On May 29, the Supreme Court issued a unanimous opinion in Seven County Infrastructure Coalition v. Eagle County, Colorado that dramatically changes the way courts scrutinize federal agencies’ environmental reviews under the National Environmental Policy Act (NEPA). Justice Brett Kavanaugh, writing for a five-justice conservative majority (with Justice Neil Gorsuch abstaining), held that (a) courts must afford federal agencies “substantial judicial deference” regarding both the scope and contents of their environmental analyses; and (b) courts do not need to consider the effects of the action to the extent they are “separate in time or place” from the proposed project. The ruling gives federal agencies permission to greatly streamline their NEPA analyses at a time when those agencies are rapidly being drained of their resources and facing increasing pressure to expedite lengthy permitting processes.
To Waive or Not to Waive? That Is the 401 Question
The U.S. Court of Appeals for the D.C. Circuit on May 16, 2025, clarified the conditions under which a state waives its Clean Water Act (CWA) Section 401 water quality certification (WQC) authority. In Village of Morrisville v. Federal Energy Regulatory Commission, the D.C. Circuit rejected arguments by a hydropower licensee that Vermont waived its certification authority under Section 401 by failing to issue a WQC within one year from receipt of a certification request. The applicant unilaterally withdrew and refiled its WQC application twice in an effort to avoid unfavorable certification conditions. Because the applicant withdrew its WQC application to further its own interests, the court held that the applicant could not claim that Vermont waived its Section 401 conditioning authority by not issuing a WQC within a year from the original application.
FERC Issues Notice of Proposed Rulemaking to Conform to EPA’s Recent CWA § 401 Rule
At its May 23, 2024 open meeting, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Proposed Rulemaking (“NOPR”) proposing to establish a one-year “reasonable period of time” for certifying authorities to act on requests for water quality certification under section 401 of the Clean Water Act (“CWA”). The proposed rule also clarifies that all FERC authorizations “that have the potential to discharge into waters of the United States,” including exemptions from licensing, require either a section 401 water quality certification or waiver thereof.
DOE Releases Awaited Draft Guidance for Bipartisan Infrastructure Law Hydropower Incentive
On February 8, the U.S. Department of Energy (DOE) released draft guidance (Draft Guidance) on the Infrastructure Investment and Jobs Act (Act) (known as the Bipartisan Infrastructure Law) Section 247 incentive, one of the key hydroelectric provisions offered by the legislative package. The Act, which President Biden signed in November 2021, provides $553.6 million in total funding to the Section 247 program for “capital improvement” projects that maintain and enhance existing hydroelectric facilities to ensure generators continue to provide clean electricity, while integrating renewable energy resources such as wind and solar, improving dam safety, and reducing environmental impacts. The Draft Guidance focuses on the Section 247 application process and how DOE will rate and select incentive recipients. DOE will accept comments on the Draft Guidance until February 28th, which provides hydropower licensees an opportunity to help shape the final guidance, and alert DOE to any potential obstacles that could prevent licensees from successfully participating in the Section 247 program.
U.S. Court of Appeals for the 9th Circuit Affirms Lower Court’s Dismissal of Tribe’s Case Against City of Seattle
On December 30, 2022, the U.S. Court of Appeals for the 9th Circuit (“9th Circuit”) affirmed a lower court’s denial of the Sauk-Suiattle Indian Tribe’s (“Tribe”) motion to remand to state court and its dismissal of the Tribe’s action against the City of Seattle (“City”) for lack of subject matter jurisdiction. The case concerns Gorge Dam, which is located on the Skagit River in Washington and is one of three dams that make up the City’s Skagit River Hydroelectric Project (“Skagit River Project” or “Project”).
Funding Begins for Hydropower Research and Development and Fish Passage
In December 2022, several federal agencies announced awards and recommendations for Bipartisan Infrastructure Law (BIL) funding. The BIL represents a core piece of President Biden’s agenda and provides significant funding for infrastructure improvements in energy and water, including over $900 million in waterpower incentives for new and existing hydropower, pumped storage, and marine energy. Funding is also provided to incentivize research, development, demonstration, and commercial application (R&D) efforts in the water power industry for technologies that improve capacity, efficiency, resilience, security, reliability, affordability, and environmental impact.
Hydropower: 2022 Lookback and 2023 Trendspotting
2022 was an active year for the hydropower industry, and as 2023 begins, it’s appropriate to review last year’s highlights and forecast the anticipated trends to continue this year.
Tenth Circuit Resolves Jurisdictional Dispute, Finds FPA Jurisdictional Limit Does Not Apply to Non-FERC Agency Orders
On September 30, the U.S. Court of Appeals for the Tenth Circuit issued an opinion in Save the Colorado, et al. v. Spellmon. The case arose from various conservation group challenges to the U.S. Army Corps of Engineers (Corps) and U.S. Fish and Wildlife Service’s (Service) decision to grant the city and county of Denver, acting through its Board of Water Commissioners (Denver Water or municipality), a discharge permit to expand the reservoir of its Gross Reservoir Hydroelectric Project, which is licensed by the Federal Energy Regulatory Commission (FERC or Commission). The central issue revolved around whether the U.S. courts of appeals have exclusive jurisdiction over challenges to non-FERC decisions arising under statutes related to the development of hydropower projects under the Federal Power Act (FPA). The Tenth Circuit ultimately held that petitions against orders by non-FERC agencies do not warrant exclusive jurisdiction in the U.S. courts of appeals.
DOE Announces $13.5M Distribution to Hydroelectric Facilities Through the Hydroelectric Production Incentive Program
On September 9, the U.S. Department of Energy (DOE) announced that it would distribute $13.5 million to incentivize hydroelectric generation in the United States. The financial support is part of the Hydroelectric Production Incentive Program, which provides funding for electricity generated and sold from dams and other water infrastructure projects that will add to or expand hydropower generation.
Senator Manchin’s Permitting Reform Bill Pulled From the Continuing Resolution
On September 21, Senator Joe Manchin (D-WV), Chairman of the Senate Energy and Natural Resources Committee, released the text of the Energy Independence and Security Act of 2022 (Act). This comprehensive Act was set to be included in the upcoming Continuing Resolution; however, on September 27, Manchin pulled the Act from the Continuing Resolution given bipartisan opposition. The Act sought to improve energy production in the United States by accelerating agency review of certain energy projects and modernizing permitting laws.