High Country Resources v. Federal Energy Company
| Decision Date | 14 February 2001 |
| Docket Number | No. 99-70747,99-70747 |
| Citation | 255 F.3d 741 |
| Parties | (9th Cir. 2001) HIGH COUNTRY RESOURCES AND GLACIER ENERGY COMPANY, PETITIONERS, v. FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT |
| Court | U.S. Court of Appeals — Ninth Circuit |
Kurt A. Denke, Seattle, Washington, for the petitioners.
Laura J. Vallance, Federal Energy Regulatory Commission, Washington, D.C., for the respondent.
Petitions for Review of an Order of the Federal Energy Regulatory Commission Project Nos. 4376-004; 4437-009
Before: Stephen Reinhardt, Kim McLane Wardlaw, and Ronald M. Gould, Circuit Judges.
OPINION
High County Resources ("HCR") and Glacier Energy Company ("Glacier") (collectively "Petitioners") petition for review of two Federal Energy Regulatory Commission ("FERC") orders dismissing their license applications for hydroelectric projects on tributaries of the Skagit River. The orders were based on a 1998 United States Forest Service determination ("1998 determination") that the projects would unreasonably diminish the fishery value of the Skagit Wild and Scenic River Area in violation of Section 7(a) of the Wild and Scenic Rivers Act ("§§ 7(a)"), codified in 16 U.S.C. §§ 1278.
In light of the 1998 determination, FERC concluded that it could not license the proposed projects, and dismissed Petitioners' applications. Petitioners challenge the orders on the ground that FERC's statutory construction of§§ 7(a) is flawed. Glacier also argues that FERC erred by relying on the 1998 determination instead of a previous §§ 7(a) determination prepared by the Forest Service in 1986 ("1986 determination").
We lack jurisdiction under 16 U.S.C. §§ 8251(b) to entertain Petitioners' statutory construction argument because it was neither raised in the administrative proceedings nor in the request for rehearing. We hold that FERC was not bound by the Forest Service's 1986 determination regarding the Diobsud Creek project. We therefore dismiss in part and deny in part the petition.
The Federal Power Act ("FPA") requires that a party seeking to construct, operate or maintain a hydroelectric power facility must obtain a license from FERC. See 16 U.S.C. §§ 817. FERC's authority to provide such licenses, however, is not unlimited. Section 7(a) of the Wild and Scenic Rivers Act,1 16 U.S.C. §§ 1278(a), provides that:
[FERC] shall not license the construction of any . . . project works under the [FPA] . . . on or directly affecting any river which is designated . . . as a component of the national wild and scenic rivers system . . . , and no department or agency of the United States shall assist by loan, grant, license, or otherwise in the construction of any water resources project that would have a direct and adverse effect on the values for which such river was established, as determined by the Secretary charged with its administration.
Section 7(a) further states that:
Nothing contained in the foregoing sentence, however, shall preclude licensing of, or assistance to, developments below or above a wild, scenic or recreational river area or on any stream tributary thereto which will not invade the area or unreasonably diminish the scenic, recreational, and fish and wildlife values present in the area [at the time it was designated as a wild and scenic river area].
In 1978, Congress designated major portions of the Skagit River as part of the wild and scenic rivers system. 16 U.S.C. §§ 1274(a)(18). Because the Skagit River runs through the Mount Baker-Snoqualmie National Forest, the Secretary of Agriculture administers this particular wild and scenic river area through the Forest Service. See 36 C.F.R. §§ 200.1(c)(2).
Between 1983 and 1990, seven parties, including Petitioners, filed license applications for eight hydropower projects in the Skagit River Basin.2 The hydroelectric plants would use a small diversion structure, similar to a dam, to route portions of the stream through a pipeline, generating five megawatts of electric power. If licensed, the two projects relevant here -the Rocky Creek project and the Diobsud Creek project -would be constructed within the Mount Baker-Snoqualmie National Forest on tributaries of the Skagit River. Neither location falls within the boundaries of the Skagit Wild and Scenic River ("Skagit WSR").
In April 1998, FERC conducted a basin-wide analysis and published a Final Environmental Impact Statement ("FEIS"). In the FEIS, FERC recommended denying five of the eight applications, including those at issue here. See 87 Fed. Energy Reg. Comm'n Rep. (CCH) ¶¶ 61,123, 61,491 n.3 (1999).
Thereafter, the Forest Service prepared its 1998 determination in which it assessed whether any of the proposed projects might "invade" or "unreasonably diminish the scenic, fish and wildlife values" of the Skagit WSR. Relying on FERC's FEIS, the knowledge of the Forest Service staff, and other available data (including a 1995 Forest Service report on the slope stability risk analysis for Skagit River small hydropower projects), the Forest Service concluded that six of the eight projects -including Rocky Creek and Diobsud Creek -would "unreasonably diminish" the fishery value in the Skagit WSR. In particular, the Forest Service concluded that the projects risked sediment delivery which could affect vulnerable fish stocks. The Forest Service further determined that none of the proposed mitigation measures would bring the risk to an acceptable level.
FERC considered both the Rocky Creek project and the Diobsud Creek project, among others, in its October 1998 Order. See 85 Fed. Energy Reg. Comm'n Rep. (CCH) ¶¶ 61,093 (1998). Interpreting its authority under §§ 7(a) of the Rivers Act, FERC first explained that it was precluded from licensing:
the construction of any project works (1) on or directly affecting any river which has been designated a component of the national wild and scenic rivers system, or (2) that would have a direct and adverse effect on the values for which such river was designated, as determined by the Secretary charged with its administration or (3) that would invade the area below or above a wild, scenic or recreational area or any stream tributary thereto or unreasonably diminish the scenic, recreational, and fish and wildlife values present in the area on the date of designation of a river as a component of the national wild and scenic rivers system.
Id. In light of the 1998 determination that the proposed projects would unreasonably diminish the Skagit WSR fishery value, FERC found that it lacked authority to license the construction of the Rocky Creek and Diobsud Creek projects and dismissed Petitioners' applications. Id.
Petitioners filed a request for rehearing on November 11, 1998. They first argued that FERC, not the Secretary of Agriculture, is the agency responsible for making determinations under the second sentence of §§7(a) of the Rivers Act. Petitioners also asserted that FERC could not rely on the 1998 Forest Service determination because it was made by the Regional Forester and was otherwise procedurally and substantively flawed. FERC considered these rehearing requests in its April 1999 Order denying the request for rehearing. See 87 Fed. Energy Reg. Comm'n Rep. (CCH) ¶¶ 61,123 (1999). FERC rejected Petitioners' first argument, holding that it was inconsistent both with the statutory scheme of the Rivers Act, which gives the Secretaries of the Interior and Agriculture the responsibility for managing and protecting the rivers, and with the legislative history of the Act, which makes clear that the authority for making a §§ 7(a) determination belongs to the Secretary administering the designated river in question. See 87 FERC at 61,491. FERC also rejected Petitioners' second argument, finding that FERC's role was not to judge the validity of another agency's practice or decision making. See 87 FERC at 61,492. Petitioners timely petitioned for review.
We generally have jurisdiction to review final decisions of FERC under 16 U.S.C. §§ 825l(b), which provides:
Any party to a proceeding under this chapter aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the United States Court of Appeals for any circuit wherein the licensee or public utility to which the order relates is located or has its principal place of business, or in the United States Court of Appeals for the District of Columbia, by filing in such court, within sixty days after the order of the Commission upon the application for rehearing, a written petition praying that the order of the Commission be modified or set aside in whole or in part.
Id. Because Petitioners have their principal place of business in Washington, we would ordinarily have jurisdiction to hear a petition for review. However, §§ 825l(b) also provides that "[n]o objection to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission in the application for rehearing unless there is reasonable ground for failure to do so." Id.
Petitioners argue for the first time on appeal that the second sentence of §§ 7(a) either provides an example of activities that are not precluded by the first sentence, or creates an exception to the general rules set forth in the first sentence.3 FERC, on the other hand, interprets the second sentence as a third, independent standard that applies specifically to proposed developments outside of wild and scenic river areas. See 85 FERC ¶¶ 61,093.
Petitioners did not raise this statutory construction argument in the administrative proceedings or in the request for rehearing. In those proceedings, Pe...
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