Court Opinion

ID: 187326
Source: CourtListenerOpinion
Date Created: 2011-02-05 03:18:54+00
Date Added: 2024-06-11T17:26:35.187678
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 9, 2009              Decided March 13, 2009

                       No. 07-1472

  EASTERN NIAGARA PUBLIC POWER ALLIANCE AND PUBLIC
   POWER COALITION, AND THEIR RESPECTIVE INDIVIDUAL
                      MEMBERS,
                     PETITIONERS

                            v.

       FEDERAL ENERGY REGULATORY COMMISSION,
                    RESPONDENT

          NEW YORK POWER AUTHORITY, ET AL.,
                    INTERVENORS

             On Petition for Review of an Order
       of the Federal Energy Regulatory Commission

     Carolyn Elefant argued the cause for petitioners. With
her on the briefs was Paul V. Nolan.

    Robert M. Kennedy Jr., Attorney, Federal Energy
Regulatory Commission, argued the cause for respondent.
With him on the brief were Cynthia A. Marlette, General
Counsel, and Robert H. Solomon, Solicitor.
                             2
     Jay T. Ryan and Charles R. Sensiba were on the brief for
intervenor Power Authority of the State of New York in
support of respondent.

    Before: HENDERSON, BROWN and KAVANAUGH, Circuit
Judges.

   Opinion for      the   Court   filed   by   Circuit   Judge
KAVANAUGH.

     KAVANAUGH, Circuit Judge: From 1958 to 2007, the
New York Power Authority operated the Niagara Power
Project pursuant to a 50-year license granted by what is now
the Federal Energy Regulatory Commission. In 2007, FERC
approved NYPA’s relicensing application and granted a new
50-year license. Several communities in western New York
have challenged FERC’s 2007 licensing decision as arbitrary
and capricious and unsupported by substantial evidence. We
deny their petition because FERC’s decision to issue the new
license was reasonable and reasonably explained.

                              I

    The Niagara Power Project is a hydroelectric facility
about five miles downriver from Niagara Falls. The project
serves as a major source of electricity for upstate New York.

     In 1958, the New York Power Authority obtained a 50-
year license from the Federal Power Commission (now the
Federal Energy Regulatory Commission). In 2005, as the end
of the 50-year license period approached, NYPA filed a
relicensing application with FERC. In 2007, based on review
of the application and its own independent study, FERC
granted NYPA a new 50-year license. Although many
affected communities in the area supported relicensing, some
                                3
towns, cities, and school districts in Niagara County and a
group of communities along the Niagara River objected to it
and have sought judicial review of FERC’s decision.

                                II

     Federal law directs FERC to issue licenses for the
construction, operation, and maintenance of hydroelectric
projects on certain U.S. waters. See 16 U.S.C. § 797(e). In
ruling on licensing applications for hydroelectric facilities like
the Niagara Power Project, FERC must consider an array of
broad and partially overlapping criteria. For example, under
§ 797(e), FERC must consider energy conservation, the
protection of fish and wildlife, recreational opportunities, and
environmental quality.        And the statute adds more
considerations for relicensing applications: For example,
under § 808, FERC must consider such factors as the project’s
safety, efficiency, and reliability, as well as its effect on the
communities it is to serve.

     Petitioners do not argue that FERC violated any specific
law applicable to licensing decisions. Rather, petitioners
contend that FERC, in considering the diverse statutory
factors, acted in a manner that was arbitrary and capricious
and unsupported by substantial evidence under the
Administrative Procedure Act. See 5 U.S.C. § 706. In other
words, this is a State Farm case, not a Chevron case. Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29 (1983); Chevron USA, Inc. v. NRDC, 467 U.S. 837
(1984). In reviewing licensing decisions under the APA, our
role is “quite limited” and “narrowly circumscribed.” Brady
v. FERC, 416 F.3d 1, 5 (D.C. Cir. 2005); Dep’t of Interior v.
FERC, 952 F.2d 538, 543 (D.C. Cir. 1992).
                               4
     Petitioners raise five specific concerns, none of which we
find persuasive.

     First, petitioners argue that a 50-year license is too long
and inconsistent with agency practice regarding the terms of
licenses. But FERC possesses express statutory authority to
set license terms between 30 and 50 years. 16 U.S.C.
§ 808(e). And under its longstanding policy, FERC typically
issues longer licenses when license conditions impose greater
costs on license-holders. Here, FERC reasonably followed
that practice. The project’s license conditions will impose
annualized costs of about $4.5 million – which suffices to
warrant a 50-year license under FERC precedents. Cf. Power
Auth. of N.Y., 105 FERC ¶ 61,102, at 61,595 (2003). We find
no basis to disturb FERC’s judgment regarding the length of
the license.

     Second, petitioners argue that FERC undervalued the
project’s output in considering the appropriate length of the
new license. Because the project operates during both peak
times (when rates are high) and off-peak times (when rates are
low), FERC projected the value of the project using an
average of peak and off-peak rates. Petitioners complain that
FERC should have tried to better predict the ratio of peak to
off-peak operation and that FERC’s failure to do so caused it
to understate the project’s value. Petitioners contend that this
alleged mistake influenced FERC’s decision to approve a 50-
year license term as opposed to a shorter term. But FERC
faced a difficult valuation question and answered it in a
permissible way given the predictive and inherently
speculative nature of the judgment it was required to make.
Applying the deferential arbitrary-and-capricious standard, we
have no room to overturn that reasoned and reasonable
determination.
                              5
     Third, petitioners contend that FERC, as a condition of
granting the license, should have required NYPA to mitigate
certain adverse environmental impacts allegedly caused by
the project. Petitioners focus particularly on shoreline
erosion, relying on short excerpts from an Environmental
Impact Statement and an expert report. But FERC reasonably
concluded that the project’s contribution to shoreline erosion
would be insignificant. Indeed, both documents cited by
petitioners ultimately conclude that the project is not a
significant cause of shoreline erosion. To the extent that
some limited erosion might occur, moreover, FERC mandated
measures to mitigate any such impact. In short, FERC acted
entirely reasonably in addressing possible adverse
environmental impacts.

     Fourth, petitioners assert that FERC should have
considered the consequences of “off-license” agreements that
NYPA reached with interested communities and organizations
in the area. Those off-license agreements provided certain
benefits to affected groups in the event that FERC granted
NYPA’s relicensing application – with the apparent goal of
fostering regional support for the project. For example,
NYPA promised to pay the Tuscarora Nation, a local Indian
tribe, $21.8 million if FERC approved NYPA’s relicensing
application.     Petitioners contend that the off-license
agreements represented NYPA’s not-so-subtle efforts to buy
off community opposition.         And they argue that the
agreements created a disparity between similarly situated
communities in New York – some of which obtained such
agreements and some of which did not. But the off-license
agreements are not related to project operations and are
irrelevant to FERC’s statutorily mandated assessment of the
relicensing application. See 16 U.S.C. § 808. Therefore,
FERC properly refused to consider the off-license agreements
in deciding whether to reissue the license to NYPA.
                                6
     Fifth, petitioners also appear to directly challenge the off-
license agreements as unlawful. The source of law on which
petitioners are relying for this argument is rather murky. In
any event, petitioners lack standing to bring such a claim
against FERC. The parties to the off-license agreements were
NYPA and certain communities and organizations affected by
the project. FERC did not approve those agreements, and
FERC does not and cannot control the agreements’ terms.
Therefore, to the extent petitioners suffered a cognizable
injury-in-fact from NYPA’s off-license agreements with other
communities (which is itself a dubious proposition), FERC
did not cause that injury; rather, NYPA did. Petitioners thus
cannot satisfy the causation element for standing.

                              ***

     FERC’s decision to grant NYPA a new 50-year license
for the Niagara Power Project was reasonable and reasonably
explained. We accordingly deny the petition for review.

                                                     So ordered.