Commissioner Richard Glick Concur in Part and Dissent in Part Regarding McMahan Hydroelectric LLC, Bynum Project

Commissioner Richard Glick Statement
April 16, 2020
Docket No. P-14858-002
Order: H-3

I agree with the Commission that the North Carolina Department of Environmental Quality (North Carolina DEQ) waived its authority under section 401 of the Clean Water Act 1 because it did not act on a substantially unrevised section 401 application for more than a year, instead participating in a withdrawal-and-resubmission scheme intended to avoid that one-year deadline.  Nevertheless, I dissent in part because the Commission goes out of its way to make a superfluous second waiver finding. 2  I would decide this proceeding on the straightforward basis on which we all agree.  Accordingly, I concur in part and dissent in part.

Section 401 requires applicants for a federal license that “may result in any discharge into the navigable waters”—a category that includes hydroelectric licenses issued by the Commission—to secure a certificate from the state in which the “discharge originates or will originate.” 3   Section 401, however, imposes a time limit on states’ review of a certificate request:  “If the State . . . fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request, the certification requirements of this subsection shall be waived with respect to such Federal application.” 4   Prior to the D.C. Circuit’s decision in Hoopa Valley, the Commission took the position that an applicant’s withdrawal and resubmission of a section 401 application was sufficient to restart the one-year deadline. 5  

Hoopa Valley rejected that interpretation in a proceeding thataddressed the long-delayed relicensing proceeding for PacifiCorp’s Klamath River Hydroelectric Facility along the border between California and Oregon. 6   To make a long story short, several years ago PacifiCorp apparently came to the conclusion that relicensing the facility would not be cost-effective. 7   PacifiCorp then entered an agreement with the two states and a variety of stakeholders to hold the relevant state licensing proceedings in abeyance while it pursued options for decommissioning the facility. 8   One of the state licensing proceedings PacifiCorp sought to delay involved its requests for a certificate pursuant to section 401.  To avoid section 401’s one-year limitation, PacifiCorp agreed to annually withdraw and resubmit its section 401 application before the one-year limit expired—a task it accomplished each year by submitting a one-page letter, stating its intent to withdraw and resubmit its application. 9  

In Hoopa Valley, the court held that PacifiCorp’s particular withdrawal-and-resubmission tactic did not restart the one-year limitation on the states’ review of its section 401 application, 10 meaning that the states had waived their section 401 authority by failing to act on PacifiCorp’s application within a year.  But the court went out of its way to limit its ruling to the facts before it.  The court explained that its decision resolved “a single issue: whether a state waives its Section 401 authority when, pursuant to an agreement between a state and an applicant, an applicant repeatedly withdraws-and-resubmits its request for water quality certification over a period of time greater than one year.” 11   

Most importantly for the purposes of today’s order, the court expressly avoided addressing what happens when the applicant modifies its section 401 application before the one-year period elapses.  The court explicitly “decline[d] to resolve the legitimacy” of an arrangement in which an applicant withdrew its 401 application and submitted a new one in its place. 12   Similarly, the court did not address “how different a [section 401 application] must be to constitute a ‘new request’ such that it restarts the one-year clock.” 13   In addition, throughout the opinion, the court referenced a slew of factors that might limit the scope of its decision, including the parties “deliberate and contractual idleness,” 14 the fact that the purpose of the agreement was to delay the license process, 15 the fact that PacifiCorp “never intended to submit a ‘new request,’” 16 and the decade-long licensing delay caused by the scheme. 17  

That makes Hoopa Valley a hard case to apply.  On the one hand, the court made clear that the Commission’s prior interpretation—that any withdrawal and resubmission of a section 401 application restarted the one-year period for review—was wrong.  Although that is enough to decide a handful of relatively easy cases, it tells us little about the majority of fact patterns likely to come before this Commission.  Indeed, as noted, the court enumerated, but did not decide, a host of questions that will ultimately determine the scope of the waiver rule announced in Hoopa Valley.

This case could have been one of the relatively easy ones.  As the Commission explains, McMahan Hydroelectric, LLC (McMahan Hydro) sent North Carolina DEQ its first section 401 application on March 3, 2017. 18   On April 26, 2017, North Carolina DEQ requested significant additional information, including a water quality monitoring plan, which had not previously been provided. 19   McMahan Hydro submitted that information on December 21, 2017, and, that same day, contacted to North Carolina DEQ to discuss withdrawing and resubmitting its application, which it ultimately did on February 20, 2018. 20   Roughly a year later, at North Carolina DEQ’s request, McMahan Hydro withdrew and resubmitted its application a second time on February 11, 2019, 21 with the only intervening changes to the application being certain revisions to the water quality monitoring program made in response to comments by North Carolina DEQ. 22  

As I explained in my partial dissent from the underlying order, the facts surrounding the second withdrawal and resubmission are sufficient for us to conclude that North Carolina waived its section 401 authority. 23  As noted, McMahan Hydro had pending before North Carolina DEQ a substantially unmodified application from February 20, 2018, (the date of its first withdrawal and resubmission) through February 20, 2019 (nine days after its second withdrawal and resubmission). 24   The principal change made during that period was the relatively minor revisions to the water quality monitoring program made in response to North Carolina DEQ’s comments. 25   Those changes were not, in my opinion, sufficient to constitute a new application.  Accordingly, the February 11, 2019 withdrawal and resubmission, made at North Carolina DEQ’s behest, did not restart the one-year deadline, meaning that McMahan Hydro had substantially the same application pending before the North Carolina DEQ for more than a year.  That is sufficient to conclude that the state waived its section 401 rights. 26  

The Commission, however, goes on to find a second waiver based on McMahan Hydro’s first withdrawal and resubmission. 27   As I explained in my statement on the underlying order, I see no need for that superfluous second finding.  In any case, I note that, in the underlying order, the Commission suggested that only a major physical modification to a project could create a new application, at least absent some undefined “unusual circumstances.” 28   Today’s order does not repeat that point—a step in the right direction from my perspective.  Nothing in the Clean Water Act or Hoopa Valley requires us so drastically limit what might constitute a new section 401 application.  Congress enacted section 401 so that states can ensure that a federally licensed or certificated project does not violate state or federal water quality standards and to permit states to impose such conditions as are necessary to ensure that result. 29   Significant changes in how a project is monitored could well determine whether a state can make the water quality findings required by section 401, even if those changes do not require a new license application with the Commission. 30   Taking the position that only a revised application with this Commission could result in a new section 401 application would discount the complex and nuanced review that many states undertake in implementing their section 401 authority. 

For these reasons, I respectfully concur in part and dissent in part.

 

• 11 33 U.S.C. § 1341(a)(1) (2018).
• 22 913 F.3d 1099, 1101 (D.C. Cir. 2019), pet. for cert. denied sub nom. Cal. Trout v. Hoopa Valley Tribe, 2019 WL 6689876 (Dec. 9, 2019).
• 33 33 U.S.C. § 1341(a)(1).
• 44 Id.
• 55 Hoopa Valley, 913 F.3d at 1104.
• 66 Id. at 1101.
• 77 Id. at 1101-02.
• 88 Id. at 1101.
• 99 Id. at 1102-04.That process had gone on for “more than a decade” by the time that the D.C. Circuit decided Hoopa Valley. Id. at 1104.
• 1010 Id. at 1103.
• 1111 Id.; see also id. at1104(noting that the D.C. Circuit had not previously addressed “the specific factual scenario presented in this case, i.e., an applicant agreeing with the reviewing states to exploit the withdrawal-and-resubmission of water quality certification requests over a lengthy period of time”).
• 1212 Id.
• 1313 Id.
• 1414 Id.
• 1515 Id. (“This case presents the set of facts in which a licensee entered a written agreement with the reviewing states to delay water quality certification.”); id. at 1105 (describing the set of facts before the court as one “in which a licensee entered a written agreement with the reviewing states to delay water quality certification”).
• 1616 Id.
• 1717 Id.
• 1818 McMahan Hydroelectric, LLC, 171 FERC ¶ 61,046, at P 19 (2020) (Rehearing Order).
• 1919 Id. P 20.
• 2020 Id. PP 20-21.
• 2121 At which point the D.C. Circuit had issued its decision in Hoopa Valley.
• 2222 Id. PP 22, 24.
• 2323 McMahan Hydroelectric, LLC, 168 FERC ¶ 61,185 (2019) (License Order) (Glick, Comm’r, concurring in part and dissenting in part at P 5).
• 2424 See supra P 7. North Carolina DEQ ultimately acted on that application on September 20, 2019, the day the Commission issued the License Order. Rehearing Order, 171 FERC ¶ 61,046 at P 30.
• 2525 See supra P 7.
• 2626 Rehearing Order, 171 FERC ¶ 61,046 at P 28.
• 2727 License Order, 168 FERC ¶ 61,185 (Glick, Comm’r concurring in part and dissenting in part at PP 4-5).
• 2828 License Order, 168 FERC ¶ 61,185 at P 38 & n.43.
• 2929 See PUD No. 1 of Jefferson Cnty. v. Wa. Dep’t of Ecology, 511 U.S. 700, 707-08 (1994); see also S.D. Warren Co. v. Maine Bd. of Envtl. Prot., 547 U.S. 370, 386 (2006) (explaining why “Congress provided the States with power to enforce ‘any other appropriate requirement of State law’” pursuant to their section 401 authority).
• 3030 PUD No. 1 of Jefferson Cnty, 511 U.S. at 707 (listing the provisions of the Clean Water Act that a state must find a discharge consistent with as part of its section 401 determination).