On April 18, 2019, FERC issued a unanimous order, supported by all FERC Commissioners, ruling that the California State Water Resources Control Board (“SWRCB”) waived authority to issue a water quality certification under Section 401 of the Clean Water Act (“CWA”), 33 U.S.C. § 1641, in the pending hydropower relicensing of the Middle Fork American River Project (“Project”).  Applying the U.S. Court of Appeals for the D.C. Circuit’s (“D.C. Circuit”) seminal opinion in Hoopa Valley Tribe v. FERC issued in early 2019 (see January 30, 2019 edition of the WER), FERC held that SWRCB’s “active[] participation” in the applicant’s annual withdrawal-and-resubmittal of the license applicant’s request for Section 401 certification since 2012, “on occasion directly requesting the withdrawal and refiling,” constituted an agreement between the applicant and SWRCB that does not re-start the maximum one-year time period for states to act on a request for water quality certification under Section 401.

The licensee of the Project and applicant for relicensing, Placer County Water Authority (“PCWA”), filed its relicensing application with FERC in February 2011.  Several months later, after FERC accepted the application for filing and noticed that the application was ready for environmental analysis, PCWA submitted its request to SWRCB for Section 401 water quality certification in July 2011.  The next month, SWRCB accepted PCWA’s request, indicated that the one-year time period for its action, and stated that PCWA’s application was complete.

SWRCB did not act within the one-year time period.  Instead, in June 2012 and every year thereafter, PCWA filed a letter with SWRCB indicating that it withdrew and resubmitted its Section 401 request.

After the D.C. Circuit issued its opinion in Hoopa Valley, PCWA filed a petition for declaratory order with FERC, asserting that pursuant to the D.C. Circuit’s opinion in that case, SWRCB had waived Section 401 certification authority in the relicensing of the Project.  FERC agreed.  In granting PCWA’s petition, FERC concluded that “Hoopa Valley provides a definitive answer to the question posed here.  While [SWRCB] and [PCWA] may not have had a formal agreement regarding withdrawing and refiling the certification application, the record shows that both entities worked to ensure that this would take place each year.”

In reaching this conclusion, FERC rejected two key arguments raised in the case.  First, FERC held that although this case, unlike Hoopa Valley, does not involve a formal agreement to suspend the Section 401 process, the lack of a formal agreement between PCWA and SWRCB does not warrant a different result:

“We agree there is nothing in the record indicating that the two entities signed a specific document governing how future certification applications were to be treated.  However, the exchanges between [SWRCB] and [PCWA] make clear that each year [SWRCB] expected (and in a number of instances specifically requested) that [PCWA] would withdraw and refile its applications and that [PCWA] cooperated in these events.  These actions amount to an ongoing agreement.”

Thus, the “two entities agreed upon a procedure that delayed a certification” beyond the maximum one-year period for SWRCB to act on a request for water quality certification established statutorily in Section 401.

Second, FERC rejected arguments that Hoopa Valley should be applied prospectively, and that finding a waiver of Section 401 authority would be fundamentally unfair and disrupt the policy of “cooperative federalism” embodied in the CWA.  FERC found that “[t]he Hoopa Valley court did not in any way indicate that its ruling was limited solely to the case before it, and to conclude that the court’s decision does not apply to similarly-situated cases would fail to give full effect to that ruling.  We are aware of no sound legal or equitable basis for doing so.”  FERC observed that “[a]rguments that this conclusion is inconsistent with fairness or with Congressional intent must be addressed to Congress, which alone has authority to revise federal legislation.”

A copy of the order is available here.