Washington Water Power Co. v. F.E.R.C.

• Decision Date: 18 October 1985
• Docket Number: No. 83-2051,83-2051
• Citation: 775 F.2d 305,249 U.S.App.D.C. 255
• Parties: WASHINGTON WATER POWER COMPANY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Spokane Tribe of Indians, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 305

775 F.2d 305

249 U.S.App.D.C. 255

WASHINGTON WATER POWER COMPANY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent Spokane Tribe of Indians, Intervenor.

No. 83-2051.

United States Court of Appeals District of Columbia Circuit.

Argued Oct. 11, 1984.

Decided Oct. 18, 1985.

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

Jerry K. Boyd, Spokane, Wash., with whom Peyton G. Bowman, III and Edward M. Leigh, Washington, D.C., were on brief, for petitioner.

Joel M. Cockrell, Atty., F.E.R.C., Washington, D.C., with whom Jerome M. Feit, Sol., and Joshua Z. Rokach, Atty., F.E.R.C., Washington, D.C., were on brief, for respondent.

Robert D. Dellwo, Spokane, Wash., with whom Gary T. Farrell, Spokane, Wash., was on brief, for intervenor Spokane Tribe of Indians.

Before TAMM ^* and MIKVA, Circuit Judges, and MacKINNON, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge MacKINNON.

Dissenting opinion filed by Circuit Judge MIKVA.

MacKINNON, Senior Circuit Judge:

Two orders of the Federal Energy Regulatory Commission ("FERC" or the "Commission") hold that the Washington Water Power Company ("Washington Power" or the "Company") is required by the Federal Power Act, 16 U.S.C. Sec. 791 et seq. ("FPA"), to obtain a license for its hydroelectric development which was completed in 1911 on the Spokane River at Little Falls, Washington. Washington Power claims it constructed, operates, and maintains the dam and associated structures under the authority of a special Act of Congress approved on March 3, 1905 (the "1905 Act"), and that the Little Falls dam therefore falls within the specific exceptions contained in sections 23(a) and 23(b) of the Federal Power Act.

The Commission contends for a different construction of the 1905 Act. It asserts that the 1905 Act did not authorize the construction of a dam, but only granted to the Company certain land and water rights ancillary to the actual construction of a dam and the occupation of the Spokane River. In addition, the Commission contends that in any case the Department of Interior's approvals under the 1905 Act of the application by the predecessor of the Company, and of the application of the Company itself, were insufficient to grant the Company the right to construct and operate the dam and the accompanying hydroelectric project, since the 1905 Act allegedly did not authorize the granting of the right to build a dam, but only the use of water and land. To occupy the Spokane River, which the Commission now claims was a navigable waterway of the United States, Washington Power allegedly should have secured permission from Congress and complied with the other requirements of sections 9 and 10 of the Rivers and Harbors Appropriation Act of 1899. 30 Stat. 1151 (1899) (codified as amended at 33 U.S.C. Secs. 401 and 403 (1982)) (hereinafter cited as the Rivers and Harbors Act). The Commission held that having failed to do this, Washington Power did not have a complete "permit or right of way" prior to June 10, 1920 to construct or to operate the dam, and therefore the dam does not fall under the exceptions set out in sections 23(a) and 23(b) of the Federal Power Act. However, the 1905 Act incorporates by reference We hold that the Spokane River in 1905-10 was not a navigable waterway of the United States and that the Secretary of the Interior was authorized by the 1905 Act, which incorporated Washington water law by reference, to consent to and grant qualified applicants valid rights of way to construct dams on and to occupy the Spokane River at Little Falls, and to authorize the construction of the Little Falls development. Washington Power's Little Falls development therefore comes within the statutory exceptions set forth in sections 23(a) and 23(b) of the Federal Power Act, and the Company is not required, now that the River below Little Falls has become navigable, to obtain a license to continue to operate and maintain the development at Little Falls.

                the water law of the State of Washington and provides that applicants for rights of way shall acquire water rights "by appropriation under and pursuant to the laws of the State of Washington."    This vital provision, which is basic to a proper interpretation of the 1905 Act, is totally ignored by the brief of the Commission.  The agency gives absolutely no consideration to this important, if not controlling, provision of the Act.  This failure is fatal to the Commission's attempted construction of the Act
                

I. BACKGROUND

Around 1905, David Wilson, a private entrepreneur responsible for much of the development of western Washington State, owned land on the south bank of the Spokane River at Little Falls, about 45 miles downstream from Spokane, Washington (J.A. 637-42). Wilson wanted to use the 83 foot drop in the river at that point (J.A. 637) to produce electricity and to do so needed to obtain an interest in the land on the north bank and in the bed and waters of the river itself. However, the north bank of the river and all land up to the high water mark on the south bank was within the Spokane Indian Reservation (the "Reservation"). Wilson could have obtained a permit from the Secretary of the Interior to use a right of way through the Reservation for a dam, etc., under the Act of February 15, 1901, 31 Stat. 790, ¹ which applied generally to public lands and reservations. Such permit, however, would have been revocable at the discretion of the Secretary. Id. Moreover, it would not have included the right to the use of the river's water. Id. Unwilling to invest in building a power dam under these circumstances, Wilson enlisted the help of Representative Jones of Washington, the Congressman for the district, to sponsor a bill, which was enacted, "[p]roviding for the acquirement of water rights ... [and] land ... for sites for power purposes and the beneficial use of said water, and for other purposes." 33 Stat. 1006 (1905). ² This bill applied only to the Spokane River along the Immediately after Congress passed the 1905 Act, Wilson took the initial step to appropriate a flow of 10,000 cubic feet per second at Little Falls pursuant to and in accordance with the laws of Washington, and applied under the 1905 Act to the Secretary of Interior to acquire the right to use the waters of the Spokane River at the point of appropriation and to purchase 100 acres of the Reservation on the north bank of the river. The Secretary of the Interior, on November 3, 1906, acting in accordance with the 1905 Act, granted the 100 acres and the right to use the waters by approving Wilson's application (J.A. 261-81). This approval constituted the "1906 permit."

                southern boundary of the Spokane Indian Reservation and became the 1905 Act.  It empowered the Secretary of the Interior to "consent " to citizens, associations and corporations of the United States acquiring "the use of the waters of the Spokane River" along the southern boundary of the Spokane Indian Reservation.  The "right" to the use of this water was to be acquired, under the procedure provided for by the Act, by "appropriation under and pursuant to the laws of the State of Washington."    It also empowered the Secretary of Interior to grant such appropriators "land" within the Reservation "for the erection of suitable water, electrical, or power plants, dams ... and other needful structures required for the development of power or for the beneficial use of said water."    Id. Sec. 2 (emphasis added)
                

Less than a year later, on July 8, 1907, Wilson sold his interests in the lands and water rights to Washington Power (J.A. 298-322). In 1908, the Company began construction of the hydroelectric development.

The dam was constructed by the Company without complying with sections 9 and 10 of the Rivers and Harbors Act, 33 U.S.C. Secs. 401 and 403, as would have been required if the Spokane River at that time and place was a "navigable river ... of the On May 18, 1908, Washington Power applied under the 1905 Act to the Secretary of the Interior to acquire the right to use the waters of the Spokane River at the point of its appropriation and to purchase an additional eight acres of Reservation lands at the same point (J.A. 328-409). On August 29, 1908, an Assistant Secretary of the Interior endorsed the initial approval of this acquisition by the Commissioner of Indian Affairs (J.A. 435). This constituted the "1908 permit." The original Wilson grant was also resurveyed by Captain Webster, United States Army, and others (J.A. 531-32), and approved by the Secretary of the Interior on May 6, 1910. The dam began producing electric power the same year.

                United States ... or ... navigable ... wholly within [Washington]." 3  Washington Power also developed the Little Falls plant on the opposite side of the river from the site originally contemplated by Wilson, and so used some lands of the Reservation that were not included in the interests assigned to the Company by Wilson.  Thus Washington Power itself appropriated a flow of 10,000 cubic feet per second pursuant to the laws of the State of Washington
                

The issue in this case is whether the present Commission correctly held, given the foregoing facts, that the present Federal Power Act, as enacted in 1920 and amended in 1935, requires Washington Power now to apply for and obtain a license in order to continue to operate and maintain the 1911 Little Falls hydroelectric development. We hold that under the exceptions contained in sections 23(a) and 23(b) of the Act, Washington Power is not required to apply for or to have any additional license or authority to continue to operate and maintain the existing Little Falls plant.

II. THE STATUTORY FRAMEWORK AND THE LAW OF APPROPRIATION IN WASHINGTON

Sections 23(a) and 23(b) of the Federal Power Act, 16 U.S.C. Secs. 816 and 817, provide:

Sec. 23(a) The provisions of this Part shall not be construed as affecting any...