Wisconsin Valley Improvement Co. v. Federal Energy Regulatory Commission

No. 97-1557 (236 F.3d 738) (D.C. Cir. January 26, 2001)

ELR Digest

The court holds that the Federal Energy Regulatory Commission (FERC) could require a hydroelectric power company, as part of its Federal Power Act (FPA) license, to implement a wild rice enhancement plan on a lake bordering federal lands in Wisconsin, but FERC's decision to charge the company an annual fee for use of submerged federal lands was arbitrary and capricious. Under FPA § 4(e), FERC has the authority to attach conditions to a license to operate a hydroelectric project where the project is located within a federal reservation. A federal reservation includes national forests, tribal lands, and other lands and interests owned by the United States. The court first holds that, based on the record, there can be no dispute that federal agencies own at least an interest in the lands overflowed by the company's reservoir. The court next holds that under its FPA authority, FERC may prescribe conditions with respect to the entire project, not only as to those portions of the project that actually occupy reservation lands, because it would be impossible to reduce the water level of the reservoir only over federal lands. The court further holds that FERC was not arbitrary or capricious in requiring the company to implement the wild rice enhancement plan. FPA § 4(e) obliges FERC to include the conditions that are prescribed by the agencies that have jurisdiction over reservation lands. Here, the agencies with jurisdiction over the neighboring federal lands were not arbitrary or capricious in concluding that the reservoir's water depth was responsible for the decline in wild rice or that the 1937 construction of a reservoir dam was responsible for so increasing the reservoir's depth as to kill off the then-extant wild rice. Similarly, the agencies were not arbitrary or capricious in concluding that reducing the reservoir's water level will enable the reservoir once again to sustain wild rice and that the use of artificial detritus would be an effective way of reintroducing wild rice to the reservoir. The court finally holds, however, that it was arbitrary and capricious for FERC to begin charging the company usage fees for submerged lands without providing any explanation for its sudden change in policy as to whether the company had the burden to demonstrate that it does not use federal government land.

The full text of this decision is available from ELR (18 pp., ELR Order No. L-325).

Counsel for Petitioner
Naikang Tsao
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Respondent
Michael D. Fischer
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20426
(202) 208-0200

[31 ELR 20368]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]