Town of Summersville, W.Va. v. F.E.R.C., 84-1517
| Decision Date | 10 January 1986 |
| Docket Number | No. 84-1517,84-1517 |
| Citation | 780 F.2d 1034 |
| Parties | , 16 Envtl. L. Rep. 20,416 TOWN OF SUMMERSVILLE, WEST VIRGINIA, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Friends of the Earth, Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
George F. Bruder, Washington, D.C., for petitioner.
Andrea Wolfman, Washington, D.C., for respondent. Jerome M. Feit, Sol. and John N. Estes, III, Atty., F.E.R.C., Washington, D.C., were on the brief for respondent.
Paula Dinerstein, Washington, D.C., for intervenor, Friends of the Earth.
Before WALD, GINSBURG and BORK, Circuit Judges.
Opinion for the Court filed by Circuit Judge WALD.
This case represents a highwater mark in misunderstanding between a municipal applicant for a license for a hydroelectric dam and the Federal Energy Regulatory Commission (FERC or the Commission). The Town of Summersville, West Virginia (Summersville) challenges FERC's dismissal of Summersville's application for a license to develop a hydroelectric project on the Gauley River in West Virginia, a river presently under consideration for inclusion in the national wild and scenic rivers system. Although FERC is statutorily barred from licensing any hydroelectric project on the Gauley River until at least 1987, Summersville maintains that FERC acted arbitrarily and capriciously in refusing to hold its application in abeyance. Because we find that FERC neither had a prior policy of holding all such license applications in abeyance nor was required by statute or reason to do so in this case, we uphold its order dismissing Summersville's license application.
Part I of the Federal Power Act authorizes FERC to license the construction and operation of nonfederal hydroelectric power facilities. 16 U.S.C. Sec. 797(e). Prior to licensing, FERC may issue a preliminary permit for the study of a potential hydroelectric project site for a period not to exceed three years. 16 U.S.C. Secs. 797(f), 798. The preliminary permit confers upon the permit holder a "priority of application" against potential competitors who might otherwise file a license application before the permittee can assess the feasibility of developing the chosen site.
The grant of a preliminary permit also gives the permittee certain advantages in the competitive proceedings at the licensing stage. Under the Commission's regulations, the holder of a preliminary permit will prevail over any competing license applicant, so long as the permittee's plans are "at least as well adapted" to the development of the project as those of its competitors. 18 C.F.R. Sec. 4.33(h)(1) (1984). And even if a competitor presents a superior plan, FERC will give the permittee an opportunity to revise its own plan to bring it up to the level of the competitor's plan. 18 C.F.R. Sec. 4.33(h)(2) (1984).
The Wild and Scenic Rivers Act (WSRA) limits FERC's authority to issue licenses under the Federal Power Act. See 16 U.S.C. Secs. 1271-1287. In the WSRA, Congress has designated over fifty rivers as components of the national "wild and scenic rivers system," 16 U.S.C. Sec. 1274, and barred the Commission from licensing the construction of any hydroelectric project "on or directly affecting" any river within that system, 16 U.S.C. Sec. 1278(a). The WSRA also provides that Congress may authorize the Secretary of Interior or the Secretary of Agriculture to study additional rivers for inclusion in the wild and scenic rivers system. After such a study, the Secretary submits a report, along with comments by other federal agencies and by state governors, to the President, who in turn makes a recommendation to Congress. The Congress then decides whether or not to designate the "study river" as a wild and scenic river. See 16 U.S.C. Sec. 1275.
In order to preserve rivers in their natural state until Congress can decide whether to designate them as wild and scenic rivers, the WSRA prohibits FERC from licensing any power project construction "on or directly affecting" any study river. This licensing ban lasts for three years following Congress' designation of a river for study, unless Congress specifically provides an even longer period. An additional moratorium period, not to exceed three years, is then provided to permit Congress to consider any report submitted by the President. 16 U.S.C. Sec. 1278(b).
The present case flows from Summersville's efforts to obtain a license for a hydroelectric project on the Gauley River in West Virginia. In 1978, Congress authorized a study of the Gauley for possible inclusion in the wild and scenic rivers system. 16 U.S.C. Sec. 1276(a)(74). Congress provided that the President's report must be submitted to Congress by September of 1984. 1 See 16 U.S.C. Sec. 1276(b)(3).
In September of 1980, Summersville applied for a preliminary permit 2 to study further development of the hydroelectric potential of the existing Summersville Dam on the Gauley River. Although Summersville did not originally inform FERC that the Gauley was a "study river," within a month of its original filing, the town submitted an exhibit to its application declaring that the project site was "included in a study of the Gauley River for possible designation as a wild and scenic river under the Wilderness Act." J.A. at 265. 3 The Commission issued Summersville a two-year permit in May of 1981. When Summersville filed a license application in November of 1982, it again informed the Commission that its project was located on a study river. Summersville revised its license application on June 27, 1983 to reflect the fact that a draft report by the Secretary of Interior did not recommend designation of the Gauley as a wild and scenic river. J.A. at 81. The Commission soon thereafter accepted for filing and began to process Summersville's license application. The Commission's letter of August 17, 1983 accepting the application asked Summersville to perform a cultural resource survey.
The Department of Interior submitted comments to FERC on Summersville's license application on January 16, 1984. Interior informed the Commission that "at present, FERC is prohibited by law from licensing any project on the Gauley River" because of the river's status as a potential wild and scenic river. J.A. at 168. The Commission received a competing license application in March of 1984 from Southeastern Renewable Resources, Inc. Two months later FERC dismissed both Summersville's and Southeastern's license applications as premature. FERC's original order dismissing the license applications explained that the statutory scheme of the WSRA vests the Secretary of Interior or Agriculture, depending on which department is administering the river, with the responsibility for determining whether a proposed project is consistent with the WSRA. As the Secretary of Interior had notified FERC that Summersville's project was on a study river, FERC was "precluded by law from considering license proposals for the site." Town of Summersville, 27 F.E.R.C. p 61,206, at p. 61,402 (1984).
FERC's Order Denying Rehearing stated:
Once it has been determined by an administering Secretary that a project is "on or directly affecting" a designated component of the [wild and scenic rivers] System or a study river, our jurisdiction to grant a license for the project is removed. While it is true that our jurisdiction to license projects on a particular study river may be reinstated should the Congress fail to make it a component of the System within a specified time period, nothing in the [WSRA] requires the Commission in the meantime to keep on file applications to develop projects on a study river. On the contrary, we conclude that the proper disposition of such applications is that they be dismissed as premature.
Town of Summersville, 28 F.E.R.C. p 61,257, at p. 61,484 (1984).
The Commission rejected Summersville's contention that it had relied on FERC's issuance of a preliminary permit and its acceptance of Summersville's license application as proof of a policy allowing FERC to consider its license application despite the Gauley's status as a study river. The Commission stated that Summersville should have known that FERC lacked authority to license a project on a study river. According to FERC's opinion, its acceptance of Summersville's license application indicated only that the determination of whether the project would be "on or directly affecting" the Gauley River had not yet been made. Once the Secretary of Interior made that determination, FERC was entitled to dismiss Summersville's license application. 4
Summersville now petitions this court to set aside the Commission's orders as arbitrary and capricious. According to Summersville, FERC must hold in abeyance Summersville's license application until the status of the Gauley River has been conclusively determined by Congress. Summersville finds this obligation in FERC's issuance of a preliminary permit and its acceptance and processing of a license application for a project on a river whose study period it knew might run until 1987. Petitioner's core argument is that the Commission has departed from its past policy of holding in abeyance license applications on study rivers and is now retroactively applying new policies to Summersville. We find that these contentions do not hold water.
Summersville's principal argument presupposes an explicit FERC policy of entertaining license applications on study rivers. 5 Because we conclude that FERC had no such policy, we reject Summersville's argument that summary rejection of its license application constituted an unacknowledged and unreasoned departure from past commission policy.
Although Summersville can point to no prior FERC decisions holding license...
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