A relicensing proceeding that began in 1991 will continue for a few more years as the Second Circuit, in Green Island v FERC, sends the case back to the agency because FERC, in an apparently futile effort to speed up its process, closed the court house door on an intervenor in violation of its own procedural rules. FERC rules require FERC to solicit interventions whenever there is a material amendment to the license application. For initial licenses, there is an exception for a material amendment resulting from the applicant complying with the requests of resource environmental agencies. But, citing FERC’s own regulations and rulemaking analysis, the Second Circuit ruled that this exception does not apply in relicensing. Hence, when, as was the case in this relicensing proceeding, the applicant and the various resource agencies reach a settlement, FERC must determine whether that settlement results in a material amendment; if so, then the agency must solicit interventions. FERC still has the option of determining that the settlement does not constitute a material amendment, but will have to make a finding to that effect before it can close the court house door a second time.

Apart from clarifying that, in relicensing cases, a settlement can result in a material amendment that requires soliciting interventions, the Green Island ruling shows that efforts to short-circuit slow moving FERC licensing proceedings can come back and haunt you. Green Island, the entity FERC sought to keep out, had proposed a different project just downstream of the existing project that FERC found would compete with the existing project because the two projects cannot co-exist. FERC blocked Green Island’s participation because Green Island arrived too late to submit a competing license application (the deadline was in 1993). But too late to submit a competing application did not mean too late to intervene to address the settlement reached twelve years later in 2005, which Green Island did, offering Green Island’s proposed project as evidence that FERC should not re-license the existing project. Tellingly, the court reminded FERC of its obligations under the seminal Scenic Hudson case, which emphasized FERC’s duty to consider alternatives even where it had no authority to command the alternative, and which admonished FERC, as guardian of the public interest, to ensure the record is complete and not blandly call balls and strikes — all suggesting that the Court wants FERC to analyze Green Island’s proposal on its merits, not block it on procedural grounds.