New York State Energy Research and Development Authority v. F.E.R.C., 83-1869

Citation746 F.2d 64
Decision Date19 October 1984
Docket NumberNo. 83-1869,83-1869
PartiesNEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Long Lake Energy Corporation, Intervenor.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Petition for Review of an Order of the Federal Energy Regulatory commission.

Thomas E. Mark, New York City, with whom G.S. Peter Bergen, New York City, and Howard A. Jack, Albany, N.Y., were on the brief for petitioner.

Arlene Pianko Groner, Atty. Federal Energy Regulatory Commission, Washington, D.C., with whom Stephen R. Melton, Acting General Counsel, and Barbara J. Weller, Deputy Sol., Washington, D.C., were on the brief for respondent.

Marvin S. Lieberman, Somerville, N.J., and Ann L. Rasenberger, Washington, D.C., were on the brief for intervenor.

Before MIKVA, BORK and STARR, Circuit Judges.

Opinion for the Court filed by Circuit Judge BORK.

BORK, Circuit Judge:

The New York State Energy Research and Development Authority ("NYSERDA") challenges a ruling by the Federal Energy Regulatory Commission ("FERC" or the "Commission") rejecting NYSERDA's application for a license for the Phoenix Hydroelectric Project, Project No. 6806-000. FERC rejected NYSERDA's application on the ground that it was not timely filed at the Office of the Secretary as required by FERC's Rule 2001. See 18 C.F.R. Sec. 385.2001 (1983). This rule was promulgated and took effect while NYSERDA's comparative licensing proceeding was pending. NYSERDA maintains that its application was properly filed under the predecessor to Rule 2001 and that this predecessor rule should have been applied here in the interest of justice. We agree with NYSERDA and conclude that FERC's ruling was arbitrary and capricious. We therefore reverse and order FERC to deem NYSERDA's application timely submitted to the Commission.

I.

NYSERDA is a state authorized public benefit corporation, N.Y.Pub.Auth.Law Sec. 1852.1 (McKinney 1981), which seeks to promote the "development and utilization of safe, dependable renewable and economic energy sources." N.Y.Pub.Auth.Law Sec. 1850-a (McKinney 1981). As a political subdivision of the State of New York, NYSERDA is recognized to be a "municipality" within the meaning of section 3(7) of the Federal Power Act, 16 U.S.C. Sec. 796(7) (1982). NYSERDA has total assets of $14,917,000 and has previously filed at least five license and permit applications with FERC. All of those applications were properly filed and have been accepted.

FERC is the agency which Congress has empowered to license the development of the nation's water resources. 16 U.S.C. Sec. 791a et seq. (1982). Recently, FERC has received over two thousand license applications a year from persons and organizations seeking to operate small scale hydroelectric projects. In order to manage its overwhelming caseload, FERC has adopted strict filing deadlines and procedures in the small scale hydro area.

On October 31, 1981, the Long Lake Energy Corporation ("Long Lake") applied for a license to construct and operate a hydroelectric power project to be known as the Phoenix Project. The proposed project was to be situated on the Oswego River in Oswego and Onondaga Counties, New York. On April 14, 1982, FERC published an official notice of Long Lake's application in the Federal Register. 47 Fed.Reg. 16,848 (1982). That notice expressly directed that all competing applications should be mailed to the following address:

Kenneth F. Plumb, Secretary

Federal Energy Regulatory Commission

825 North Capitol Street, N.E.

Washington, D.C. 20426

Joint Appendix ("J.A.") at 2.

In response to the FERC notice of April 14, NYSERDA decided to file a competing license application for the Phoenix Project. NYSERDA informed FERC of its intent to file such an application on June 23, 1982, and under FERC's filing regulations NYSERDA's application thus became due by October 25, 1982. See 18 C.F.R. Sec. 4.33(c) (1982). NYSERDA thus had actual notice that its application was due in the Secretary's Office at 825 North Capitol Street on October 25.

NYSERDA hired an engineering firm, Tippetts-Abbett-McCarthy-Stratton ("TAMS"), to make the necessary studies and all appropriate filings with the Commission regarding the Phoenix Project. TAMS had been working on NYSERDA's application since January 20, 1982 and was therefore aware of the April 14 notice that FERC had published in the Federal Register. J.A. at 15. TAMS had extensive experience in hydroelectric project engineering; however, it had never before filed documents with FERC. In attempting to ascertain what were the Commission's procedural rules, TAMS first consulted a guide to the Commission's rules known as the "Blue Book" and published by the Commission in April, 1982. See FERC, Application Procedures for Hydropower Licenses, Exemptions and Preliminary Permits (Apr.1982).

The Blue Book's discussion of the filing regulations did not make reference to the Commission's new Rules of Practice and Procedure, 18 C.F.R. Part 385 (1983). In particular, the Blue Book did not mention the revised rule at issue here, Rule 2001, 18 C.F.R. Sec. 385.2001 (1983). While it did refer to this rule's more general predecessor, the Blue Book did not include the text of that provision. Because of these lacunae in the Blue Book, TAMS endeavored to obtain clarification of FERC's submission and filing requirements from the staff of the FERC's Division of Hydropower Licensing.

Mr. Robert Bell, the member of the Division of Hydropower Licensing responsible for the Phoenix Project, directed TAMS to the Docket Section of the Office of the Secretary. This Section told TAMS that it should deliver the NYSERDA license application to the Division of Hydropower Licensing. J.A. at 15-16. Specifically, the Docket Section instructed TAMS to deliver the license application to the following address:

FERC

Division of Hydropower Licensing

Railway Building

400 1st Street, N.W.

Washington, D.C.

202-376-9171 Id. When TAMS called the telephone number it had been given, an employee of the Division of Hydropower Licensing confirmed these directions. Moreover, the same FERC employee informed TAMS that the application would be deemed timely and properly submitted if it were received before closing time at the above address. Id. at 16-17.

On October 22, 1982, or three days before the due date, a TAMS messenger delivered the application by hand to the Division of Hydropower Licensing. As FERC's rules require, TAMS submitted an original and fourteen copies of the application. A cover letter attached to the application was addressed to FERC Secretary Kenneth F. Plumb and listed the proper address to which the application should in fact have been delivered. TAMS made timely service of the application on all other parties to the proceeding. An additional copy of the application was delivered to Mr. Bell on October 22, and this copy was ultimately routed to the Office of the Secretary through FERC's internal mail. However, the application was delayed in transit within FERC, and it was not until October 27 that the Office of the Secretary stamped the application as "received." J.A. at 18-19.

At some later date, NYSERDA's application was returned to the Division of Hydropower Licensing, which rejected it as untimely. On November 30, 1982, the Deputy Director of the Office of Electric Power Regulation wrote a letter rejecting NYSERDA's application and stating that NYSERDA should direct all inquiries regarding the rejection to Mr. Bell. When TAMS contacted Mr. Bell, he indicated for the first time that NYSERDA's application should have been submitted to the Office of the Secretary and not to the Division of Hydropower Licensing. See J.A. at 21. In its Order Denying Appeal and Order Denying Rehearing, FERC relied on NYSERDA's failure to comply with Rule 2001, a new rule governing filings with the Commission which had gone into effect on August 26, 1982. 18 C.F.R. Sec. 385.2001 (1983). Rule 2001 provides:

(a) Filings with the Commission: (1) Except as otherwise provided in this chapter, any document required to be filed with the Commission must comply with Rules 2001 to 2005 and must be submitted to the Secretary by:

(i) Mailing the document to the Secretary, Federal Energy Regulatory Commission, 825 North Capitol Street, NE., Washington, D.C. 20426; or

(ii) Hand delivering the document to Room 3110, 825 North Capitol Street, NE., Washington, D.C.

(2) Any document is considered filed on the date stamped by the Secretary, unless the document is subsequently rejected. Any document received after regular business hours is considered filed on the next regular business day.

18 C.F.R. Sec. 385.2001 (1983).

In rejecting NYSERDA's application, FERC declined to act pursuant to Rule 101(c)(2), which allows it to apply its prior Rules of Practice and Procedure, 18 C.F.R. Part 1 (1982), to proceedings pending on August 26, 1982, where such use is warranted "in the interest of justice." 18 C.F.R. Sec. 385.101(c)(2) (1983). The preamble to FERC's new Rules clarifies that the Commission may exercise this discretionary authority "in light of any inequities that may result from the imposition" of the new Rules. 47 Fed.Reg. 19,014, 19,016 (1982). FERC gave no reasons for its refusal to employ Rule 101(c)(2). NYSERDA has appealed FERC's denial of its application claiming that the Commission acted arbitrarily and capriciously. We agree.

II.

If NYSERDA's application were untimely filed under both the old and the new rule, there would be no question about the legality of FERC's action in rejecting it. Therefore, in reviewing the Commission's behavior, we take up first the question of whether NYSERDA's application was properly filed under the old rule. Rule 2001 superseded 18 C.F.R. Sec. 1.14(a) (1982), which provided as follows:

The filing of written applications ... with the...

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