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L.S. Starrett Co. v. Federal Energy Regulatory Commission

Citation: 41 ELR 20212
No. No. 10-1470, (1st Cir., 06/15/2011)

The First Circuit upheld a FERC order requiring a precision tool and instrument manufacturer to seek licensing under §23(b) of the Federal Power Act before it can proceed with certain changes to a hydroelectric generating facility project on its property. Under §23(b), the company must seek licensing if: (1) its facility is located on a stream over which Congress has Commerce Clause jurisdiction; (2) its proposed changes constitute "post-1935 construction" within the meaning of the Federal Power Act; and (3) the proposed modifications will affect the interests of interstate or foreign commerce. FERC considered the project to be "post-1935 construction" because it would result in an increase in installed capacity. The company countered that because the proposed work was merely a repair and would not increase actualcapacity beyond the 1992 installed capacity, it was not "post-1935 construction." But no matter how the capacity was measured, there would be an increase in capacity; both the actual and the installed capacities would be greater than their respective 1992 values. As such, it is a post-1935 construction project. In addition, substantial evidence supports FERC's conclusion that the dam is part of a class of projects that, in the aggregate, impact interstate commerce. Therefore, because there is no doubt that the dam is located on a "commerce clause stream," the licensing procedures of §23(b) apply. In a concurring opinion, one of the judges noted his reluctance to join in the outcome of the decision, writing that the project "is a prime example of efficient usage through a nonpolluting power source and is one that we should be encouraging, not stifling."