FERC Jurisdiction over Water

SUBHEAD: Adam Asquith provides the following US Supreme Court decision to backup claims that Hawaii law will be powerless. From Adam Asquith on 20 April 2011 - Image above: The great seal of the Federal Energy Regulatory Commission - a division of the Department of Energy. Below is a Supreme Court ruling reaffirming FERCs premptive role in water use. It clearly shows that a FERC licensee does not even have to get a State permit or comply with State law. Pursuant to the Federal Power Act (FPA), respondent Federal Energy Regulatory Commission (FERC) issued a license authorizing the operation in California of a hydroelectric project, which draws, and releases a mile later, water from Rock Creek to drive its generators. After considering the project's economic feasibility and environmental consequences, FERC set an interim "minimum flow rate" of water that must remain in the bypassed section of the stream and thus remains unavailable to drive the generators. The State Water Resources Control Board (WRCB) issued a state water permit that conformed to FERC's interim minimum requirements, but reserved the right to set different permanent ones. When WRCB later considered a draft order requiring permanent minimum flow rates well in excess of the FERC rates, the licensee petitioned FERC for a declaration that FERC possessed exclusive jurisdiction to determine the project's minimum flow rates. FERC ordered the licensee to comply with the federal permit's rates, concluding that the task of setting such rates rested within its exclusive jurisdiction. It reasoned that setting the rates was integral to its planning and licensing process under the FPA, and that giving effect to competing state requirements would interfere with its balancing of competing considerations in licensing and would vest in States a veto power over federal projects inconsistent with the FPA, as interpreted in First Iowa Hydro-Electric Cooperative v. FPC, 328 U. S. 152. WRCB adopted the higher flow requirements and intervened seeking a rehearing of FERC's order. FERC denied the request, concluded that the State sought to impose conflicting license requirements, and reaffirmed its conclusion that it had exclusive jurisdiction to determine the rates. The Court of Appeals affirmed, concluding that FPA § 27 -- which saves from supersedure state...

"laws . . . relating to the control, appropriation, use, or distribution of water used in irrigation or for municipal or other uses, or any vested right acquired therein"

- as construed in First Iowa, did not preserve the State's right to regulate minimum flow rates, and that the FPA preempted WRCB's minimum flow rate requirements. Page 495 U. S. 491 Held: The California requirements for minimum stream flows cannot be given effect and allowed to supplement the federal flow requirements. Pp. 495 U. S. 496-507. (a) Were the meaning of § 27 and the preemptive effect of the FPA matters of first impression, the State's argument that the stream flow requirement might relate to a use encompassed by § 27 -- the generation of power or protection of fish -- could be said to present a close question. However, First Iowa has previously construed § 27, holding that it is limited to laws relating to the control, appropriation, use, or distribution of water in irrigation or for municipal or other uses of the same nature, and has primary, if not exclusive, reference to such proprietary rights. Such rights are not implicated in the instant case. California's request that First Iowa's interpretation be repudiated misconceives the deference the Court must accord to longstanding and well-entrenched decisions, especially those interpreting statutes that underlie complex regulatory regimes. There has been no sufficient intervening change in the law, or indication that First Iowa has proved unworkable or has fostered confusion and inconsistency in the law, that warrants a departure from established precedent. First Iowa's limited reading of § 27 has been endorsed, see FPC v. Oregon, 349 U. S. 435, and the decision has been employed with approval in a range of cases. In addition, Congress has amended the FPA to elaborate and reaffirm First Iowa's understanding that the FPA establishes a broad and paramount federal regulatory role. Pp. 495 U. S. 496-500. (b) First Iowa's narrow reading of § 27 was not dictum, but was necessary for and integral to the Court's conclusion that FPA § 9(b) -- which governs submission to the federal licensing agency of evidence of compliance with state law -- did not require licensees to obtain a state permit or to demonstrate compliance with the state law prerequisites to obtaining such a permit, but rather merely authorized the federal agency to require evidence of actions consistent with the federal permit. A broad interpretation of § 27 would have "saved" the state licensing requirements and would have created concurrent jurisdiction of state and federal authorities over the same subject matter. Pp. 495 U. S. 500-503. (c) Although California v. United States, 438 U. S. 645, construed § 8 of the Reclamation Act of 1902 -- which is similar to, and served as a model for, FPA § 27 -- in a manner more generous to the States' regulatory powers than was First Iowa's reading of § 27, it bears quite indirectly, at best, upon the FPA's interpretation. In interpreting the Reclamation Act, the Court did not advert to or purport to interpret the FPA, and held simply that § 8 requires the Secretary of the Interior to comply with state laws governing the use of water employed in federal reclamation projects. The purpose, structure, and legislative history of Page 495 U. S. 492 the two statutes show that the FPA envisioned a considerably broader and more active federal oversight role in hydropower development than did the Reclamation Act. Even if the two savings clauses were properly viewed in isolation from the remainder of their respective Acts, § 8 explicitly directs that the Secretary "shall proceed in conformity with such [state] laws," language which has no counterpart in § 27 and which was crucial to the Court's interpretation of § 8. Pp. 495 U. S. 503-505. (d) Section 27's legislative history does not require abandonment of First Iowa's interpretation, because a quite natural reading of the statutory language has failed to displace an intervening decision providing a contrary interpretation; because First Iowa expressly considered the history and found it to support the Court's interpretation of the FPA and § 27; because it is only tangentially related to the issue at hand; and because strong interests support adherence to First Iowa. Pp. 495 U. S. 505-506. (e) The FPA and the federal license conditions established pursuant to the Act preempt the California stream flow requirements. The State's requirements conflict with FERC's licensing authority and with the balance struck by the federal license condition. Pp. 495 U. S. 506-507. 877 F.2d 743, affirmed. Page 495 U. S. 493 O'CONNOR, J., delivered the opinion for a unanimous Court. .