Court Opinion

ID: 7850504
Source: CourtListenerOpinion
Date Created: 2022-09-08 17:23:41.758968+00
Date Added: 2024-06-11T16:29:04.429723
License: Public Domain

BAZELON, Senior Circuit Judge,
dissenting:
This petition for review vividly illustrates the tension between two of this country’s most pressing concerns: the need to assure adequate supplies of energy and the need to protect the environment. In a hydroelectric licensing proceeding, FERC is responsible for balancing these often competing goals. Two statutes give content to this task: the Federal Power Act (FPA) and the National Environmental Policy Act (NEPA). The FPA, which sets forth a public interest licensing standard, requires that FERC take a comprehensive, regional approach in investigating the need for and alternatives to a proposed hydroelectric facility. NEPA, an “essentially procedural” mechanism, sets forth a number of requirements designed to ensure that the agency has taken a “hard look”1 at the reasonable alternatives to its proposed action.
In the instant proceeding, environmental groups, private citizens, and California agencies have persistently and forcefully argued that the need for the proposed North Fork Stanislaus project’s power is greatly exaggerated, and that the alleged need can easily be met through the reasonable alternative of purchasing power from intrastate or interstate suppliers. In response to these arguments, however, FERC devoted a total of two scattered and misleading sentences to the issue in its Environmental Impact Statement (EIS). Regardless of adamant public criticism of its draft EIS, the agency made no revisions. Turning to the licensing order, FERC did not address the alternative of purchased power at all. In its Order Denying Rehearing, FERC finally gave explicit treatment to the role of PG & E and other utilities in supplying NCPA’s needs. This treatment, however, was limited to two points: first, the fact that the issue “was not new to this Commission”; and second, a statistic in the California Energy Commission’s (CEC) 1981 Electricity Tomorrow (ET)2 Report concerning PG & E’s “reserve margin.” FERC’s treatment of this statistic, however, was patently capricious.
The court today holds that this shoddy performance satisfies the exacting statutory requirements of the FPA and NEPA. A careful analysis of precedent and the licensing record, however, demonstrates that FERC has violated both the letter and the spirit of these statutes. I therefore respectfully dissent.3
I. Background
FERC has presented both a “purpose” and a “need” for the North Fork Stanislaus hydro project. Separation of the two is essential to understanding the instant dispute.
The proffered purpose of the project is for the Calaveras County Water District (CCWD), the project applicant, to make money to finance water-development projects. Section 2.1 of the EIS states that *347“[t]he sale of the power generated by this project would reduce the cost of water to the residents of Calaveras County.”4 This section indicates that power will be sold, not only to NCPA, but “throughout the Northern California area power systems.”5
A licensee’s bare “purpose” is not enough under either NEPA or the FPA; FERC must also determine that a “need” for the power exists.6 Despite the statement in section 2.1 of the EIS that power will be sold “throughout the Northern California area,” it has not focused on statewide energy needs. Instead, it has consistently sought to demonstrate a need for the power solely by reference to the NCPA area. NCPA’s needs, painted in apocryphal terms, formed the basis both of the EIS and of FERC’s licensing order.7
The reasoning presented is straightforward: based on (sharply-contested) demand projections, NCPA will have certain capacity and energy requirements in future years. Purchases from the Western Area Power Administration (WAPA) and NCPA’s development of its own geothermal facilities will meet a portion of this need. After accounting for these projected supplies, however, a deficit will remain.8 Although eontradict*348ing section 2.1 of the EIS, section 1.1 states that “all of the electric power produced by the project will be sold to NCPA.”9 This power will reduce NCPA’s deficit.
Until now, “almost all” of NCPA’s needs have been met through purchase contracts with WAPA and PG & E.10 FERC did not, however, consider continued power purchasing (other than the WAPA contracts) to be a feasible resource for meeting NCPA’s needs, and therefore did not include this alternative in the alternatives section of the EIS.11 In the entire EIS, FERC gave a one-sentence explanation of why PG & E could no longer be relied upon:
The contracts for the purchase of power between individual members of NCPA and PGE can be terminated on 6 to 24 months notice and cannot be considered as firm resources to meet NCPA’s load in 1985, when the proposed project is scheduled to be operational.12
The only other discussion of the power-purchase alternative consists of one sentence that appears one hundred forty-one pages later in the EIS, asserting that denial of the license would force NCPA “to secure or develop other means to meet its electrical capacity and energy requirements, which would consume nonrenewable fossil-fuel resources.” 13
Public comments in response to the Draft EIS sharply criticized FERC’s failure to assess power purchasing as an alternative. For example, the California Resources Agency, parent agency of the CEC, asserted that this failure, among “several other major deficiencies,” required that “a new complete draft ... be prepared and made available for public comment.”14 The Resources Agency stated:
The need for the energy is not demonstrated. The report merely states that the Northern California Power Agency (NCPA) wishes to have their own generation facilities instead of continuing to buy energy from the Western Area Power Administration (WAPA) and Pacific Gas and Electric (PGandE). There is no showing whatsoever that WAPA or PGandE have insufficient power for NCPA areas. Most, if not all, of this capacity already exists in WAPA and PGandE facilities; nor does the applicant make any kind of convincing argument that a controlled utility such as PGandE could' arbitrarily deny municipalities needed, available energy.15
*349FERC’s staff responded with three words of commentary: “See Section 1”16 — a reference to the one-sentence analysis that prompted the Resources Agency’s criticisms.
The Resources Agency continued: “The alternatives section is substantially deficient. It does not include even all the obvious alternatives for energy production. Certainly the alternative of continued purchases from WAPA and PGandE appears reasonable. An additional intertie with the Pacific Northwest is another alternative for peaking power that should be analyzed.”17 The staff responded:
NCPA would continue to purchase power from the Western Area Power Administration and PGE, although the proposed project would reduce the amount of power that NCPA would be required to purchase from PGE. The power that PGE would not have to supply NCPA would come primarily from oil- and coal-burning generating units that PGE intends to acquire. An additional intertie with the Pacific Northwest would not provide the dependable capacity equivalent to the proposed project. The amount of power available from the Pacific Northwest depends on the magnitude of the power loads in the Pacific Northwest and the amount of power available for generation. At times, there is no power available for transfer from the Pacific Northwest, and, as future loads in that area increase, less power will be available to California.18
Friends of the River (FOR) also criticized the EIS’s needs analysis for failing to document the need for the power. In addition, FOR objected to FERC’s failure to take state-wide needs and policies into account.19 FERC’s staff responded, once again, by simply referring back to section 1 of the EIS.20
Comments received from Dale Meyer continued the theme of the Resources Agency’s and FOR’s criticisms: “The need for the project power is not documented .... The State of California Energy Commission data would lead one to conclude the peak demand for the NCPA servpce] area may be greatly overestimated.”21 Again the staff responded with the unhelpful observation, “See Section 1 for discussion of need for project power.”22 The staff added a surprising observation. Although the need for the project power was premised on the unavailability of additional firm supplies, the response to Meyer continued: “It is Staff’s position that NCPA should not be denied the option to develop its own generation resources even if a private supplier can supply NCPA’s needs at present.”23
Arguments that the power was not needed, and that NCPA could continue to secure energy from PG & E and other suppliers, also dominated the licensing proceeding.24 *350In its licensing order, however, FERC did not discuss power purchasing from PG & E or other utilities at all. Rather, it proceeded to use precisely the same analytic process as in the EIS: NCPA’s projected needs, minus WAPA and geothermal supplies, yielding a deficit that required construction of the North Fork Stanislaus facility.25
At the rehearing stage, the environmental petitioners renewed their criticisms of the EIS’s needs and alternatives analyses, arguing that CCWD had failed to meet its burden of establishing the project’s need.26 This time FERC explicitly addressed the environmental petitioner’s criticisms. First, it stated in its Order Denying Rehearing, the petitioner’s arguments “are not new to this Commission.”27 Second, the CEC’s 1981 ET Report “in fact demonstrates that PG & E’s ability to meet load in the future is uncertain. Under adverse hydrological conditions, PG & E’s reserve margin in 1985 could be as little as 3 percent.”28
II. FPA Claims
A. FERC’s Planning Duty
Section 10(a) of the FPA provides:
That the project adopted .. . shall be such as in the judgment of the Commission will be best adapted to a comprehensive plan for improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, for the improvement and utilization of waterpower development, and for other beneficial public uses, including recreational purposes.29
In Udall v. Federal Power Commission,30 the Supreme Court held that this language imposes a comprehensive planning duty:
The grant of authority to the Commission to alienate federal water resources does not, of course, turn simply on whether the project will be beneficial to the licensee. Nor is the test solely whether the region will be able to use the additional power. The test is whether the project will be in the public interest. And that determination can be made only after an exploration of all issues relevant to the “public interest,” including future power demand and supply, alternate sources of power, the public interest in preserving reaches of wild rivers and wilderness areas, the preservation of anadromous fish for commercial and recreational purposes, and the protection of wildlife.31
This duty to assess needs and alternatives imposes a difficult burden, fraught with the uncertainties of prediction. But as the FPC (predecessor of FERC) noted shortly after Udall:
An applicant seeking to utilize the nation’s waterways for the development of power has an obligation to look beyond its own needs to those of the region in which it operates. Western Massachusetts Electric Co., 39 FPC 723, 734-35, 40 FPC 296 at 300. Far from being merely an unwelcome burden we are convinced that the reasonable regional planning required to be detailed by the exhibit will, in most cases, be beneficial to the prospective licensee, as well as the general public.32
*351One of the keys to comprehensive planning is the consideration of whether power purchasing is a feasible alternative to new construction. Power purchasing is a straightforward concept: utilities in need of energy and capacity contract with other utilities for the purchase and transfer of firm supplies. Transfer of this power is accomplished either through “interconnection” — use of transmission lines — or through “displacement” across power grids.33
Within the utility industry, interconnection through power-purchase contracts is an integral and basic tool. The record demonstrates that every California utility analyzed in the CEC’s 1981 ET Report relies, to some extent, on both intrastate and interstate interconnections for the delivery of firm, purchased capacity and energy.34
California’s state energy policy also encourages the use of interconnection for meeting future energy needs.35 The ET Report, in the chapter on Policies and Recommendations, states:
California should support the construction of additional transmission interconnections between the state and out-of-state utilities and between utilities within the state.
Studies by the Energy Commission, by the California Power Pool, and by the U.S. General Accounting Office have consistently shown that increased interconnections between Northwestern, California, and Southwestern utilities would provide substantial benefits to all utilities.36
At the federal level, it is clear that the FPA requires consideration of power purchasing in a licensing proceeding. In Udall, for example, there was evidence in the record indicating that purchased power from other sources was an alternative with “reasonable prospects of realization.”37 The Court held that the FPC’s failure to explore this alternative violated its statutory duty to examine “future power supply and demand” and “alternative sources of power.” 38 Even before Udall, federal courts had held that alternate sources of power, including interconnection, must be considered. In Scenic Hudson Preservation Conference v. Federal Power Commission,39 for example, the Second Circuit held with respect to the FPC’s licensing of a New York pumped-storage hydroelectric project:
The Commission neither investigated the use of interconnected power as a possible alternative to the Storm King project, nor required Consolidated Edison to supply such information. The record sets forth Consolidated Edison’s interconnection with a vast network of [New England] utilities .... There is no evidence in the record to indicate that either the Commission or Consolidated Edison ever seriously considered this alternative.... [T]his failure of the Commission ... cannot be reconciled with its planning re*352sponsibility under the Federal Power Act40
In addition to its general section 10(a) planning duties, FERC is also responsible for pursuing interconnection as a result of section 202(a) of the FPA41
For the purpose of assuring an abundant supply of electric energy throughout the United States ... the Commission is empowered to divide the country into regional districts for ... interconnection .... It shall be the duty of the Commission to promote and encourage such interconnection and coordination within each such district and between such districts.42
Pursuant to this provision, FERC has promoted transfer of interconnected power in the California area through the Pacific Northwest — Southwest system, a series of three major north-south transmission lines linking California with the Northwest and the Southwest.43
B. Analysis
The court holds that FERC has fully complied with the letter and the spirit of its planning function. In this case, however, the record fails to support this holding.
1. NCPA’s Relationship with PG & E
The court accepts without question FERC’s assertion that NCPA cannot rely on continued power purchases from PG & E because contracts between the two utilities are short-term in nature and not necessarily renewable.44 FERC has argued that PG & E is likely to cut off power to NCPA in the future.45 Yet there is no evidence in the record to substantiate this argument.
First, there is nothing about short-term purchase contracts that per se excludes them from being considered in long-range forecasting. Utility industry practice is to the contrary. In its resource planning, for example, PG & E projects 600 MW of diversity exchanges with Bonneville Power Administration to continue indefinitely, even though the current contract is short-term and scheduled to expire in 1986.46
Second, the court has pointed to nothing in the record suggesting an actual possibility that PG & E would “refuse to serve the NCPA area in the reliably consistent manner it has for so many years.”47 NCPA’s members are customers of PG & E. As a regulated utility, PG & E bears responsibility for meeting the energy and capacity needs of its entire planning and service area. NCPA is part of this area.48 The PG & E area’s generation needs and resources are considered as a whole both by PG & E and by the CEC49 when establishing forecasts and considering plans for facilities. *353Both NCPA’s expected demands and the various possible resources that might meet them are accounted for by PG & E’s forecasts and plans.50
The only hard piece of evidence cited by FERC in support of its dismissal of future power purchases from PG & E concerns the worst-case “reserve margin”51 for NCPA. Citing Table III — 2 of the CEC’s 1981 ET Report, FERC argued in its Order Denying Rehearing that data on PG & E’s reserve margin demonstrates that “PG & E’s ability to meet NCPA’s load in the future is uncertain.” 52 FERC uses this uncertainty to justify its conclusion that PG & E might terminate service to the NCPA area. Table III — 2 shows that, under a “worst-case analysis,”53 PG & E’s reserve margin in 1985 could be as low as three percent. FERC’s use of this data is capricious.54
In setting forth PG & E’s “worst case scenario” reserve-margin projections, the CEC cautioned that:
The margins shown for the PG & E area are for that system operating in isolation; PG & E’s existing interconnections with other utilities and their likely support of PG & E during emergency conditions is ignored. Thus, if Diablo Canyon is not licensed and operated, the PG & E area may require assistance from other utilities if unscheduled very large power plant outages are experienced during the next few years. PG & E is well interconnected with other utilities and will become more so with its intended construction of the third 500 kV AC line to the Pacific Northwest. Thus, with continued cooperation among the state’s utilities and regulatory agencies in developing and implementing contingency measures as has occurred over the last few years, California will continue to have reliable electric supplies.55
In short, Table III — 2 calculates the reserve margin while explicitly ignoring the significance of interconnection. The table cannot then be used to show the inadequacy of such interconnection. Despite FOR’s persistent efforts, FERC has not responded to this important qualification at all. There is nothing in the record to suggest that the CEC’s analysis is erroneous. FERC’s cryptic reliance on the CEC reserve-margin forecast is misleading and should therefore fail.
2. NCPA’s Relationship with Suppliers Beyond PG & E
In response to criticism of its refusal to consider outside power-purchases, FERC’s staff stated: “At times, there is no power available for transfer from the Pacific-Northwest, and, as future loads in that area increase, less power will be available to California.”56 Based on nothing more than this assertion, FERC continued its refusal to expand the inquiry beyond PG & E. The court notes that FERC did not undertake a detailed examination of resources beyond *354PG & E’s. Yet, it holds that FERC was not required to enlarge its inquiry.57
a. Scope of Inquiry
Central to the court’s holding is the notion that the area of inquiry is within the agency’s discretion, not for judicial determination. Although this is not in dispute, the limits of the inquiry must still reflect a rational determination, supported by substantial evidence. FERC’s treatment of sources beyond PG & E must be consistent with its planning duty. The scope of the inquiry has to bear some resemblance to reality. Current utility practice, CEC policy, and judicial precedent all demonstrate that power purchasing from beyond PG & E is not at all “speculative.”
b. Availability of Power
Although FERC contends there is sometimes no power available for transfer, this assertion is squarely contradicted by the record. Power is available and is forecast to be available from other California utilities as well as the Pacific Northwest,58 Canada,59 the Southwest,60 other states in the western region,61 and Mexico.62 The CEC fully anticipates that other utilities will continue outside purchases.63 The utilities themselves incorporate their reliance on these power purchases in their internal forecasts.64
The utility industry in this country is highly dependent on power purchasing and interconnection. Both intrastate and interstate arrangements are common practice.65 PG & E relies heavily on power purchasing and intends to do so in the future.66 The CEC has vigorously promoted increased inter-utility reliance in its future policy recommendations.67 In light of these considerations, FERC’s refusal to consider power-purchasing beyond PG & E at all is unjustified.
c. Geographic Boundary of FERC’s Inquiry
While refusing to look any further than PG & E in its exploration of alternatives, FERC does look to WAPA,68 a source clearly outside of the geographic boundary FERC imposed on its inquiry. To set a geographic limit for its investigation of alternatives, yet arbitrarily to ignore it by considering purchases from WAPA, constitutes capricious action on the part of the Commission.
d. The CEC’s Posture
The court argues that the CEC has included the Calaveras project in its future energy projections. Yet, this assumption is not supported by the CEC’s ET Report. This report, on which the majority relies, contains two sets of energy projections. The first, prepared by PG & E, is entitled “Proposed Utility Resource Plan.”69 The second, prepared by the CEC itself, is entitled “Alternative Scenario.”70 PG & E’s “Proposed Utility Resource Plan” does include Calaveras in its forecast.71 The CEC’s “Alternative Scenario,” however, does not.72 The CEC explicitly states that the “Alternative Scenario” is its “Preferred Out*355look”73 and the forecast that it adopts in planning.74
Special weight should be given to the official state policy embodied in the CEC recommendation.75 This court should look to the “Preferred Outlook” which allows for California’s future energy needs absent power from the Calaveras project.
The majority emphasizes that California has set a goal of limiting out-of-state power purchases.76 Indeed, this statement is made once in the ET Report.77 It must, however, be viewed within the context of the entire report. The importance of future construction of additional transmission interconnections with out-of-state utilities and between utilities within the state receives far greater emphasis.78 The CEC actively promotes continued and increased interconnection in the future while ranking additional hydroelectric development low among its priorities.79
The California Resources Agency, the entity charged with registering the state’s reaction, has vigorously opposed the Calaveras project throughout all stages of the proceedings. It found FERC’s treatment of the power-purchasing alternative completely inadequate and without any basis.80 Curiously, the court ignores the Resources Agency’s substantial opposition to the project.
III. NEPA Claims
A. The Requirements of NEPA
NEPA requires that in all significant federal actions:
all agencies of the Federal Government shall ... study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources.81
The agency must set forth its analysis in a “detailed statement,” the EIS. NEPA sets forth exacting procedural requirements governing exactly what must be included in the EIS. These requirements cut to the very heart of NEPA; they are the “linchpin” of the Act.82
Determining which alternatives are “appropriate,” therefore warranting detailed treatment, is a common-sense inquiry. An “EIS cannot be found wanting simply because the agency failed to include every alternative device and thought conceivable by the mind of man.”83 Thus “fanciful,”84 “remote,”85 “uncommon,”86 and “unknown”87 alternatives need not be scruti*356nized. On the other hand, “appropriate,”88 “reasonable”89 and “obvious”90 alternatives must be given detailed treatment in the EIS, even though ultimately rejected by the agency in favor of its proposed action. The standard of review is therefore governed by the “rule of reason.”91 In evaluating an agency’s choice of alternatives for inclusion in the EIS, a reviewing court gives content to the rule-of-reason standard by looking to, inter alia, agency and judicial precedents, comments received by the agency in response to the draft EIS, and the administrative record.92 The quest is to ensure that the agency has taken a “hard look” at alternatives; 93 the “detailed statement” requirement “prevents stubborn problems from being shielded from internal and external scrutiny.”94
In considering whether an agency’s discussion of alternatives complies with NEPA, a reviewing court must ultimately employ two criteria: it must decide (a) whether the discussion indicates that the agency in “good-faith objectivity” has taken the required “hard look” at alternatives; 95 and (b) whether the discussion is detailed enough to permit those who did not participate in its preparation to “understand and consider meaningfully” the reasoning, premises, and data relied upon, and to permit a “reasoned choice among different courses of action.”96
The Council on Environmental Quality (CEQ) has promulgated regulations governing the implementation of NEPA.97 These regulations are entitled to “substantial deference” as interpretations of NEPA.98 Moreover, FERC’s own regulations bind it to deal fully “with alternative courses of action to the proposal and, to the maximum extent practicable, the environmental effects of each alternative.”99
The CEQ regulations require the Commission to “[r]igorously explore and objectively evaluate all reasonable alternatives.” 100 It must “identify any methodologies used and shall make explicit reference ... to the scientific and other sources relied upon for conclusion in the statement.” 101 The agency must respond to comments received regarding the Draft EIS.102 If it determines that the comments do not warrant further agency response, an explanation must be given, “citing the sources, authorities, or reasons which support the agency’s position ....”103
*357B. Analysis
The FPA and NEPA impose many similar requirements on the agency. The procedural requirements of NEPA, however, are distinct from and far more stringent than the duties imposed by the FPA. Compliance with the FPA is no guarantee of compliance with NEPA.
1. Power Purchasing from Beyond PG & E
The court recognizes that power purchasing from sources beyond PG & E received no treatment in the EIS.104 Yet because it finds purchasing to be “speculative,”105 it holds that this alternative does not require detailed consideration in the EIS. At least five factors demonstrate that, under the “rule of reason,” power purchasing is an “obvious,” “reasonable,” and completely “feasible” alternative that must receive “detailed” treatment in the EIS.106
a. Public comments. Numerous commentators noted that the Draft EIS had failed absolutely to provide any information why FERC believed that, with the exception of WAPA sales, NCPA could no longer rely on contractual deliveries of firm capacity and energy. They noted the alternative, pursued by numerous other California utilities, of interconnection with the Northwest.107
b. Industry practice. The power-purchase contract is an integral and basic tool in the utility industry. The record demonstrates that every California utility analyzed in the CEC’s 1981 ET Report relies, to some extent, on both intrastate and interstate interconnections for the delivery of firm, purchased capacity and energy.108
c. California policy. California ranks power-pooling and interconnections among utilities near the top of its list of “Preferred Options for Meeting Electricity Needs”— and much higher than conventional hydro facilities.109 State policy actively encourages these practices.
d. NCPA’s previous practice. Until now, NCPA has always met its power needs exclusively through power purchasing from other suppliers. These contractual deliveries have apparently been sufficient to meet NCPA’s needs, even in adverse hydro years. This history demonstrates the reasonableness of continued purchasing as an “alternative” to be considered under NEPA.
e. Precedent. Previous cases that have examined this issue have held that power purchasing is a reasonable alternative requiring detailed treatment in an EIS. In National Wildlife Federation v. Andrus,110 for example, the Department of the Interi- or had authorized a 28 MW powerplant on the San Juan River in New Mexico. In its EIS, the department dismissed the alternative of “obtaining the necessary power from alternative power sources already extant in the area” in a three-sentence discussion strikingly similar to FERC’s cryptic analysis in the instant case.111 The district court *358held this analysis “lacking in the detail which is clearly required by the statute itself and in the ‘rigorous exploration and objective evaluation of the environmental impacts of all reasonable alternative actions, particularly those that might . .. avoid some or all of the adverse environmental effects.’ ”112 Moreover, the alternative of “obtaining power from the uncommitted reserves stored in the Colorado River Storage Project system” was brought to the agency’s attention, but not treated at all in the EIS. The court held that this alternative was “not unreasonable ... and [it] should have been discussed in the FES.”113
The failure to consider power purchasing in National Wildlife contrasts with Mason County Medical Association v. Knebel.114 There the issue was whether the Rural Electrification Administration, in authorizing a coal-fired steam generating facility, had failed in its EIS “ ‘to adequately discuss or seriously consider the alternative of purchasing winter peak power’ from nearby ‘summer-peaking’ utilities” in neighboring states.115 The district court and the court of appeals held that this alternative had received sufficient consideration in the EIS. The EIS itself set forth seven distinct reasons why power purchasing could not meet projected needs. These reasons were supported by citation in the EIS to various studies, letters, and affidavits. The EIS clearly showed that other utilities had been contacted about power purchasing; it set forth in a coherent, comprehensive manner why those utilities were unable or unwilling to supply the projected, needs. Based on this treatment of the power-purchasing alternative, the Sixth Circuit held that the EIS “presents sufficient information for a reasoned choice of alternatives.”116
The power-purchasing issue also was presented in Swinomish Tribal Community v. FERC.117 There FERC had authorized the raising of the Ross Dam, in Seattle, Washington, to provide additional power for Seattle’s projected growth in energy demand. The D.C. Circuit found that power purchasing, along with other alternatives, had been “considered in detail” in the EIS: The annual costs of power purchasing were “established and compared” with the costs of alternative energy sources, and the “beneficial and detrimental environmental effects” of purchased power were “carefully considered” and explicated in the EIS.118 Moreover, it was “unchallenged” that Seattle’s major supplier had already given the city written notice that, within several years, it would be unable to meet Seattle’s growth in energy demand.119
2. Rehabilitation of the EIS
The court holds that although FERC violated NEPA by failing to include its discussion of power purchasing in the EIS, the violation was cured by the Commission’s July 1982 Order Denying Rehearing. I agree that “the EIS is not an end in itself, but rather a means toward the goal of better decision-making.”120 FERC, however, failed to meet this goal through either the EIS, the Order Denying Rehearing, or both documents read together.
The Order Denying Rehearing did not contain the detailed consideration of alternatives lacking in the EIS.121 Moreover, its “analysis” was limited to Table III — 2122 of the ET Report which completely ignores *359interconnection. Reliance on this table’s statistics in isolation results in inaccurate treatment of PG & E.123
Of even greater significance, the Order Denying Rehearing did not discuss reliance on utilities beyond PG & E at all; the discussion was limited to PG & E’s role. Power purchasing from beyond PG & E was a reasonable alternative requiring detailed treatment in the EIS. The Order Denying Rehearing did nothing to correct the EIS’s failure to do so.
Even if the Order Denying Rehearing had contained the discussion lacking in the EIS, however, it would not cure FERC’s NEPA violation. In analyzing the adequacy of an EIS, the reviewing court may look to the entire administrative record only for certain narrowly defined reasons. First, the EIS may, for the sake of convenience, have cited to data, studies, and other materials in the administrative record to support its analyses of alternatives.124 Second, “[sjtudy of the administrative record by the court helps to assess the degree of discussion any particular alternative deserves ....”125 Dissection of the record cannot, however, cure an otherwise-defective EIS. “NEPA expressly places the burden of compiling information on the agency so that the public and interested government departments can conveniently monitor and criticize the agency’s action.”126 A court “can use the administrative record to set the standard for how much discussion within the EIS a particular alternative merits, but cannot deem the unincorporated record to satisfy that standard.”127
In the instant case the Order Denying Rehearing was not circulated for comment. There was no opportunity for the public and other agencies to raise objections to the order through comments. To say that the reading of the Order Denying Rehearing together with the EIS satisfies the statute is to undermine the very foundation of NEPA.
The court expresses the fear that a remand of this ease would breed cynicism towards the law.128 I strongly disagree. NEPA’s strict procedural requirements are not a “pointless technicality.”129 They are the procedural means Congress and the CEQ have specified “to vindicate the substantive goals of NEPA.”130 This court is faced with an instance in which FERC has palpably failed to carry out its statutorily mandated investigation. It is the function of a reviewing court to determine whether an agency has complied with its congressional mandate, not to decide when a noncomplying agency is “close enough.” Failure to order a remand, in light of blatant statutory violations, can only breed far greater cynicism towards the law.
IV. Conclusion
The court today holds that power purchasing from beyond the PG & E area need not be considered under either the FPA or NEPA. As the court notes, predictions of this type confront a degree of uncertainty *360and risk without historical precedent.131 It is precisely because of such uncertainty and risk, however, that FERC’s myopic approach' must be rejected. As uncertainty increases, so does the need for comprehensive and intelligent planning. “Despite the explosion of uncertainty — -indeed because of it — it is more urgent than ever to plan and to share risks regionally.”132
The FPA mandates regional planning, the promotion of interconnection, and the consideration of alternate sources of power. ■ NEPA requires the rigorous consideration of alternatives in a form which will facilitate public comment. Because FERC has abdicated these statutory duties, I respectfully dissent.

. Kleppe v. Sierra Club, 427 U.S. 390, 96 S.Ct. 2718, 49 L.Ed.2d 576 (1976).

. CEC, Electricity Tomorrow: 1981 Final Report (January 1981) [hereinafter cited as ET],

. Because a remand is required, this opinion does not reach the issues raised in petitions 82-2021, 82-2026, or 82-2030 which have been consolidated with this case. Were the issues to be reached, I would agree with the majority’s reasoning.

. EIS § 2.1, reprinted in I JA at 190.

. Id. The EIS states that power will be sold to “PG & E, Sacramento Municipal Utility District, NCPA, the City and County of San Francisco, the Water and Power Resources Services Central Valley Project, the Modesto and Turlock Irrigation Districts, and the California Department of Water Resources.” Id.

. Udall v. FPC, 387 U.S. 428, 450, 87 S.Ct. 1712, 1724, 18 L.Ed.2d 869 (1967); Scenic Hudson Preservation Conference v. FPC, 354 F.2d 608, 620-23 (2d Cir.1965), cert. denied, 384 U.S. 941, 86 S.Ct. 1462, 16 L.Ed.2d 540 (1966).

. See EIS § 1.1, reprinted in I JA at 187; Calaveras County Water Dist., slip op. at 4 (FERC Feb. 8, 1982) (order issuing license (major) and denying motions) [hereinafter cited as “FERC Order”], reprinted in II JA at 915; Calaveras County Water Dist., slip op. at 2 (FERC July 9, 1982) (order denying rehearing) [hereinafter cited as “Rehearing Denial”], reprinted in II JA at 960.
This opinion assumes without deciding that FERC correctly concluded there was a need for the proposed project’s power. However, it should be noted that the EIS is facially inconsistent with respect to the core question of the distribution of the North Fork Stanislaus power. That NCPA will receive “all” of the power has been emphasized over and over again; this is the stated premise of the entire project. At the same time, however, EIS § 2.1 asserts that CCWD will sell project power not only to NCPA, but to service areas “throughout the Northern California area power systems.” See supra note 5 and accompanying text. Moreover, the CEC reports indicate that 100 MW (almost half the project’s capacity) and 301 GWh (almost three-fifths of the project’s energy) have already been arranged to be sold, not to NCPA, but to the Sacramento Municipal Utility District (SMUD). I CEC, Preliminary Report on Electricity, at page 7-16 (Oct. 1982) (Table 7-1-7). To say the least, these palpable, inexplicable inconsistencies present disturbing questions about the reliability of the “needs” analysis.

. The need assessment consisted of the following: FERC accepted, without any independent effort at verification, the need projection submitted by NCPA:
MW GWh
TOTAL NEED (1985) 947.5 5,326
(WAPA) -404.0 -2,315
(Geothermal) -150.0 -1,314
NET NEED 393.5 1,697
Data derived from EIS § 1.1, reprinted in I JA at 187. The North Fork Stanislaus project would provide NCPA with 200 MW and 560 GWh, leaving a continuing net need of l‘93.5 MW and 1,137 GWh.
In response to public criticism to the Draft EIS that these figures were “greatly overestimated,” see infra note 21, FERC made no effort to substantiate these figures, but stated simply that “NCPA should not be denied” the project “even if a private supplier can supply NCPA’s needs,” see infra note 23 and accompanying text.
Confronted in the licensing proceedings with CEC data demonstrating that NCPA’s projections were without foundation, FERC made the following revisions:
MW GWh
TOTAL NEED (1985) 860 3,906
(WAPA) -404 -2,315
(Geothermal) -150 -1,314
NET NEED 306 277
Licensing Order at 4, reprinted in II JA at 730. The project power would yield a capacity need of 106 MW and an energy surplus of 283 GWh. FERC briefly stated — and has not repeated this assertion since — that this energy surplus would be used toward reducing NCPA’s WAPA purchases. Id. But see supra note 7, (almost three-fifths of project’s energy will be sold, not to NCPA, but to SMUD).
*348FERC’s failure to assess independently the accuracy of NCPA’s projected needs may well have violated NEPA. See, e.g., Sierra Club v. Alexander, 484 F.Supp. 455, 469 (N.D.N.Y.) (agency must exercise “independent judgment” when using developer’s data), aff’d, 633 F.2d 206 (2d Cir.1980). Moreover, use of subsequent materials to “rehabilitate” these defects may well undermine the basic purpose of NEPA. See, Grazing Fields Farm v. Goldschmidt, 626 F.2d 1068, 1072-74 (1st Cir.1980); 1-291 Why? Association v. Burns, 372 F.Supp. 223 (D.Conn.1974). Resolution of these issues is not necessary to disposition of the instant controversy.

. EIS § 1.1, reprinted in I JA at 187.

. Id.

. In addition to alternative hydroelectric sites, the EIS analyzed geothermal, nuclear, coal-fired steam, and combustion turbine generation projects that NCPA could either construct itself or in cooperation with other utilities. Other alternatives (solar, wind, fuel cells, and magnetohydrodynamics) were noted but not discussed in detail. See id. §§ 8-1 to 8-11, reprinted in I JA at 318-28.

. Id. § 1.1, reprinted in I JA at 187.

. Id. § 8.6, reprinted in I JA at 328.

. Id. H-24, reprinted in I JA at 412. The Resources Agency’s review “was coordinated with the' Departments of Boating and Waterways, Conservation, Fish and Game, Food and Agriculture, Forestry, Health Services, Parks and Recreation, Transportation, and Water Resources; the Air Resources, Reclamation, Solid Waste Management and State Water Resources Control Boards; and the State Lands Commission.” Id. H-22, reprinted in I JA at 410.
In a separate section, the Resources Agency again remarked that FERC had not demonstrated any basis for believing that PG & E’s supplies were unreliable, and added that the CEC’s “latest available estimates” indicated that “NCPA’s future needs are overstated in the DEIS.” Id. H-23, reprinted in I JA at 411.

. Id. H-26, reprinted in I JA at 414.

. . Id.

. Id. H-27, reprinted in I JA at 415.

. Id. In a separate section, the Resources Agency again remarked that FERC had not demonstrated any basis for believing that PG & E’s supplies were unreliable, and added that the CEC’s “latest available estimates” indicated that “NCPA’s future needs are overstated in the DEIS.” Id. H-23, reprinted in I JA at 411. The staff responded:
It has not been deomonstrated [sic] that, in the future, PGE would be authorized to install enough capacity at a rate which would guarantee that it would not be faced with a capacity deficit. There have been numerous attempts to block capacity additions to the California power systems. If PGE were faced with a possible shortage, it would deny power to its wholesale customers before it would accept an outage on its systems.

Id.

. Id. H-55, reprinted in I JA at 443.

. Id.

. Id. H-64, reprinted in I JA at 452.

. Id.

. Id.

. FOR and Dale Meyer, for example, argued that “the Commission has never explained the logic[al], legal, policy or factual basis in viewing the service area for NCPA as separate from the PG & E service area.” Memorandum in Response to Applicant’s Motion and in Support of Intervenors’ Motions, at 3 (Mar. 29, 1981), reprinted in II JA at 576. Invoking California statutory provisions, state agency policies, and *350industry practices, see id. at 3-4, 7-10, reprinted in II JA at 576-77, 580-83, they argued that FERC’s failure to consider “inter-utility transfers” did not make either “economic” or “planning” sense, id. at 3, reprinted in II JA at 576.

. FERC Order at 4, reprinted in II JA at 915.

. See Application of Environmental Intervenors for Rehearing at 2-7, reprinted in II JA at 789-94.

. Order Denying Rehearing at 2, reprinted in II JA at 960.

. Id.

. 16 U.S.C. § 803(a) (1976).

. 387 U.S. 428, 87 S.Ct. 1712, 18 L.Ed.2d 869 (1967).

. id. (emphasis supplied). See Scenic Hudson Preservation Conference v. FPC, 354 F.2d 608, 620-23 (2d Cir.1965), cert. denied, 384 U.S. 941, 86 S.Ct. 1462, 16 L.Ed.2d 540 (1966).

. Order No. 384, 42 FPC 135 at 141 (1969) (emphasis added). See Consolidated Edison Company of New York, Inc., Project No. 2338, 44 FPC 350 (1970); Monongahela Power Company, Potomac Edison Company and West Penn Power Company, Project No. 2709, 58 FPC 451, 533 (1977).

. Power purchasing can be effected through a number of short- or long-term contractual arrangements: (1) sales of firm capacity with energy; (2) sales of firm capacity without energy; (3) diversity exchanges of capacity; and (4) energy/capacity exchanges. See generally ET at 278-80, reprinted in SAB at 319-21.

. See ET at 278-90, reprinted in SAB at 319-31; see also id. at 327 (PG & E figures), 333 (SMUD figures), 336 Southern California Edison (SCE figures), 342 Los Angeles Department of Water and Power (LADWP figures), 348 San Diego Gas and Electric (SDG & E figures), reprinted in SAB at 369, 375, 378, 384, 390. The CEC’s “current trends” data projects total California “transfers” to grow from 4,771 MW and 18,891 GWh in 1984 to 5,735 MW and 25,820 GWh in 1992. ET at 359, reprinted in SAB at 401.

. Along- with conservation, power pooling occupies the first-priority tier. Interutility transfers occupy the third-priority tier. Conventional hydro facilities occupy the fifth-priority tier. See ET at 300-02, reprinted in SAB at 342-44.

. ET at 387, reprinted in SAB at 430.

. 387 U.S. at 444-46, 87 S.Ct. at 1720-21.

. Id. at 450, 87 S.Ct. at 1724. This violation was not the Court’s sole ground for reversal and remand.

. 354 F.2d 608 (2d Cir.1965), cert. denied, 384 U.S. 941, 86 S.Ct. 1462, 16 L.Ed.2d 540 (1966).

. Id. at 621-22 (emphasis supplied).

. 16 U.S.C. § 824a(a) (1976).

. Id. (emphasis supplied).

. The highly important PNW-SW [Pacific Northwest-Southwest] Intertie system consists of three major north-south transmission lines. The two 500-kV a-c lines were constructed and went into operation in 1968 and 1969, respectively, following the original proposal for interconnection of the Pacific Northwest and Southwest regions .... The line has recently been uprated by about 20 percent by increasing the current rating of the converters from 1,800 to 2,000 amperes. Plans exist to increase the voltage rating from ±400 to ±500 kV, which will increase the capacity to about 2,000 MW.
Power Pooling In The United States, FERC-0049 at 139-41 (Dec., 1981).

. Majority opinion at 99 (hereinafter cited as Maj. op.).

. See EIS § 1.1, reprinted in I JA at 187.

. See ET at 280, reprinted in SAB at 321.

. FOR Reply Brief at 9. Compare Swinomish Tribal Community v. FERC, 627 F.2d 499, 503, 514 (D.C.Cir.1980) (evidence demonstrated that Seattle had been served with actual notice by its major supplier that future needs could not be met).
PG & E Rule and Regulation No. 14 provides that “[i]n case of shortage of supply and during the period of such shortage, the Company will ... apportion its available supply of energy among all customers in the most reasonable manner possible.” II JA at 629.

. Application of Environmental Intervenors for Rehearing, reprinted in II JA at 792.

. The CEC is part of the California Resources Agency, the agency charged with reviewing the energy aspects of the federal EIS and with registering “official” state imput. See infra note 75.

. See ET at 49-73, 325-31, reprinted in SAB at 89-113, 367-73.

. “Reserve margin” is the amount of standby generating capability to be used in the event that some other energy-producing units fail.

. FERC Brief at 41.

. Worst-case analysis includes situations in which energy shortages occur due to no operation of nuclear reactors, extreme drought, or no available geothermal energy from Mexico.

. It should be noted that this three-percent statistic is the only hard evidence that FERC offers in support of its failure to consider PG & E as a resource for NCPA’s needs. In other words, FERC has offered no evidence that PG & E will be unable to continue to meet NCPA’s needs under normal conditions; the only hard data FERC relies upon concerns the “worst case scenario.” There is nothing wrong per sé with such an approach; as FERC notes, “the very purpose of ... resource planning is to anticipate the unexpected.” FERC Brief at 42. As the discussion in the text demonstrates, however, FERC’s cryptic reliance on the Table III — 2 data is “misleading.” FOR Brief at 21.

. ET at 316, reprinted in SAB at 358; see also asterisk qualification at bottom of Table III — 2 at 317, reprinted in SAB at 359.

. EIS § 1.1, H-27, reprinted in I JA at 415.

. Maj. op. at 101.

. See ET at 279, reprinted in SAB at 320.

. Id. at 284-86, reprinted in SAB at 325-27.

. Id. at 286-90, reprinted in SAB at 327-31.

. Id. at 284, reprinted in SAB at 325.

. Id. at 278, reprinted in SAB at 319.

. Id.

. Id. at 283, reprinted in SAB at 324.

. See supra note 34 and accompanying text.

. ET at 283, reprinted in SAB at 324.

. Id. at 387, reprinted in SAB at 430.

. EIS § 1.1, reprinted in I JA at 187.

. See ET at 355, reprinted in SAB at 397.

. Id. at 357, reprinted in SAB at 399.

. Id. at 355, reprinted in SAB at 397.

. Id. at 357, reprinted in SAB at 399.

. Id at 356, reprinted in SAB at 398.

. Our assessment of individual electricity options indicates a clear preference for a select group of options; our analyses of utility plans and alternative scenarios demonstrate the clear advantages of the Commission’s “Preferred Outlook” and the disadvantages and the financial risks of not pursuing the “Preferred Outlook.”
Id. at 370, reprinted in SAB at 412.

. The California Public Resources Code § 25000 establishes the Commission’s (CEC) demand and need assessments as the official need criteria for power plant certification. See § 25309 of the Warren-Alquist Act of 1974.
The CEC adopted its staff’s needs forecast, not the utility’s for PG & E. See ET at 35, reprinted in SAB at 75. The aggregate nature of PG & E’s forecasting model made it impossible to determine the end uses responsible for given changes in demand. See id. at 54, reprinted in SAB at 94.

. See Maj. op. at 102.

. See ET at 354, reprinted in SAB at 396.

. See id. at 300-02, 387, reprinted in SAB at 342-44, 430.

. See supra note 35 and accompanying text.

. EIS § 1.1, H-24, reprinted in I JA at 412.

. 42 U.S.C. § 4332(2)(E) (1976).

. On the purposes of this “linchpin” requirement, see generally Grazing Fields Farm v. Goldschmidt, 626 F.2d 1068, 1073 (1st Cir.1980).

. Vermont Yankee, 435 U.S. 519, 551, 98 S.Ct. 1197, 1215, 55 L.Ed.2d 460 (1978).

. Grazing Fields Farm v. Goldschmidt, 626 F.2d 1068, 1074 (1st Cir.1980).

. Save Lake Washington v. Frank, 641 F.2d 1330, 1335 (9th Cir.1981).

. Vermont Yankee, 435 U.S. 519, 551, 98 S.Ct. 1197, 1215, 55 L.Ed.2d 460 (1978).

. Id.

. 42 U.S.C. § 4332(2)(E) (1976).

. 40 C.F.R. § 1502.14(a) (1982).

. Coalition for Canyon Preservation v. Bowers, 632 F.2d 774, 784 (9th Cir.1980).

. See, California v. Block, 690 F.2d 753, 767 (9th Cir.1982); Izaak Walton League of America v. Marsh, 655 F.2d 346, 371-72 (D.C.Cir.1981); Concerned About Trident v. Rumsfeld, 555 F.2d 817, 827 (D.C.Cir.1977).

. See, California v. Block, 690 F.2d 753, 772-73 (9th Cir.1982); Grazing Fields Farm v. Goldschmidt, 626 F.2d 1068, 1074 (1st Cir.1980); Silva v. Lynn, 482 F.2d 1282, 1284-85 (1st Cir.1973).

. See, North Slope Borough v. Andrus, 642 F.2d 589, 601 (D.C.Cir.1980).

. Grazing Fields Farm v. Goldschmidt, 626 F.2d 1068, 1072 (1st Cir.1980).

. Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21, 96 S.Ct. 2718, 2730 n. 21, 49 L.Ed.2d 576 (1976); Izaak Walton League of America v. Marsh, 655 F.2d 346, 371 (D.C.Cir.1981); North Slope Borough v. Andrus, 642 F.2d 589, 599, 601 (D.C.Cir.1980); Save Our Sycamore v. Metropolitan Transit Auth., 576 F.2d 573, 575 (5th Cir.1978).

. See, e.g., Izaak Walton League of America v. Marsh, 655 F.2d 346, 368-69 (D.C.Cir.1981); Save Lake Washington v. Frank, 641 F.2d 1330, 1334 (9th Cir.1981).

. 40 C.F.R. §§ 1500-1508 (1982).

. Andrus v. Sierra Club, 442 U.S. 347, 358, 99 S.Ct. 2335, 2341, 60 L.Ed.2d 943 (1979).

. 18 C.F.R. § 2.80(b) (1982).

. 40 C.F.R. § 1502.14(a) (1982) (emphasis supplied).

. 40 C.F.R. § 1502.24 (1982).

. 40 C.F.R. § 1503.4(a) (1982).

. 40 C.F.R. § 1503.4(a)(5) (1982); see California v. Block, 690 F.2d 753, 772-74 (9th Cir.1982). Silva v. Lynn, 482 F.2d 1282, 1285 (1st Cir.1973).

. Maj. op. at 106.

. id at 105.

. The majority notes that power purchasing may well be a component of need, rather than an alternative to power generation. Yet, NEPA’s procedures are designed to ensure consideration of alternate means of achieving a given objective; means which might prove environmentally less destructive. Here, the objective is to guarantee NCPA adequate power, not to create a new energy supply. If power purchases can meet this objective, they are a reasonable alternative and one which requires inclusion in the EIS. The determination of need and the consideration of alternatives are closely linked. But, this does not eliminate the duty to include power purchasing among the alternatives.

. See supra note 17.

. See supra note 34.

. See supra note 35.

. 440 F.Supp. 1245 (D.D.C.1977).

. The EIS stated:
The effect of this alternative on the Navajo Indian Nation would be an increase in annual operation and maintenance costs of more than $2 million per year. In addition, hydro-generation does not create pollutants, nor consume any of our natural resources. It would have to be replaced with coal-fired or nuclear generating plants, and the resulting overall environmental impact would be greater.
Id. at 1253-54.

. Id. at 1254 (quoting 40 C.F.R. § 1500.-8(a)(4) (1976)).

. Id.

. 563 F.2d 256 (6th Cir.1977).

. Id. at 262.

. Id. at 262-63.

. 627 F.2d 499 (D.C.Cir.1980).

. Id. at 514.

. Id. at 503, 514.

. North Slope Borough v. Andrus, 642 F.2d 589, 599-600 (D.C.Cir.1980).

. Order Denying Rehearing, reprinted in II JA at 959.

. See ET at 317, reprinted in SAB at 359.

. See supra p. 117.

. See, e.g., Coalition for Canyon Preservation v. Bowers, 632 F.2d 774, 782 (9th Cir.1980); Stop H-3 Ass’n v. Lewis, 538 F.Supp. 149, 169 (D.Haw.1982).

. Grazing Fields Farm v. Goldschmidt, 626 F.2d 1068, 1074 (1st Cir.1980).

. Id. at 1073.

. Id. at 1074; see also North Slope Borough v. Andrus, 642 F.2d 589, 603-04 (D.C.Cir.1980) (EIS contained a “substantial discussion” of disputed alternative; reports in the record “merely elucidate [d] (at a secondary level of examination) and eliminated legitimate doubts concerning the extensiveness of the (primary) discussion ... in the EIS.”).

. Maj. op. at 108.

. Grazing Fields Farm v. Goldschmidt, 626 F.2d at 1073.

. Id.

. Maj. op. at 101.

. Lee, The Path Along the Ridge: Regional Planning in the Face of Uncertainty, 58 Wash.L. Rev. 317, 322 (1983).