Commissioner James Danly Statement
June 15, 2023
Project No. 2701-065
Today’s decision[1] runs afoul of the Clean Water Act (CWA)[2] and the Administrative Procedure Act (APA).[3] I therefore dissent.
At issue is whether the New York State Department of Environmental Conservation (New York DEC) waived its right to issue a water quality certification under CWA section 401. Specifically, the question presented is whether New York DEC’s denial of Erie Boulevard Hydropower, L.P.’s (Erie) request for a water quality certification complied with CWA regulations. The Commission’s review of actions on water quality certification requests is narrow—it is limited to “facially review[ing]”[4] certification issuances and denials to determine whether they comply with the procedural requirements of section 401 and implementing regulations.[5] In this case, if the issuance complies, the request is denied; if not, the state’s right has been waived.[6]
CWA regulations require denial of a water quality certifications to include:
(i) [t]he specific water quality requirements with which the discharge will not comply; (ii) [a] statement explaining why the discharge will not comply with the identified water quality requirements; and (iii) [i]f the denial is due to insufficient information, the denial must describe the specific water quality data or information, if any, that would be needed to assure that the discharge from the proposed project will comply with water quality requirements.[7]
At a minimum, a facial review of New York DEC’s certification denial shows that New York DEC failed to include two of the three required elements listed in section 121.7(e)(1). New York DEC failed the first requirement when it declined to identify “specific water quality requirements with which the discharge will not comply”[8] and failed the second requirement when it chose not to include “[a] statement explaining why the discharge will not comply with the identified water quality requirements.”[9] CWA’s regulations state that “[t]he certification requirement for a license . . . shall be waived upon . . . [f]ailure or refusal to satisfy the requirements of § 121.7(e)”[10] and direct the federal agency issuing the license—in this case, the Commission—to “provide written notice . . . that waiver of the certification requirement . . . has occurred.”[11]
My colleagues do not like this outcome. Instead of finding waiver, they resort to interpreting the regulation to mean that, “by providing the information specified in section 121.7(e)(1)(iii), i.e., identifying the water quality data or information needed to assure the project will comply with water quality requirements, the certifying authority complies with section 121.7(e)(1)(i) and (ii).”[12] This must be wrong. Nothing in the regulation or its preamble states (or even implies) that by meeting the third element, the certifying agency has successfully met the first two. The preamble to the CWA regulations states again and again that all three elements must be included in a certification denial in order to comply with section 121.7(e):
“Consistent with the proposal, the final rule requires certification denials . . . to include three elements to support certification denials.”[13]
“The [Environmental Protection Agency (EPA)] is finalizing the requirement that a certification denial . . . include three elements to support the denial.”[14]
“[F]ederal agencies are required to determine whether certification denials include the three elements listed in section 121.7(e).”[15]
“If certification denials do not include these three elements, the certifying authority has ‘fail[ed] or refuse[d] to act’ . . . and therefore has waived certification.”[16]
There can be no confusion regarding the EPA’s meaning.[17]
But my colleagues pay no mind to the EPA. Instead, they declare that their interpretation is necessary for the regulation because “[i]n the absence of information providing details about the potential effects of the project proposal, it would not be possible for an agency to determine which, if any, water quality requirements the discharge will not comply with or to provide an explanation of how the discharge will not comply.”[18] Citing to absurdity doctrine cases,[19] my colleagues argue that they may interpret the regulation in a manner that “make[s] sense.”[20]
The absurdity doctrine cannot be invoked simply because one finds an outcome objectionable. Courts have held that “to justify a departure from the letter of a statute because of its spirit and policy, the absurdity following from the literal application of its words must not only ‘be so gross as to shock the general moral or common sense’, but also ‘there must be something to make plain the intent of Congress that the letter of the statute is not to prevail.’”[21]
That rare circumstance does not exist here. The meaning of the CWA regulations is clear: all three elements must be included in certification denials.[22] The EPA found these requirements necessary to “promote transparency and to help assure that certifying authorities understand and consider the appropriate scope of information when . . . issuing a denial.”[23] While the CWA regulations allow denials based on insufficient information,[24] the regulations sought to discourage certifying agency’s use of that rationale: “the final rule includes a number of provisions that should reduce the need for certifying authorities to deny certification based on insufficient information.”[25] The majority’s reading would encourage the use of the rationale without effective restraint or transparency. It would be hard to claim that either the EPA’s deliberate policy decision to limit the number of denials based on insufficient data or its desire to promote transparency are “absurdities” liable to “shock the general moral or common sense.”
In fact, it is the majority makes that no sense. Let us not forget why New York DEC denied certification without prejudice—because the Commission has not completed its review under the National Environmental Policy Act (NEPA).[26] However, the CWA regulations state that requiring multi-year NEPA reviews to be complete before a state acts on CWA section 401 application is “contrary to the plain language of the statute, which requires certifying authorities to act on a request within a reasonable period of time that does not exceed one year.”[27] How can the majority think New York DEC’s rationale is permissible when the EPA has advised that “[t]o the extent that State or Tribal implementing regulations may have required a NEPA review to be completed as part of a section 401 certification review, the EPA encourages certifying authorities to update those regulations to incorporate deadlines consistent with the reasonable period of time established under the CWA, or to decouple the NEPA review from the section 401 process, so as to ensure timely action on section 401 certification requests and to avoid waiver by the certifying authority”?[28]
My colleagues cannot avoid a literal reading of the CWA regulations. New York DEC’s certification denial does not include all three elements of section 121.7(e) of the CWA regulations, meaning the Commission must find waiver. Failure to comply with the CWA regulations is a violation of the CWA and the APA.
For these reasons, I respectfully dissent.
[1] Erie Boulevard Hydropower, L.P., 183 FERC ¶ 61,198 (2023) (Erie).
[2] 33 U.S.C. § 1341(a)(1).
[3] 5 U.S.C. § 706.
[4] 85 Fed. Reg. 42,210, 42,266 (July 13, 2020).
[5] 85 Fed. Reg. at 42,267. See also City of Tacoma v. FERC, 460 F.3d 53, 68 (D.C. Cir. 2006) (stating that the CWA requires that the Commission “at least to confirm that the state has facially satisfied the express requirements of section 401”).
[6] 40 C.F.R. §§ 121.8-121.9.
[7] Id. § 121.7(e)(1)(i)-(iii) (emphasis added).
[8] 40 C.F.R. § 121.7(e)(1)(i).
[9] Id. § 121.7(e)(1)(ii). New York DEC agrees that it did not satisfy two of the three requirements in section 121.7(e)(1). New York DEC, May 12, 2023 Comments on Rehearing Request, Docket No. P-2701-000, at 2 (“In the absence of information providing details about the project proposal, such as an [Environmental Assessment], it would not be possible for [New York DEC] to determine which, if any, water quality requirements the discharge will not comply with or to provide an explanation of how the discharge will not comply.”) (citing 40 C.F.R. § 121.7(e)(1)(i-ii)).
[10] Id. § 121.9(a)(2)(iii).
[11] Id. § 121.9(c); see also 85 Fed. Reg. at 42,267 (“[i]f certification denials do not include [the] three elements [listed in section 121.7(e)(1)], the certifying agency has ‘fail[ed] or refuse[d] to act’” . . . and therefore has waived certification.”).
[12] Erie, 183 FERC ¶ 61,198 at P 15 (citation omitted).
[13] 85 Fed. Reg. at 42,265 (emphasis added).
[14] Id. (emphasis added).
[15] Id. at 42,267 (emphasis added).
[16] Id. (emphasis added).
[17] It should also be recognized that the preamble stated that the “final rule provisions retain the same meaning as the proposed provisions.” Id. at 42,263. The proposed provisions stated, “the EPA is proposing that the written notification include the reasons for denial, including the specific water quality requirements with which the proposed federally licensed or permitted project will not comply, a statement explaining why the proposed project will not comply with the identified water quality requirements, and the specific data, information, or project modifications, if any, that would be needed for the certifying authority to determine that the discharge will comply with water quality requirements.” 84 Fed. Reg. 44,080, at 44,111 (Aug. 22, 2019).
[18] Erie, 183 FERC ¶ 61,198 at P 17.
[19] Id. P 15 n.35 (citing Posey v. Heckler, 812 F.2d 1408, at *3 (6th Cir. 1987); cf. Griffin v. Oceanic Contractors, 458 U.S. 564, 575 (1982)).
[20] Id. P 15.
[21] Porter v. Nowak, 157 F.2d 824, 826 (1st Cir. 1946) (quoting Crooks v. Harrelson, 282 U.S. 55, 60 (1930)). Likewise, while in some instances “and” should be read disjunctively rather than in its ordinary conjunctive sense, that is only in the case “where strict grammatical construction will frustrate clear legislative intent.” Bruce v. First Fed. Sav. & Loan Ass’n of Conroe, Inc., 837 F.2d 712, 715 (5th Cir. 1988) (footnote omitted).
[22] Supra P 5.
[23] 85 Fed. Reg. at 42,256; id. (“These requirements are intended to increase transparency and ensure that any limitation or requirement added to a certification, and any denial, is within the scope of certification.”); id. at 42,265 (“The required elements will lead to more transparent decision-making and a more complete record of the administrative action.”).
[24] Id. (“the final rule reaffirms and clarifies that insufficient information about the proposed project can be a basis for a certification denial”).
[25] Id. at 42,263. It should also be recognized that the CWA regulations contemplate modifications to the proposed project during the certification request review period. See id. at 42,247 (“minor changes to the proposed project, such as those that do not change the project footprint in a material way, should not warrant the submission of a new certification request”).
[26] Erie, 183 FERC ¶ 61,198 at P 9.
[27] 85 Fed Reg. at 42,265.
[28] Id. at 42,272 n.62.