Turlock Irrigation Dist. v. Fed. Energy Regulatory Comm'n

36 F.4th 1179

TURLOCK IRRIGATION DISTRICT and Modesto Irrigation District, Petitioners

v.FEDERAL ENERGY REGULATORY COMMISSION, Respondents

American Whitewater, et al., Intervenors

No. 21-1120

C/w 20-1121

United States Court of Appeals, District of Columbia Circuit.

Argued April 11, 2022

Decided June 17, 2022

Misha Tseytlin argued the cause for petitioners. With him on the briefs were Charles R. Sensiba, Morgan M. Gerard, and Kevin M. LeRoy.

Michael A. Swiger was on the brief for Hydropower amici curiae in support of petitioners.

Jared B. Fish, Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With him on the brief were Matthew R. Christiansen, General Counsel, and Robert H. Solomon, Solicitor.

Eric M. Katz, Supervising Deputy Attorney General, Office of the Attorney General for the State of California, argued the cause for intervenor California State Water Resource Control Board in support of respondent. With him on the brief were Rob Bonta, Attorney General, Robert W. Byrne, Senior Assistant Attorney General, and Jennifer Kalnins Temple and Adam L. Levitan, Deputy Attorneys General.

Julie Gantenbein, Lena H. Hughes, Joseph Palmore, and Andrew McAleer Hawley were on the brief for Intervenors Tuolumne River Trust, et al. in support of respondent.

Robert W. Ferguson, Attorney General, Office of the Attorney General for the State of Washington,Kelly T. Wood and Gabrielle Gurian, Assistant Attorneys General, Philip J. Weiser, Attorney General, Office of the Attorney General for the State of Colorado, Carrie Noteboom, First Assistant Attorney General, William Tong, Attorney General, Office of the Attorney General for the State of Connecticut, Jill Lacedonia, Assistant Attorney General, Karl A. Racine, Attorney General, Office of the Attorney General for the District of Columbia, Caroline Van Zile, Acting Solicitor General, Kwame Raoul, Attorney General, Office of the Attorney General for the State of Illinois, Aaron M. Frey, Attorney General, Office of the Attorney General for the State of Maine, Brian Frosh, Attorney General, Office of the Attorney General for the State of Maryland, Adam D. Snyder, Assistant Attorney General, Keith Ellison, Attorney General, Office of the Attorney General for the State of Minnesota, Peter N. Surdo, Special Assistant Attorney General, Matthew J. Platkin, Acting Attorney General, Office of the A ttorney General for the State of New Jersey, Lisa J. Morelli, Deputy Attorney General, Hector Balderas, Attorney General, Office of the Attorney General for the State of New Mexico, William Grantham, Assistant Attorney General, Letitia James, Attorney General, Office of the Attorney General for the State of New York, Barbara D. Underwood, Solicitor General, Brian Lusignan, Assistant Attorney General, Joshua S. Stein, Attorney General, Office of the Attorney General for t he State of North Caro lina, Asher P. Spiller, Assistant Attorney Gene ral, Ellen F. Rosenblum, Attorney Genera l, Office of the Attorne y General for the State of Oregon, Paul Garrahan, Attorney-in-Charge, Thomas J. Donovan, Jr. , Attorney General, Office of the Attorney General for the State of Vermont, Laura B. Murphy, Assistant Att orney General, Maura Healey , Attorney Gen eral, Office of the Attorney General for the State of Ma ssachusetts, Matthew Ireland, Assistant Attorney General, Turner H. Smith, Assistant Attorney General and Deputy Chief, Josh Shapiro, Attorney General, Office of the Attorney General for the Commonwealth of Pennsylvania, Aimee D. Thomson, Deputy Attorney General, Jason Miyares, Attorney General, Office of the Attorney General for the Commonwealth of Virginia, were on the brief for amici curiae States of Washington, et al. in support of respondents.

Before: Wilkins and Walker, Circuit Judges, and Randolph, Senior Circuit Judge.

Randolph, Senior Circuit Judge:

An applicant for a federal license to operate a hydroelectric facility must seek a State certification that the facility's discharges will comply with the water quality standards specified in federal law. 33 U.S.C. § 1341(a)(1). The State may grant the applicant's request outright, or it may grant the request subject to conditions relating to water quality, or it may deny the request, or it may fail to act. If the State agency denies certification, no federal license, or at least no federal long-term license, may issue. See id. § 1341(d).

This case presents questions about the directive in section 401 of the Clean Water Act that if "the State ... fails or refuses to act on a request for certification" within one year from receiving the request, the State "shall" be deemed to have waived its authority to grant or deny water quality certification. Id. § 1341(a)(1).

The Federal Energy Regulatory Commission decides whether to license private, municipal and State hydroelectric projects subject to federal jurisdiction. See 16 U.S.C. §§ 797(e), 817(1).¹ This case arose from a combined licensing and re-licensing proceeding for two hydroelectric facilities in California. The administrative record is as follows.

Both of the hydroelectric facilities – the Don Pedro Project and the La Grange Project – are on the Tuolumne River in central California. The Turlock and Modesto Irrigation Districts own the facilities. FERC's predecessor agency granted a fifty-year license to operate the Don Pedro Project. The license expired in 2016. The other, quite smaller project – La Grange – has operated since the 1890's but in 2012 FERC decided that La Grange was subject to federal licensing authority. We upheld FERC's decision in Turlock Irrigation District v. FERC , 786 F.3d 18 (D.C. Cir. 2015).

In 2017, the Districts filed with FERC a new license application for the La Grange Project and an amended relicensing application for the Don Pedro Project.

On January 26, 2018, the Districts filed certification requests for both projects with the California State Water Resources Control Board. On January 24, 2019 – 363 days later – the California Board denied the requests "without prejudice." The California Board gave two reasons. The first: "FERC has not yet completed its National Environmental Policy Act (NEPA) environmental analysis for the Projects." J.A. 820. The second: "the Districts, as lead agencies for the Projects, have not begun the CEQA [California Environmental Quality Act] process. Without completion of the CEQA process, the State Water Board cannot issue a certification." Id. The Board added that its denial was not a "judgment on the technical merits." Id.

On April 22, 2019, the Districts sent the Board "substantively unchanged" certification requests for the Projects. Turlock Irrigation Dist. & Modesto Irrigation Dist. , 174 FERC ¶ 61,042, at P. 8 (2021) (" Declaratory Order "). On April 20, 2020 – 364 days later – the Board again denied the requests "without prejudice." The Board gave the same explanation as it had before.²

The Districts sent a third certification request for both projects to the California Board in July 2020. In October of that year, while these requests were pending, the Districts filed a petition with FERC seeking a declaratory order that the California Board had waived section 401(a)(1)’s State certification requirement. One month later, the Districts informed the California Board that they were withdrawing their certification applications. Despite the Districts’ withdrawal of these requests, in January 2021 the California Board granted certification for both Projects.³ Although the Districts had still not completed the CEQA process for the Projects, California law had changed to allow the California Board to grant certification prior to the completion of that process. Declaratory Order , at P. 11 & n.25 ; see Cal. Water Code § 13160(b)(2) (2020).

The Districts object to the conditions – some forty-five – that the California Board imposed in granting their requests for certification. If the California Board did not waive its certification authority under section 401(a)(1), those conditions would be mandatory. See 33 U.S.C. § 1341(d). On the other hand, if the California Board had waived its section 401(a)(1) authority, the conditions would become only "recommendations" for FERC to consider in developing the terms and conditions of the Districts’ federal licenses under Federal Power Act § 10(a), 16 U.S.C. § 803(a). FED. ENERGY REGUL. COMM'N, OFF. OF ENERGY PROJECTS, DIV. OF HYDROPOWER LICENSING, PREPARING ENVIRONMENTAL DOCUMENTS: GUIDELINES FOR APPLICANTS, CONTRACTORS, AND STAFF 10 (2008).

FERC denied the Districts’ petition for a declaratory order. Declaratory Order , at PP. 1, 20–35. The Districts petitioned for rehearing which FERC denied. Turlock Irrigation Dist. & Modesto Irrigation Dist. , 175 FERC ¶ 61,144, at PP. 11–21 (2021) (" Rehearing Order " ).⁴ FERC reasoned that the California Board, "by denying the applications without prejudice, indeed acted on [ ] them ...." Declaratory Order , at P. 28. FERC relied on section 401's "plain language," which requires that a State "act" on a certification request within one year. Id. at P. 33 ; Rehearing Order , at P. 11. FERC distinguished the California Board's denials without prejudice from Hoopa Valley Tribe v. FERC , 913 F.3d 1099 (D.C. Cir. 2019), which FERC said involved "a coordinated withdrawal and resubmittal scheme" that allowed the State agencies to not act and still avoid waiver. Rehearing Order , at PP. 16. Because section 401 requires only action within a year to avoid waiver, FERC also rejected the Districts’ argument that the California Board's denials were "invalid" as a matter of federal law because they were "on non-substantive grounds" and not "on the technical merits of the certification requests." Declaratory Order , at PP. 30–32 ; see Rehearing Order , at P. 11.

We agree with FERC that the California Board did not waive its certification authority under section 401(a)(1) and that FERC's ruling is not contrary to Hoopa Valley . The Fourth Circuit...