Opinion ID: 3053048
Heading Depth: 3
Heading Rank: 3

Heading: Preliminary Permit

Text: Fall River next argues that FERC’s orders are inconsistent with its regulations and with its issuance of a preliminary permit in this case because Fall River’s Preliminary Permit Application was substantially identical to its Final License Application. Fall River contends that this change in policy must be supported by a reasoned explanation. See generally Flagstaff Med. Ctr., Inc. v. Sullivan, 962 F.2d 879, 886 (9th Cir. 1992) (explaining that “changes in agency interpretation must be supported by a ‘reasoned analysis’ ”). FALL RIVER RURAL ELECTRIC v. FERC 12649 [5] FERC’s preliminary permit regulations provide: “The Commission will not accept an application for a preliminary permit for project works that . . . [w]ould interfere with a licensed project in a manner that, absent the licensee’s consent, would be precluded by Section 6 of the Federal Power Act.” 18 C.F.R. § 4.33(a)(2). FERC’s practice is that “where it is clear at the preliminary permit application stage that the development proposed in the permit application would cause impermissible alterations of an existing license under section 6, the Commission will not grant the permit.” Kamargo Corp., 53 FERC ¶ 61,411, at 62,439. However, “[w]here it is not clear at the permit stage that the proposed development would involve an impermissible alteration of an existing license, the Commission will issue the permit.” Id. In other words, “[t]he preliminary permit is actually only a minor threshold hurdle for the applicant, and the grant of a preliminary permit is in no respect an indication of the merits of a license proposal.” Town of Summersville v. FERC, 780 F.2d 1034, 1038-39 (D.C. Cir. 1986). Therefore, “[u]nless a permanent legal barrier precludes FERC from licensing the project, FERC will issue a preliminary permit.” Id. at 1038. [6] We cannot say that it was “clear” at the preliminary permit stage that Fall River’s proposed project would substantially alter PPL’s license, nor can we say that there was a “permanent legal barrier” to Fall River’s proposed project when FERC issued the preliminary permit. In fact, Fall River discussed developing Hebgen Dam with PPL in early 2001, and at that time PPL agreed that Fall River could and would make an application for a preliminary permit, and that it would negotiate a site use agreement with Fall River. [7] In granting Fall River’s preliminary permit, FERC noted Fall River’s representation “that they will not impact [PPL’s] project.” 95 FERC ¶ 62,265, at 64,400. Had Fall River and PPL reached a mutually acceptable site use agreement, there is no indication that Fall River’s preliminary permit application would have otherwise been precluded by a 12650 FALL RIVER RURAL ELECTRIC v. FERC “permanent legal barrier.” When PPL ultimately informed FERC that it “[did] not intend to resume these negotiations for the installation of additional generation at the Hebgen development,” FERC promptly dismissed Fall River’s license application. Therefore, we conclude that FERC’s orders are consistent with both its regulations on issuing preliminary permits and its prior issuance of a preliminary permit in this case, and that FERC has not made any change in policy that requires justification.