On September 20, 2019, FERC issued an original license to McMahan Hydroelectric, LLC (“McMahan”) for the 600-kilowatt Bynum Hydroelectric Project, located on the Haw River in Chatham County, North Carolina. In its licensing order, FERC held that North Carolina waived authority under section 401 of the Clean Water Act (“CWA”) by failing to act within one year of receiving McMahan’s request for water quality certification under section 401. In a separate statement, Commissioner Glick—while agreeing with the conclusion that North Carolina had waived section 401 authority—dissented in the Commission’s rationale for finding waiver.

McMahan filed its license application with the Commission on March 30, 2015. On March 3, 2017, McMahan requested water quality certification from the North Carolina Department of Environmental Quality (“DEQ”). Pursuant to section 401 of the CWA, North Carolina DEQ had until March 3, 2018 to act on McMahan’s request or waive certification. On April 26, 2017, North Carolina DEQ requested additional information to supplement McMahan’s application, and indicated that McMahan’s application would be put on hold until it provided a water quality monitoring plan and a copy of the Commission’s draft Environmental Assessment (“EA”) for the Project. McMahan submitted its water quality monitoring plan to North Carolina DEQ on December 21, 2017. On the same day, McMahan contacted North Carolina DEQ stating that, because FERC had yet to issue its EA, it would like to discuss refiling its application for water quality certification. North Carolina DEQ responded, instructing McMahan to withdraw and refile its application for water quality certification, which it did on February 20, 2018.

On October 25, 2018, FERC staff issued its EA for the Bynum Project. On January 18, 2019, at North Carolina DEQ’s request, McMahan submitted a revised water quality monitoring plan. On February 11, 2019, McMahan again withdrew and resubmitted its request for water quality certification.

Based on these facts, the Commission held that North Carolina waived authority under section 401. Quoting the U.S. Court of Appeals for the D.C. Circuit’s opinion in Hoopa Valley Tribe v. FERC, the Commission observed that “a state waives its Section 401 authority when, pursuant to an agreement between the state and applicant, an applicant repeatedly withdraws-and-resubmits its request for water quality certification over a period of time greater than one year.” The Commission further held that North Carolina’s request for additional information—i.e., the water quality monitoring plan and FERC’s EA—did not constitute a “new” water quality certification application that would reset the one-year statutory deadline. The Commission maintained that responding to a state’s request for additional information “generally would not rise to the level of a material change to a project’s plan of development” warranting a new section 401 application, as such requests do not involve “a material change to a project’s plan of development.” The Commission reasoned that “failing to find waiver due to information requests from state agencies could encourage the states to ask applicants to provide additional data in order to give themselves more time to process certification requests, in contravention of Congress’ intent.”

Commissioner Glick concurred that North Carolina waived authority under CWA section 401 in the licensing of the project. He dissented, however, in the Commission’s rationale. Commissioner Glick disagreed with the Commission’s “suggestion that additional information submitted by an applicant is irrelevant when determining whether a state waived its section 401 authority.”

Commissioner Glick stated that there may be situations where an applicant withdraws its request for certification and resubmits “a wholly new one in its place,” or where additional information constitutes “a significant modification” to a pending section 401 application that could justify re-starting the one-year clock. He noted that “[n]othing in Hoopa Valley’s reasoning requires the Commission to determine that a state waives its water quality certification authority when the applicant withdraws and resubmits an application that has been significantly modified since the previous submission,” and that it would be possible that a significant modification to a pending section 401 application could justify withdrawing and resubmitting the application without running afoul of the one-year time limitation.

Commissioner Glick’s opinion did not address how significant a modification would need to be to re-start the one-year clock. Clearly, a water quality monitoring plan sought by North Carolina in this case is insufficient, as Commissioner Glick concurred with the finding of a waiver.

FERC’s order is available here.