Green Island Power Authority v. F.E.R.C.

• Decision Date: 10 August 2009
• Docket Number: Docket No. 07-2011-ag(Con).,Docket No. 07-1737-ag(L).,Docket No. 07-5141-ag(Con).
• Citation: 577 F.3d 148
• Parties: GREEN ISLAND POWER AUTHORITY, Adirondack Hydro Development Corporation, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Erie Boulevard Hydropower, L.P., Intervenor.
• Court: U.S. Court of Appeals — Second Circuit

577 F.3d 148

GREEN ISLAND POWER AUTHORITY, Adirondack Hydro Development Corporation, Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Erie Boulevard Hydropower, L.P., Intervenor.

Docket No. 07-1737-ag(L).

Docket No. 07-2011-ag(Con).

Docket No. 07-5141-ag(Con).

United States Court of Appeals, Second Circuit.

Argued December 19, 2008.

Decided August 10, 2009.

Frances E. Francis (William S. Huang and Rebecca J. Baldwin, on the brief), Spiegel & McDiarmid, LLP, Washington, DC, for Petitioners.

Holly E. Cafer (Cynthia A. Marlette, General Counsel, and Robert H. Solomon, Solicitor, on the brief), Federal Energy Regulatory Commission, Washington, DC, for Respondent.

John A. Whittaker, Winston & Strawn, LLP, Washington, DC (Mel R. Jiganti, U.S. Legal Director, Brookfield Power, Marlborough, MA, on the brief), for Intervenor.

Marc S. Gerstman (Jennifer M. Wilson and Jessica Backer Brand, on the brief), Law Offices of Marc S. Gerstman, Albany, N.Y., for Amici Curiae Scenic Hudson, Inc., Capital District Regional Planning Commission, Village of Green Island, Town of Green Island, City of Watervliet, Town of Waterford, New York Bicycling Coalition, Inc., New York Association of Public Power, Public Utility Law Project of New York, Inc., and Friends of the Falls, in support of Petitioners.

Before: SACK and KATZMANN, Circuit Judges.^*

KATZMANN, Circuit Judge:

This case arises out of proceedings before the Federal Energy Regulatory Commission ("FERC") to relicense the School Street Hydroelectric Project. It calls upon us principally to consider the validity of the order denying Green Island Power Authority's ("Green Island") motion to intervene, and the order granting a new license to Erie Boulevard Hydropower, L.P. ("Erie") to operate the School Street Hydroelectric Project for a term of forty years. For the reasons stated below, we find that Adirondack Hydro Development Corporation ("Adirondack") lacks standing to challenge any of the orders issued during the administrative proceedings. We further find that FERC acted arbitrarily and capriciously when it denied Green Island's motion to intervene in the relicensing proceedings. Because we cannot conclude that this error was not prejudicial, we vacate the license order and remand the case for further proceedings consistent with this opinion.

BACKGROUND

The School Street Hydroelectric Project ("School Street Project" or "School Street") is located on the Mohawk River in Albany and Saratoga Counties in New York State. It diverts water from the river at a dam located nearly 4000 feet upstream from Cohoes Falls, New York's second largest waterfall. The water runs through a power canal that is 4400 feet long and 150 feet wide and ultimately flows into a powerhouse containing five generating units with a total installed electrical capacity of 38.8 megawatts ("MW"). The water flows through the powerhouse and is returned to the Mohawk River downstream from Cohoes Falls. In total, water diverted from the river by the School Street Project bypasses approximately 4500 feet of the riverbed, including the waterfall.

The School Street Project dam was constructed in 1831, and the facility began to be utilized to generate electrical power in 1916. Niagara Mohawk Power Corporation ("Niagara Mohawk") filed an application for an original license to operate the School Street Project on August 20, 1965.¹ The Federal Power Commission² issued such a license to Niagara Mohawk on June 11, 1969, for a term to run from April 1, 1962 to December 31, 1993. See Niagara Mohawk Power Corp., 41 F.P.C. 772, 773 (1969).

Niagara Mohawk held the license and operated the School Street Project for that entire term. Two years prior to the end of the term, on December 23, 1991, Niagara Mohawk filed an application for a new license for the School Street Project, pursuant to § 15(c)(1) of the Federal Power Act ("FPA"). See 16 U.S.C. § 808(c)(1) ("Each application for a new license pursuant to this section shall be filed with the Commission at least 24 months before the expiration of the term of the existing license."). That application proposed to add a 21-MW capacity generator to the School Street Project, which would have increased its total electrical generating capacity to approximately sixty megawatts. In addition, the application proposed recreational, fisheries, historic preservation, and water quality enhancements.

Niagara Mohawk was the only entity to submit an application for the School Street Project by the statutory deadline of December 31, 1991. In response, FERC issued public notice describing in broad terms the proposal contained within that application and setting a deadline of April 12, 1993, for the filing of comments, protests, and motions to intervene. Timely motions to intervene were filed by American Whitewater Affiliation, American Rivers Inc., New York Rivers United, the Natural Heritage Institute, the National Audubon Society, R. Pisani and W. Corrigan, the United States Department of the Interior, and Adirondack Mountain Club.

As part of the relicensing process, Niagara Mohawk was required to request a certification from the New York State Department of Environmental Conservation ("NYS DEC") that the discharge from the School Street Project into the Mohawk River would comply with applicable provisions of the Clean Water Act. See 33 U.S.C. § 1341(a)(1). Indeed, FERC was prohibited from granting a license until this certification had been provided, unless NYS DEC waived the requirement, which it could do by failing or refusing to act on Niagara Mohawk's certification request within "a reasonable period of time (which shall not exceed one year) after receipt of such request." Id. Niagara Mohawk requested this certification for the School Street Project, which NYS DEC denied in November 1992 without prejudice to renewal. Niagara Mohawk appealed that decision, and it and NYS DEC entered into settlement negotiations regarding the certification and licensing of School Street and nine other hydroelectric projects operated by Niagara Mohawk. Those negotiations continued into 2005; during that time period, FERC issued annual licenses, pursuant to 16 U.S.C. § 808(a)(1), that allowed Niagara Mohawk to continue to operate the School Street Project. See Table of Notices of Authorization for Continue, 66 F.E.R.C. ¶ 61,145, 61,279 (1994).

While the negotiations between Niagara Mohawk and NYS DEC were on-going, FERC continued to analyze the School Street license application. In November 1995, FERC issued public notice that the School Street Project was ready for an environmental analysis. It stated that Niagara Mohawk intended to add an additional generator to increase School Street's installed capacity to approximately sixty megawatts, which would require an expansion of the existing powerhouse and excavation of the power canal. The notice solicited comments, reply comments, recommendations, terms and conditions, and prescriptions. See Notice of Application Ready for Environmental Analysis (Nov. 16, 1995).

Niagara Mohawk responded to this notice by informing FERC that it no longer viewed the installation of the proposed 21-MW generator as economically feasible, and it advised FERC that its environmental analysis should consider, as an alternative, relicensing School Street without that additional generating capacity. See Letter from Jerry L. Sabattis, Niagara Mohawk Hydro Licensing Coordinator, to John H. Clements, Director, FERC Office of Hydropower Licensing (Dec. 13, 1995), at 2 (stating that Niagara Mohawk "no longer intend[ed] to install" the generator). Notwithstanding Niagara Mohawk's view that the removal of the proposed generator would "materially affect[] Niagara Mohawk's fish protection/enhancement plan proposal," id., FERC did not issue any public notice of this change. Instead, it issued a draft environmental assessment of the School Street Project in November 1996 that analyzed the license application both with and without the 21-MW generator, concluding that it "d[id] not recommend [Niagara Mohawk's] proposed new [generator] and related improvements to the power canal." See Draft Environmental Assessment for Hydropower License (Nov.1996), at 53. FERC issued public notice announcing the availability of the draft environmental assessment and seeking comments on it. See Notice of Availability of Draft Environmental Assessment, 61 Fed.Reg. 60,277 (Nov. 20, 1996).

One of the parties that filed comments was the NYSD Limited Partnership, the owner of the New York State Dam Hydroelectric Project, which was located on the Mohawk River approximately one mile downstream from the School Street Project. In addition, Adirondack, the managing general partner of the NYSD Limited Partnership, filed a motion to intervene out-of-time in the School Street relicensing proceedings on March 26, 1997; it asserted that its interest in the proceedings derived from its ownership interest in the New York State Dam, which could be adversely impacted by FERC's licensing order given (1) its location relative to School Street and (2) the fact that the School Street Project impacted downstream flows on the Mohawk River. FERC granted Adirondack's motion to intervene on August 19, 1997.

Following Adirondack's intervention, time passed without much action in the relicensing proceedings. In February 1999, Niagara Mohawk and Erie submitted a joint application seeking approval of, inter alia, (1) the transfer of School Street's license from Niagara Mohawk to Erie, and (2) substitution of Erie in place of Niagara Mohawk as the applicant on the pending School Street license application. FERC issued public notice of this application and set a deadline of June 9, 1999, for filing comments and motions to intervene. See Notice of Transfer of Licenses and Soliciting Comments, Motions to Intervene, and Protests (May 5, 1999). FERC subsequently granted the application, the School Street license was...