On August 5, the U.S. Court of Appeals for the Ninth Circuit overruled several orders by the Federal Energy Regulatory Commission (FERC) and held that the California State Water Resources Control Board (SWRCB) did not waive its authority to issue water quality certifications for several hydroelectric projects. Before the court in SWRCB v. FERC, No. 20-72432, were several orders on appeal from FERC where the Commission found that SWRCB had participated in a coordinated “withdrawal-and-resubmission” scheme to evade the Clean Water Act (CWA) Section 401 one-year statutory time limit on a state’s review of a certification application.

The court described that a practice had developed to avoid time running out on a CWA Section 401 request where a project proponent would withdraw and resubmit its request for certification just before the one-year deadline. In the consolidated cases, because the SWRCB could not complete its California Environmental Quality Act (CEQA) analysis within the time limit, it coordinated with the applicants to ensure that the requests were withdrawn and resubmitted. Since the D.C. Circuit’s 2019 ruling in Hoopa Valley Tribe v. FERC, 913 F.3d 1099, found that a “coordinated withdrawal-and-resubmission scheme” constituted a “failure” or “refusal” to act under the meaning of Section 401, FERC had examined the record of withdrawal and resubmission arrangements in a number of ongoing hydropower relicensing proceedings. In the consolidated cases, FERC found that, in several proceedings, SWRCB had sought to evade the time limit and that its coordinated efforts were demonstrated in correspondence with the applicants.

However, the Ninth Circuit vacated FERC’s decisions, finding that the Commission’s reliance on those communications did not support that the SWRCB was unlawfully seeking additional time. Rather, the court distinguished coordination scenarios where the state certifying authority sought an extension because it was beneficial to the agency as opposed to when the arrangement is only beneficial for an applicant. The court concluded that the record demonstrated that the project applicants chose to withdraw their certification requests because the applicants had not yet prepared their CEQA analyses, which benefited only the applicants. The court embraced the SWRCB’s position that it was legally obligated to deny the requests without prejudice without a complete CEQA analysis.

FERC will now need to review its orders for the hydroelectric projects to make sure its rulings are consistent with not only the Ninth Circuit’s latest opinion, but also case law that has been developing in several circuits after Hoopa Valley Tribe. For example, in 2021, the Second Circuit found that the New York State Department of Environmental Conservation waived its certification authority when it coordinated with the applicant to “post-date” the filing date of its water quality certification application by several weeks, allowing a several day extension of the one-year period.