Coalition for Fair and Equitable Reg. v. F.E.R.C.
Decision Date | 24 July 2002 |
Docket Number | No. 01-1071.,01-1071. |
Citation | 297 F.3d 771 |
Parties | The COALITION FOR FAIR AND EQUITABLE REGULATION OF DOCKS ON LAKE OF THE OZARKS, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent. Union Electric Company, doing business as AmerenUE, Intervenor — Intervenor on Appeal. |
Court | U.S. Court of Appeals — Eighth Circuit |
Bruce H. Stoltze, argued, Des Moines, IA (Steven P. Brick, on the brief), for appellant.
Robert H. Solomon, argued, Washington, DC (Kevin P. Madden, Dennis Lane and Judith A. Albert, on the brief), for appellee.
John R. Molm, argued, Washington, DC (Charles A. Zdebski and Ann E. Buckley, on the brief), for intervenor.
Before: BOWMAN, JOHN R. GIBSON, and STAHL,1 Circuit Judges.
The Coalition for the Fair and Equitable Regulation of Docks on the Lake of the Ozarks petitions for review of a Federal Energy Regulatory Commission decision denying its challenge to user fees assessed on docks at the Lake. The Lake is part of a hydropower project on the Osage River that is owned and operated by Intervenor Union Electric Company under a license from FERC that authorizes Union Electric to allow certain uses of the Lake for the benefit of the public and to recoup its costs of doing so, subject to oversight by FERC. Union Electric established a program requiring owners of docks extending into the Lake to obtain permits for the docks and to pay user fees. The Coalition, a group of lake-front property owners, filed a complaint with FERC contending that FERC could not delegate to Union Electric the power to impose the fees; that the fees constituted an illegal tax or toll; that FERC should order discovery and a hearing on the Coalition's complaint; and that the fees were unreasonable. FERC denied the Coalition's complaint and its request for rehearing. The Coalition now petitions for review of FERC's decision, reiterating the arguments it made before FERC as well as some additional ones. We deny review.
The Federal Water Power Act of 1920 authorized the Federal Power Commission (now the Federal Energy Regulatory Commission) to issue licenses to public or private licensees to build hydropower projects on navigable waters of the United States. 16 U.S.C. § 797(e) (2000). The Water Power Act was
the outgrowth of a widely supported effort of the conservationists to secure enactment of a complete scheme of national regulation which would promote the comprehensive development of the water resources of the Nation, in so far as it was within the reach of the federal power to do so, instead of the piecemeal, restrictive, negative approach of the River and Harbor Acts and other federal laws previously enacted.
First Iowa Hydro-Elec. Co-op. v. Fed. Power Comm'n, 328 U.S. 152, 180, 66 S.Ct. 906, 90 L.Ed. 1143 (1946). Congress later added the requirement that FERC, in considering whether to license a project, take into account not only the "power and development purposes for which licenses are issued," but also "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." 16 U.S.C. § 797(e) (Pub.L. No. 99-495, § 3(a) (1986)) (emphasis added).
To promote recreational use of hydropower projects, FERC has adopted a regulation placing responsibility on project licensees to develop their project's recreational resources and permitting licensees to recruit the help of public agencies and private interests in this endeavor. 18 C.F.R. § 2.7 (2001). Specifically, the regulation states: "The Commission will not object to licensees and operators of recreational facilities within the boundaries of a project charging reasonable fees to users of such facilities in order to help defray the cost of constructing, operating, and maintaining such facilities." Id.
Article 41 of Union Electric's license for the Osage Project allows Union Electric to grant permission for certain uses of the project lands and waters without prior Commission approval, if the use is "consistent with the purposes of protecting and enhancing the scenic, recreational, and other environmental values of the project." That authority, however, comes with the concomitant responsibility to "supervise and control the uses and occupancies for which [Union Electric] grants permission." Under subsection b of Article 41, Union Electric can allow such uses as "non-commercial piers, landings, boat docks, or similar structures and facilities." At the same time, Union Electric is charged with the responsibility of making sure that any such structures are of suitable design and are well-maintained. The license provides: "To implement this paragraph (b), the Licensee may, among other things, establish a program for issuing permits for the specified types of use and occupancy of project lands and waters, which may be subject to the payment of a reasonable fee to cover the Licensee's costs of administering the permit program." FERC reserved the right to require Union Electric to file its standards, guidelines, and procedures for implementing the land-use article, and FERC also retained the right to require modifications of these instruments.
Pursuant to Article 41, after public notice and comment, Union Electric adopted permit requirements for use and occupancy of project land and waters. Anyone desiring to build or modify structures, including docks, on project property, was required to apply for a permit. Effective January 1, 1999, Union Electric adopted two "User fees," one covering all permits for new docks and modifications to existing docks, and the other being a user fee applicable to docks occupying more than 3000 square feet of water space. The fee for new construction and modification was set at a single payment of $400 for docks of between 1800 and 3000 square feet and $250 for docks less than 1800 square feet. For docks larger than 3000 square feet, the fee was a recurring annual fee of $.045 per square foot. Union Electric's permit instructions stated: "Total fees collected by [Union Electric] will be applied to [Union Electric's] shoreline management costs at the Lake of the Ozarks."
The Coalition wrote FERC, asking it to rule that FERC itself had no authority to allow Union Electric to charge dock user fees at all because they amounted to a "tax for the use of public waterways," and further, that the actual fees on the Osage project were unreasonable because they exceeded the cost of reviewing the permit applications and inspecting the docks.
The Director of FERC's division of Licensing and Compliance responded with a letter dated August 5, 1999, generally affirming that Union Electric was authorized under Article 41 of the Osage project license to charge a reasonable fee to cover costs of administering the permit program and concluding that Union Electric's costs of administering the permit program exceeded the fees it collected. The Director did, however, advise Union Electric that certain expenses it claimed — its shoreline cleaning, fish stocking, and mosquito spraying costs — were not properly includable as costs of administering the permitting program and therefore should not be supported by dock permit fees.
Not satisfied with the decision articulated in the Director's August 5 letter, the Coalition filed a complaint with FERC, which the agency denied. FERC first considered the argument that the Federal Power Act does not authorize FERC to impose user fees or to allow Union Electric to do so. FERC reviewed the Act, and found that Congress expressly contemplated the use of hydropower projects for recreational purposes and that Congress gave FERC "wide latitude and discretion in the performance of its licensing and regulatory functions." Union Electric Co., 90 FERC 61, 249, 2000 WL 280769, at *3 (March 16, 2000) ( ). It is FERC's policy to encourage development of recreational facilities at licensed projects, and as part of that policy, to allow the licensee to recoup the resulting expenses. An example of this policy is found at 18 C.F.R. § 2.7: "The Commission will not object to licensees and operators of recreational facilities within the boundaries of a project charging reasonable fees to users of such facilities in order to help defray the cost of constructing, operating, and maintaining such facilities." FERC concluded that Congress has granted it the power to issue the kind of license it granted to Union Electric and to permit Union Electric to recoup certain expenses through user fees. 2000 WL 280769, at *4-5.
The Coalition further argued that the user fees amounted to a tax, to which FERC responded that money charged in return for a benefit of which the beneficiary has voluntarily availed itself is not a tax, but a fee. FERC reasoned that Union Electric "is not taxing the private property of the dock owners, but imposing a fee for allowing the dock owners to extend their facilities onto project property." Id. at *6.
The Coalition argued that Article 41 of the license gave Union Electric authority to recover only the cost of issuing permits, but not any other shoreline management expenses. Putting aside the expenses the Director had already excluded (fish-stocking, mosquito-spraying, and adopt-a-shoreline programs), FERC concluded that the remaining categories of expenses claimed by Union Electric (property management, permit processing and enforcement, derelict dock removal, and lake survey expenses) were of the sort Union Electric could recoup as "cost[s] of administering the permit program." Id. at *7. Union Electric reported allowable expenses of $945,000 for 1999, whereas its...
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