At the June 18, 2020 and July 16, 2020 Commissioner meetings, FERC issued a combined five orders continuing its trend of finding that a state has waived its Clean Water Act (“CWA”) section 401 authority for failing to issue a water quality certification within one year from receiving the request for certification.  Since the D.C. Circuit’s 2019 ruling in Hoopa Valley Tribe v. FERC (see December 11, 2019 edition of the WER), which held that the plain language of section 401 limited a state’s review to one year, the Commission has consistently found state waiver when the time period has been exceeded under a variety of circumstances.  Below is a summary of FERC’s recent orders finding that a state certifying authority waived its section 401 authority.

The Merced Irrigation District order tracks a coordinated effort between the water quality certification applicant (first Pacific Gas & Electric in 2012 and thereafter Merced starting in 2014) and the California State Water Resources Control Board (“California Board”) to annually withdraw-and-resubmit the certification.  The withdrawals-and-resubmissions were intended to “re-trigger” the section 401 one-year period and allow the California Board to meet state environmental review requirements under the California Environmental Quality Act (“CEQA”).  In 2019, in the wake of the Hoopa Valley Tribe decision, the California Board denied Merced’s certification request without prejudice.  In line with FERC precedent following Hoopa Valley Tribe (see previous editions of the WER discussing Pacific Gas and Electric, Nevada Irrigation District, McMahan Hydroelectric, and Yuba County Water Agency), the Commission held that the California Board was complicit in the withdrawal-and-resubmission scheme and that CEQA cannot override the Congressionally mandated one-year requirement.

The South Feather Water and Power Agency (“SFWPA”) order, issued on June 18, 2020, similarly follows another withdrawal-and-resubmission scheme between the water quality certification applicant (SFWPA with its first submission in 2008) and the California Board.  Here, however, the California Board issued the water quality certification in 2018—before the D.C. Circuit’s 2019 Hoopa Valley Tribe decision.  After the D.C. Circuit interpreted CWA section 401 as establishing a bright-line, maximum one-year requirement for states to decide on a request for water quality certification, SFWPA petitioned the Commission for a finding that the California Board had waived its authority long before it issued the certification in 2018 and asked the Commission not to include its conditions in the project’s license, once issued.  The Commission found that the California Board had waived its authority and that Hoopa Valley Tribe applies even retroactively.  The Commission explained that previously, in Southern California Edison, it held that the legal principles articulated in Hoopa Valley Tribe apply to waiver determinations for water quality certifications issued prior to the Hoopa Valley Tribe decision.  There, the Commission explained that “legal rules announced in judicial decision-making typically have retroactive effect and ‘[r]etroactivity is the norm in agency adjudications[,]’… ‘no less than judicial adjudications.’”  For these same reasons, the Commission saw “no justification for not applying Hoopa Valley here.”

In an order issued on July 16, 2020, the Commission granted Pacific Gas and Electric Company’s (“PG&E”) declaratory order that the California Board waived its certifying authority for the relicensing of the Upper North Fork Feather River Project.  This order also tracked another withdrawal-and-resubmission scheme and statements by the California Board that additional information might be required to complete the CEQA process.  Here, however, the California Board argued that additional information was required regarding project infrastructure development plans, which supplemented the original application and the Commission should find that this supplementation amounted to a new “request” for certification that would re-trigger the one-year requirement.  In response, the Commission stated that “an applicant’s submittal of additional information at a certifying agency’s request generally would not rise to the level of a material change to a project’s plan of development, such that an application to amend a pending license application, and a new certification request, would be warranted.”  Additionally, in this instance, the Commission concludes that even if supplementation would re-trigger the one year period, there were additional one-year cycles where no supplementation was provided, and thus the new request analysis is irrelevant.

On July 16, 2020, the Commission also issued two orders rejecting arguments raised in rehearing requests of orders finding waivers by the California Board, PG&E for the Kilarc-Cow Creek Project and Southern California Edison for the Big Creek Projects.  In both of these orders, after considering the California Board’s rehearing arguments, the Commission again found the certifying agency’s arguments unpersuasive. The Commission reaffirmed that the holding in Hoopa Valley Tribe is not limited to formal memorialized agreements to extend the one-year deadline, that correspondence between the certifying agency and the applicant can establish a functional agreement, and that the reason the certifying agency requires additional time (including state processes like CEQA or outstanding information requests) is “irrelevant.”

FERC’s orders in the various proceedings are available: here for the Merced proceeding, here for the SFWPA proceeding, here for the PG&E Upper North Fork Feather River Project proceeding, here for the PG&E Kilarc-Cow Creek Project proceeding, and here for the Southern California Edison proceeding.