit Judge WILLIAMS.

ROBERTS, Circuit Judge.

An Oklahoma agency licensed by the Federal Energy Regulatory Commission to operate a hydroelectric project applied for a license amendment to permit the expansion of a commercial marina located on project property. FERC approved the amendment over the opposition of petitioners — two lakefront homeowners — who argued that the expansion was not in the public interest. In particular, they maintained that the cove where the marina is located had exceeded its "carrying capacity," precluding further growth. They also contended that FERC could not approve the expansion in the absence of comprehensive guidelines for shoreline development on the project, and that FERC erred in approving the state agency's waiver of one of its regulations.

Our review of FERC's decision is limited, and under that limited review we conclude that FERC considered the impact of the proposal on a variety of non-development objectives, as required by the applicable statute, and that FERC's treatment of the carrying capacity issue was not arbitrary or capricious or lacking in substantial evidence. We also find that FERC adequately explained its decision to proceed in the absence of comprehensive guidelines for shoreline development, and its determination to approve the departure from the state agency's regulations. We deny the petition.

I.

The Pensacola dam in northeast Oklahoma impounds the waters of the Grand or Neosho River, creating the Grand Lake O' the Cherokees. The dam and resulting lake are regulated by the Grand River Dam Authority (GRDA), a state agency, pursuant to a license issued by FERC. See Grand River Dam Authority, Order Issuing New License, 59 FERC ¶ 62,073, 1992 WL 510727 (1992).

FERC's licensing authority for such hydroelectric projects is governed by Section 4(e) of the Federal Power Act, 16 U.S.C. § 797(e). That section provides, in pertinent part:

In deciding whether to issue any license under this subchapter for any project, the Commission, in addition to the power and development purposes for which licenses are issued, shall give equal consideration to the purposes of energy conservation, the protection, mitigation of damage to, and enhancement of, fish and wildlife (including related spawning grounds and habitat), the protection of recreational opportunities, and the preservation of other aspects of environmental quality.

Further guidance is found in Section 10(a)(1), 16 U.S.C. § 803(a)(1), which conditions all licenses on a requirement that

the project adopted ... shall be such as in the judgment of the Commission will be best adapted to a comprehensive plan for improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, for the improvement and utilization of water-power development, for the adequate protection, mitigation, and enhancement of fish and wildlife (including related spawning grounds and habitat), and for other beneficial public uses, including irrigation, flood control, water supply, and recreational and other purposes referred to in section 797(e) of this title.

GRDA's license calls on that agency to develop a long-term recreation management plan for Grand Lake, including an estimate of the lake's "carrying capacity" — defined as "the level of use ... that would begin to detract from a safe or enjoyable recreation experience" — and "measures for managing lake use if it exceeds the carrying capacity." Order Issuing New License, 59 FERC at 63,230. Regarding the agency's oversight of boat docks, the license permits GRDA to authorize the construction of "noncommercial" structures "that can accommodate no more than 10 watercraft at a time." Id. at 63,231. Larger undertakings require the agency to apply to FERC for a license amendment.

GRDA filed a recreation plan in 1997. Appended to the plan was a study of carrying capacity conducted by faculty and students at Oklahoma State University. See Pensacola Recreation Management Plan, App. F. That study, the plan noted, did not "defin[e] a `magic number' that represented the statistical carrying capacity of Grand Lake." Rec. Plan at 15-16. The plan also included a separate memorandum by the study's principal author, Professor Lowell Caneday, which did set forth a specific capacity figure for the lake: 0.13 boats per acre. Id., App. I at 3. Based on aerial photographs, estimated boating densities for the lake as a whole were below Dr. Caneday's figure in 1996, but above it in 1997. See id., App. G & H.

GRDA explained in the recreation plan that, in light of the carrying capacity information, it had adopted the goal of making certain changes in the management of Grand Lake. Rec. Plan at 16. Notably, these changes did not include a halt to shoreline development, although a management proposal featured in the OSU study called for such a step. Compare id., App. J (GRDA management strategy) ("Grand Lake will provide... (F) Shoreline development following best management practices and existing regulations") with id., App. F at 83 (OSU proposal) ("Grand Lake ... will provide ... (f) restriction of further shoreline development").

The recreation plan also addressed the license requirement that it include recommended measures for managing lake use if carrying capacity were exceeded:

If the use of the project exceeded its documented carrying capacity, GRDA could implement seasonal rules targeted at the activity. More seasonal patrolmen could be hired to enforce existing and future restrictions. Special events could be limited to certain days of the week or the months they would be allowed.

Id. at 17. Finally, the plan featured proposed rules and regulations governing shore and water use — including a rule that docks may not extend into the water the longer of 125 feet or one-third of the distance to the opposite shore. Id., App. B at 6.

FERC approved the recreation plan. See Grand River Dam Authority, Order Modifying and Approving Long-Term Recreation Plan, 84 FERC ¶ 62,144, 1998 WL 481851 (1998). In particular, the Commission endorsed GRDA's capacity management approach, including its decision not to implement the strategy outlined in the OSU study that would be more restrictive with respect to development. See id. at 64,229 ("While [the OSU strategy] includes greater restrictions, we believe the licensee's proposal is reasonable at this time given the project's slower than expected growth in recreation uses and the currently underutilized recreation facilities"). Anticipating that the lake would experience increased shoreline development in the future, however, and noting GRDA's express willingness to do so, FERC stated that GRDA "should continue its efforts to work with project stakeholders on the development of a comprehensive [shoreline] management plan [CSMP] for the project." Id. at 64,231. FERC also directed the agency to file periodic reports monitoring recreation use and shoreline development, as well as progress updates on the development of a CSMP. Id. at 64,232.

Duck Creek cove is an arm of Grand Lake described as "one of the lake's most frequently used boating areas." Final Environmental Assessment at 27. In 2001, the owner of Arrowhead North Marina, a commercial facility located on Duck Creek cove, asked GRDA for permission to expand and reconfigure the facility. The expansion sought to add 64 boat slips, many for large boats. GRDA endorsed the plan, and, as required by its license, filed an application with FERC for a license amendment permitting the expansion.

Numerous area residents, as well as the U.S. Department of the Interior, submitted comments regarding the proposal. Intervenors opposing the expansion included Mike Brady and Cheryl Creekmore, owners of property on Duck Creek. While proceedings were pending before the Commission, GRDA filed its first monitoring report on recreation use and shoreline development, which showed a continuing rise in boating densities on the lake. See 2003 Recreation Plan Monitoring Report at 3 & Attachment C.

FERC approved the marina expansion, over the dissent of one Commissioner. Grand River Dam Authority, Order Approving Non-Project Use of Project Property, 105 FERC ¶ 61,100, 2003 WL 22422344 (2003). The Commission reasoned that the proposed expansion would have "beneficial impacts on employment, tax revenues and tourism," offsetting "some adverse impacts on the visual character and scenic quality of the landscape." Id. at 61,506-07. The Commission further found that the expansion "would result in only moderate long-term adverse impacts to boating use and navigational safety." Id. at 61,507. The Commission also held that it could approve the proposal even though the reconfigured marina exceeded GRDA's dock length restrictions. Id.

Turning specifically to the issue of carrying capacity, FERC found that "while there is evidence that boating densities in the cove are increasing, such evidence does not confirm that the cove has reached its carrying capacity." Id. In a final environmental assessment accompanying the order, FERC staff added that "the...