United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 8, 2017 Decided March 6, 2018 

No. 16-1296 

DUKE ENERGY CAROLINAS, LLC, 

PETITIONER

v. 

FEDERAL ENERGY REGULATORY COMMISSION, 

RESPONDENT

On Petition for Review of Orders of the 

Federal Energy Regulatory Commission 

John A. Whittaker IV argued the cause and filed the briefs 

for petitioner. 

Susanna Y. Chu, Attorney, Federal Energy Regulatory 

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

brief were David L. Morenoff, General Counsel, and Robert H. 

Solomon, Solicitor. 

Before: GARLAND, Chief Judge, and ROGERS and 

SRINIVASAN, Circuit Judges. 

 Opinion for the Court filed by Circuit Judge ROGERS. 
2 

 ROGERS, Circuit Judge: In anticipation of expiration of 

the fifty-year license for the Catawba-Wateree Project, Duke 

Energy Carolinas, LLC (“Duke Energy”) filed an application 

with the Federal Energy Regulatory Commission for a new 

fifty-year license. The Commission, upon determining that 

construction and environmental measures under the new 

license were “moderate” in nature and scope, granted a fortyyear license. Duke Energy petitions for review, contending 

principally that the Commission failed to treat it like similarlysituated applicants that received fifty-year licenses and 

announced a new qualitative approach to determining license 

terms without prior notice or reasoned analysis, leaving 

applicants and courts without objective standards. According 

due deference to the Commission’s expertise in determining 

whether measures under a license are moderate or extensive 

and to its interpretation of its precedent and policy choices, we 

deny the petition for review. 

I. 

The Federal Power Act authorizes the Commission to 

issue licenses for hydroelectric projects for terms of up to fifty 

years. 16 U.S.C. § 799. Upon expiration of a license, the 

Commission may issue a new license for a term that is in the 

public interest, but for not less than thirty nor more than fifty 

years from the date it issues. Id. § 808(a),(e). The Commission 

generally issues a thirty-year license term for projects with 

“little or no” redevelopment, new construction, new capacity, 

or environmental mitigation and enhancement measures; a 

forty-year license term for projects involving “moderate” 

measures; and a fifty-year license for projects involving 

“extensive” measures. See, e.g., PUD No. 1 of Chelan Cnty., 

117 FERC ¶ 62,129 at ¶ 128 (2006); PUD No. 1 of Pend Oreille 

Cnty., 112 FERC ¶ 61,055 at ¶ 127 (2005); Portland General 
3 

Electric Co., 111 FERC ¶ 61,450 at ¶ 167 (2005); N.Y. Power 

Auth. (St. Lawrence), 105 FERC 61,102 at ¶ 225 (2003). 

The Catawba-Wateree Project for which Duke Energy 

sought a new license for fifty years includes eleven 

developments along hundreds of miles of the Catawba and 

Wateree Rivers in North Carolina and South Carolina. The 

original fifty-year license was set to expire on August 31, 2008, 

and two years prior Duke Energy entered into a Comprehensive 

Relicensing Agreement with 70 entities that specified measures 

to be undertaken upon relicensing. It filed the agreement with

its application for a new license. The Commission determined, 

based on staff recommendations in light of public comments, 

various filings, and a final environmental impact statement, 

that under its general licensing policy the appropriate license

term was forty years. See Duke Energy Carolinas, LLC, 153 

FERC ¶ 62,134 at ¶¶ 6-10, 277 (2015) (“License Order”). It 

concluded the license authorizes “a moderate amount of new 

construction (e.g., fish passage facilities and bladder dam on 

the Wateree spillway) and new environmental mitigation and 

enhancement measures (e.g., higher minimum flow releases 

from [six developments]; recreation flow releases from [five 

developments]; diadromous fish monitoring associated with 

fish passage program, sturgeon monitoring, and recreation 

development).” Id. 

Duke Energy requested rehearing, arguing the license 

should be longer, claiming the Commission had failed to 

consider all of the license measures and their costs and 

including with its request a list of the measures required under 

the new license. In addition to the costs of these measures, 

Duke Energy stated it had spent about $54 million on new 

construction to implement measures proposed in its August 

2006 application and required by the Relicensing Agreement 

before the new license issued, and had incurred $111 million in
4 

costs pursuing relicensing. Duke Energy pointed to instances 

in which the Commission had granted a fifty-year license based 

on a project’s annual cost and the impact of costs on the total

annual benefit of the project and argued, based on its estimate

of total and annual costs for the Catawba-Wateree Project, that

it was entitled to the same. It also claimed the signatories to 

the Relicensing Agreement had agreed to a fifty-year license 

term. The Commission denied rehearing and affirmed the 

forty-year license term. Duke Energy Carolinas, LLC, 156 

FERC ¶ 61,010 at ¶¶ 13-14 (2016) (“Rehearing Order”). Duke 

Energy petitions for review. 

II. 

 The issue on appeal is whether the 

Commission reasonably found that the measures required by 

the hydroelectric license it issued to Duke Energy were 

“moderate,” warranting a forty-year license term under the 

Commission’s precedents. “In a [hydroelectric] licensing 

decision such as this, where few explicit statutory provisions 

govern, [the court’s] role is narrowly circumscribed.” U.S. 

Dept. of Interior v. FERC, 952 F.2d 538, 543 (D.C. Cir. 1992).

The court will “defer to the agency’s expertise . . . so long as 

its decision is supported by substantial evidence in the record

and reached by reasoned decisionmaking.” Turlock Irrigation 

District v. FERC, 786 F.3d 18, 25 (D.C. Cir. 2015) (internal 

quotation marks and citations omitted). Essentially, the court 

must “look to whether [the Commission] ‘articulated a rational 

explanation for its action’” and either acted “consistent with 

. . . or offer[ed] a reasoned basis for its departure from 

precedent.” Williams Gas Processing v. FERC, 475 F.3d 319, 

326 (D.C. Cir. 2006) (quoting AT & T Inc. v. FCC, 452 F.3d 

830, 837 (D.C. Cir. 2006); ConAgra Inc. v. NLRB, 117 F.3d 

1435, 1443 (D.C. Cir. 1997)). 
5 

Duke Energy’s principal challenge to the License and 

Rehearing Orders is that the Commission was arbitrary and 

capricious because it failed to treat Duke Energy like similarlysituated applicants with similar costly projects that received 

fifty-year license terms and offered no reasoned explanation for 

the disparate treatment. New York Power Authority, 120 FERC 

¶ 61,266 (2007), in its view, exemplifies the Commission 

policy of granting fifty-year license terms for projects based on 

their costs. There, the Commission re-licensed for a fifty-year 

term the Niagara Project that spanned the Niagara River 

connecting Lake Erie and Lake Ontario and that, pursuant to 

statute, has “the capacity to use all of the United States’ share 

of Niagara River water available for power generation,” New 

York Power Authority, 118 FERC ¶ 61,206 at ¶¶ 4, 13 (2007); 

New York Power Authority, 120 FERC ¶ 61,266 at ¶ 19 (2007). 

The Commission acknowledged that it “did use cost as a 

significant part of its analysis [of the Niagara Project],” but

stated that its precedent “does not generally treat cost as 

dispositive.” Rehearing Order ¶ 14 n.17. For instance, in

Consumers Power Co., 68 FERC ¶ 61,077 (1994), the 

Commission announced its general standard, stating it issues 

“new licenses for [forty] years or more for projects which 

include substantial new construction or capacity increases,” 68 

FERC ¶ 61,077 at 61,383-84, and observing that “licenses of 

longer duration . . . ease the economic impact of the new 

costs[,] . . . encourage better comprehensive development of 

the renewable power generating resource[,]” and ease the 

burden of “substantial or costly environmental mitigation and 

enhancement measures,” id. at 61,384. But the Commission 

has not interpreted this precedent to support a costdeterminative approach. Rehearing Order ¶ 14. Any lingering 

ambiguity was clarified in Duke Energy Progress, 153 FERC 

¶ 61,056, ¶¶ 38, 41-42 (2015) and in the orders now on review. 
6 

The Commission also stated that it “agree[s] with Duke 

Energy that the measures required with respect to the 

substantially larger Niagara Project do not appear greater than

those required for the Catawba-Wateree Project,” but explained 

it “view[s] that older case as an outlier that is not consistent 

with the majority of more recent orders.” Id. ¶ 22. It cited the 

project in North Carolina in Duke Energy Progress, Inc., 151 

FERC ¶ 62,004 at ¶ 232, aff’d on reh’g, 153 FERC ¶ 61,056 

(2015) and the project in Washington State in Public Utility 

Dist. No. 1 of Douglas County, Wash., 141 FERC ¶ 62,104 

at ¶ 40 (2012), aff’d on reh’g, 143 FERC ¶ 61,130 (2013). For 

each, the Commission granted forty-year licenses for projects 

involving new environmental and related construction 

measures that were like those for the Catawba-Wateree Project. 

Id. ¶ 13 & n.14. The Commission had looked at the measures 

qualitatively. Id. ¶¶ 13 & n. 14, 14. 

Other precedent cited by Duke Energy was also 

distinguishable because for those projects the Commission had 

“relied on the general extent of the measures required, rather 

than . . . on a quantitative analysis of costs.” Id. ¶ 21 & n. 42 

(citing Chelan Cnty., 117 FERC at ¶ 129; Pend Oreille Cnty., 

112 FERC at ¶ 127; St. Lawrence, 105 FERC at ¶ 228). Where 

the Commission approved fifty-year license terms, the parties 

to the relicensing agreement had specifically agreed to a fiftyyear term or the projects were significantly smaller, meaning 

“the measures required there are not analogous to the measures 

required . . . with respect to the much larger Catawba-Wateree 

project.” Rehearing Order ¶ 21 & n. 42 (citing Chelan Cnty., 

117 FERC at ¶ 129; Pend Oreille Cnty., 112 FERC at ¶ 127; 

St. Lawrence, 105 FERC at ¶ 228). Duke Energy’s position 

that it “should receive a [fifty]-year license because the 

signatories to the Relicensing Agreement support such a 

license term overstates the language of the agreement,” id.

¶ 24; the Commission pointed out that the language “does not 
7 

provide unequivocal support for a [fifty]-year license, but 

rather . . . support” for a new license “that is not less than [forty] 

years nor more than [fifty] years,” id. (internal quotation marks 

and italics omitted). 

Recognizing that “Duke Energy predominantly relies on 

costs as the basis for supporting a longer license term,” the 

Commission gave a fulsome response. Id. ¶ 14. As a general 

matter, it explained, the Commission “do[es] not subject [cost]

estimates to the type of rigorous analysis that would be 

necessary were [it] to treat them as matters of absolute fact.” 

Id. Because “cost estimates can fluctuate widely over time,” it 

concluded, “a strictly quantitative analysis is problematic.” Id.

¶ 15. More particularly, it reflected, that although “costs can 

provide some indication of the extent of required measures, 

costs alone are never entirely dispositive, especially where, as 

here, Duke Energy’s cost data are not reliable.” Id. ¶ 14. “In 

response to Commission staff’s request to simply update the 

cost estimates . . . Duke Energy instead filed new estimates —

unsupported by any explanation.” Id. ¶ 15. The Commission 

noted as well that in responding Duke Energy included a $40 

million gate instead of the $10 million bladder dam called for 

in the License Order. Id.

Because the Commission acknowledged that its policy has 

shifted and explained it, see Westar Energy, Inc. v. FERC, 568 

F.3d 985, 989 (D.C. Cir. 2009)(citing FCC v. Fox Television 

Stations, Inc., 556 U.S. 502, 514 (2009)), the Commission 

could reasonably conclude its Niagara Project precedent and 

other precedent on which Duke Energy relies did not “require 

[it] to extend [Duke Energy’s] license term.” Rehearing Order

¶¶ 14 n.17, 22. 

Responding to Duke Energy’s objection to the 

characterization of the Catawba-Wateree measures as 
8 

“moderate,” the Commission pointed out that “[u]nder the new 

license, Duke Energy will not be constructing extensive new 

facilities, adding substantial capacity, or complying with 

extensive new environmental measures, so as to justify a 

[fifty]-year license term.” Id. ¶ 13. Listing “[t]he most costly 

new measures” under the license, the Commission explained 

that “[t]he nature and extent of these measures are not unusual

for a large-sized project like the . . . Catawba-Wateree Project 

and are similar to those required in other recent licenses that

received [forty]-year terms.” Id. ¶ 13 & n.14 (citing Duke 

Energy Progress, Inc., 151 FERC ¶ 62,004 and Public Utility 

Dist. No. 1 of Douglas Cnty., Wash., 141 FERC ¶ 62,104). 

Duke Energy’s objection to the Commission’s reliance on 

its recent precedent is not persuasive. See Reply Br. 16. It is 

true that the license in one case was issued after Duke Energy 

filed its application for re-licensing, and that the other case

involved a project that was significantly less costly than the 

Catawba-Wateree Project going forward. Duke Energy 

concludes these circumstances reinforce the conclusion that the

Commission failed to treat it like similarly situated applicants. 

For instance, it suggests that the Duke Energy Progress

decision was rendered over eleven years after Duke Energy had 

relied on the Commission’s cost-based approach in Consumers 

Power and New York Power Authority to engage in settlement 

talks with stakeholders and agree to submit measures it 

concluded would warrant a fifty-year license, and over nine 

years after Duke Energy submitted its re-license application. 

The Commission acknowledges that its license term 

determinations are fact intensive as each project is unique, 

Rehearing Order ¶ 23, and on rehearing offered, as discussed, 

a sufficient comparative analysis, id. ¶¶ 13 & n. 14, 21-22. 

Moreover, the Commission observed that Duke Energy “does 

not suggest that it cannot recoup its costs within [forty] years 
9 

or that the license term in any other way causes hardship to it.” 

Id. ¶ 25. To the extent Duke Energy objects generally that the 

Commission’s qualitative approach amounts to a “‘we-knowit-when-we-see-it’ approach,” Pet’r’s Br. 47-48, the court notes 

that the Commission has adopted a license policy going 

forward using a forty-year term as the default, with variations

for other terms in response to a number of factors. See Policy 

Statement on Establishing License Terms for Hydroelectric 

Projects, 161 FERC ¶ 61,078 (Oct. 19, 2017). This would 

suggest that remanding for greater clarity by the Commission 

would have no practical utility as the policy on which the 

Commission would rely is clear. 

Determining the scope and nature of measures required 

under a hydroelectric power license invoke the technical 

expertise of the Commission to which the court generally 

defers. Turlock Irrigation District, 786 F.3d at 25-26. Whether 

the requirements of a hydroelectric license issued by the 

Commission constitute “moderate” as opposed to “extensive” 

measures under Commission precedent seems “a classic 

example of a factual dispute the resolution of which implicates

substantial agency expertise.” Marsh v. Oregon Nat. Res. 

Council, 490 U.S. 360, 376-77 (1989). Likewise, the court will 

generally “defer to the Commission’s interpretations of its own

precedents.” Columbia Gas Transmission Corp. v. FERC, 477 

F.3d 739, 743 (D.C. Cir. 2007). Duke Energy makes little 

effort to distinguish the type of measures under the new license 

from those that merited forty-year terms, and the 

Commission’s response in the challenged orders fully met 

Duke Energy’s objection that the Commission failed to 

consider all of the measures required under the new license and

reasonably explained the basis for its “moderate” 

determination. The Commission stated that it was unclear 

whether all of Duke Energy’s listed license measures were new 
10 

and that not all of Duke Energy’s cost estimates were 

supported. Rehearing Order ¶¶ 15, 23 n.45. 

Finally, Duke Energy contends that the Commission failed 

to address legitimate arguments against applying its longstanding policies not to consider pre-license and license 

preparation costs in determining the appropriate license term. 

The Commission explained that Duke Energy’s reliance on 

“expenditures [of $54 million] it incurred prior to license 

issuance to implement certain measures proposed in its August 

2006 application,” and on expenses for preparation of the relicense application were misplaced in view of the 

Commission’s long-standing policies: In determining an 

appropriate license term, the Commission will “only consider 

measures required for the first time in the new license.” Id.

¶¶ 18-19 & n.30. In determining a project’s economic benefits,

the Commission will consider the “costs of the relicensing 

process,” which it considers “are not relevant in considering 

the appropriate license term.” Id. ¶ 19. Invocation of its policy 

against counting such expenditures is insufficient, Duke 

Energy maintains, because it “never explained why such costs 

were not relevant” or addressed the argument that “not 

considering such costs was contrary to the public interest goals 

of Consumers Power.” Pet’r’s Br. 55. 

But reliance on long-standing policies generally requires 

no elaborate explanation. See Michigan Consolidated Gas Co. 

v. FERC, 883 F.2d 117, 122-23 (D.C. Cir. 1989). Duke Energy 

has not shown either policy is unlawful on its face, much less 

that a policy against double counting the same measure under 

multiple licenses is unreasonable. Here, the Commission 

pointed out that Duke Energy “subsequently made the decision 

to seek the license amendments required to complete the 

measures sooner, rather than wait until its new license was 

issued,” Rehearing Order ¶ 19. Further, the Commission noted 
11 

that some of Duke Energy’s cost estimates were not fully 

supported, id. ¶ 22, or were inconsistent with the new license 

because it was unclear that all the enhancement and mitigation 

measures are new measures, id. ¶ 23 n.45. Duke Energy’s 

effort to avoid the plain meaning of the staff request to update 

the cost estimates is unpersuasive; as license applicant it had

every incentive to explain the basis for its cost estimates and it 

cannot prevail by shifting the burden of clarification to the 

Commission. See Pet’r’s Br. 42-44. Nor could overreading of 

the signatories’ agreement support a fifty-year term. 

Rehearing Order ¶ 24. 

 Accordingly, we deny the petition for review.