City of Dothan, Ala. v. F. E. R. C., 81-1941

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtBefore MacKINNON and MIKVA; MacKINNON; MIKVA
Citation684 F.2d 159
PartiesCITY OF DOTHAN, ALABAMA, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Municipal Electric Authority of Georgia, Intervenor.
Docket NumberNo. 81-1941,81-1941
Decision Date03 August 1982

Petition for Review of an Order of the Federal Energy Regulatory commission.

Alan I. Robbins, Washington, D. C., with whom Donald R. Allen and Glen L. Ortman, Washington, D. C., were on the brief, for intervenor.

Channing D. Strother, Jr., Washington, D. C., with whom Arnold Fieldman, Washington, D. C., was on the brief, for petitioner.

Arlene Pianko Groner, Atty., F. E. R. C., Washington, D. C., with whom Charles A. Moore, Gen. Counsel, and Jerome M. Feit, Sol., F. E. R. C., Washington, D. C., were on the brief, for respondent.

Before MacKINNON and MIKVA, Circuit Judges, and COWEN, * Senior Judge, United States Court of Claims.

Opinion for the Court filed by Circuit Judge MacKINNON.

Dissenting opinion filed by Circuit Judge MIKVA.

MacKINNON, Circuit Judge:

After reviewing competing applications for a preliminary permit to investigate development of a hydroelectric facility, the Federal Energy Regulatory Commission (the Commission) determined that the two proposals submitted by parties of equal statutory priority were equally well adapted to serve the public interest and in accordance with its regulations awarded the preliminary permit to the party whose application was filed first. We hold that substantial evidence supports the Commission's decision and that it did not act arbitrarily or capriciously in granting the preliminary permit to the applicant that filed first.


The George W. Andrews Lock and Dam on the Chattahoochee River that forms the boundary between Georgia and Alabama is operated by the United States Army Corps of Engineers (the Army Engineers). On March 7, 1979, Alabama Electric Cooperative, Inc. (Coop) filed an application for a preliminary permit for a proposed hydroelectric power project at the existing Andrews dam site. Nine days later on March 16, 1979, Municipal Electric Authority of Georgia (Georgia) filed a competing permit application for a project at the same dam site. On August 23, 1979, the Commission issued public notice of the two competing applications. In response to that public notice, the Army Engineers wrote to the Commission and gave its approval to the issuance of preliminary permits provided that the applicants adhered to the Corps' "General Requirements for Non-Federal Hydroelectric Plant Construction at U.S. Army Corps of Engineers Water Resources Projects." Those requirements necessitate that the "(d) esign, construction and operation of all power facilities that will be an integral part of (a) dam" be approved by the Army Engineers. Brief of Commission at Addendum A3. The Army Engineers also recommended that applicants "closely coordinate their studies" for the projects with the Corps. Id. at A2.

On October 25, 1979, the City of Dothan, Alabama (Dothan) filed a protest against the Coop and Georgia applications and petitioned for intervention in both dockets. The following day Dothan filed a notice of its intent to file its own competing application. And on December 21, 1979, over nine months after Georgia's application, Dothan filed a competing application for a preliminary permit at the same dam site. Under the controlling statute Dothan was entitled to the same statutory preference for a permit as Georgia because both are instrumentalities of states. Where two municipalities or states apply for preliminary permits for the same project, the Commission favors the applicant whose plans are better adapted "to develop, conserve, and utilize in the public interest the water resources of the region ...." 18 C.F.R. § 4.33(g)(1) (1981). If the Commission finds that the proposals of two municipalities or states are "equally well adapted" to the objectives of the Act, then it grants the preliminary permit to the applicant that filed first. 18 C.F.R. § 4.33(g)(2) (1981). 1 Coop did not actively participate in the subsequent proceedings, presumably because it was a cooperative corporation, not a state instrumentality, and therefore of a lower statutory priority than either Georgia or Dothan. See 18 C.F.R. § 4.33(g)(3) (1981).

Dothan's application included a description of its own proposed project and, as required by 18 C.F.R. § 4.33(d)(2) (1981), contained a detailed statement of why its proposal was allegedly better adapted than Georgia's to developing, conserving and utilizing in the public interest the water resources of the region. Dothan raised a number of points but the most important ones related to two variations from Georgia's proposal:

(1) Georgia's application proposed locating the powerhouse on the Georgia side of the river. Dothan proposed the Alabama bank which provides advantages in terms of cost savings, convenience of construction, efficiency of dam operations and navigational concerns;

(2) Georgia's proposed project design was based on a mistaken assumption of the amount of available "head," i.e., the elevation of the water behind the dam. Georgia's plan assumed an average head of 24 feet whereas 14 to 16 feet was the more correct estimate and Dothan used that.

Commission regulations allowed Georgia 30 days from the date of submission of Dothan's application in which to file, if it so desired, a rebuttal showing that its plans were at least as well adapted as Dothan's. 18 C.F.R. § 4.33(e) (1981). Georgia elected not to file such rebuttal. On May 29, 1980, however, Georgia filed a "Protest in Opposition to and Motion to Deny Application for Preliminary Permit Filed by City of Dothan, Alabama" (App. 18-27.) In its protest statement, Georgia agreed with Dothan that the powerhouse would be best located on the Alabama side of the river and revised downward its calculation of the available head. (App. 22-23.) Georgia did not make any other changes in its project design. It did argue, however, that its proposal was at least equal to, if not better than Dothan's because (1) its preliminary engineering study was substantially completed and (2) had produced six alternative proposals incorporating varying sized generating units. Georgia also argued that (3) its proposal would serve many more customers than Dothan's (App. 21.), (4) that it would be better able to integrate the power produced by the Andrews project into an existing power transmission system (App. 22), and (5) that it was in a stronger financial position than Dothan and therefore could assure that the project would be developed (App. 23-24.) and at an earlier date (App. 28-29). Several days later Georgia filed an "Amendment to Protest and Motion" in which it recognized the reduced energy production capability of its proposed project. Id. We find the dissent's contention that this amendment should justify a remand to be without merit and to involve a misconstruction of a post hoc regulation, 18 C.F.R. § 4.35. 2 On March 27, 1981, the Director of the Commission's Office of Electric Power Regulation (the Director), acting pursuant to authority delegated him by the Commission, issued a preliminary permit to Georgia and denied the competing applications. (App. 44-53.) The Director determined that the proposals of Georgia and Dothan were both equally well adapted to achieving the public interest purposes of the Federal Power Act, and therefore awarded the preliminary permit to Georgia because its application was filed prior to that of Dothan. Article 11 of the preliminary permit specifically directed that Georgia coordinate the studies for the proposed project with the Army Engineers. (App. 49.)

On May 27, 1981, the Commission issued an Order Denying Dothan's Appeal and affirming the decision of the Director. (App. 72-76.) The Commission explained that because applications for preliminary permits deal with flexible and speculative plans it did not strictly hold applicants to their initial plans. The Commission considered the applications of Georgia and Dothan together as competing applications and concluded that the differences between Georgia's and Dothan's proposals reflected "not a different scheme of development but rather a different level of refinement and specificity." (App. 73.) The Commission concluded that Georgia was not required to file a statement rebutting Dothan's asserted claims of having a superior proposal. 3 Finally, the Commission held that it had fully complied with the rationale of Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 66 S.Ct. 148, 90 L.Ed. 108 (1945), which requires that the Commission consider competing applications together, because the applications of Dothan and Georgia were consolidated and considered together. (App. 75.) 4


The rule is clear that judicial review of agency action is narrow. The provisions of the Administrative Procedures Act, 5 U.S.C. § 706(2)(A), (E), require a reviewing court to set aside agency action found to be arbitrary, capricious, an abuse of discretion or unsupported by substantial evidence. Accordingly, the role of this court is not to make its own independent assessment as to whether one of the two competing applications is superior, rather our role is to consider whether the Commission's determination that the plans of Georgia and Dothan are equally well adapted to the public interest objectives of the Act is supported by substantial evidence. If substantial evidence supports the determination that the two competing applications are equally well adapted, then our inquiry ceases.

The record shows that Georgia did alter its proposal in two respects: the site of the powerhouse and the available head estimate. Both Georgia and Dothan attach wholly different significance to those changes. The Commission and Georgia assert that Georgia's changed plans represent only a modification of its original application-an expected and...

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