Opinion ID: 6983530
Heading Depth: 2
Heading Rank: 1

Heading: The Choice of Baseline

Text: The petitioners contend that the FPA requires the Commission to evaluate the EWEB proposal against a baseline embodying a theoretical reconstruction of what the McKenzie River basin would be like today had the Leaburg and Walterville projects not been in place for the greater part of this century. To evaluate this argument under Chevron, we first must determine whether Congress has spoken with sufficient clarity to foreclose the Commission’s alternative interpretation. See Rainsong, 106 F.3d at 273. Our construction of the FPA commences, as it must, with the statute’s text. See United States v. Hockings, 129 F.3d 1069, 1071 (9th Cir.1997). The FPA, however, nowhere defines or even mentions the concept of an environmental baseline. Therefore, as the statutory language evinces no specific congressional directive, we look next to its legislative history. See Northwest Forest Resource Council v. Glickman, 82 F.3d 825, 830-31 (9th Cir.1996). 16 The legislative history of the FPA supports, but does not directly sanction, the Commission’s decision to use an existing-project baseline. The ECPA conference report comes nearest to evidencing congressional intent on this issue. The report states that “[i]n exercising its responsibilities in relicensing, the conferees expect FERC to take into account existing structures and facilities in providing for these nonpower and nondevelopmental values.” H.R. Conf. Rep. No. 99-934, at 21-22 (1986), reprinted in 1986 U.S.C.C.A.N. at 2537, 2538. More emphatically, the report “noted that the Commission must take into account existing structures and facilities ... in relicensing proceedings under section 15.” Id. at 2543 (emphasis added). The petitioners acknowledge this legislative imperative but assert that the Commission altogether excluded from consideration the environmental harms caused by these existing structures and facilities, thereby precluding “equal consideration” of non-power values as mandated by FPA section 4(e). 17 This contention lacks merit, for the record demonstrates numerous instances where the Commission diligently evaluated the adverse environmental impacts on the McKenzie River basin caused by the operation of the Leaburg and Wal-terville projects. The petitioners also proffer excerpts from the ECPA house report in support of their position that the Commission must evaluate relicensing issues “in light of today’s standards and concerns,” and that “procedures and substance applicable to original licenses, including the treatment of non-developmental values, apply fully in relicensing.” H.R.Rep. No. 99-507, at 33-34 (1986), reprinted in 1986 U.S.C.C.A.N. 2496, 2521. This Court’s review, however, does not turn on single words or phrases in the legislative record, see United States ex rel. Fine v. Chevron, U.S.A., Inc., 72 F.3d 740, 744 (9th Cir.1995) (en banc), especially when they are taken out of context. When read conjunctively with the surrounding text, these quotations-and indeed the entire house report-display nothing more than Congress’ intent to emphasize that the Commission’s section 4(e) “equal consideration” responsibilities apply to relicensing as well as original licensing proceedings. 18 A fair reading of the report as a whole thus precludes the petitioners’ treatment of the legislative history and convinces us that “Congress has not directly addressed the precise question at issue.” Chevron, 467 U.S. at 843, 104 S.Ct. at 2782. We therefore proceed to the second strand of our inquiry under Chevron. This prong of Chevron instructs us that where Congress implicitly leaves a gap for the agency to fill, there is a “delegation of authority to the agency to elucidate ... the statute.” Chevron, 467 U.S. at 843-44, 104 S.Ct. at 2782. We will not substitute our own construction of the statute unless we determine that the Commission’s interpretation is unreasonable. See Rainsong, 106 F.3d at 272-73 (citing Chevron, 467 U.S. at 844, 104 S.Ct. at 2782-83); accord Association of Pub. Agency Customers, 126 F.3d at 1169 (‘When relevant statutes are silent on the salient question, we assume that Congress has implicitly left a void for an agency to fill. We must therefore defer to the agency’s construction of its governing statutes, unless that construction is unreasonable.”). Applying these principles here, we must determine whether the Commission’s decision to employ an existing project baseline fills the interstices of the FPA in a permissible fashion. The Commission concluded in the Order on Rehearing that “it is highly doubtful that attempts to ascertain the status of various resources prior to the time a 50-year-old project was constructed would result in the development of any useful information.” 81 Fed. Energy Reg. Comm’n Rep. (CCH) at 62,327 (citations omitted). We believe that this con-elusion furnishes a reasonable interpretation of the FPA. It defies common sense and notions of pragmatism to require the Commission or license applicants to “gather information to recreate a 50-year-old environmental base upon which to make present day development decisions.” 54 Fed.Reg. at 23776. The past fifty years of development in the McKenzie River Valley has reconfigured its environmental makeup, introducing changes that include differences in land use, water flows, water quality, river geomorphology, fish species composition, and fishery management practices. To the extent a hypothetical pre-project or no-project environment can be recreated, evaluation of such an environment against current conditions at best serves to describe the current cumulative effect on natural resources of these historical changes. 19 Moreover, we agree with the Commission that the adoption of an existing project baseline does not preclude consideration and inclusion of conditions in a license that enhance fish and wildlife resources and reduce negative impacts attributable to a project since its construction. See Order on Reh’g, 81 Fed. Energy Reg. Comm’n Rep. (CCH) at 62,327 (“[P]ast environmental impacts are relevant in determining what measures are appropriate to protect, mitigate, and enhance natural resources.... Enhancement may in many cases constitute a reduction of the negative impacts attributable to the project since its construction.”); see also City of Tacoma, Washington, 71 Fed. Energy Reg. Comm’n Rep. (CCH) ¶ 61,381, at 62,492 (June 22, 1995) (“[U]se of existing conditions as the starting point for analysis is reasonable, ... is not precluded by either the language or legislative history of the FPA, ... [and] does not preclude us from considering, in appropriate cases, available information concerning resources affected by a project....”). We find it more than reasonable, however, for the Commission to conduct its “evaluation and consideration of the appropriateness of requiring enhancement measures ... in the context of today’s environment and not in the context of the world as it existed 50 years ago.” Order on Reh’g, 81 Fed. Energy Reg. Comm’n Rep. (CCH) at 62,327. Simply stated, nothing in the FPA suggests that the only acceptable future for the McKenzie River basin is a recreation of its past. Nor are we persuaded by any of the petitioners’ other challenges to the reasonableness of the Commission’s baseline analysis. First, ODFW submits that the FPA implicitly requires a baseline consisting of a no-project minimum instream flow. This argument conflates the baseline issue with a proposed section 10(j) recommendation and must be rejected. 20 As the Commission accurately notes, the FPA does not mandate “that all past damage to fish and wildlife caused by a project ... be ‘mitigated’ in a relicensing proceeding.” 54 Fed.Reg. at 23,792. More significantly, as discussed in greater detail below, the FPA establishes a delicately balanced process by which the Commission decides whether or how to incorporate a given agency recommendation into a license. Requiring the Commission to establish a baseline containing every fish and wildlife recommendation would undermine the Commission’s mandate to consider numerous conflicting interests, rendering sections 4(e), 10(a), 10(j), and 18 superfluous. This approach cannot stand. It would place the Commission in an untenable position and require us to adopt an approach violative of the precept that “[statutes should not be construed to make surplus-age of any provision.” Wilshire Westwood Assocs. v. Atlantic Richfield Corp., 881 F.2d 801, 804 (9th Cir.1989) (quoting Pettis ex rel. United States v. Morrison-Knudsen Co., 577 F.2d 668, 673 (9th Cir.1978)). The petitioners premise their final argument upon a novel reading of our decision in Confederated Tribes and Bands of the Yakima Indian Nation v. Federal Energy Regulatory Comm’n, 746 F.2d 466 (9th Cir.1984). This Court has held that, in the context of an original FPA hydropower licensing, “once a project begins, the ‘pre-project environment’ becomes a thing of the past. Evaluating the project’s effect on pre-project resources is simply impossible.” LaFlamme v. Federal Energy Regulatory Comm’n, 852 F.2d 389, 400 (9th Cir.1988). The petitioners, however, contend that Yakima compels a different result when the Commission considers a relicensing proposal. The petitioners’ reliance on Yakima is misplaced. Yakima presented the questions of whether the Commission violated the FPA or NEPA either when it bypassed the preparation of an environmental impact statement or when it deferred consideration of fishery protection until after it relicensed the hydropower project. See 746 F.2d at 470-75. In Yakima, we resolved both questions against the Commission, holding that the Commission must consider the environmental impacts of reli-censing before issuing a new license. See id. at 475-77. In the Order on Rehearing, the Commission noted that it repeatedly has addressed the confluence between the Yakima opinion and the baseline issue. See 81 Fed. Energy Reg. Comm’n Rep. (CCH) at 62,326-27. Indeed, as early as 1989, in its regulations implementing the relicensing provisions of the ECPA, the Commission observed that: [Wjhile Yakima clearly requires the Commission to evaluate resource impacts prior to licensing, the Commission sees nothing in that decision that requires it either to pretend that current projects do not exist, or to require applicants to gather information to recreate a 50-year old environmental base upon which to make present day development decisions. 54 Fed.Reg. at 23776. We agree with the Commission’s sensible application of Yakima, and the petitioners have cited no authority to suggest a contrary reading. Indeed, no such authority exists. Our conclusion is consistent with the opinion of the District of Columbia Circuit in United States Department of Interior v. Federal Energy Regulatory Commission in which the court described the limited reach of our decision in Yakima, stating: Yakima at most imposes on the Commission the duty to consider and study the environmental issue before granting a license.... Yakima simply endorses the unstartling principles that an agency must establish a record to support its decisions and that a reviewing court, without substituting its own judgment, must be certain that the agency has considered all factors required by the statute. 952 F.2d 538, 546 (D.C.Cir.1992). Accordingly, because the Commission’s construction of the FPA offends neither the Chevron reasonableness standard nor the intent of Congress, we defer to the Commission’s decision to use an existing project environmental baseline.