On September 25, 2012, the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) issued a non-precedential summary order affirming FERC’s reissuance of a license to Erie Boulevard Hydropower, L.P. (“Erie”) for the School Street Hydroelectric Project (“School Street Project”). The School Street Project is located on the Mohawk River near the City of Cohoes, New York. Specifically, the Second Circuit determined that a proposed settlement agreement that modified certain aspects of the project’s hydroelectric license application was not a “material amendment” of the license application and thus, upheld FERC’s reissuance of the license. Unless petitioner Green Island Power Authority (“Green Island”) seeks to appeal the Second Circuit holding, FERC’s order resolves the status of the hydroelectric license that has been pending for over twenty years.
The School Street Project license was set to expire in 1993, but before the license’s expiration, the original holder of the license, Niagara Mohawk Power Corp., filed in 1991 to renew the license for an additional forty years. The application was not immediately accepted by FERC due to a denial of Clean Water Act certification for the project. The relevant interested parties entered into settlement negotiations to resolve environmental issues associated with the project. In 2005, Erie filed with FERC an Offer of Settlement (“2005 Settlement”) for the School Street Project to resolve the environmental disputes related to the project.
After having its preliminary permit for its Cohoes Falls project in a separate docket denied and an initial motion to intervene in the School Street Project docket ignored, Green Island filed comments on the 2005 Settlement. Additionally, Green Island renewed its motion for intervention, this time arguing that the 2005 Settlement constituted a “material amendment” to the School Street Project license, thus allowing new interventions to be filed in the proceeding. FERC denied Green Island’s motion to intervene as out of time. Eventually, FERC accepted the 2005 Settlement, and in 2007 FERC officially issued a new license to Erie to continue the School Street Project.
Green Island requested that FERC grant rehearing of its orders; when these requests were rejected Green Island sought judicial review of FERC’s orders in the Second Circuit. The Second Circuit vacated the license and remanded the case back to FERC in 2009, requiring FERC to consider whether the Offer of Settlement “materially amended” the School Street Project license application before denying Green Island’s motion to intervene. In 2010, FERC determined that the 2005 Settlement was not a “material amendment” within the meaning of FERC’s regulations. Accordingly, the 2005 Settlement at FERC did not open the proceedings to new comments and interventions. FERC reinstated the School Street Project license that had been vacated by the Second Circuit.
Green Island challenged FERC’s remand determinations and again sought rehearing in the Second Circuit. Upon review of FERC’s remand orders, the court found that FERC had reasonably interpreted and applied its regulations in determining that a settlement agreement modifying certain aspects of a hydroelectric license application was not a “material amendment” of the license application and affirmed FERC’s re-issuance of the license to Erie. Notably, the Second Circuit reasoned that even though the 2005 Settlement proposed to remove a 21-MW turbine, “the project would still be required to operate in run-of-river mode and could provide the same minimum flows to the bypassed reach of the Mohawk River” proposed in the 1991 application. Thus, the 2005 Settlement did not amount to a “fundamental and significant change” to “plans of development proposed in an application for a license.”