Opinion ID: 1232885
Heading Depth: 2
Heading Rank: 3

Heading: Green Island's Motion to Intervene

Text: As it did before the agency, Green Island argues here that FERC disregarded its obligation to solicit motions to intervene at three points during the relicensing proceedings: (1) in December 1995, when Niagara Mohawk informed FERC that it no longer intended to install the proposed 21-MW generator; (2) in May 2001, when Erie reversed course and informed FERC that it intended to install the proposed 21-MW generator; and (3) in March 2005, when Erie submitted the Offer of Settlement. Green Island contends that because FERC failed to solicit interventions at any of these three points, its treatment of Green Island's motion to intervene as untimely was arbitrary and capricious. Under the regulations governing relicensing proceedings, upon the filing of a material amendment to a new license application, FERC must reissue public notice of that application, along with dates for comments, intervention, and protests. See 18 C.F.R. § 16.9(b)(3), (d)(1). A material amendment to plans of development proposed in an application for a license ... means any fundamental and significant change, including but not limited to ... [a] change in the installed capacity, or the number or location of any generating units of the proposed project if the change would significantly modify the flow regime associated with the project. 18 C.F.R. § 4.35(f)(1)(i). FERC did not view any of the events identified by Green Island as warranting the solicitation of motions to intervene. Specifically, it determined that the 1995 and 2001 events did not constitute materials amendments to the license application because they did not significantly affect the project's flow regime. September 21 Order Denying Rehearing, 120 F.E.R.C. ¶ 61,267, at 62,184-85. It determined that the 2005 Offer of Settlement did not warrant intervention for three reasons: (1) it supplement[ed] rather than supersede[d] the license application; (2) it did not significantly affect interests in a manner not contemplated by the original application; and (3) it fell under one of the exceptions to the intervention requirements contained in 18 C.F.R. § 4.35(e). See id. at 62,185-86 & n. 26. Consequently, FERC analyzed Green Island's motion pursuant to the factors governing its consideration of late motions to intervene. See 18 C.F.R. § 385.214(d). FERC's factual findings underlying its conclusion that the 1995 and 2001 events did not constitute material amendments to the license application because they did not significantly modify the project's flow regime are supported by substantial evidence. See Friends of the Ompompanoosuc v. FERC, 968 F.2d 1549, 1554 (2d Cir.1992) (`Substantial evidence' has been defined to mean such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. (internal quotation marks omitted)). With respect to the removal of the generator from consideration in 1995, FERC recognized that this would result in a change in flows, because more water would spill over the dam whenever flows available for generation exceeded the capacity of the existing turbines. September 21 Order Denying Rehearing, 120 F.E.R.C. ¶ 61,267, at 62,184. It concluded, however, that this would not significantly affect the project's flow regime because the project would still be required to operate in a run-of[-]river mode, and to provide the same minimum flows in the bypassed reach. Id. FERC referenced this same reasoning when it concluded that the 2001 reinstatement of the 21-MW generator did not constitute a material amendment. Although Green Island criticizes FERC's reasoning as illogical and nonsense, it offers no actual evidence to demonstrate that FERC's conclusion was flawed. Consequently, FERC's decisions not to solicit motions to intervene in 1995 or 2001 were not arbitrary and capricious. [10] FERC's decision not to solicit motions to intervene following the March 2005 Offer of Settlement, however, was arbitrary and capricious. See LaFleur, 300 F.3d at 267. Section 16.9(b)(3) of its regulations requires FERC to reissue public notice and seek comments, interventions, and protests, if an applicant for a new license materially amends its application as that term is defined in 18 C.F.R. § 4.35(f)(1). Thus, the analysis that FERC should have performed at that time required it to consider solely whether the Offer of Settlement constituted a fundamental and significant change to the School Street license application. See 18 C.F.R. § 4.35(f)(1). FERC did not address this question. Rather, it relied on two groundsthat (1) settlement agreements generally supplement rather than supersede license applications, and (2) the Offer of Settlement did not significantly affect interests in a manner not contemplated by the original applicationthat have no bearing on the analysis. FERC's third reason for not soliciting motions to intervene in 2005that the Offer of Settlement fell under one of the exceptions in 18 C.F.R. § 4.35(e)similarly was improper. On the surface, § 4.35(e) would appear to be applicable. As a general matter, § 4.35 governs how to determine the date of acceptance of a license application when that application has been amended. See 18 C.F.R. § 4.35(a) ([I]f an applicant amends its filed application as described in paragraph (b) of this section, the date of acceptance of the application under § 4.32(f) is the date on which the amendment to the applica[tion] was filed.). The regulation applies when, for example, the applicant [a]mends its filed license ... application... to materially amend the proposed plans of development. [11] Id. § 4.35(b)(1). In that event, the application is considered a new filing for ... [t]he purpose of determining its timeliness under § 4.36 of this part ... and ... [r]eissuing public notice of the application under § 4.32(d)(2). Id. § 4.35(c). Section 4.35(e) creates exceptions to the operation of § 4.35(a) where, inter alia, the amendment is made by a license ... applicant to its proposed plans of development to satisfy requests of resource agencies. Id. § 4.35(e)(4). Thus, when an applicant amends a license application in response to a request from a resource agency, that amendment has no impact on the date on which the application is deemed to have been filed. Moreover, § 4.35(e) appears to indicate that FERC does not have to reissue public notice of the application, even if the amendment to that application is material. In the present context, however, that of a relicensing proceeding, § 4.35 is not the appropriate regulation upon which to rely. Rather, FERC should have conducted its analysis pursuant to the requirements of § 16.9, which applies to an applica[tion] for a new license or nonpower license for a project subject to sections 14 and 15 of the Federal Power Act. 18 C.F.R. § 16.9(a). Indeed, § 16.9(b)(3) explicitly provides that [t]he requirements of § 4.35 of this chapter do not apply to an application under this section, except that the Commission will reissue a public notice of the application in accordance with the provisions of § 16.9(d)(1) if an amendment described in § 4.35(f) of this chapter is filed. In other words, in relicensing proceedings FERC may look to § 4.35 only for its definition of material amendment; FERC must reissue public notice and set a date for comments, intervention, and protests any time an applicant for a new license materially amends its license application. The administrative history of § 16.9(b)(3) supports our understanding of the role § 4.35 plays in relicensing proceedings and demonstrates that FERC's interpretation of that regulation is unreasonable. In setting forth its final rule with respect to hydroelectric relicensing regulations under the FPA, FERC explained that § 4.35 was not relevant to the filing of amendments to new license applications, except insofar as that section is to be used to determine whether such amendments are material. Under § 4.35, when amendments to applications that are considered as material are filed, the filing date of the initial application is deemed to be the date the material amendment is filed for a variety of purposes, including the determination of whether the initial application was timely filed vis-a-vis competition deadlines. On its face, § 4.35 applies to relicensing proceedings. However, application of § 4.35 to relicensing proceedings would mean that an application for new license timely filed by an applicant prior to the 24-month new license filing deadline would be rejected if the applicant were to file a material amendment to the application after the 24-month deadline, even if the amendment were filed prior to the final amendment deadline established for the proceeding. The Commission believes it is appropriate to waive § 4.35 as to relicensing proceedings to avoid this situation.... However ..., the § 16.9(d)(1) notice will be reissued to obtain the views of the public and others should an amendment considered material under § 4.35(f) be filed. Hydroelectric Relicensing Regulations Under the Federal Power Act, 54 Fed.Reg. 23,756, 23,787 (June 2, 1989) (footnotes omitted). It is plain, therefore, that FERC's decision not to solicit motions to intervene following the submission of the Offer of Settlement was predicated on three reasons not contemplated by its regulations. [12] Furthermore, its failure to conduct the proper analysis may have affected its treatment of Green Island's motion to intervene. Had FERC determined that the Offer of Settlement was a material amendment, then it would have been required to solicit interventions, Green Island's renewed motion to intervene would have been timely, and FERC could not have analyzed that motion pursuant to the factors applicable to untimely motions to intervene. Consequently, FERC's denial of Green Island's motion to intervene, without first conducting the proper analysis to determine whether it was required to solicit such motions, was arbitrary and capricious.