Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-10-01066/USCOURTS-caDC-10-01066-0/pdf.json

Parties Involved:
Alcoa Power Generating Inc.
Petitioner
Federal Energy Regulatory Commission
Respondent
Stanly County, North Carolina
Intervenor for Respondent
State of North Carolina
Intervenor for Respondent

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify the

Clerk of any formal errors in order that corrections may be made before the

bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 24, 2011 Decided May 3, 2011

No. 10-1066

ALCOA POWER GENERATING INC.,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION,

RESPONDENT

STANLY COUNTY, NORTH CAROLINA

 AND STATE OF NORTH CAROLINA,

INTERVENORS

On Petition for Review of Orders 

of the Federal Energy Regulatory Commission

David R. Poe argued the cause and filed the briefs for

petitioner.

Jennifer S. Amerkhail, Attorney, Federal Energy Regulatory

Commission, argued the cause for respondent. With her on the

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 1 of 21
2

brief were Thomas R. Sheets, General Counsel, and Robert H.

Solomon, Solicitor.

Marc D. Bernstein, Special Deputy Attorney General, North

Carolina Department of Justice, argued the cause for intervenor

State of North Carolina in support of respondent. With him on

the brief were Roy Cooper, Attorney General, James C. Gulick,

Senior Deputy Attorney General, and Donald W. Laton,

Assistant Attorney General. 

Before: ROGERS and TATEL, Circuit Judges, and WILLIAMS,

Senior Circuit Judge.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: The Alcoa Power Generating

Company petitions for review of two orders of the Federal

Energy Regulatory Commission with respect to the relicensing

of its Yadkin Project facilities in North Carolina pursuant to 16

U.S.C. § 808. A precondition of licensing is receipt of a State

certification that any discharges into navigable waters will

comply with sections 301-03 and 306-07 of the Clean Water

Act, 33 U.S.C. §§ 1311-13, 1316-17. Section 401(a)(1) of the

Clean Water Act provides that State certification “shall be

waived with respect to such Federal application” if the State

certifying agency “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 . . . .” 33 U.S.C.

§ 1341(a)(1). When a State administrative law judge stayed

pending appeal the water certification issued by the State

agency, Alcoa Power petitioned the Commission for a

declaratory order that the certifying agency had waived its

authority by not issuing a certification that was effective and

complete within one year. The Commission denied the petition,

ruling there was no waiver because the State had “act[ed] on”

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 2 of 21
3

Alcoa Power’s application within one year of its filing. See

Alcoa Power Generating Inc., 129 FERC ¶ 61,028 (2009)

(“Order”); Alcoa Power Generating Inc., 130 FERC ¶ 61,037

(2010) (“Rehearing Order”).

Alcoa Power contends that the Commission misinterpreted

the law and the facts and that the State violated the time limit in

Section 401(a)(1) by linking the effectiveness of the certification

to satisfaction of a bond requirement after the expiration of the

one-year period, thereby waiving its right to issue a certification

for the project. The Commission maintains that the petition for

review is not ripe because, in accordance with its policy, it has

not been able to act on Alcoa Power’s application for licensure

in view of on-going State administrative review and stay of the

certification. We hold that the petition is ripe, because if the

certification was waived, then the pendency of the State

proceeding is no bar to the Commission acting on Alcoa

Power’s licensing application. See Rehearing Order ¶ 15. We

agree with the Commission’s interpretation of Section 401 in

ruling that there was no waiver by the State and, therefore, we

deny the petition for review.

I.

As the expiration of the Yadkin Project’s 50-year license

approached, Alcoa Power filed an application for a license

renewal with the Commission in April 2006. As the

hydroelectric project indisputably falls within the scope of

Section 401(a)(1) as one that “may result in any discharge into

the navigable waters,” it requested a Section 401 certification

from the North Carolina Department of Environment and

Natural Resources on May 10, 2007. The Department’s

Division of Water Quality issued the water quality certification

on November 16, 2007, and Alcoa Power filed it with the

Commission on November 30, 2007. Before the Commission

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 3 of 21
4

proceeded with licensing, the Division of Water Quality

informed Alcoa Power on April 16, 2008 that its previous

certification proceeding had failed to provide an adequate

opportunity for public comment (as apparently required under

State law). Accordingly, the Division of Water Quality revoked

the original water quality certification and told Alcoa Power to

re-apply. 

Alcoa Power complied shortly thereafter, on May 8, 2008,

withdrawing and re-filing its previous request. A public hearing

was held on January 15, 2009, and the hearing officer submitted

a report with findings on May 6, 2009. The Division of Water

Quality issued a new certification on May 7, 2009, the last day

of the one-year period. This new certification (the “2009

Certification”) contained a number of terms and conditions,

including a requirement that Alcoa Power undertake various

improvement, control, and monitoring measures related to water

quality. Importantly, the 2009 Certification also required Alcoa

Power or its parent company, Alcoa Inc., to post a surety bond

in the amount of $240 million “to cover all water quality

improvement costs” related to the Yadkin Project “within ninety

days of receipt of the Certification” and to remain posted until

a dissolved oxygen water quality standard was met for three

consecutive years. The condition further stated that “[t]his

Certification is only effective once the required

performance/surety bond is in place.”

Alcoa Power submitted the 2009 Certification to the

Commission the next day, May 8, 2009. Then, on May 27,

2009, a North Carolina administrative law judge issued a

preliminary injunction staying the 2009 Certification pursuant

to a motion filed by Stanly County, North Carolina, arguing that

the Division of Water Quality violated State law by declining to

consider certain water quality impacts of the Yadkin Project. 

Alcoa Power challenged the 2009 Certification in the same State

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 4 of 21
5

administrative proceeding on the ground that the bond condition

was excessive and impossible to comply with, and that the

effectiveness clause in the bond condition violated the time

limits for action under State law and Section 401 of the Clean

Water Act. 

Alcoa Power filed a petition for a declaratory order with the

Commission on September 17, 2009. It argued that North

Carolina had waived its Section 401 authority by failing to act

on the request for certification within one year because the

effectiveness clause of the bond condition rendered the

“purported certificate . . . incomplete.” Pet. for Declaratory

Order 1. Issuing a conditional certification on the last day of the

statutory deadline, Alcoa Power continued, “ensured that the

required bond could not be posted (and, thus, that its

certification could not become ‘effective’) prior to the expiration

of the statutory deadline.” Id. at 4. The Commission ruled that

the issued certification was the “act” required by Section 401

irrespective of whether further action was required of Alcoa

Power under certification conditions because the State’s action

was complete upon its issuance of the certification. Order ¶ 8.

In seeking rehearing, Alcoa Power argued that the

Commission’s order was factually and legally unsupported, and

also that the bond condition not only could not be satisfied

within the one-year period, but that it could never be satisfied as

written, and that even if a certification that is not effective

within one year is valid under Section 401, one that can never be

effective is not. It attached the affidavit of a bond agent, Charles

R. Croyle, who described the terms of the bond condition as

“nebulous” and stated that “it would be extremely difficult, if

not impossible, to place a bond with those requirements and of

that magnitude in the marketplace.” Croyle Aff. ¶¶ 5-6, Nov.

13, 2009. Stanly County, the Department of Environmental and

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 5 of 21
6

Natural Resources, and the State of North Carolina intervened

and opposed the request for rehearing.

The Commission denied rehearing, concluding that Section

401's one-year period for a State to “act” does not foreclose a

certification that requires action beyond the one-year period as

long as the certification itself issues before the one-year

anniversary of the request. Rehearing Order ¶ 14. The

“controlling point,” the Commission explained, was that “no

additional decision will be required from the [State] Division on

the certification request itself.” Id. With regard to the clause

stating that the certification was not “effective” until satisfaction

of the bond condition, the Commission ruled that this would not

delay its licensing proceeding because Section 401 permits it to

proceed once the certification “has been obtained,” 33 U.S.C.

§ 1341(a)(1), regardless of whether it has become “effective.” 

Rehearing Order ¶ 15. The Commission concluded that it

“would be free to issue a license, regardless of whether the

certification provided that it was not yet effective,” and

accordingly, there was no waiver issue. Id. The Commission

interpreted its regulations to mean that a Section 401 waiver

occurs where a State “has not denied or granted certification” by

the one-year date. 18 C.F.R. § 4.34(b)(5)(iii). Pursuant to its

policy, the Commission stayed the licensing proceeding pending

resolution of the State administrative appeal. See Rehearing

Order ¶ 15. This petition for review followed.

II.

The Commission maintains the petition is not ripe for

review because the ongoing administrative proceeding in North

Carolina could significantly change the analysis or moot the

petition altogether, and Alcoa Power would suffer little hardship

if a decision on the waiver issue were delayed until the

culmination of the State proceeding. We disagree.

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 6 of 21
7

In making the ripeness determination, the court considers

two factors: “‘[1] the fitness of the issues for judicial decision

and [2] the hardship to the parties of withholding court

consideration.’” Devia v. NRC, 492 F.3d 421, 424 (D.C. Cir.

2007) (quoting Nat’l Treasury Emps.’ Union v. United States,

101 F.3d 1423, 1431 (D.C. Cir. 1996)) (modification in

original). On the first factor, “fitness,” the court considers

whether the issue presented is “‘purely legal, whether

consideration of the issue would benefit from a more concrete

setting, and whether the agency’s action is sufficiently final.’” 

La. Pub. Serv. Comm’n v. FERC, 522 F.3d 378, 397 (D.C. Cir.

2008) (quoting Atl. States Legal Found., Inc. v. EPA, 325 F.3d

281, 284 (D.C. Cir. 2003)) (internal quotation marks omitted). 

The “basic rationale” of this requirement “is to prevent the

courts, through avoidance of premature adjudication, from

entangling themselves in abstract disagreements over

administrative policies, and also to protect the agencies from

judicial interference until an administrative decision has been

formalized and its effects felt in a concrete way by the

challenging parties.” Abbott Laboratories v. Gardner, 387 U.S.

136, 148-49 (1967). But there is also a “usually unspoken”

underlying rationale relating to the doctrine of mootness: a claim

may be unripe where “‘[i]f we do not decide [the claim] now,

we may never need to.’ Devia, 492 F.3d at 424 (quoting Nat’l

Treasury Emps.’ Union, 101 F.3d at 1431) (modification in

original). Accordingly, the fitness analysis requires the court to

consider both whether the context in which the issue is presented

is sufficiently concrete and conducive to judicial determination,

and whether deciding the issue now would violate principles of

judicial restraint and efficiency that counsel against “spending

[our] scarce resources on what amounts to shadow boxing.” Id.

at 424-25 (quoting McInnis-Misenor v. Maine Med. Center, 319

F.3d 63, 72 (1st Cir. 2003)).

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 7 of 21
8

The Commission acknowledges that the challenged orders

“represent a dispositive agency decision” on the waiver issue. 

Resp’t’s Br. 15. Nonetheless it maintains that because Alcoa

Power’s ultimate goal in the relicensing proceeding is issuance

of a new fifty-year license for the Yadkin Project, this matter is

unripe until the Commission rules on the licensing request. 

Further maintaining that the relief Alcoa Power seeks is

acceleration of the Commission’s licensing decision, and not a

license itself, the Commission suggests that the petition could be

mooted at any time by the North Carolina administrative law

judge upon lifting the stay of certification. Alternatively, the

Commission maintains that the administrative law judge could

modify the bond condition and thereby change the analysis this

court must undertake.

Alcoa Power responds, citing Louisiana Public Service

Commission v. FERC, 522 F.3d at 398, that a mere possibility

that the Commission could revisit its dispositive ruling later in

the licensing proceeding is insufficient to find the waiver issue

presented in the petition for review unripe. In Louisiana Public

Service Commission, the court explained that orders “clearly

contingent on subsequent proceedings or events” are unripe for

review, but where the Commission had “conclusively resolved

the refund and timing issues,”a petition seeking review of those

issues was ripe. 522 F.3d at 398. Further, Alcoa Power points

out that the waiver issue presents a purely legal question

regarding the meaning of Section 401's one-year limit for State

certification and that nothing in the State proceeding could moot

the claim or change the analysis. It correctly distinguishes the

cases relied on by the Commission as involving circumstances

not present here: (i) issues the federal agency had not

conclusively decided, as in Toca Producers v. FERC, 411 F.3d

262, 266 (D.C. Cir. 2005); (ii) issues that if “not adjudicated at

this time may . . . not require adjudication at all,”Friends of

Keeseville v. FERC, 859 F.2d 230, 235 (D.C. Cir. 1988); and

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 8 of 21
9

(iii) issues that would require a detailed and fact-intensive

analysis that could ultimately be mooted by subsequent agency

action, as in Ohio Forestry Ass’n v. Sierra Club, 523 U.S. 726,

734-45 (1998).

The nature of the review required by the petition for review,

and the strong likelihood that this court will have to decide the

waiver issue later if not now, weigh in favor of concluding the

petition is fit for judicial review. The waiver issue presents a

purely legal question: does a state waive its Section 401

certification authority when it issues a certification within the

one-year period stating that it is not effective until the applicant

satisfies a condition that can be satisfied, if at all, only outside

of the one-year period? Addressing this question will not

require the sort of “time-consuming judicial consideration of the

details of an elaborate, technically based plan” that led the

Supreme Court to decline to hear a pre-implementation

challenge to logging regulations in Ohio Forestry Association,

523 U.S. at 735-36. Further, the Commission has no plans to

revisit the waiver issue, and thus it cannot be argued that “[t]he

Commission has yet to pass conclusively upon whether [Alcoa

Power is] entitled to the only relief [it] now seek[s],” Toca

Producers, 411 F.3d at 266, namely a lifting of the stay of the

licensing proceeding. Because the Commission has ruled

dispositively on the waiver issue, the court would not be shortcircuiting any agency proceeding by addressing the waiver issue

now.

The petition for review was filed in a context that

distinguishes it from Friends of Keeseville v. FERC, on which

the Commission relies in maintaining that the availability of

judicial review at a later stage favors finding this petition for

review unripe. In Keeseville, a nonprofit development

corporation sought review of the Commission’s order ruling that

the petitioner’s application for a hydroelectric plant

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 9 of 21
10

development permit was untimely, and that the permit should be

granted to a for-profit competitor. 859 F.2d at 232. Before this

court resolved the matter, the Commission cancelled the

competitor’s permit when it failed to file a required report. Id.

As a result, the petition was moot insofar as it sought revocation

of the permit. Id. As for the untimeliness of the petitioner’s

application, the court held the issue unfit for judicial review

because “if the issue is not adjudicated at this time, it may not

require adjudication at all.” Id. at 235. The court reasoned that

it was “possible” petitioner had “lost interest in developing” the

site, noting that petitioner had not filed a new application since

the cancellation of the competitor’s permit. Id. at 235 & n.13. 

But even if petitioner remained interested in developing the site,

the court noted that it could file a new application, the grant of

which would moot the timeliness issue. See id. at 235. Whether

it adjudicated the matter and deemed the application timely or

petitioner filed a new application, the Commission would in

either event proceed to evaluate the merits of the application on

essentially the same timeline, and thus the petitioner’s only real

interest in having the matter decided was the “inconvenience of

filing a new application,” id. at 236 n.15. The “relatively slight”

interest in withholding judgment was therefore greater than the

petitioner’s “insignificant” interest in having the issue decided. 

Id. at 236.

Here, the probability that the court will not confront the 

waiver issue at a later date (were we to conclude the case is

unripe) is very low. The waiver issue would not be moot unless

Alcoa Power prevailed in the North Carolina proceeding and the

State decided to waive its certification rights rather than revise

the certificate to accommodate this hypothetical ruling or the

Commission ultimately declined to issue a license for reasons

unrelated to the certificate. Neither of these scenarios seems

likely. Of course, Alcoa Power might as a practical matter

abandon its waiver argument if the State administrative law

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 10 of 21
11

judge removed the bond condition. But that seems improbable

and its possibility does not undermine the legal proposition that

the waiver issue will not become moot as soon as the North

Carolina proceeding is complete, and therefore the waiver

argument would almost certainly be made again sooner or later

to this court.

Furthermore, even if Alcoa Power eventually prevails in the

State proceeding and the bond condition is modified or

eliminated, it may be years before the stay of certification is

lifted and the Commission proceeds with licensing. The

remoteness of the possibility of a swift end to the state

proceeding is underscored by North Carolina’s recent revocation

of the 2009 Certification.1

 Neither the Commission nor the State

and County intervenors provide any reason to conclude that the

State administrative stay of the 2009 Certification will be lifted

anytime soon. Any institutional interest in deferring

adjudication is thus remote and theoretical. 

For these reasons we conclude that any judicial interest in

deferring adjudication is slight and that the waiver issue is

otherwise fit for judicial review. 

1

 On January 10, 2011, days before oral argument in this

court, the parties advised the court that on December 1, 2010, the

Division of Water Quality, citing “intentionally withheld information”

material to the State’s water quality assessment, issued a Notice of

Revocation of the 2009 Certification. Letter to William Bunker,

Alcoa Power, from Colleen H. Sullins, N.C. Dep’t of Envtl. & Natural

Res. (Dec. 1, 2010). The Notice of Revocation was filed with the

Commission, and in response Alcoa Power advised the Commission

that it intended to “contest its issuance.” Letter to Sec’y, FERC, from

David R. Poe, Counsel to Alcoa Power (Dec. 7, 2010). 

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 11 of 21
12

On the hardship factor, the Commission points out that

Alcoa Power continues to operate the Yadkin Project pursuant

to annual licenses that renew the terms of the original 1958

license for one year at a time, and thus faces no hardship

because its “continued operation of the Project is not called into

question” by this arrangement. Resp’t’s Br. 18. Alcoa Power

observes that this court has held that “where there are no

institutional interests favoring postponement of review, a

petitioner need not satisfy the hardship prong,” AT&T Corp. v.

FCC, 349 F.3d 692, 700 (D.C. Cir. 2003), and hence the court

“need not review” the hardship factor. Pet’r’s Reply Br. 8. But

the court has recognized both approaches are followed “and “we

typically weigh the institutional interests in postponing review

against the hardship delay would cause.” TRT

Telecommunications Corp. v. FCC, 876 F.2d 134, 141 (D.C. Cir.

1989). 

Alcoa Power maintains that deferring adjudication of the

waiver issue would impose an undue burden by requiring a

“lengthy and costly state proceeding” that, if it is correct on the

merits, is entirely moot, id. at 9, and that delay in obtaining a

fifty-year renewal denies it the certainty and security required 

to make long-term capital investments in the Yadkin Project. 

Although “the burden of participating in further administrative

and judicial proceedings does not constitute sufficient hardship”

in a ripeness challenge, AT&T Corp., 349 F.3d at 702, and

business uncertainty resulting from agency action or inaction

may sometimes not be a legally cognizable hardship, see Nat’l

Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803, 811

(2003), this court acknowledged an exception to the proposition

in Exxon Mobil Corp. v. FERC, 501 F.3d 204, 208 (D.C. Cir.

2007). There the court credited the fact that “delaying

resolution . . . [would] tend to inhibit or delay investment” in

large part because “Congress ha[d] made unmistakably clear its

intention to speed construction of” the Alaska Pipeline and “[i]n 

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 12 of 21
13

the unusual circumstances of th[at] case” delay would have been 

“a cognizable hardship to the Nation as a whole.” Id. Although

Alcoa Power does not suggest delay in the relicensing of the

Yadkin Project would cause “cognizable harm to the Nation as

a whole,” the statute sets the hydroelectric project license term

at not less than 30 nor more than 50 years, see Federal Power

Act § 15, as amended by Electric Consumers Protection Act of

1986, § 5, 16 U.S.C. § 808(e), revealing congressional

recognition that significant capital investments cannot be made

in hydro power projects without the certainty and security of a

multi-decade license. According some weight to the hardship

that Alcoa Power faces from relicensing delay is, therefore,

justified.

Because the waiver issue is fit for review and the legally

cognizable hardship that Alcoa Power will suffer from delay,

although not overwhelming, suffices to outweigh the slight

judicial interest in the unlikely possibility that we may never

need to decide the waiver issue, we hold the petition is ripe for

review.

III.

Alcoa Power contends that the Commission misinterpreted

Section 401(a)(1) in ruling that North Carolina did not waive its

certification authority because it did not “fail[] or refuse[] to

act,” 33 U.S.C. § 1341(a)(1), within the one-year statutory

period. To the contrary, Alcoa Power maintains, a State only

“act[s]” within the meaning of Section 401(a)(1) when it “issues

a [certification] that is complete and capable of becoming

effective within the one-year period or denies certification

within that time.” Pet’r’s Br. 28. The Commission’s view that

the 2009 Certification is a qualifying “act” under Section 401

even though by its terms the certification is not “effective” until

Alcoa Power secures a $240 million bond, in Alcoa Power’s

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 13 of 21
14

view, “would allow a state to indefinitely block or delay federal

action” and thus thwart Congress’s intent in imposing a one-year

time limit on a State’s certification authority. Id. Essentially,

Alcoa Power maintains that it would render Section 401(a)(1)’s

time limit nugatory if a State could issue the certification on

time but with conditions that would prevent the Commission

from proceeding with licensing until some point in the future

beyond the one-year date.

A.

We begin with a note on our jurisdiction. In enacting the

Clean Water Act, Congress sought to expand federal oversight

of projects affecting water quality while also reinforcing the role

of States as “the ‘prime bulwark in the effort to abate water

pollution,’” Keating v. FERC, 927 F.2d 616, 622 (D.C. Cir.

1991) (quoting United States v. Puerto Rico, 721 F.2d 832, 838

(1st Cir. 1983)). The certification authority granted States is

“[o]ne of the primary mechanisms” through which they may

exercise this role, as it provides them with “the power to block,

for environmental reasons, local water projects that might

otherwise win federal approval.” Id. If a State denies a water

quality certification request, Section 401(a)(1) provides that no

federal “license or permit shall be granted.” 33 U.S.C.

§ 1341(a)(1). If a State issues a certification contingent on the

applicant’s satisfaction of various conditions, Section 401(d)

requires the agency upon issuing the license to incorporate those

conditions in the final license. Id. § 1341(d). These conditions

may be based on requirements for monitoring or performance

standards under the Clean Water Act, or “any other appropriate

requirement of State law.” Id. 

In S.D. Warren Co. v. Maine Board of Environmental

Protection, 547 U.S. 370, 386 (2006), the Supreme Court

construed States’ Section 401 certification authority broadly to

admit few restrictions on a State’s authority to reject or

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 14 of 21
15

condition certification. For this reason, a State’s decision on a

request for Section 401 certification is generally reviewable only

in State court, because the breadth of State authority under

Section 401 results in most challenges to a certification decision

implicating only questions of State law. See City of Tacoma,

Wash. v. FERC, 460 F.3d 53, 67 (D.C. Cir. 2006). A water

quality certification is reviewable in federal court, however, at

least to the extent Section 401 itself imposes requirements that

a State must satisfy in order for a certification to be a

“certification required by this section,” 33 U.S.C. § 1341(a)(1). 

At issue in City of Tacoma was whether the State of Washington

had “establish[ed] procedures for public notice” as required by

Section 401(a)(1). This court vacated the license and remanded

the matter to the Commission to determine whether the State had

established and followed proper public notice procedures. 460

F.3d at 67. 

As in City of Tacoma, the question Alcoa Power presents in

its petition for review is whether a State-issued water quality

certification complies with the requirements of Section 401. 

Specifically, the question is whether the 2009 Certification is

valid under Section 401 as the State’s “act on a request for

certification” within the statutory one-year period. 33 U.S.C.

§ 1341(a)(1). If it is not, then the 2009 Certification is invalid

under federal law, the State has waived its certification rights,

and the Commission may proceed immediately with licensing. 

If the 2009 Certification is valid, then the ongoing challenge to

the certification in the State administrative proceeding is

relevant to the ultimate disposition of Alcoa Power’s license

application; Alcoa Power does not challenge the Commission’s

policy of staying licensing proceedings pending a challenge in

State proceedings to an otherwise-valid water quality

certification. Because the validity of the 2009 Certification

under Section 401 is a question of federal law, the issue was

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 15 of 21
16

properly put to the Commission, and is now properly before this

court.

B.

Turning to the merits of Alcoa Power’s petition, the

Commission concedes that its interpretation of Section 401 is

entitled to no deference by the court because the Environmental

Protection Agency, and not the Commission, is charged with

administering the Clean Water Act. Ala. Rivers Alliance v.

FERC, 325 F.3d 290, 296-97 (D.C. Cir. 2003). Our review of

the Commission’s interpretation of Section 401 is de novo. Id.

at 297. With regard to Alcoa Power’s contention that the

Commission misinterpreted or misapplied its own regulations,

however, the Commission’s interpretation is entitled to

substantial deference and subject to reversal only if it “is plainly

erroneous or inconsistent with the regulation.” Bluestone

Energy Design v. FERC, 74 F.3d 1288, 1292 (D.C. Cir. 1996)

(quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512

(1994)). The Commission’s factual findings are reviewed under

the deferential arbitrary and capricious standard. See Lichoulas

v. FERC, 606 F.3d 769, 775 (D.C. Cir. 2010).

Section 401(a)(1) requires that a State “act on a request for

certification[] within a reasonable period of time (which shall

not exceed one year) after receipt of such request,” or else “the

certification requirements of this subsection shall be waived

with respect to such Federal application.” 33 U.S.C.

§ 1341(a)(1). In imposing a one-year time limit on States to

“act,” Congress plainly intended to limit the amount of time that

a State could delay a federal licensing proceeding without

making a decision on the certification request. This is clear

from the plain text. Moreover, the Conference Report on

Section 401 states that the time limitation was meant to ensure

that “sheer inactivity by the State . . . will not frustrate the

Federal application.” H.R. Rep. 91-940, at 56 (1970), reprinted

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 16 of 21
17

in 1970 U.S.C.C.A.N. 2741. Such frustration would occur if the

State’s inaction, or incomplete action, were to cause the federal

agency to delay its licensing proceeding. 

Alcoa Power thus correctly maintains that the purpose of

the waiver provision is to prevent a State from indefinitely

delaying a federal licensing proceeding by failing to issue a

timely water quality certification under Section 401. From this

conclusion it follows that the inverse must also be true: if a

certification would allow the Commission to proceed with

licensing, then waiver did not occur. Crucial, then, to Alcoa

Power’s petition is whether the 2009 Certification will allow the

Commission to proceed with licensing without first requiring

satisfaction of a condition contained in the certification. Alcoa

Power points to the clause in the bond condition that the

certification is “only effective” upon its satisfaction as

impermissibly operating to delay Commission proceedings

beyond the statutory one-year period. The provision operates,

Alcoa Power maintains, as a condition precedent to licensing,

and because it was impossible for Alcoa Power to satisfy the

condition within the one-year period set by Section 401 — the

certification having been issued on the final day of that period

— if, indeed, it could ever be satisfied, the certification would

“delay and block” the federal licensing beyond the one-year

period and thereby run afoul of the waiver provision. Pet’r’s

Reply Br. 16. 

Alcoa Power’s interpretation assumes, however, that the

“effective” clause means that the bond condition does, in fact,

operate as a condition precedent to licensing. North Carolina,

whose agency issued the water quality certification, claims that

the 2009 Certification had no legal effect until its terms were

incorporated into the federal license, and so “[t]here would have

been no reason or authority for [the Division of Water Quality]

to include a condition that required [Alcoa Power] to do

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 17 of 21
18

anything before the license was issued.” Respondent-Intervenor

North Carolina Br. 20. The State continues, the only way to

interpret the certification “sensibly is that the bond condition is

simply a condition of the Certification that becomes enforceable

when the Commission issues the license.” Id. at 21. North

Carolina explains that the purpose of the “effective” clause is to

require Alcoa Power to post the bond before it undertakes to

satisfy the various other conditions of the certificate, thereby

ensuring that it does not “commence any programs that it cannot

complete.” Id. It notes that Alcoa Power filed the certification

with the Commission the day after issuance without any mention

of the effectiveness clause or indication that the Commission

would have to wait for it to satisfy a condition precedent prior

to licensing.

The Commission rejected Alcoa Power’s interpretation,

ruling that Section 401 allowed it to proceed with licensing

irrespective of the “effective” clause in the bond condition to the

2009 Certification. The Commission reasoned that the Clean

Water Act requires it only to wait for “the certification required

by this section [to be] obtained,” Section 401(a)(1) (emphasis

added), not for the certification to be effective, and “the

Commission would be free to issue a license, regardless of

whether the certification provided that it was not yet effective.” 

Rehearing Order ¶ 15. If Alcoa Power did not post the bond,

then it “might be a failure to meet a condition of the

certification” that could warrant a license suspension or

revocation proceeding, “but it would not require a delay in

Commission action” to issue the license in the first place. Id.2

2

 In its brief, the Commission suggested that it did not reach

the question of whether it could issue a license prior to Alcoa Power’s

satisfaction of the bond condition, relying on a footnote in the

Rehearing Order stating that the question was “premature.” Rehearing

Order ¶ 15 n.6. This overreads the footnote, because the Commission

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 18 of 21
19

As a result, there is no waiver issue because the “effective”

clause would not operate to delay or block the federal licensing

proceeding beyond Section 401's one-year period. The

Commission also rejected Alcoa Power’s contention that the

bond condition “delayed the legal effectiveness” of the 2009

Certification, Pet’r’s Br. 42, in violation of 18 C.F.R.

§ 4.34(b)(5)(iii), which deems a State’s certification authority

waived if the certification is “not denied or granted” within the

one-year period. The Commission read the regulation

consistently with its interpretation of Section 401 that the grant

of certification — even with conditions — qualifies under the

regulation, and thus there was no waiver.

The Commission’s interpretation of Section 401(a)(1) to

allow licensing once a certification has been “obtained,” 33

U.S.C. § 1341(a)(1), even if the certification is not by its terms

immediately “effective,” is consistent with the plain text and

statutory purpose of the provision. It also conforms to the

State’s understanding of when the condition in its certification

is enforceable. Nowhere in Section 401 is it stated that a

certification must be fully effective prior to the one-year period

much less prior to licensing; it requires only that a State “act”

within one year of an application and that a certification be

“obtained.” 33 U.S.C. § 1341(a)(1). The largely unqualified

terms of Section 401 are broader than Alcoa Power suggests and

unrelated to the effectiveness of a certification prior to licensing. 

To accept Alcoa Power’s interpretation would require adding

terms to the statute that Congress has not included. See Nat’l

Ass’n of Mfrs. v. Dep’t of Labor, 159 F.3d 597, 600 (D.C. Cir.

quite clearly did rule on rehearing that the “effective” provision in the

bond condition of the 2009 Certification “does not change the fact that

the State has acted and certification has been issued,” and thus “the

Commission would be free to issue a license” upon conclusion of the

State administrative appeal. Id. ¶ 14.

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 19 of 21
20

1998). It is, moreover, unclear what meaning the “effective”

clause could possibly have prior to licensing; Alcoa Power

appears to agree that the certification itself is not enforceable

(whether or not the disputed clause is present) until its terms are

incorporated by the Commission in an issued license. Instead,

Alcoa Power suggests that by inserting the clause the Division

of Water Quality meant to restrain the Commission from issuing

a license until Alcoa Power satisfied the bond condition. North

Carolina denies that its agency had any such intention, and if it

had, it would have said so more clearly. More likely, just as

North Carolina and the Commission interpret it, the “effective”

clause requires Alcoa Power to satisfy the bond condition within

90 days of license issuance and before it undertakes to satisfy

the remediation and monitoring conditions of the certification. 

A failure to do so could constitute a condition violation that

subjects it to suspension or revocation proceedings. See

Rehearing Order ¶ 15. The clause alone, however, does not

purport to restrain the Commission from exercising its federal

authority to proceed with licensing. 

It follows that the Commission reasonably interpreted its

regulation consistently with its interpretation of Section

401(a)(1). Because the Commission correctly ruled that it was

free under Section 401 to proceed with licensing

notwithstanding the bond condition, the request for certification

was, for all relevant federal purposes, “granted” before the

statutory and regulatory one-year deadline expired and thus

there was no waiver under the regulation just as there was none

under the statute.

In sum, under Section 401, the State, acting through its

Division of Water Quality, timely issued a water quality

certification that complied with the requirements of Section 401. 

The Commission on rehearing made clear that it was free to

commence its licensing proceeding but for its policy to stay such

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 20 of 21
21

proceedings pending conclusion of the State proceeding, which

policy Alcoa Power does not challenge. Because the “effective”

clause in the bond condition of the 2009 Certification did not

operate to block or delay the federal licensing proceeding, and

it did not contravene Section 401(a)(1)’s waiver provision, much

less the Commission’s regulations, Alcoa Power’s objections to

the substantive content of the 2009 Certification is a matter of

State law that is properly raised in the State proceeding, as

Alcoa Power has done. 

Alcoa Power’s additional objection that the Commission

failed to engage in reasoned decision-making by ignoring or

misapprehending certain material facts fails. The allegedly

ignored facts are that (i) the bond condition as written in the

2009 Certification is objectively impossible to satisfy, and (ii)

the Division of Water Quality had ample time to request

satisfaction of the bond condition within the one-year statutory

period in view of the extended procedural history of Alcoa

Power’s requests for certification. These assertions became

irrelevant to the Commission’s waiver analysis once it

concluded that neither Section 401 nor its own regulation

required it to wait until the bond condition was satisfied before

proceeding with Alcoa Power’s license application. The

Commission therefore had no reason to analyze these issues in

greater depth.

Accordingly, we deny the petition for review.

USCA Case #10-1066 Document #1305957 Filed: 05/03/2011 Page 21 of 21