Opinion ID: 3053048
Heading Depth: 3
Heading Rank: 2

Heading: FERC Precedent

Text: Fall River next argues that FERC’s orders are inconsistent with its precedents and are therefore not entitled to deference. In its Rehearing Order FERC analyzed Fall River’s proposed project by applying both cases involving a substantial alteration of an existing license, and cases where it found no substantial alteration. 114 FERC ¶ 61,152, at 61,508-09. Fall River challenges FERC’s application of these cases.
[3] In Niagra Mohawk Power Corporation, FERC rejected a license application that proposed a two-phase modification of an existing development. 29 FERC ¶ 61,005, 61,010 (1984). The first phase involved modifying an existing head12646 FALL RIVER RURAL ELECTRIC v. FERC gate structure, rehabilitating an existing portion of an abutment, and constructing a powerhouse and penstocks. Id. The second phase involved preventing all flows from entering the existing plant, effectively closing down its operation. Id. FERC concluded that “this amount of construction work requires fundamental alterations to [the] licensed project works, and places it in clear violation of Section 6.” Id. Fall River contends that its proposed modifications to the Hebgen Development are not remotely similar in scale to the proposed alterations in Niagra Mohawk. However, as in Niagra Mohawk, Fall River’s proposal includes more than an insubstantial amount of construction, namely building a powerhouse, installing a penstock, and excavating around a portion of PPL’s existing conduit. In JDJ Energy Company, FERC rejected a preliminary license application that proposed modifying approximately 75 feet of an existing dam and modifying an existing powerhouse to accommodate construction of a new powerhouse. 41 FERC ¶ 61,354 (1987). FERC explained that “JDJ’s proposal would involve significant structural modifications to the project dam and to project works in the area immediately adjacent to the dam.” Id. Fall River notes that it does not propose any modifications to an existing powerhouse and “very little” modifications to the existing dam. However, Fall River does propose constructing a powerhouse, modifying the intake tower and conduit, and installing a penstock. In Green Island Power Authority, FERC rejected a preliminary license application that proposed constructing a new dam that would inundate an existing dam, decommissioning various other facilities, thereby rendering an existing project inoperable. 110 FERC ¶ 61,034, 61,109 (2005). Fall River notes that its proposed project bears no similarity to the project proposed in Green Island. Admittedly, Fall River’s proposal would not render PPL’s project inoperable, but that does not necessarily make FERC’s orders in this case inconsistent with Green Island. FERC never represented Fall River’s proposal FALL RIVER RURAL ELECTRIC v. FERC 12647 to be on all fours with the proposed project in Green Island. FERC’s citation to Green Island simply illustrates an extreme example of a substantial alteration.
In Weber Basin Water Conservancy District, FERC granted a license that proposed installing a penstock underneath an existing canal. 50 FERC ¶ 61,409, 62,263 (1990). Construction of the penstock involved making an opencut excavation through the canal, approximately eight feet wide and eight feet deep, placing the penstock in the excavation, backfilling the excavation, and restoring the disturbance to the canal lining. Id. n.13. In concluding that these proposed modifications did not amount to a substantial alteration, FERC explained that “once constructed [the penstock] will not physically interfere with [prior licensees],” and that “construction should take approximately three to seven days to complete.” Id. As noted, and unlike in Weber Basin, Fall River’s penstock would physically interfere with PPL’s license because it would fundamentally alter the flow of water through Hebgen Dam. Furthermore, Fall River’s proposed construction schedule spans an estimated eight months, not three to seven days. In Howard W. Bair, FERC granted a preliminary permit that proposed utilizing an existing fish water release pipe and constructing a powerhouse. 20 FERC ¶ 61,092, 61,194 (1982). The only proposed modification to the existing iron pipe was to extend it by forty feet, id. at App. A, which FERC noted was only a “small scale development.” By contrast, Fall River’s proposed modifications to the intake tower and conduit are far more extensive than simply extending the existing conduit by forty feet. Further, Bair involved an application for a preliminary permit, not a final license. FERC will issue a preliminary permit unless “it is clear at the preliminary permit stage” that the license would require an existing licensee’s permission under Section 6. See Kamargo Corp., 53 FERC ¶ 61,411, 62,439 (1990) (emphasis added). 12648 FALL RIVER RURAL ELECTRIC v. FERC Finally, in both PG&E, 720 F.2d at 89, and Fluid Energy Systems, Inc., 24 FERC ¶ 61,298, 61,615 (1983), FERC concluded that a 0.3% reduction in power generation did not amount to a substantial alteration of an existing license. Fall River notes that similar to these cases, its proposed project will not reduce power generation at the Hebgen Dam. This is undoubtedly true, as the Hebgen Development currently has no power generating facilities. However, neither PG&E nor Fluid Energy Systems involved physical modifications to an existing project comparable to those now proposed by Fall River. [4] In sum, we disagree with Fall River’s argument that FERC’s orders are inconsistent with its precedents. In citing these cases, FERC did not suggest they are on all fours factually with Fall River’s proposed project. Instead, FERC used these cases as examples of instances where alterations were substantial and where they were not. As FERC explained in its Rehearing Order, “[t]he degree of encroachment that makes an alteration ‘substantial’ is a case-specific determination.” 114 FERC ¶ 61,152, at 61,508. These cases served as guideposts in FERC’s evaluation and analysis of Fall River’s proposal. Therefore, FERC’s conclusion in this case that Fall River’s proposed project amounts to a substantial alteration of PPL’s license under Section 6 of the FPA is entirely consistent with its precedents and is entitled to deference.