First Iowacooperative v. Federal Power Commission State of Iowa

• Decision Date: 29 April 1946
• Docket Number: No. 603,HYDRO-ELECTRIC,603
• Citation: 66 S.Ct. 906,328 U.S. 152,90 L.Ed. 1143
• Parties: FIRST IOWACOOPERATIVE v. FEDERAL POWER COMMISSION (STATE OF IOWA, Intervener)
• Court: U.S. Supreme Court

328 U.S. 152

66 S.Ct. 906

90 L.Ed. 1143

FIRST IOWA HYDRO-ELECTRIC COOPERATIVE

v FEDERAL POWER COMMISSION (STATE OF IOWA, Intervener).

No. 603.

Argued March 8, 1946.

Decided April 29, 1946.

[Syllabus from pages 152-155 intentionally omitted] Mr. David W. Robinson, of Washington, D.C., for petitioner.

Mr. Howard E. Wahrenbrock, of Washington, D.C., for respondent, Federal Power Commission.

Mr. Neill Garrett, of Des Moines, Iowa, for intervenor, State of Iowa.

Mr. Justice BURTON delivered the opinion of the Court.

This case illustrates the integration of federal and state jurisdictions in licensing water power projects under the Federal Power Act.¹ The petitioner is the First Iowa Hydro-Electric Cooperative, a cooperative association organized under the laws of Iowa with power to generate, distribute and sell electric energy. On January 29, 1940, pursuant to § 23(b)² of the Federal Power Act, it filed with the Federal Power Commission a declaration of intention to construct and operate a dam, reservoir and hydro-electric power plant on the Cedar River, near Moscow, Iowa.³

On April 2, 1941, it also filed with the Commission an application for a license, under the Federal Power Act, to construct an enlarged project essentially like the one it now wishes to build. The cost of the enlarged project is estimated at $14,600,000. It calls for an 8,300 foot earthen dam on he Cedar River near Moscow, an 11,000 acre reservoir at that point and an eight mile diversion canal to a power plant to be built near Muscatine on the Mississippi. The canal will create two other reservoirs totaling 2,000 acres. It is alleged that the three reservoirs incidentally will provide needed recreational facilities. The power plant will have four turbo-generating units with a total capacity of 50,000 kw., operating with an average head of 101 feet of water provided by the fall from the canal to the Mississippi. Water will be pumped from the Mississippi up to the head bays of the power intake dam at the plant to meet possible shortages in supply. The tailrace will extend for a mile along the shore of the Mississippi to a point below Dam 16 on that River. Transmission lines will connect the project with a source of steam standby electric current at Davenport, Iowa, 24 miles up the Mississippi. The plant is expected to produce 200,000,000 kwh. of marketable power per year, of which 151,000,000 kwh. will be firm energy in an average year. Interchange of energy is proposed with the Moline-Rock Island Manufacturing Company near Davenport and the project is suggested as an alternative to the addi- tion of a 50,000 kw. unit to the plant of that company. The power will be available especially to non-profit rural electrification cooperative associations and to cities and towns in 35 or more nearby counties.

The Cedar River rises in Minnesota and flows 270 miles southeasterly through Iowa to Moscow which is 10 miles west of the Mississippi. From there it flows south-westerly 29 miles to Columbus Junction where it joins the Iowa River and Returns southeasterly 28 miles to the Mississippi. The proposed diversion will take all but about 25 c.f.s. of water from the Cedar River at Moscow. This will correspondingly reduce the flow in the Iowa River while the diverted water will enter the Mississippi at Muscatine, about 20 miles above its present point of entry at the mouth of the Iowa River. There are no cities or towns on the Cedar River between Moscow and Columbus Junction and the record indicates that the petitioner has options upon 98% of the riparian rights on the Cedar River in that area. At petitioner's request, this application was treated as a supplement to its then pending declaration of intention to construct the smaller project.

On June 3, 1941, the Commission made the following findings:

(1) That the Cedar and Iowa Rivers are navigable waters of the United States;

'(2) That the diversion of water from the Cedar River by means of the diversion canal as set forth above would have a direct and substantial effect upon the flow and stage of the Iowa River and hence would affect the navigable capacity of that river;

'(3) That the alternate withholding of water in the reservoir and canal during periods of shut-down of the power plant and the release of water at substantial rates of flow during periods of operation of the power plant, as set forth above, would cause extreme fluctuations in the flow of the Mississippi River at Muscatine, Iowa, and would substantially affect the navigable capacity of that river;

'(4) That the interests of interstate commerce would be affected by construction of the project as described in the declaration of intention as supplemented;

'(5) That the two small islands * * * (in the Cedar River) are public lands of the United States and will be partly or wholly flooded by the reservoir of the proposed project and will be occupied by the project.

'(6) That a license for the construction porposed above is required under the provisions of the Federal Power Act.' 2 Fed. Power Comm.Rep., 958.⁴

On August 11, 1941, the petitioner, pursuant to that finding, filed with the Commission an application for a license to construct the project above described. On November 4, 1941, the Commission granted the State of Iowa's petition to intervene and, since then, the State has opposed actively the granting of the federal license.

On January 29, 1944, after extended hearings, the Commission rendered an opinion including the following statements:

'As first presented, the plans of the applicant for developing the water resources of the Cedar river were neither desirable nor adequate, but many important changes in design have been made. (The opinion here quoted in a footnote § 10(a) of the Federal Power Act.)⁵ The applicant has also agreed to certain modifications proposed by the Chief of Engineers of the War Department. The present plans call for a practical and reasonably adequate development to utilize the head and water available, create a large storage reservoir, and make available for recreational purposes a considerable area now unsuitable for such use, all at a cost which does not appear to be unreasonable.

'Further changes in design may be desirable, but they are minor in character and can be effected if the applicant is able to meet the other requirements of the act.' In re First Iowa Hydro-Electric Cooperative, 52 P.U.R.,N.S., 82, 84.

We believe that the Commission would have been justified in proceeding further at that time with its consideration of the petitioner's application upon all the material facts. Such consideration would have included evidence submitted by the petitioner pursuant to § 9(b)⁶ of the Federal Power Act as to the petitioner's compliance with the requirements of the laws of Iowa with respect to the petitioner's property rights to make its proposed use of the affected river beds and banks and to divert and use river water for the proposed power purposes, as well as the petitioner's right, within the State of Iowa, to engage in the business of developing, transmitting, and distributing power, and in any other business necessary to effect the purposes of the license. The Commission, however, was confronted at that point with a claim by the State of Iowa that the petitioner must not only meet the requirements for a fed ral license for the project under the Federal Power Act, but should also present satisfactory evidence of its compliance with the requirements of Chapter 363 of the Code of Iowa, 1939, hereinafter discussed, for a permit from the State Executive Council of Iowa for the same project.

While it now appears, from its brief and the argument in this Court, that it is the opinion of the Federal Power Commission that the requirements of Chapter 363 of the Code of Iowa as to this project have been superseded by those of the Federal Power Act, yet, at the time of the original hearing, the Commission felt that the courts were the appropriate place for the decision on Iowa's contention as to the applicability and effectiveness of Chapter 363 of its Code in relation to this project. The Commission decided, therefore, to proceed no further until that question had been decided by the courts, and dismissed the petitioner's application, without prejudice, in accordance with the following explanation stated in its opinion:

'The appropriate place for a determination of the validity of such state laws is in the courts and, if we dismiss the application for license on the basis of failure to comply with the requirements of § 9(b), applicant may seek review of our action and its contentions under § 313(b) of the Federal Power Act.' 52 P.U.R.,N.S., 82, 85.

The Commission also expressly found that—

'The applicant has not presented satisfactory evidence, pursuant to § 9(b) of the Federal Power Act, of compliance with the requirements of applicable laws of the state of Iowa requiring a permit from the State Executive Council to effect the purposes of a license under the Federal Power Act, and the pending application, as supplemented, should be dismissed without prejudice.' Id., 52 P.U.R.,N.S., at page 85.

This action, after all, did not save the Commission from passing on the issue, for the order of dismissal was a ruling upon it, adverse both to the petitioner's contentions and to its own views on the law. The Commission would have been justified in following its own interpretation of the Federal Power Act and proceeding with the merits of the application without requiring the petitioner to submit evidence of its compliance with the terms of Chapter 363, or of any other laws of the State of Iowa, which the Commission held to be inapplicable or to have been superseded by the Federal Power Act.

On the applicant's petition for review of the dismissal, it was affirmed by the United States Court of Appeals for the District of Columbia. 151 F.2d 20. We then granted certiorari under § 240(a) of the...