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Summersville, Town of v. Federal Energy Regulatory Comm'n

ELR Citation: 16 ELR 20416
Nos. No. 84-1517, 780 F.2d 1034/(D.C. Cir., 01/10/1986)

The court upholds the Federal Energy Regulatory Commission's (FERC's) denial of an application for a hydropower license for modification to an existing dam on a river under study for inclusion in the wild and scenic river system. Petitioner obtained a preliminary permit to study its proposed project on the Ganley River in West Virginia, submitted a license application, and was requested by FERC to supplement the application, but FERC then denied the application. The court rules that FERC's policy of granting preliminary permits for rivers under study pursuant to the Wild and Scenic River Act (WSRA) does not imply a policy of holding license applications in abeyance until completion of the study. FERC has never stated a policy of holding license applications in abeyance. The policy of issuing preliminary permits on rivers under study does not necessarily imply such a policy. FERC has issued three-year preliminary permits in cases where the WSRA process could take longer, thereby suggesting that the only way in which the priority of application conferred by the three-year permit could be given effect would be to hold applications filed during the permit period until after completion of the study. The WSRA review could be completed in less than the maximum period specified by Congress or plaintiff could have decided to relocate its project to a river not under WSRA review. Indeed, FERC's policy and practice of issuing preliminary permits in all cases, unless there was an absolute legal ban to later issuing a license is consistent with the commission's actions in this case. The court notes that if preliminary permits were held to extend the license application period, FERC would have to give them much more attention, thereby straining the commission's limited resources. The provisional nature of the preliminary permit is made clear by the permits themselves and holding the license application in abeyance would be contrary to the policy stated by FERC and implied in the structure of the Federal Power Act (FPA) to avoid stale license applications. The court rules that holding the application in abeyance until the final date for completion of the WSRA study would violate the FPA requirement that preliminary permits confer a priority of application for a maximum of three years. In light of these considerations, the court holds that, while there was a real misunderstanding over the impact of FERC's actions, the Commission's decision to deny the license application was not arbitrary and capricious.

The court next holds that FERC complied with any duties to warn it may have owed to plaintiffs. The court first rules that the commission had no duty to warn that it could not hold applications in abeyance; that projects covered by preliminary permits might never be licensed was clear from the statute. The court also rules that FERC has not adopted a policy of including in preliminary permits for projects on rivers under WSRA study, warnings about the need to relocate the projects. Furthermore, even if such a policy does exist, the terms of petitioner's permit did provide effective notice of petitioner's obligation to protect environmental values.

The court next holds that FERC's acceptance of plaintiff's license application did not commit it to hold the application in abeyance. Petitioner initially based its application on an erroneous legal theory that the WSRA does not bar the modernization of existing dams and thus did not expect its application to be stayed. Even after that theory was rejected, petitioner clearly expected action on its application before the study period ended. The court also rules that FERC did not destroy petitioner's property right ina priority of application since that statute limits that priority to three years, and petitioner had no right to expect this time limit to be extended. Finally, the court notes that the president's 1985 recommendation that the river not be included in the wild and scenic river system did not change the validity of the 1984 FERC decision challenged here.

Counsel for Petitioner
George F. Bruder
Bruder & Gentile
Suite 600, 1350 New York Ave. NW, Washington DC 20005
(202) 783-1350

Counsel for Respondent
Andrea C. Wolfman, Jerome M. Feit, John N. Estes III
Office of the General Counsel
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20002
(202) 357-5200

Counsel for Intervenor
Paula Dinerstein
Friends of the Earth, Inc.
530 7th St. SE, Washington DC 20003
(202) 543-4312

Before: WALD, GINSBURG, and BORK, Circuit Judges.