Opinion ID: 187482
Heading Depth: 2
Heading Rank: 2

Heading: Environmental Assessment

Text: Jackson County raises several objections to FERC's EA. We address the objections seriatim. First, Jackson County asserts that FERC improperly segmented its review of the four Tuckasegee projects from the three Nantahala projects and from each other. We believe the Commission appropriately limited the scope of its review. It is true that [a]gencies may not evade their responsibilities under NEPA by artificially dividing a major federal action into smaller components, each without `significant' impact.' Coal. on Sensible Transp., Inc. v. Dole, 826 F.2d 60, 68 (D.C.Cir.1987) (citing Taxpayers Watchdog, Inc. v. Stanley, 819 F.2d 294, 298 (D.C.Cir.1987)). The rule against segmentation, however, is not required to be applied in every situation. To determine the appropriate scope for an EIS, courts have considered such factors as whether the proposed segment (1) has logical termini; (2) has substantial independent utility; (3) does not foreclose the opportunity to consider alternatives, and (4) does not irretrievably commit federal funds for closely related projects. Taxpayers Watchdog, Inc., 819 F.2d at 298. In this case, FERC did not segment the individual Tuckasegee projects but instead considered all four in a single EA and, as the petitioners acknowledge, did indeed address the cumulative effects of the four projectsif not with the result the petitioners desired. See EA at 44-45 (setting out scope of cumulative effects analysis); id. at 105-06, 156-57, 284-85 (analyzing cumulative effects on water quantity and quality, aquatic resources and recreational resources); Jackson County Reh'g Req. at 53 (asserting Surrender Order ignores the associated cumulative impacts to which the EA devoted considerable ink (though little wisdom)). Throughout, FERC noted in particular the interconnectedness of the East and West Fork Projects with the Dillsboro dam because the flow from the former projects largely determined the capacity of the latter project as a run-of-the-river project. See, e.g., Surrender Order at 2 ¶ 4; Rehearing Order at 2 ¶ 4, at 23 ¶ 65 n. 73. That FERC treated the two Nantahala River projects and the Tuckasegee River projects separately was reasonable under Taxpayers Watchdog, Inc., 819 F.2d at 298. The Nantahala projects are geographically distinct from the Tuckasegee projects, located on a separate river and covered by a separate, albeit related, settlement agreement. Nor is it true, as Jackson County seems to suggest, that approving the license surrender and dam removal for the Dillsboro Project the so-called linchpin of the two settlement agreements, see, e.g., Pet'rs' Br. 49 will automatically trigger FERC approval of the other features of the two settlements. Each project's relicensing application requires separate approval by FERC based on an analysis thereof. See 16 U.S.C. § 797(e) (Issue of licenses for construction, etc., of dams, conduits, reservoirs, etc.); see generally 18 C.F.R. ch. I, subch. A, pt. 4 (Licenses, Permits, Exemptions, and Determination of Project Costs). Second, Jackson County asserts FERC failed to consider alternatives to license surrender and dam/powerhouse removalin particular, alternatives to licensure surrender which would keep the project licensed and operating in some form, such as the proposal in the Preferred Settlement Agreement to relicense the Dillsboro Project and transfer it to Jackson County. See also Pet'rs' Br. 60 (suggesting relicensing the Dillsboro Project by the current licensee and commencing a new round of competition); id. at 63 (alternative of enhancing renewable energy generation at the site) (emphasis in original). FERC dismissed such alternatives, however, in reliance on its long-held policy that it lacks authority to relicense or transfer a license and facilities without the licensee's consent. See Surrender Order at 13 ¶ 28 (A licensee cannot be required to retain or renew its license if it wishes to surrender. Likewise, the Commission cannot compel a transfer, and in any case, no entity developed a transfer proposal, nor has Duke expressed any interest in one.) (footnotes omitted) (citing Ariz. Pub. Serv. Co., 109 F.E.R.C. ¶ 61,036 at ¶ 39 & n. 34 (2004)); Wellesley Rosewood Maynard Mills, L.P., 108 F.E.R.C. ¶ 61,-048 (2004); Rehearing Order at 12, ¶ 31 n. 41 ([W]e cannot force a licensee to seek a new license for its project upon expiration of the existing license. Thus, given Duke's express desire to surrender its license, any alternative predicated on the company's receiving a new license is not feasible and merits no further consideration.). While Jackson County offered before the Commission to assume responsibility for the dam and powerhouse, and thereby save Duke the costs of removal and mitigation, it did not then challenge FERC's transfer policy itself and is therefore foreclosed from doing so now. See Save Our Sebasticook v. FERC, 431 F.3d 379, 381-82 (D.C.Cir.2005) (petitioner forfeited challenge not raised before FERC to Commission's legal principle that it may not compel licensee that applies to surrender license to continue operating the project) (citing 16 U.S.C. § 825 l (b)). Jackson County also contends FERC improperly ignored alternatives regarding fish passage proposed by Jackson County. Pet'rs' Br. 63. FERC reasonably rejected this alternative, however, concluding that while the Commission may have the authority to order the construction of such facilities as a condition of license surrender, [it] would have no jurisdiction to require ongoing maintenance and monitoring to ensure their effectiveness. Rehearing Order at 12 ¶ 32. [7] Finally, Jackson County argues, summarily, that FERC violated 18 C.F.R. § 385.602 which provides that an offer of settlement may be submitted by any party to a proceeding as well as FERC's (unidentified) prior cases when it fail[ed] to review [the `Offer of Preferred Settlement Agreement'] as a legitimate offer of settlement. Pet'rs' Br. 69. FERC considered the Preferred Settlement Agreement but rejected it as simply a recitation of the filer's position and a settlement agreement in name only because [n]either Duke, the licensee, nor any of the federal and state resource agencies that have played a major role in the Dillsboro surrender are parties to it. Surrender Order at 6 ¶ 12 n. 14. This characterization of the document was not arbitrary or capricious. For the foregoing reasons, the petition for review is denied. We emphasize that nothing in this opinion should be construed to affect the relicensing proceedings for the other six Nantahala and Tuckasegee River projects currently pending before the Commission. See supra at 1286 n. 1. So ordered.