On May 21, 2020, FERC issued the latest in a series of orders finding that a state—California, in this case—waived its authority to issue water quality certification pursuant to section 401 of the Clean Water Act (CWA) for the Yuba County Water Agency’s (YCWA) Yuba River Development Project, a FERC-licensed hydroelectric project in northern California.

On April 28, 2014, YCWA submitted a timely application for a new license for the Yuba River Project (FERC No. 2246), located on the Yuba River, North Yuba River, Middle Yuba River and Oregon Creek in Yuba, Sierra, and Nevada counties, California.  The Project was originally licensed in 1963.

Section 401(a)(1) of the CWA provides that any applicant for a federal license to conduct an activity which “may result in a discharge into the navigable waters of the United States” provide the federal licensing agency a water quality certification from the state in which the discharge originates, or evidence of the state’s waiver of certification.  The CWA provides that where a 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 is waived.  It also provides that the licensing or permitting agency—FERC in this case—may not grant a license or permit until certification has been granted or waived.

YCWA initially requested water quality certification from the California State Water Resources Control Board (California Board) on August 24, 2017.  The California Board acknowledged receipt of the application in a September 21, 2017 letter to Yuba County which stated that the County’s “letter initiates a one-year deadline from the date it was received for the [Board] to act on the request for certification” and that the “deadline for certification action is August 24, 2018.”  On July 25, 2018, California Board staff sent an email to Yuba County, reiterating that the action date for the Yuba River Project was August 24, 2018, and inquired whether YCWA would be filing a California Environmental Quality Act (CEQA) document, which the California Board stated it needed to complete its environmental analysis for the certification request.  YCWA replied the same day, stating that it planned “to submit the withdrawal/resubmittal letter on August 20.”  Later that day, the California Board instructed YCWA to “submit the letter by next Friday” which was August 3.  On August 3, 2018, YCWA withdrew and resubmitted its request for water quality certification, indicating that the project had not changed since YCWA filed its initial request the prior year.  The California Board acknowledged receipt of YCWA’s letter and stated that it “serves as a formal withdrawal and re-filing request for certification,” and established a new certification deadline of August 3, 2019.

Following the D.C. Circuit’s issuance of its opinion in Hoopa Valley Tribe v. FERC (see Jan. 30, 2019 edition of the WER), which held that the withdrawal-and-resubmission approach does not re-start the statutory one-year deadline for water quality certification, the California Board issued an order denying YCWA’s request for water quality certification without prejudice, stating that, because the CEQA process and consultation under the Endangered Species Act (“ESA”) had not been completed, YCWA should file a new request for certification.

Instead, YCWA filed a request for the Commission to determine whether the California Board waived its water quality certification authority for the Project.  The California Board, the California Department of Fish and Wildlife (California DFW), and the Foothills Water Network (Foothills) opposed YCWA’s request and argued that there was no agreement between YCWA and the California Board for YCWA to withdraw and refile its application; that YCWA acted unilaterally in doing so; that YCWA’s failure to submit a CEQA document prevented the California Board from issuing a certification; and that the California Board’s issuance of a certification would not delay FERC’s relicensing proceeding, even if it lasted beyond one year.

In its May 21 Order holding that the California Board waived its section 401 authority, FERC stated that “an explicit written agreement to withdraw and refile is not necessary to support a finding of waiver” and found that the “coordination between the California Board and YCWA alone is sufficient evidence that the California Board sought withdrawal and resubmittal as a means of circumventing the one-year statutory deadline for the state agency to act.”  Because the California Board asked Yuba County to withdraw and re-file its request, the Commission found that the California Board was complicit in the applicant effectuating the withdrawal and re-filing of its request.

FERC also rejected the California Board’s argument that it was unable to act on the certification request because YCWA did not provide it with a CEQA document, noting that “the Board did not dispute Yuba County’s statements that the project had not changed between applications and that the Board had all of the information it needed to act.”  The Commission reiterated its position from prior orders, stating that the “state’s reason for delay [is] immaterial,” and that, to the extent a state has insufficient information to act on a request for certification, it can simply deny the request.  The Commission also dismissed the California Board’s argument that a finding of waiver would serve no purpose in this case, because FERC cannot issue a license until consultation under the ESA is complete.  FERC found this argument unpersuasive, concluding that “[r]egardless of whether a water quality certification decision is the sole factor delaying a licensing proceeding, the general principle from Hoopa Valley still applies…”  Finally, the Commission did not accept the California Board’s argument that Yuba County failed to exhaust its state administrative remedies, stating that the issue of whether a state waived its certification authority is a federal question properly before the Commission.

Relatedly, while YCWA’s request was pending with the Commission, a group of environmental organizations, including Foothills, California Coastkeeper Alliance, the South Yuba River Citizens League, Sierra Club California, and American Whitewater, filed a letter with California Governor Newsom, urging his administration to challenge FERC’s findings of waiver of section 401 under Hoopa Valley Tribe and to initiate state legislative action to prevent future waivers of California’s authority under section 401.

FERC’s Order is available here.

The environmental group’s letter to Governor Newsom is available here.