Nevada Power Co. v. Watt, C-78-0174.

• Decision Date: 24 April 1981
• Docket Number: No. C-78-0174.,C-78-0174.
• Citation: 515 F. Supp. 307
• Parties: NEVADA POWER COMPANY, Plaintiff, v. James G. WATT, Secretary of the Interior; Frank Gregg, Director of the Bureau of Land Management; and Paul L. Howard, Director of the Utah State Office of the Bureau of Land Management, Defendants.
• Court: U.S. District Court — District of Utah

515 F. Supp. 307

NEVADA POWER COMPANY, Plaintiff, v. James G. WATT,^* Secretary of the Interior; Frank Gregg, Director of the Bureau of Land Management; and Paul L. Howard, Director of the Utah State Office of the Bureau of Land Management, Defendants.

No. C-78-0174.

United States District Court, D. Utah, C. D.

April 24, 1981.

Elliott Lee Pratt and Thomas R. King of Clyde, Pratt, Gibbs & Cahoon, Salt Lake City, Utah, for plaintiff.

Ronald L. Rencher, U. S. Atty., and Wallace T. Boyack, Asst. U. S. Atty., Salt Lake City, Utah, for defendants.

MEMORANDUM DECISION

CHRISTENSEN, Senior District Judge.

Nevada Power Company (Nevada Power), the above-named plaintiff, filed applications for, and is maintaining related proceedings to obtain, necessary rights-of-way for the construction of the Allen-Warner Valley Electric Generation and Transmission System to be built in Nevada and southern Utah to furnish electricity to portions of southern Utah, Nevada and California. Rights-of-way for the purpose have to be obtained from the Bureau of Land Management (BLM) charged with the control of the public lands involved. As part of the procedure for obtaining such rights-of-way, Nevada Power submitted an Environmental Assessment (EA) to the Bureau. The Bureau issued an Environmental Impact Statement (EIS).

In the course of processing the application for the rights-of-way, the Bureau required plaintiff to make deposits for the reimbursement of costs incurred by the Bureau in the preparation of the EIS, and plaintiff has made those deposits under protest.

By the present action plaintiff seeks, inter alia, a declaratory judgment that the regulations under which the Secretary assessed and required deposits for such costs are invalid and that the administration of the cost-reimbursement program of the defendants is invalid. It has now filed a motion for summary judgment declaring that "the regulations 43 C.F.R. 2802.1-2 and 2803.1-1," under which the Secretary assessed and required deposits for such costs, "are invalid and unconstitutional as they are invoked by the Defendants in requiring reimbursement by plaintiff of all actual EIS costs"; that the Federal Land Policy and Management Act of 1976, 43 U.S.C. §§ 1701 et seq. (FLPMA), § 1734(b), requires the Secretary to consider the factors of reasonableness, "in the absence of which the statute is unconstitutional as a basis for assessing EIS costs to the Plaintiff"; that the plaintiff is entitled to a refund of the moneys invalidly assessed and paid out, and an order requiring the defendants to make said refunds; that the court should grant summary judgment ordering the defendants "to continue to process Plaintiff's applications and Environmental Impact Statements and enjoining the Defendants from assessing the Plaintiff for costs which the Court determines are invalid under the above legal principles," and ordering defendants to account to plaintiff for all costs assessed to and paid by the plaintiff "in order to properly allocate said costs in accordance with the Judgment of the court herein."

The defendants too have filed a motion for summary judgment premised upon a denial of plaintiff's basic contentions and maintaining that the defendants in requiring the deposits in question acted within the discretion of the Secretary and in harmony with governing statutes and regulations, and that the court should declare their actions valid and reasonable.

Defendants apparently do not dispute the jurisdiction of this court over the subject matter of the controversy generally. They do contend that it is without jurisdiction to grant an order requiring the repayment of funds because the Court of Claims has exclusive jurisdiction over such matters.

Factual Background:¹

The plaintiff, a Nevada corporation licensed and authorized to do business in the states of Arizona, Utah and Nevada, is a public utility engaged in the generation, transmission and distribution of electric power. It is the sponsoring entity of the proposed Allen-Warner Valley Energy System to be built in southern Utah and southern Nevada with transmission facilities extending through Utah, Nevada, Arizona and California. The proposed system is to consist of several power plants, a coal slurry pipeline system, transmission and communication systems, and a water project, which will supply cooling water for one of the power plants as well as culinary and irrigation water to surrounding communities.²

Since the components of the Allen-Warner Valley Energy System are to be located primarily on federal land, plaintiff and other participants in the Energy System have applied to the Bureau of Land Management for various rights-of-way, as required by 43 U.S.C. §§ 959 and 961, and the FLPMA § 501, 43 U.S.C. § 1761.

The National Environmental Policy Act (NEPA) requires that Environmental Impact Statements (EIS's) be prepared for projects that involve major federal actions affecting the human environment, 42 U.S.C. § 4332(2)(C). The BLM decided on November 18, 1974, that an EIS would be prepared for the proposed system. After Nevada Power submitted a six-volume EA, describing the Energy System and analyzing its environmental impacts, the BLM prepared its own EIS containing material from the Nevada Power EA; an analysis of six alternatives, including the proposed Energy System; and for most of the alternatives, an analysis of potential impacts on air quality, water resources, vegetation, wildlife, cultural resources (archaeology, ethnology and history), recreation and aesthetics, wilderness, land use, socioeconomics, coal resources, energy efficiency and unavoidable adverse impacts. All of the right-of-way applications involved here are still pending and cannot be granted until sometime in 1981 when the NEPA process is completed.

The BLM has assessed plaintiff in advance for all of the costs for work to be done in processing the right-of-way applications relating to the Energy System. These assessments have included costs incurred in the preparation of the EIS. To date, plaintiff's payments total $1,404,052.34, all of which have been made under protest.

Plaintiff appealed defendants' original assessment of costs to the Interior Board of Land Appeals; the appeal was dismissed without prejudice on June 10, 1980, together with certain other appeals, pending the outcome of the present suit in Federal District Court. The agency's order of dismissal is enigmatic with respect to the question of exhaustion of administrative remedies.³ However, inasmuch as the point is not relied upon by either side, the agency has declined to proceed further on the related administrative appeal until this case is decided by this court, and further action is to be directed on the part of the Secretary after remand, it is concluded that we should proceed to judgment here.

Statutory and Regulatory Background:

The FLPMA provides in section 504(g), 43 U.S.C. § 1764(g), that the Secretary may require an applicant for a right-of-way to reimburse the United States for "all reasonable administrative and other costs" incurred in processing the application. Reimbursement of reasonable costs may be obtained in two ways: "by regulation or prior to promulgation of such regulations, as a condition of a right-of-way."

Section 510(a) of the FLPMA, 43 U.S.C. § 1770(a), provides that the provisions of Title V, including section 504(g), shall apply to all right-of-way applications pending on or filed after the effective date of the FLPMA (October 21, 1976).

Section 310 of the FLPMA, 43 U.S.C. § 1740, provides that the Secretary "shall promulgate rules and regulations to carry out the purposes of this Act and of other laws applicable to the public lands." The promulgation of rules and regulations is to be governed by the provisions of Chapter 5 of the Administrative Procedure Act. Until rules and regulations are promulgated, the lands are to be administered under existing rules and regulations to the extent practical.

Section 304(b), 43 U.S.C. § 1734(b), provides that "reasonable costs" for the purposes of that section include the costs of Environmental Impact Statements, and further that in determining whether costs are reasonable, the Secretary may take into consideration various factors, these provisions to be more specifically noticed hereafter since they are critical to a resolution of the issues before the court.

The Independent Offices Appropriation Act of 1952 (IOAA) provides in 31 U.S.C. § 483a that services provided by federal agencies to any person, except those engaged in official government business, are to be self-sustaining to the full extent possible. The heads of agencies are authorized to promulgate regulations to prescribe "such fee, charge, or price, if any, as he shall determine ... to be fair and equitable taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts."

The Public Land Administration Act (PLAA), § 201, 43 U.S.C. § 1371, which was repealed by the FLPMA, provided that the Secretary could establish reasonable filing fees, service fees and charges with respect to applications relating to public lands. Section 204, 43 U.S.C. § 1374, provided for refunds in the case of payments that were not required or were in excess of the amount required.

The Secretary of the Interior adopted the original Reimbursement Regulations under authority of the IOAA and the PLAA. The regulations became effective June 1, 1975. 43 C.F.R. § 2802.1-2 (1975). On June 26, 1980, the Secretary signed regulations revising 43 C.F.R. Part 2800, effective July 31, 1980, 45 Fed.Reg. 44518 (July 1, 1980). The revisions included the reissuance of the initial Reimbursement Regulations. The number of the regulations was changed from 43 C.F.R. § 2802.1-2 to § 2803.1-1. Hereinafter we cite the old numbering.

Under the Reimbursement Regulations, an applicant for a...