Abrams, Robert H

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Florida Agricultural & Mechanical University College of Law

Florida A&M University College of LawScholarly Commons @ FAMU LawJournal Publications Faculty Works1990So Much Water Around the Dam: State StreamflowRegulation of Federally Licensed HydroelectricFacilitiesRobert H. AbramsFlorida A&M University College of Law, robert.abrams@famu.eduFollow this and additional works at: http://commons.law.famu.edu/faculty-researchPart of the Environmental Law Commons, and the Water Law CommonsThis Article is brought to you for free and open access by the Faculty Works at Scholarly Commons @ FAMU Law. It has been accepted for inclusion inJournal Publications by an authorized administrator of Scholarly Commons @ FAMU Law. For more information, please contactlinda.barrette@famu.edu.Recommended CitationRobert H. Abrams, So Much Water Around the Dam: State Streamflow Regulation of Federally Licensed Hydroelectric Facilities,1989-90 Preview U.S. Sup. Ct. Cas. 380 (1990)WATER RIGHTSSo much water around the dam: State streamflow regulationoffederally licensed hydroelectricfacilitiesby Robert H. AbramsState of Californiav.Federal Energy Regulatory Commissionand Rock Creek Limited Partnership(Docket No. 89-333)Argument Date: March 20, 1990Congress, in a series of laws dating back to 1920, estab-lished federal regulatory authority over the constructionand operation of hydroelectric facilities, an authority thatis today vested in the Federal Energy Regulatory Commis-sion (FERC). In a long-standing ruling on federal regula-tory power, First Iowa Hydro-Electrtc Cooperative v.Federal Power Commission, 328 U.S. 152 (1946), theUnited States Supreme Court held that the predecessoragency to FERC enjoyed a power to regulate hydroelec-tric projects to the exclusion of the states, at least insofaras a state streamflow regulation conflicts with the termsof the federal license. In that decision the Court interpretednarrowly a section of the governing statute that preserveda degree of concurrent state authority.In more recent years, the Court has shown a greaterhesitancy to oust state regulatory authority in a variety ofcontexts, at least one of which is similar to state stream-flow regulation of a federal hydropower licensee. In thiscase, California challenges the received wisdom of the FirstIowa case and urges that a state in the valid exercise ofits police power should be allowed to assure adequate in-stream flows to protect fish and wildlife by requiring thatmore water bypass the hydroelectric generation facilitythan the amount called for in the federal license.ISSUEDoes section 27 of the Federal Power Act of 1935 (16U.S.c. § 821 (1982 ed.)) preserve the power of the State ofCalifornia to regulate the use of water within its borderswhen such regulation will affect the authorized actions ofa federal hydropower licensee?Robert H. Abrams is a professor of law at Wayne StateUniversity School of Law, Detroit, MI48202; telephone(313) 577-3935.380FACTSIn 1982 a partnership sought a license from FERC tobuild a small hydroelectric generating facility on RockCreek, a tributary of the South Fork of the American Rivernear Placerville, Calif. As approved and licensed by FERC,the Rock Creek project diverts a portion of the streamthrough a tunnel and penstocks to its turbine generatorsand then returns the water to the American River aboutone mile below the original diversion point. The facilitycan generate up to 3,000 kilowatts and produces about7,000 megawatt-hours of electricity annually. The projectis located partially on private land owned by the RockCreek Limited Partnership and partially on federally ownedland administered by the federal Bureau of LandManagement.During the licensure proceedings, FERC, as required bythe governing law, advised California of the proposal andconsidered materials on the environmental impacts of theproposed project submitted by both the applicant and theCalifornia Department of Fish and Game (CDFG). In 1983FERC issued a license and required that the project main-tain minimum instream flows (for protection of fish) of 11cubic feet per second (cfs) from May through September,and 15 cfs at all other times. These flow levels were theones contended for by the project applicant and were lessthan the flows sought by CDFG.Even before initiating the FERC licensure proceeding,the project applicant sought to obtain the necessary state-law water rights from the California State Water ResourcesControl Board (SWRCB)under the state's prior appropria-tion system. The SWRCB in 1984 granted the water rightson an interim basis in reliance on the study of environ-mental impacts provided by the applicant. The SWRCB,however, expressly found that study to be "deficient" inseveral regards and required the applicant to prepare a newstudy in consultation with the CDFG. In 1987, after themandated study was completed, the SWRCB found thatthe flow rates previously approved "would greatly reducethe fishery habitat in Rock Creek" and revised the waterrights of the project to require instream flows of 60 cfsfrom March through June and 30 cfs the remainder of theyear. These flows met with the approval of CDFG.In 1986, while the state water-rights proceeding was stillunderway, the project applicant petitioned FERC for an or-der declaring that FERC's jurisdiction of the instrearn flowissue was exclusive and could not be reconsidered by theSWRCB. Just prior to the final SWRCBaction, FERC issuedPREVIEWan order claiming exclusive authority, stating that "the es-tablishment of minimum flows is beyond the reach of stateregulation ... [the SWRCBj has no authority to set mini-mum flows for the project that conflict with those con-tained in the license...." California then tried to intervenein the FERC proceeding and obtain reconsideration of thenewest FERCruling. Intervention was allowed, but Califor-nia's legal position, that section 27 of the Federal PowerAct preserves concurrent regulatory authority, was re-jected. An appeal was taken to the Ninth Circuit Court ofAppeals, which affirmed the FERC position. 877 F.2d 743(1989). The Supreme Court granted California's petition fora writ of certiorari.BACKGROUND AND SIGNIFICANCEThis case is significant as a matter of law and policy. Theprecise legal issue it poses, whether FERC orders preemptstate streamflow requirements, is rather narrow, turningon an interpretation of a single section of the Federal PowerAct that is not of exceedingly broad application. The le-gal significance attaches because this case represents an-other datum in the array of decisions that address naturalresource federalism. In the past two decades, the SupremeCourt has often allowed the states more room to regulatefederally controlled activities, but limits on state authoritydo still exist.Among these limits, First lou-a for over 40 years hasbeen a high-water mark of federal dominance, granting ex-clusive power to the federal government to regulate thewaters used by hydroelectric generating facilities. Its rever-sal or evisceration would be a signal victory for the statesin their effort to wrest control over natural resource policyfrom the federal government. The downfall of First Iowawould mean that in almost all natural-resource regulationcases, the Supreme Court will presume the intent of Con-gress is for concurrent state regulation.As a practical matter, this case will have an effect on allhydropower facilities. Although states may prove unwill-ing to seek changes in established operating proceduresat federally licensed facilities because to do so would up-set established patterns of use, many new smallhydropower facilities are being proposed nationwide. Thenew interest in hydropower stems from the Public Utili-ties Regulatory Policies Act of 1978 (PURPA), which offerssubstantial economic incentives for developers of smallhydroelectric generating facilities. FERC, for example,received only 47 hydropower applications in 1977, but in1981, a post-PURPA year, FERC received 1,752 suchapplications.The environmental consequences of so many damprojects could be significant. The affected states feel them-selves far better able to fly-speck the environmental con-sequences of these hydropower proposals than the FERCstaff. FERC, of course, lacks the degree of localized exper-tise that the states enjoy in regard to state water resourcesand fish management programs. Additionally, FERC's en-Issue No. 11vironmental review is burdened by the large numbers ofhydropower applications, and FERC's staff resources mustalso be expended in reviewing a host of other aspects ofeach hydroelectric project and non-hydropower projectalike.ARGUMENTSFor the State ofCalifornia (Counsel ofRecord, Roder-ick E. Walston, Deputy Attorney General, 350 McAllisterStreet, Suite 6000, San Francisco, CA 94102; telephone(415) 557-3920):1. Section 27 of the Federal Power Act provides that statewater laws apply to hydropower projects.2. California v. United States, 438 U.S. 645 (1978), com-pels a reinterpretation of section 27.3. Congress has traditionally deferred to state water laws.4. The legislative history of the Federal Power Act indi-cates that Congress intended to defer to state water law.5. First Iowa is distinguishable from this case.6. FERCpreemption would impair the state's ability to al-locate the limited water supply.7. There is no conflict between state and federal regula-tion in this case.For Federal Energy Regulatory Commission (Coun-sel ofRecord, Kenneth W Starr; Solicitor General, Depart-ment ofJustice, Washington, DC 20530; telephone (202)633-2217):1. Section 27 does not reserve authority to the states toveto the exercise of the Commission's authority to de-termine whether and on what terms a hydropower proj-ect would represent an appropriate use of waterresources.2. The California minimum-flow requirements do notconstitute a proprietary right under California law andare inconsistent with FERC's licensing authority.For Rock Creek Limited Partnership (Counsel of Rec-ord, Louis Touton, Jones, Day, Reavis & Pogue, 255 S.Grand Avenue, Suite 3000, Los Angeles, CA 90071; tele-phone (213) 625-3939):1. Supreme Court precedents establish that FERC has ex-clusive authority to license and regulate hydroelectricprojects within its jurisdiction.2. The legislative history of the relevant statutes disclosesa congressional intent to have federal regulation beexclusive.3. First Iowa is not inconsistent with California 1'. UnitedStates.4. This case does not involve the kind of "water rights"that remain subject to state control under section 27of the Federal Power Act.AMICUS BRIEFSThis case sparked a good deal of support for both sides.In support of California, Idaho filed a brief representing381its view as well as that of the remaining 48 states. Otherbriefs on that side were filed representing local govern-mental units and environmental groups. Respondentsreceived support from numerous power-generating utili-ties and a small number of other FERC license holders.In Support of the State of California1. The portion of First Iowa addressing the proper in-terpretation of section 27 is dicta and misstates the in-tent of Congress.2. FERC's efforts to expand the scope of its regulatoryauthority are inconsistent with the scope of action in-tended for it by Congress.3. In enacting the Federal Power Act, Congress recognizedthat the public interest would best be served by stateregulation of water resources.4. FERC cannot fairly and efficiently regulate streamflowrequirements on a national basis.5. The jurisdiction of FERC and the states over by-passflows is concurrent.In Support of FERC and the Rock Creek LimitedPartnership1. First Iowa has served the interests of regulation of thepower industry predictably and well for 45 years andshould not now be abandoned.2. The comprehensive regulatory scheme of the FederalPower Act evinces an intent on the part of Congressthat FERC's license be the exclusive control ofhydropower facilities governed by the Act.3. The 1986 Electric Consumers Protection Act confirmsthat FERChas exclusive authority to establish minimumflows.4. Section 27 of the Federal Power Act is unlike section8 of the Reclamation Act of 1902 that was interpretedin California 1'. United States.5. The state regulation here involved directly conflictswith the FERC order and is therefore not a valid exer-cise of any concurrent regulatory authority that Califor-nia may enjoy.6. The holding below can be affirmed on the basis thatthe land involved in this case is federally reserved landas to which federal authority is exclusive.American Bar Association, 750 North Lake Shore Drive. Chicago. Illinois 60611~PREVIEW OF UNITED STATES SUPREME COURT CASES First Class MailU.S. PostagePAIDAmerican BarAssociation382 PREVIEW

So Much Water Around the Dam: State Streamflow Regulation of Federally Licensed Hydroelectric Facilities

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So Much Water Around the Dam: State Streamflow Regulation of Federally Licensed Hydroelectric Facilities

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