On October 17, 2019, FERC denied requests for rehearing filed by the California State Water Resources Control Board (“SWRCB”) and conservation organizations in response to the Commission’s unanimous April 18, 2019 order finding that SWRCB had waived its authority under section 401(a)(1) of the Clean Water Act (“CWA”), 33 U.S.C. § 1641, to issue a water quality certification for the relicensing of Placer County Water Agency’s Middle Fork American River Hydroelectric Project (“Middle Fork Project”) (see April 24, 2019 edition of the WER).

In its April 18 order, FERC applied the U.S. Court of Appeals for the D.C. Circuit’s (“D.C. Circuit”) opinion in Hoopa Valley Tribe v. FERC (see January 30, 2010 edition of the WER), finding that SWRCB’s “active[] participation” in the applicant’s annual withdrawal and resubmittal of its request for section 401 certification since 2012 constituted an agreement between the applicant and SWRCB that does not re-start the maximum one-year period for states to act on a request for water quality certification under section 401.

In their requests for rehearing, SWRCB and the conservation organizations argued that the SWRCB did not waive its authority under section 401 because the SWRCB did not enter into an agreement with Placer County to defer action on its requests for water quality certification and because the SWRCB did not “fail or refuse to act on a request beyond the statute’s one-year deadline.” SWRCB and the conservation organizations also attempted to distinguish Hoopa Valley Tribe v. FERC, arguing that it is only applicable in cases involving a formal, written agreement calling for withdrawal and resubmission to indefinitely delay the water quality certification. Rather, SWRCB states that it repeatedly notified Placer County that it should withdraw its request prior to the one-year deadline to avoid denial without prejudice and that it would have timely denied the request without prejudice if Placer County’s withdrawal had not deprived it of the opportunity. The conservation organization similarly stated that section 401, on its face, does not prohibit an applicant from withdrawing its request before the end of the one-year period.

SWRCB also attempted to distinguish Hoopa Valley Tribe v. FERC by stating that neither Placer County nor SWRCB intended to defer review and attributing its delay in issuing the certification to a drought emergency in California between 2012 and 2014 that resulted in an increased workload and lack of resources. SWRCB additionally claimed that the identity of the party asserting waiver in Hoopa Valley Tribe v. FERC was determinative, because the Tribe in that case was an “excluded and injured third party” whereas here, Placer County participated in and benefited from withdrawal and resubmission. SWRCB argued that FERC should have found that Placer County’s annual correspondences constituted “new requests” that restarted the one-year clock because, after the initial application in July 2011, Placer County’s relicensing proposal materially changed over time through other separate processes, such as an evaluation of the project under the California Environmental Quality Act (“CEQA”) and the filing of mandatory conditions from other federal agencies in 2013. Finally, SWRCB objected to the Commission’s Declaratory Order on the basis that past acts or omissions by both the SWRCB and Placer County demonstrated a “justifiable reliance” on FERC’s longstanding interpretation that the one-year waiver period restarts upon the withdrawal and resubmission of an application.

The Commission unanimously denied rehearing, finding that the SWRCB had communicated about and, in at least two instances, requested that Placer County withdraw and resubmit its request for certification. The Commission found that, despite the lack of an explicit agreement, the repeated withdrawal and refiling of the same application gave the SWRCB several years beyond section 401’s one-year deadline to act and amounted to an ongoing agreement with Placer County “that let the California Board usurp the Commission’s control over whether and when a new license would issue” for the project.

The Commission also dismissed the arguments that neither party in this case intended to defer review and that the SWRCB was unable to act because of a lack of resources. The Commission held that the one-year waiver period is “a statutory deadline for which a failure to comply cannot be excused by a state’s alleged lack of resources,” and that the alleged intentions of the parties are immaterial. Rather, it found that the SWRCB “accepted, and indeed encouraged, Placer County’s withdrawal and resubmission of its water quality certification request for more than seven years, to avoid acting on Placer County’s application.” FERC also dismissed the argument that the identity of the party asserting waiver is determinative, stating that “nothing in the Hoopa Valley court’s construction of the Clean Water Act rested on the identity of the litigants.”

Finally, FERC dismissed the SWRCB’s claim that Placer County’s annual correspondence constituted “new requests” that re-started the one-year clock. Looking to the record, FERC found that no additional information was submitted for the SWRCB’s consideration after 2013, and that Placer County notified the SWRCB in 2013 that it had completed its evaluation of the project under the CEQA and submitted a draft water quality certification based on final mandatory conditions from federal agencies. Referring to Placer County’s June 4, 2014 letter withdrawing and resubmitting its request for certification, FERC stated that, even if it were to treat that letter as a “new request” that started a new one-year waiver period, the SWRCB did not act on that request for over four years. Finally, FERC dismissed the argument that the SWRCB was justified in relying on FERC’s past practice of interpreting the one-year waiver period to restart with the withdrawal and resubmission of an application. FERC acknowledged that Hoopa Valley held that the Commission’s past interpretation was incorrect, that it must resolve cases before it based on current law, and that the D.C. Circuit did not limit its ruling in Hoopa Valley to prospective cases.

FERC’s order is available here.