Opinion ID: 184033
Heading Depth: 1
Heading Rank: 1

Heading: DOE's failure to provide the affected States with modeling data interfered with their ability to consult with DOE

Text: We note that, by failing to provide the affected States with the modeling data on which it based the Congestion Study, DOE prevented the affected States from providing informed criticism and comments. There can be no doubt that the modeling data was critical to DOE's study. [10] Moreover, DOE recognizes that even under a notice-and-comment requirement, an agency has a duty to identify and make available technical studies and data that it has employed in reaching the decisions to propose particular rules. Kern County Farm Bureau v. Allen, 450 F.3d 1072, 1076 (9th Cir.2006). DOE, however, defends its failure to disclose any of the modeling data to the affected States prior to the issuance of the Congestion Study by arguing that it disclosed the technical studies and data after it issued the Congestion Study and that the information did not need to be disclosed because it was proprietary. [11] We have already held that DOE's duty to consult in preparing the Congestion Study is separate from, and requires greater interaction with the affected States, than DOE's obligation to the States when preparing the NIETC report. Accordingly, its post-study release of the information does not excuse its failure to consult with the affected States in preparing the Congestion Study. Moreover, DOE's argument that the proprietary interests in the modeling data justified their retention is not well taken. First, as noted by the States, there is no factual or legal basis for DOE's unstated assumption that the States would not, or could not, respect any legitimate proprietary interests in the modeling data. Second, and more importantly, the case cited by DOE, American Radio Relay League, Inc. v. Federal Communications Commission, 524 F.3d 227 (D.C.Cir.2008), specifically states that under the Administrative Procedure Act (APA) an agency must disclose the technical studies and data upon which it bases a ruling. [12] Third, there is no doubt that the modeling information was critical to DOE's preparation of the Congestion Study. [13] The ability to consult on a matter is severely compromised when an entity is denied access to the basis of the decision.
More importantly, we cannot conclude that DOE's failure to consult was harmless error. Certainly, American Radio Relay League notes that any failure to disclose information for public comment is subject to the rule of prejudicial error. Id. at 237. We also have held that when reviewing agency action under the APA, we must take due account of the harmless error rule. Paulsen v. Daniels, 413 F.3d 999, 1006 (9th Cir.2005). We have stressed, however, that a court must exercise great caution in applying the harmless error rule in the administrative rulemaking context. Id. In Riverbend Farms, Inc. v. Madigan, 958 F.2d 1479 (9th Cir. 1992), which involved a failure of an agency to fulfill the notice-and-comment procedures of the APA, we stated: It's true, as plaintiffs argue, that we must exercise great caution in applying the harmless error rule in the administrative rulemaking context. The reason is apparent: Harmless error is more readily abused there than in the civil or criminal context. An agency is not required to adopt a rule that conforms in any way to the comments presented to it. So long as it explains its reasons, it may adopt a rule that all commentators think is stupid or unnecessary. Thus, if the harmless error rule were to look solely to result, an agency could always claim that it would have adopted the same rule even if it had complied with APA procedures. To avoid gutting the APA's procedural requirements, harmless error analysis in administrative rulemaking must therefore focus on the process as well as the result. We have held that the failure to provide notice and comment is harmless only where the agency's mistake clearly had no bearing on the procedure used or the substance of decision reached. Sagebrush Rebellion, Inc. v. Hodel, 790 F.2d 760, 764-65 (9th Cir.1986). Id. at 1487. We have applied this definition of harmless error  clearly had no bearing on the procedure used or the substance of decision reached  in a number of cases over the last eighteen years. For example, see Paulsen, 413 F.3d at 1006-08 (adopting the no bearing standard, noting that the agency's mistake clearly had a bearing on the procedure used, and commenting that the fact that petitioners had an opportunity to protest an already-effective rule prior to the time it was applied to each of them does not render the APA violation harmless); City of Sausalito v. O'Neill, 386 F.3d 1186, 1220 (9th Cir.2004) (holding that in the rulemaking context, we exercise great caution in applying the harmless error rule, holding that failure to provide notice and comment is harmless only where the agency's mistake clearly had no bearing on the procedure used or the substance of decision reached) (internal quotation marks and citations omitted); Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service, 378 F.3d 1059, 1071 (9th Cir.2004) (noting that in the context of agency review, the role of harmless error is constrained and may be employed only when a mistake of the administrative body is one that clearly had no bearing on the procedure used or the substance of decision reached); and Buschmann v. Schweiker, 676 F.2d 352, 358 (9th Cir.1982) (holding that an agency can rely on harmless error only when a mistake of the administrative body is one that clearly had no bearing on the procedure used or the substance of decision reached) (internal quotations marks and citations omitted). [14] The dissent, however, posits that the Supreme Court's recent decision in Shinseki v. Sanders, ___ U.S. ___, 129 S.Ct. 1696, 173 L.Ed.2d 532 (2009), requires a different definition of harmless error. We do not agree. In Sanders, the Supreme Court clarified that in agency cases, as in appellate review of civil cases, the burden of showing an error is harmful normally falls upon the party attacking the agency's determination. Id. at 1706. The Supreme Court struck down the Federal Circuit's harmless error framework, in part because it require[d] the VA, not the claimant to explain why the error [was] harmless. Id. at 1705. The Court, however, did not redefine harmless error, but rather embraced a commonsense approach to the concept. To say that the claimant has the burden of showing that an error was harmful is not to impose a complex system of burden shifting rules or a particularly onerous requirement. In ordinary civil appeals, for example, the appellant will point to rulings by the trial judge that the appellant claims are erroneous, say, a ruling excluding favorable evidence. Often the circumstances of the case will make clear to the appellate judge that the ruling, if erroneous, was harmful and nothing further need be said. But, if not, then the party seeking reversal normally must explain why the erroneous ruling caused harm. If, for example, the party seeking an affirmance makes a strong argument that the evidence on the point was overwhelming regardless, it normally makes sense to ask the party seeking reversal to provide an explanation, say, by marshaling the facts and evidence showing the contrary. The party seeking to reverse the result of a civil proceeding will likely be in a position at least as good as, and often better than, the opposing party to explain how he has been hurt by an error. 129 S.Ct. at 1706. We do not think that this approach to harmless error allows us to depart from our consistent case law holding that harmless error requires a determination that the error had no bearing on the procedure used or the substance of[the] decision reached. Paulsen, 413 F.3d at 1006 (quoting Sagebrush, 790 F.2d at 764-65). In Miller v. Gammie, 335 F.3d 889 (9th Cir.2003) (en banc), we held that where the reasoning or theory of our prior circuit authority is clearly irreconcilable with the reasoning or theory of intervening higher authority, a three-judge panel should consider itself bound by the later and controlling authority, and should reject the prior circuit opinion as having been effectively overruled. Id. at 893. Certainly, Sanders clarifies that the burden of showing an agency's deviation from the APA was not harmless rests with the petitioner, but we see nothing in Sanders that is clearly irreconcilable with the reasoning or theory underlying our definition of harmless error. [15] Moreover, here our concern with process is very different from the issue in Sanders. There, the Supreme Court's exclusive focus on the harmlessness of the error in affecting the final outcome  the determination of disability  was a logical application of the statutory and regulatory requirements of notice by the agency to the veteran as to how to pursue his claim. The notice requirement was not an end in itself; it was a means to permit the veteran to develop his claim for disability. If a failure of notice had no effect on the determination of the disability claim, there could be no harm; the failure of notice by itself was of no consequence. In contrast, here, as in Riverbend Farms, the congressional notice requirement reflects the desirability of the interactive process itself. [16] 958 F.2d 1479. The consultative process dictated by Congress serves the purpose of permitting the States to participate in the formulation of federal policy in an area of major interest to the States. As in Riverbend Farms, Congress did not require the agency to accept the views of the States; its requirement was directed at process and not merely a final result (although early consultation often will lead to a better result). Id. at 1487. Under such a scheme, we are not free to depart from our consistent case law holding that a finding of harmless error requires a determination that the error had no bearing on the procedure used or the substance of [the] decision reached. Paulsen, 413 F.3d at 1006 (quoting Sagebrush, 790 F.2d at 764-65) (emphasis added). The dissent, however, prefers the D.C. Circuit's approach in Gerber v. Norton, 294 F.3d 173, 182 (D.C.Cir.2002), that to show that error was prejudicial a plaintiff must indicate with reasonable specificity what portions of the documents it objects to and how it might have responded if given the opportunity. (internal quotation marks and citations omitted). The dissent asserts that other circuits have adopted a similar approach for showing prejudice from procedural errors. [17] Although we are compelled to follow our prior case law, we would reach the same conclusion applying the standard proffered by the dissent. We find that the petitioners have demonstrated that they were excluded from the decisionmaking process, have indicated what evidence and information they would have provided if given the opportunity, and have shown how their interests were harmed by their exclusion. Placing the burden of showing that DOE's failure to consult was not harmless on the petitioners, we determine that the affected States have shown that DOE's failure to comply with Congress's mandate in § 216 was harmful. First, we note that although the nature of consultation makes it difficult to determine the precise consequences of its absence, the prejudice to the party excluded is obvious. Consultation requires an exchange of information and opinions before the agency makes a decision. This requirement is distinct from the opportunity to offer comments on the agency's decision. The essential verity of this distinction is illustrated by posing the question: would any attorney forgo the opportunity to argue his client's case before a judge renders a decision in favor of seeking reconsideration after the judge has made a decision? Of course not; such a decision might well amount to malpractice. Similarly, here, the opportunity to comment on DOE's completed Congestion Study does not compensate for the lost opportunity of consulting with DOE in the formation of that study. [18] Another drawback of the dissent's approach is its failure to appreciate that DOE's failure to consult has a substantive, as well as procedural component. The exclusion of the affected States from the decisionmaking process not only limited the information available to DOE, it altered the way in which DOE made its discretionary decisions. In Kurzon v. United States Postal Service, 539 F.2d 788 (1st Cir.1976), the First Circuit indicated that where there was an alleged substantive error, it would remand only if the court is in substantial doubt whether the administrative agency would have made the same ultimate finding with the erroneous finding removed from the picture. Id. at 796 (internal quotation marks and citations omitted). Here, we are left with substantial doubt as to whether DOE would have made the same findings had it consulted with the affected States. Second, the impact of the lack of consultation before a decision is made as contrasted to commenting after the agency has made a decision is particularly severe here because, as DOE admits, its decisions were for the most part discretionary. In its May 7, 2007, Notice, DOE stated that there is no generally accepted understanding of what constitutes `constraints or congestion that adversely affects consumers,' 72 Fed.Reg. at 25,843, and noted that [t]he statute provides little direction on how the Department should draw the boundaries of a National Corridor, id. at 25,848. Thus, DOE admits that its determinations and conclusions in the Congestion Study were not decisions compelled by some mathematical formulae, but important discretionary decisions for which there was little guidance. [19] The value of consulting with an agency before it makes a decision is greatest when the agency is tasked with adopting a novel approach that will then affect all stakeholders. In such a situation, as here, a court can hardly conclude that the agency's refusal to consult with the affected States had no bearing on the substance of the decision reached. See Paulsen, 413 F.3d at 1006. The dissent's recitation of the States' opportunity to comment reflects its failure to appreciate how consulting is different from commenting. Of course, the States were aware that Congress had directed DOE to conduct a Congestion Study. They had to protect themselves, and perhaps try to reduce the potential harm from a lack of consultation, by responding to DOE's request for comments. But, contrary to the dissent's suggestion, there is no evidence that DOE ever consulted with any State. [20] Finally, a review of the objections filed by the affected States and others reveals that DOE's failure to consult with the affected States in developing the Congestion Study was not harmless error and that consultation would probably have resulted in a different study. [21] Among the over 400 comments that DOE received when it published the Congestion Study were assertions that: (1) the focus of the Congestion study is too narrow to accommodate State laws and policies on renewable portfolio standards; (2) DOE had adopted too broad a definition of adverse effects; (3) designations should only be made for areas actually experiencing congestion adversely affecting consumers and not areas that may experience congestion in the future; and (4) DOE should clarify the criteria it would use in deciding whether to designate a National Corridor. 72 Fed.Reg. at 25,842-43. DOE does not claim that its decisions in the Congestion Study were compelled or that consultation could not have produced variations. Rather, DOE's responses to the comments stress its discretion, implicitly recognizing that consultation might well have resulted in different decisions. For example, the first line of DOE's response stresses that § 216 gives it discretion. Id. at 25,843. It admits that the term constraints or congestion that adversely affects consumers ... is ambiguous and the statute attaches no modifiers to the term to specify the particular type of magnitude of adverse effect intended. Id. DOE's admission that a term is ambiguous and that the statute provides little guidance in its interpretation indicates that its decisions might well have been altered through consultation with the affected States. The likelihood that consultation would produce different results may be seen, for example, in the petitioners' objections to DOE's designation of the entire Mid-Atlantic region as a NIETC Corridor and to their assertions that DOE failed to consider regional efforts to address energy constraints and congestions. This is not to suggest that DOE's determinations were unreasonable. Rather, it appears that petitioners' objections are not frivolous, may well have some merit, and thus, we cannot conclude that DOE, were it to exercise its discretion when informed by consultation with the affected States, would not modify its decisions. The failure to consult was not some technical error, but resulted in a decisionmaking process that was contrary to that mandated by Congress and one that deprived DOE of timely substantive information. We conclude that DOE's failure to consult with the affected States, as directed by Congress, was not harmless error.
When a court determines that an agency's action failed to follow Congress's clear mandate the appropriate remedy is to vacate that action. See, e.g., Nw. Envtl. Advocates v. EPA, 537 F.3d 1006, 1026-27 (9th Cir.2008) (explaining that the district court's decision to vacate the EPA's action was the proper remedy when EPA acted outside of its authority and in defiance of Congress's clear intent). Similarly, where a regulation is promulgated in violation of the APA and the violation is not harmless, the remedy is to invalidate the regulation. See Paulsen, 413 F.3d at 1008. Accordingly, as we have determined that § 216 required more than the notice-and-comment procedure adopted by DOE, and that DOE's failure to consult with the affected States was not harmless error, precedent and reason require that we vacate the Congestion Study and remand for the DOE to prepare a Congestion Study in consultation with the affected States. DOE's suggestion that we might vacate only those portions of the Congestion Study for which the States have shown prejudice, misconstrues the nature of the right to consultation as well as the deference we owe to DOE's decisions. As noted, it is almost impossible to determine the precise impact of a decisionmaker's failure to consult prior to making a discretionary decision. Because the Congestion Study invokes DOE's sound discretion for which there are few, if any, objective criteria, we simply cannot know what DOE would have decided had it considered the affected State's perspectives before it completed the study, or foretell what it will decide after consulting with the affected States. Accordingly, DOE must prepare a Congestion Study in consultation with the affected States which thereafter may be judicially reviewed. We express no opinion as to the form or results of the collaboration. Indeed, presumably DOE could, in the exercise of its sound discretion, come to the same or similar conclusions that it did in the initial study. Of course, it might reach very different conclusions. What is critical is that it follow the statute's mandate and consult with affected States, particularly as § 216 requires DOE to prepare a congestion study every three years.
We next address DOE's failure to prepare an Environmental Impact Statement (EIS) or an Environmental Assessment (EA) for either of the NIETCs. We do so for two reasons. First, even if we had not determined that the Congestion Study must be vacated, we would nonetheless hold that the NIETCs must be vacated because DOE violated the law in failing to consider the environmental consequences of the NIETCs. Second, because DOE will now have to prepare new NIETCs based on a new Congestion Study, our guidance on this issue should be useful for all concerned.
All parties agree that pursuant to the National Environmental Policy Act, 42 U.S.C. § 4332(2)(C), DOE, like any other federal agency, must include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on the potential environmental consequences of the action. [22] Id. In Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989), the Supreme Court noted that NEPA promotes its sweeping commitment to prevent or eliminate damage to the environment and biosphere by focusing Government and public attention on the environmental effects of proposed agency action so that the agency will not act on incomplete information, only to regret its decision after it is too late to correct. Id. at 371, 109 S.Ct. 1851 (internal quotation marks and citations omitted). In Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008), the Supreme Court reiterated that [p]art of the harm NEPA attempts to prevent in requiring an EIS is that, without one, there may be little if any information about prospective environmental harms and potential mitigating measures. 129 S.Ct. at 376; see also Monsanto v. Geertson Seed Farms, ___ U.S. ___, 130 S.Ct. 2743, 2768, 177 L.Ed.2d 461 (2010) (Stevens, J., dissenting) (noting that an EIS is especially important where the environmental threat is novel). Ultimately, our role is to insure that the agency has taken a `hard look' at environmental consequences. ... Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21, 96 S.Ct. 2718, 49 L.Ed.2d 576 (1976). In accord with this approach, we have reiterated that the agency bears the primary responsibility to ensure that it complies with NEPA. ` Ilio'ulaokalani Coal. v. Rumsfeld, 464 F.3d 1083, 1092 (9th Cir. 2006) (quoting Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 765, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004)). We reiterated in Alaska Ctr. for Environment v. U.S. Forest Service, 189 F.3d 851, 859 (9th Cir. 1999), that [w]hen an agency decides to proceed with an action in the absence of an EA or EIS, the agency must adequately explain its decision. Id. (internal citation omitted). We commented that [a]n agency cannot avoid its statutory responsibilities under NEPA merely by asserting that an activity it wishes to pursue will have an insignificant effect on the environment. Id. (quoting The Steamboaters v. FERC, 759 F.2d 1382, 1393 (9th Cir.1985)). In Klamath Siskiyou Wildlands Center v. Boody, 468 F.3d 549 (9th Cir.2006), we noted that an EIS must be prepared if substantial questions are raised as to whether a project may cause significant degradation of some human environmental factor. Id. at 562 (internal citation omitted). We explained that [t]he plaintiff need not show that significant effects will in fact occur, but if the plaintiff raises substantial questions whether a project may have a significant effect, an EIS must be prepared, and noted that [t]his is a low standard. Id. (internal citation omitted). In addition, we stated: Furthermore, not only did BLM fail to conduct an EIS prior to implementing either of the ASR Decisions, it did not even conduct an EA. NEPA's implementing regulations state that EAs should be conducted to provide sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact. 40 C.F.R. § 1508.9(a)(1). Indeed, as we explained in Metcalf v. Daley, 214 F.3d 1135, 1143 (9th Cir.2000), [b]ecause the very important decision whether to prepare an EIS is based solely on the EA, the EA is fundamental to the decision-making process. In this vein, we have held that [i]f the proposed action does not categorically require the preparation of an EIS, the agency must prepare an EA to determine whether the action will have a significant effect on the environment. Kern v. Bureau of Land Mgmt., 284 F.3d 1062, 1066 (9th Cir.2002). Klamath, 468 F.3d at 562. Thus, our precedents hold that an agency cannot merely assert that its decision will have an insignificant effect on the environment, but must adequately explain its decision. Alaska Ctr., 189 F.3d at 859. In The Steamboaters, we reversed and vacated the agency's order because the agency failed to prepare even an EA and did not discuss the evidence presented by the various agencies or how the particular conditions placed on the project would prevent environmental damage. 759 F.2d at 1393. We explained that the agency must supply a convincing statement of reasons why potential effects are insignificant. Id. (internal citation omitted). The appellate court must be able to determine whether the agency took a `hard look' at the potential environment impacts of the project and [t]he statement of reasons is crucial to such a determination. Id.
We apply these standards to DOE's assertion that, although NEPA applies, it was not required to undertake any review of potential environmental consequences because the NIETCs do not have any environmental effects. [23] We are compelled to reject DOE's assertion because (1) its conclusory statement does not allow us to determine whether DOE took a hard look at the potential environmental consequences; and (2) although the effects of the NIETCs may be uncertain and difficult to quantify, the potential consequences of such effects are significant enough to undermine DOE's conclusory determination that no EA need be prepared. [24]
DOE argues that the NIETCs do not have any environmental effect because they do not approve of the siting of any transmission facility, and furthermore, any particular siting will be subject to NEPA review. Our precedent, however, provides that agency action may constitute a major Federal action even though the program does not direct any immediate ground-breaking activity. In Forelaws on Board v. Johnson, 743 F.2d 677 (9th Cir.1984), the petitioners challenged the Bonneville Power Administration's (BPA) offers of long-term contracts for power. Id. at 679. Although BPA argued that its actions that merely allocate federal power to different customers do not significantly affect the environment, we held that the contracts raised considerations of far greater historic and regional import and significantly affect the environment. [25] Id. at 682. Accordingly, we concluded that BPA's action was not sufficient and required the preparation of an EIS. Id. at 686. DOE recognizes the relevancy of Forelaws, but seeks to distinguish the case on the ground that DOE has no authority to site electric transmission facilities. This distinction is not persuasive because the NIETCs, in essence, influence the areas in which electric transmission facilities will be located, even though they do not determine the precise locations of the facilities. As in Forelaws, the locations of those areas could have great historic and regional consequences that significantly affect the environment. Thus, the fact that the NIETCs do not approve the actual sitings of specific transmission facilities does not excuse DOE from considering the NIETCs' environmental impacts. Furthermore, Forelaws does not stand alone in holding that broad agency programs may constitute major Federal actions, even though the programs do not direct any immediate ground-disturbing activity. See Oregon Natural Desert Ass'n v. BLM, 531 F.3d 1114, 1116 (9th Cir.2008) (finding EIS inadequate for land use plan covering a large portion of Oregon); N. Alaska Envtl. Ctr v. Kempthorne, 457 F.3d 969, 973 (9th Cir.2006) (noting that an EIS was prepared for agency action making entire Northwest Petroleum Reserve available for oil and gas leasing despite the lack of site specific analysis for particular locations where drilling might occur); Friends of Yosemite Valley v. Norton, 348 F.3d 789, 800-01 (9th Cir.2003) (evaluating programmatic EIS for land use plan for national park); [26] Blue Mountains Biodiversity Project v. Blackwood, 161 F.3d 1208, 1213 (9th Cir.1998) (finding EA inadequate and requiring EIS for log-salvaging plan for national forest). [27]

DOE asserts that the NIETCs are not major federal actions because it would be pure speculation to predict their environmental impacts. Citing Northcoast Environmental Center v. Glickman, 136 F.3d 660 (9th Cir.1998), DOE asserts that an agency action that has only speculative environmental impacts is not a major federal action. Our holding in Northcoast is more nuanced than suggested by DOE. At issue in that case was a proposal by the Forest Service (FS) to establish guidelines for research, management strategies, and information sharing concerning a root rot fungus on federal land in Oregon. Id. at 670. The district court found that the programs did not constitute final agency action subject to judicial review and that even if they did, they were not major federal actions significantly affecting the environment. Id. at 668. On appeal, we first noted that where review is sought under the general review provision of the APA, the agency's decision must be a final agency action and the plaintiffs must establish they have suffered a legal wrong, or will be adversely affected or aggrieved within the meaning of the relevant statute. Id. We proceeded to comment that the agency action must (1) be federal, (2) `major', and (3) have a significant environmental impact. [28] Id. The opinion focused on the third requirement. We concluded that the district court properly recognized that none of the activities had an actual or immediately threatened effect on the environment and correctly decided that the FS reasonably found that its actions did not significantly affect the quality of human environment. [29] Id. at 669-70. Although sympathetic to plaintiffs' concern that agencies should conduct a full NEPA analysis when management plans are implemented or proposed, we concluded that the current forest management programs did not call for specific enough action to trigger NEPA's procedural requirements, and noted that plaintiffs could challenge the sufficiency of an agency EIS when discrete agency action is called for. Id. at 670. Northcoast offers several points of guidance. First, in determining whether the program had a significant environmental impact, we implicitly held that the program was a final agency action subject to review under the APA, even though we recognized that plaintiffs could challenge the sufficiency of an agency EIS when discrete agency action is called for. [30] Id. Second, we determined that the program was, at least potentially, a major Federal action. It is not clear whether the requirement that agency action be major was considered separately from the requirement that the action have significant environmental impact, or whether the latter was treated as an element of the former. In any event, the opinion certainly implies that if the program did have a significant environmental impact, it would have been a major federal action. Third, although Northcoast states that an agency need not prepare an environmental study when its action does not have a significant environmental impact, it also holds that the record must be sufficient to allow the court to determine that the agency's conclusion was reasonable. See 136 F.3d at 670. Here, the NIETCs are undoubtedly final agency actions. The NIETCs conclude DOE's responsibilities under § 216. They establish the boundaries for two national electric transmission corridors. Once the NIETCs become final, any question as to the actual siting of a facility within the corridors will be addressed to FERC. See 73 Fed.Reg. at 12,969 (DOE agrees that the effect of a National Corridor is to delineate geographic areas within which, under certain circumstances, FERC may ultimately authorize the construction or modification of electric transmission facilities.). Both the intent and impact of the NIETCs support the conclusion that they constitute major Federal action. They create National Interest corridors to address national concerns. The NIETCs cover over a 100 million acres in ten States. Moreover, they create new federal rights, including the power of eminent domain, that are intended to, and do, curtail rights traditionally held by the states and local governments. See 16 U.S.C. § 824p(b), (e). In sum, we hold that the NIETCs are final agency actions that constitute major Federal actions.
The remaining question is whether the NIETCs could have significant environmental impacts or, more accurately, whether DOE has created a record sufficient to allow us to evaluate whether its no effects determination is reasonable. DOE proffers four arguments against being required to undertake an environmental study. First, DOE contends that no potential project-specific impacts are reasonably foreseeable or caused by the NIETCs. DOE contends that the NIETCs are not decisions to add transmission capacity to solve the problems of congestion or to site transmission facilities along preselected routes. DOE claims that these decisions remain to be made by multiple independent actors, and given the vast range of options available ... it would be pure speculation to predict environmental impacts or assign them (as a matter of causation) to the Designation Order. DOE further asserts that under § 216 its limited task was to determine the conditional availability of a federal forum for siting transmission projects, and it would have been premature for DOE to evaluate the potential environmental impacts of new transmission facilities when deciding merely whether a federal forum should be made available. DOE also contends that even if the NIETCs were certain to result in specific projects being submitted to FERC, DOE was not required to prejudge the potential impacts of those projects because a project-specific NEPA review is required before a permit issues. Second, DOE claims that the NIETCs have no foreseeable programmatic effects. DOE admits that in some instances NEPA may require review of programmatic decisions that prescribe future actions, even though project-specific NEPA review will occur before a particular project is undertaken. [31] Nonetheless, DOE maintains that the NIETCs are not programmatic decisions with reasonably-foreseeable future effects because each NIETC is not a plan to guide land management or energy policy decisions, but merely makes available a federal procedural remedy ( i.e., a forum for the consideration of interstate transmission lines), in the event that FERC finds relevant State forums to be inadequate per the standards set by Congress. DOE maintains that the addition of a backstop federal forum does not mean that States and FERC will approve a greater number of projects and it does not favor transmission solutions over non-transmission alternatives ... nor particular generation sources over others. DOE recognizes that it is tasked with choosing the geographic boundaries of the National-Interest Corridors, but asserts that petitioners have failed to show that these boundaries circumscribe relevant alternatives as they place no limits on State siting authorities. Third, DOE denies that the NIETCs could have any impacts on sensitive areas such as critical habitat for endangered species, scenic rivers, wilderness areas, and historic sites. DOE points out that an EIS must be prepared whenever substantial questions are raised about whether a specific project may have a significant effect. DOE further asserts that petitioners have the burden of showing that the potential impacts to sensitive resources are a reasonably foreseeable result of the designations. DOE maintains that [t]he very breadth of these designations belies any suggestion that impacts can be meaningfully evaluated at the designation stage, even if it is assumed that the designation will prompt additional transmission projects. DOE disagrees with petitioners' claim that the inclusion of land within a corridor will discourage conservation, opining that a NIETC might as readily spur the expansion of parks and conservation easements within the Corridors, as interested parties seek to protect sensitive resources. [32] DOE further argues that claims of potential habitat fragmentation within a corridor cannot be meaningfully reviewed because of the many variables and wide range of alternatives. DOE claims that any suggestion that environmentally sensitive areas might be excluded from the corridors confuses DOE's threshold task (designating areas with congestion problems) with the States' and FERC's subsequent task (evaluating proposed solutions). Fourth, DOE argues that the NIETCs do not diminish any legal protections because Congress provided that nothing in § 216 alters federal environmental laws, including laws requiring special authorization for use of federal lands or federal permits for impacting air and water resources. The NIETCs do not allow power companies to run away from state and federal environmental and land use laws because they, in themselves, have no preemptive effect, and FERC's authority to preempt State law under § 216(b) is project-specific and limited to circumstances enumerated by Congress. According to DOE, there are no foreseeable adverse effects from the mere threat of federal intervention because potential acceleration of State proceedings does not dictate the outcome of those proceedings and because DOE does not have any discretion to alter the statutory time frames, which might preclude meaningful review of their potential effects. There may be merit to some of DOE's arguments in terms of limiting the scope of an EIS or in explaining why an EA and not an EIS should be prepared, but they fail both as a matter of law and fact to justify DOE's failure to undertake any study of the potential environmental impacts. DOE's primary argument appears to be that because the NIETCs do not approve any specific sites, they have no meaningful environmental impact. This perspective fails to appreciate that a decision to encourage, through a number of incentives, the siting of transmission facilities in one municipality rather than another has effects in both municipalities in terms of the values of land and proposed and potential uses of land. The effects may be difficult to measure and may be determined ultimately to be too imprecise to influence the Designation, but this is precisely the type of determination that only can be intelligently made after the preparation of at least an EA. Recognition of these consequences flowing from the NIETCs defeats most of DOE's reasons for not preparing an EA or EIS. Without such a study, it is impossible to fairly determine whether project-specific impacts are reasonably foreseeable, whether there are programmatic effects, [33] and whether the Designation has any impact on sensitive areas. Furthermore, the NIETCs do diminish legal protections at least as to whether any particular geographic area should be included in a corridor. The particular siting of a transmission facility may be challenged before a State or FERC, but a challenge to a specific site cannot challenge the inclusion of the area involved in the NIETCs by DOE. Thus, the alleged impact of the NIETCs' inclusion of particular areas as within the corridors, and the exclusion of other areas, are subject to review for environmental impacts at this time or not at all.
Any remaining doubt as to whether it is possible to consider the environmental impacts of the NIETCs dissipates in light of DOE's preparation of a Programmatic Environmental Impact Statement (PEIS) for its designation of the West-wide Corridors for federal lands in eleven western states. See U.S. Department of Energy et al., Programmatic Environmental Impact Statement, Designation of Energy Corridors on Federal Land in the 11 Western States (DOE/EIS-0386), 2007 (hereinafter PEIS). A separate and distinct provision in the EPAct, § 368 of the Energy Policy Act of 2005 (Pub.L. No. 109-58, § 368, 119 Stat. 727, codified at 42 U.S.C. § 15926), directs federal land-management agencies to identify rights-of-way across lands they administer to serve as energy corridors. DOE points out that the statute provides that any corridor designated under this section shall, at a minimum, specify the centerline, width, and compatible uses of the corridor. 42 U.S.C. § 15926(e). Together with the Department of Interior, DOE prepared the required PEIS. See 42 U.S.C. § 15926(a)(2) (providing for the preparation of any environmental reviews that may be required to complete the designation of such corridors). The federal agencies issued the PEIS in October 2007. Two aspects of the PEIS are of particular relevance to this case. First, in response to the question why conduct an environmental review under NEPA and prepare a programmatic analysis, the PEIS's executive summary states: Section 368 requires the Agencies to conduct any environmental reviews necessary to complete the designation of Section 368 energy corridors. The proposed designation of Section 368 energy corridors would not result in any direct impacts on the ground that may significantly affect the quality of the human environment. Nevertheless, the Agencies have decided to prepare a PEIS to conduct a detailed environmental analysis at the programmatic level and to integrate NEPA at the earliest possible time. [34] PEIS, supra, Executive Summary, at ES.8 (footnote omitted). Second, after identifying an `unrestricted' conceptual West-wide network of energy transport paths, the executive summary explained: Next, the locations of individual segments of the conceptual network defined in Step 1 were examined and revised to avoid major known environmental, land use, and regulatory constraints (such as topography, wilderness areas, cultural resources, military test and training areas, and Tribal and state natural and cultural resource areas, etc.).... The revision resulted in a preliminary West-wide energy corridor network that avoided private, state and Tribal lands, many important known natural and cultural resources, and many areas incompatible with energy transport corridors because of regulatory or land use constraints while meeting the requirements and objectives of Section 368. PEIS, supra, at ES.12.2.1. We recognize that the PEIS and the West-wide Designation were undertaken pursuant to a separate and distinct provision of the EPAct. Nonetheless, the creation of the PEIS and its impact on the resulting corridor designation is strong evidence both that it is possible to determine the environmental impacts of a proposed energy corridor and that the study of such environmental impacts may result in modifications of a corridor's boundaries. The West-wide Corridors Designation, like the NIETC Designation, did not approve any specific sites, but designated specific areas for sites. Nonetheless, the lead agencies, including DOE, reshaped the corridors in response to the PEIS to exclude certain sensitive lands. Certainly § 15926 contains a more specific requirement for a study of environmental impacts than § 216, but DOE's ability to undertake a PEIS for West-wide Corridors, and to modify the boundaries based on the PEIS, undermines its assertion that it is not possible to evaluate the environmental impacts of a NIETC.
DOE also asserts that it has adequately documented its decision not to undertake any review under NEPA. It argues that similar to the situation in Northcoast, neither NIETC is a specific proposal with environmental consequences that can be meaningfully evaluated at this time. 136 F.3d at 663 (internal quotations omitted). We doubt that a NIETC is similar to the management guidelines at issue in Northcoast, but even if we were to engage in this fiction, this case does not contain the critical factual element present in Northcoast: a record that supports the reasonableness of the agency's decision not to prepare an EIS or EA. We cannot accept DOE's unsupported conclusion that its final agency action that covers ten States and over a 100 million acres does not, as a matter of law, have some environmental impact. See Alaska Ctr., 189 F.3d at 859; The Steamboaters, 759 F.2d at 1393. If the smaller West-wide Corridors are worthy of a PEIS, as detailed in the statement's executive summary, then a much larger NIETC is also presumptively worthy of an EA or EIS. In any event, DOE has failed to present the documentation necessary to allow us to determine that there are no environmental impacts or that DOE took a hard look at the environmental impacts.
Finally, DOE suggests, citing 40 C.F.R. § 1500.3, that even if we were to determine that a formal EA was required to document DOE's no effects determination, DOE's failure to do so was, at most, harmless error. As noted in Section III C, supra, following the issuance of the Supreme Court's opinion in Sanders, 129 S.Ct. 1696, we place the burden on petitioners to show that the failure to undertake an environmental study is not harmless error. Here, even a cursory review of petitioners' contentions raises substantial questions ... as to whether [the NIETCs] may cause significant degradation of some human environmental factor. Klamath Siskiyou Wildlands, 468 F.3d at 562 (internal citation omitted). [35] For example, petitioners note that the Southwest Corridor includes the Joshua Tree National Park and the Sonoran Desert National Monument. It includes more than three million acres of national wildlife refuge as well as national parks and 57 state beaches, reserves and recreational areas. The Mid-Atlantic Corridor encompasses four national forests, over a million acres of national reserves, historic properties, and environmentally sensitive lands. In light of the agencies' sensitivity to environmental impacts in their creation of the West-wide Corridors, we cannot conclude that the DOE's failure to undertake a study of the NIETCs' environmental impacts constitutes harmless error. In sum, NEPA requires that for all major Federal actions significantly affecting the quality of the human environment an agency must prepare a detailed statement on the environmental impact of the action and any adverse environmental effects. 42 U.S.C. § 4332(c). DOE did not prepare an EIS or even an EA for its NIETC Designation. Its proffered reasons for not doing sothe NIETC Designation is not a major Federal action, NEPA review will take place in subsequent requests for specific sitings, and there are no significant impacts from the Designationare not persuasive as a matter of law and are not supported by the record. Accordingly, because DOE has not shown that it has taken the requisite hard look at the environmental consequences of the NIETCs, we vacate the NIETC Designation and remand the matter to DOE to prepare at least an EA to determine whether there are any environmental impacts that significantly affect the quality of human environment, and whether, if so, the impacts warrant adjustments. [36]
Petitioners also argue that DOE violated the Endangered Species Act (ESA), 16 U.S.C. § 1531, by failing to consult with the Secretary of Interior pursuant to 16 U.S.C. § 1536(a)(2). We have recently stated that [t]he threshold for triggering the Endangered Species Act is relatively low; consultation is required whenever a federal action ` may affect listed species or critical habitat.' Cal. ex rel. Lockyer v. USDA, 575 F.3d 999, 1018 (2009) (quoting 50 C.F.R. § 402.14(a)) (emphasis added). DOE responds that petitioners' arguments concerning the ESA echo their NEPA arguments. Petitioners also contend that DOE violated the National Historical Preservation Act (NHPA) by failing to comply with 16 U.S.C. § 470f, which requires that it accept comments from certain entities, including the Advisory Council on Historic Preservation (ACHP), prior to the approval of the expenditure of any Federal funds on an undertaking that has the potential to adversely affect historic properties. See 36 C.F.R. §§ 800.1(c); 800.3(a); 800.16(y). DOE argues that it reasonably declined to initiate historic-preservation review under NHPA, and further claims that it adequately responded to the two letters it received from the ACHP. As we hold that the Congestion Study and the NIETCs Designation must be vacated and the matter remanded to the DOE, we need not consider petitioners' claims under the ESA and NHPA. Should DOE on remand designate NIETCs in a manner that petitioners believe violates either the ESA or NHPA, they can then seek judicial review of those decisions.
Petitioners have raised numerous challenges to particular aspects of the Mid-Atlantic Corridor and the Southwest Corridor. However, as the Designation of these corridors is vacated, these challenges are moot and we need not address them. Petitioners will have the opportunity to present their concerns to DOE in the proceedings on remand. We are confident that whatever actions DOE takes, the subsequent challenges to those actions (if any) will turn, at least in part, on facts and arguments that are not before us now.