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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 24, 2011 Decided May 3, 2011
No. 10-1066
ALCOA POWER GENERATING INC.,
PETITIONER
v.
FEDERAL ENERGY REGULATORY COMMISSION,
RESPONDENT
STANLY COUNTY, NORTH CAROLINA
AND STATE OF NORTH CAROLINA,
INTERVENORS
On Petition for Review of Orders
of the Federal Energy Regulatory Commission
David R. Poe argued the cause and filed the briefs for
petitioner.
Jennifer S. Amerkhail, Attorney, Federal Energy Regulatory
Commission, argued the cause for respondent. With her on the
2
brief were Thomas R. Sheets, General Counsel, and Robert H.
Solomon, Solicitor.
Marc D. Bernstein, Special Deputy Attorney General, North
Carolina Department of Justice, argued the cause for intervenor
State of North Carolina in support of respondent. With him on
the brief were Roy Cooper, Attorney General, James C. Gulick,
Senior Deputy Attorney General, and Donald W. Laton,
Assistant Attorney General.
Before: ROGERS and TATEL, Circuit Judges, and WILLIAMS,
Senior Circuit Judge.
Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: The Alcoa Power Generating
Company petitions for review of two orders of the Federal
Energy Regulatory Commission with respect to the relicensing
of its Yadkin Project facilities in North Carolina pursuant to 16
U.S.C. § 808. A precondition of licensing is receipt of a State
certification that any discharges into navigable waters will
comply with sections 301-03 and 306-07 of the Clean Water
Act, 33 U.S.C. §§ 1311-13, 1316-17. Section 401(a)(1) of the
Clean Water Act provides that State certification “shall be
waived with respect to such Federal application” if the State
certifying agency “fails or refuses to act on a request for
certification, within a reasonable period of time (which shall not
exceed one year) after receipt of such request . . . .” 33 U.S.C.
§ 1341(a)(1). When a State administrative law judge stayed
pending appeal the water certification issued by the State
agency, Alcoa Power petitioned the Commission for a
declaratory order that the certifying agency had waived its
authority by not issuing a certification that was effective and
complete within one year. The Commission denied the petition,
ruling there was no waiver because the State had “act[ed] on”
3
Alcoa Power’s application within one year of its filing. See
Alcoa Power Generating Inc., 129 FERC ¶ 61,028 (2009)
(“Order”); Alcoa Power Generating Inc., 130 FERC ¶ 61,037
(2010) (“Rehearing Order”).
Alcoa Power contends that the Commission misinterpreted
the law and the facts and that the State violated the time limit in
Section 401(a)(1) by linking the effectiveness of the certification
to satisfaction of a bond requirement after the expiration of the
one-year period, thereby waiving its right to issue a certification
for the project. The Commission maintains that the petition for
review is not ripe because, in accordance with its policy, it has
not been able to act on Alcoa Power’s application for licensure
in view of on-going State administrative review and stay of the
certification. We hold that the petition is ripe, because if the
certification was waived, then the pendency of the State
proceeding is no bar to the Commission acting on Alcoa
Power’s licensing application. See Rehearing Order ¶ 15. We
agree with the Commission’s interpretation of Section 401 in
ruling that there was no waiver by the State and, therefore, we
deny the petition for review.
I.
As the expiration of the Yadkin Project’s 50-year license
approached, Alcoa Power filed an application for a license
renewal with the Commission in April 2006. As the
hydroelectric project indisputably falls within the scope of
Section 401(a)(1) as one that “may result in any discharge into
the navigable waters,” it requested a Section 401 certification
from the North Carolina Department of Environment and
Natural Resources on May 10, 2007. The Department’s
Division of Water Quality issued the water quality certification
on November 16, 2007, and Alcoa Power filed it with the
Commission on November 30, 2007. Before the Commission
4
proceeded with licensing, the Division of Water Quality
informed Alcoa Power on April 16, 2008 that its previous
certification proceeding had failed to provide an adequate
opportunity for public comment (as apparently required under
State law). Accordingly, the Division of Water Quality revoked
the original water quality certification and told Alcoa Power to
re-apply.
Alcoa Power complied shortly thereafter, on May 8, 2008,
withdrawing and re-filing its previous request. A public hearing
was held on January 15, 2009, and the hearing officer submitted
a report with findings on May 6, 2009. The Division of Water
Quality issued a new certification on May 7, 2009, the last day
of the one-year period. This new certification (the “2009
Certification”) contained a number of terms and conditions,
including a requirement that Alcoa Power undertake various
improvement, control, and monitoring measures related to water
quality. Importantly, the 2009 Certification also required Alcoa
Power or its parent company, Alcoa Inc., to post a surety bond
in the amount of $240 million “to cover all water quality
improvement costs” related to the Yadkin Project “within ninety
days of receipt of the Certification” and to remain posted until
a dissolved oxygen water quality standard was met for three
consecutive years. The condition further stated that “[t]his
Certification is only effective once the required
performance/surety bond is in place.”
Alcoa Power submitted the 2009 Certification to the
Commission the next day, May 8, 2009. Then, on May 27,
2009, a North Carolina administrative law judge issued a
preliminary injunction staying the 2009 Certification pursuant
to a motion filed by Stanly County, North Carolina, arguing that
the Division of Water Quality violated State law by declining to
consider certain water quality impacts of the Yadkin Project.
Alcoa Power challenged the 2009 Certification in the same State
5
administrative proceeding on the ground that the bond condition
was excessive and impossible to comply with, and that the
effectiveness clause in the bond condition violated the time
limits for action under State law and Section 401 of the Clean
Water Act.
Alcoa Power filed a petition for a declaratory order with the
Commission on September 17, 2009. It argued that North
Carolina had waived its Section 401 authority by failing to act
on the request for certification within one year because the
effectiveness clause of the bond condition rendered the
“purported certificate . . . incomplete.” Pet. for Declaratory
Order 1. Issuing a conditional certification on the last day of the
statutory deadline, Alcoa Power continued, “ensured that the
required bond could not be posted (and, thus, that its
certification could not become ‘effective’) prior to the expiration
of the statutory deadline.” Id. at 4. The Commission ruled that
the issued certification was the “act” required by Section 401
irrespective of whether further action was required of Alcoa
Power under certification conditions because the State’s action
was complete upon its issuance of the certification. Order ¶ 8.
In seeking rehearing, Alcoa Power argued that the
Commission’s order was factually and legally unsupported, and
also that the bond condition not only could not be satisfied
within the one-year period, but that it could never be satisfied as
written, and that even if a certification that is not effective
within one year is valid under Section 401, one that can never be
effective is not. It attached the affidavit of a bond agent, Charles
R. Croyle, who described the terms of the bond condition as
“nebulous” and stated that “it would be extremely difficult, if
not impossible, to place a bond with those requirements and of
that magnitude in the marketplace.” Croyle Aff. ¶¶ 5-6, Nov.
13, 2009. Stanly County, the Department of Environmental and
6
Natural Resources, and the State of North Carolina intervened
and opposed the request for rehearing.
The Commission denied rehearing, concluding that Section
401's one-year period for a State to “act” does not foreclose a
certification that requires action beyond the one-year period as
long as the certification itself issues before the one-year
anniversary of the request. Rehearing Order ¶ 14. The
“controlling point,” the Commission explained, was that “no
additional decision will be required from the [State] Division on
the certification request itself.” Id. With regard to the clause
stating that the certification was not “effective” until satisfaction
of the bond condition, the Commission ruled that this would not
delay its licensing proceeding because Section 401 permits it to
proceed once the certification “has been obtained,” 33 U.S.C.
§ 1341(a)(1), regardless of whether it has become “effective.”
Rehearing Order ¶ 15. The Commission concluded that it
“would be free to issue a license, regardless of whether the
certification provided that it was not yet effective,” and
accordingly, there was no waiver issue. Id. The Commission
interpreted its regulations to mean that a Section 401 waiver
occurs where a State “has not denied or granted certification” by
the one-year date. 18 C.F.R. § 4.34(b)(5)(iii). Pursuant to its
policy, the Commission stayed the licensing proceeding pending
resolution of the State administrative appeal. See Rehearing
Order ¶ 15. This petition for review followed.
II.
The Commission maintains the petition is not ripe for
review because the ongoing administrative proceeding in North
Carolina could significantly change the analysis or moot the
petition altogether, and Alcoa Power would suffer little hardship
if a decision on the waiver issue were delayed until the
culmination of the State proceeding. We disagree.
7
In making the ripeness determination, the court considers
two factors: “‘[1] the fitness of the issues for judicial decision
and [2] the hardship to the parties of withholding court
consideration.’” Devia v. NRC, 492 F.3d 421, 424 (D.C. Cir.
2007) (quoting Nat’l Treasury Emps.’ Union v. United States,
101 F.3d 1423, 1431 (D.C. Cir. 1996)) (modification in
original). On the first factor, “fitness,” the court considers
whether the issue presented is “‘purely legal, whether
consideration of the issue would benefit from a more concrete
setting, and whether the agency’s action is sufficiently final.’”
La. Pub. Serv. Comm’n v. FERC, 522 F.3d 378, 397 (D.C. Cir.
2008) (quoting Atl. States Legal Found., Inc. v. EPA, 325 F.3d
281, 284 (D.C. Cir. 2003)) (internal quotation marks omitted).
The “basic rationale” of this requirement “is to prevent the
courts, through avoidance of premature adjudication, from
entangling themselves in abstract disagreements over
administrative policies, and also to protect the agencies from
judicial interference until an administrative decision has been
formalized and its effects felt in a concrete way by the
challenging parties.” Abbott Laboratories v. Gardner, 387 U.S.
136, 148-49 (1967). But there is also a “usually unspoken”
underlying rationale relating to the doctrine of mootness: a claim
may be unripe where “‘[i]f we do not decide [the claim] now,
we may never need to.’ Devia, 492 F.3d at 424 (quoting Nat’l
Treasury Emps.’ Union, 101 F.3d at 1431) (modification in
original). Accordingly, the fitness analysis requires the court to
consider both whether the context in which the issue is presented
is sufficiently concrete and conducive to judicial determination,
and whether deciding the issue now would violate principles of
judicial restraint and efficiency that counsel against “spending
[our] scarce resources on what amounts to shadow boxing.” Id.
at 424-25 (quoting McInnis-Misenor v. Maine Med. Center, 319
F.3d 63, 72 (1st Cir. 2003)).
8
The Commission acknowledges that the challenged orders
“represent a dispositive agency decision” on the waiver issue.
Resp’t’s Br. 15. Nonetheless it maintains that because Alcoa
Power’s ultimate goal in the relicensing proceeding is issuance
of a new fifty-year license for the Yadkin Project, this matter is
unripe until the Commission rules on the licensing request.
Further maintaining that the relief Alcoa Power seeks is
acceleration of the Commission’s licensing decision, and not a
license itself, the Commission suggests that the petition could be
mooted at any time by the North Carolina administrative law
judge upon lifting the stay of certification. Alternatively, the
Commission maintains that the administrative law judge could
modify the bond condition and thereby change the analysis this
court must undertake.
Alcoa Power responds, citing Louisiana Public Service
Commission v. FERC, 522 F.3d at 398, that a mere possibility
that the Commission could revisit its dispositive ruling later in
the licensing proceeding is insufficient to find the waiver issue
presented in the petition for review unripe. In Louisiana Public
Service Commission, the court explained that orders “clearly
contingent on subsequent proceedings or events” are unripe for
review, but where the Commission had “conclusively resolved
the refund and timing issues,”a petition seeking review of those
issues was ripe. 522 F.3d at 398. Further, Alcoa Power points
out that the waiver issue presents a purely legal question
regarding the meaning of Section 401's one-year limit for State
certification and that nothing in the State proceeding could moot
the claim or change the analysis. It correctly distinguishes the
cases relied on by the Commission as involving circumstances
not present here: (i) issues the federal agency had not
conclusively decided, as in Toca Producers v. FERC, 411 F.3d
262, 266 (D.C. Cir. 2005); (ii) issues that if “not adjudicated at
this time may . . . not require adjudication at all,”Friends of
Keeseville v. FERC, 859 F.2d 230, 235 (D.C. Cir. 1988); and
9
(iii) issues that would require a detailed and fact-intensive
analysis that could ultimately be mooted by subsequent agency
action, as in Ohio Forestry Ass’n v. Sierra Club, 523 U.S. 726,
734-45 (1998).
The nature of the review required by the petition for review,
and the strong likelihood that this court will have to decide the
waiver issue later if not now, weigh in favor of concluding the
petition is fit for judicial review. The waiver issue presents a
purely legal question: does a state waive its Section 401
certification authority when it issues a certification within the
one-year period stating that it is not effective until the applicant
satisfies a condition that can be satisfied, if at all, only outside
of the one-year period? Addressing this question will not
require the sort of “time-consuming judicial consideration of the
details of an elaborate, technically based plan” that led the
Supreme Court to decline to hear a pre-implementation
challenge to logging regulations in Ohio Forestry Association,
523 U.S. at 735-36. Further, the Commission has no plans to
revisit the waiver issue, and thus it cannot be argued that “[t]he
Commission has yet to pass conclusively upon whether [Alcoa
Power is] entitled to the only relief [it] now seek[s],” Toca
Producers, 411 F.3d at 266, namely a lifting of the stay of the
licensing proceeding. Because the Commission has ruled
dispositively on the waiver issue, the court would not be short-
circuiting any agency proceeding by addressing the waiver issue
now.
The petition for review was filed in a context that
distinguishes it from Friends of Keeseville v. FERC, on which
the Commission relies in maintaining that the availability of
judicial review at a later stage favors finding this petition for
review unripe. In Keeseville, a nonprofit development
corporation sought review of the Commission’s order ruling that
the petitioner’s application for a hydroelectric plant
10
development permit was untimely, and that the permit should be
granted to a for-profit competitor. 859 F.2d at 232. Before this
court resolved the matter, the Commission cancelled the
competitor’s permit when it failed to file a required report. Id.
As a result, the petition was moot insofar as it sought revocation
of the permit. Id. As for the untimeliness of the petitioner’s
application, the court held the issue unfit for judicial review
because “if the issue is not adjudicated at this time, it may not
require adjudication at all.” Id. at 235. The court reasoned that
it was “possible” petitioner had “lost interest in developing” the
site, noting that petitioner had not filed a new application since
the cancellation of the competitor’s permit. Id. at 235 & n.13.
But even if petitioner remained interested in developing the site,
the court noted that it could file a new application, the grant of
which would moot the timeliness issue. See id. at 235. Whether
it adjudicated the matter and deemed the application timely or
petitioner filed a new application, the Commission would in
either event proceed to evaluate the merits of the application on
essentially the same timeline, and thus the petitioner’s only real
interest in having the matter decided was the “inconvenience of
filing a new application,” id. at 236 n.15. The “relatively slight”
interest in withholding judgment was therefore greater than the
petitioner’s “insignificant” interest in having the issue decided.
Id. at 236.
Here, the probability that the court will not confront the
waiver issue at a later date (were we to conclude the case is
unripe) is very low. The waiver issue would not be moot unless
Alcoa Power prevailed in the North Carolina proceeding and the
State decided to waive its certification rights rather than revise
the certificate to accommodate this hypothetical ruling or the
Commission ultimately declined to issue a license for reasons
unrelated to the certificate. Neither of these scenarios seems
likely. Of course, Alcoa Power might as a practical matter
abandon its waiver argument if the State administrative law
11
judge removed the bond condition. But that seems improbable
and its possibility does not undermine the legal proposition that
the waiver issue will not become moot as soon as the North
Carolina proceeding is complete, and therefore the waiver
argument would almost certainly be made again sooner or later
to this court.
Furthermore, even if Alcoa Power eventually prevails in the
State proceeding and the bond condition is modified or
eliminated, it may be years before the stay of certification is
lifted and the Commission proceeds with licensing. The
remoteness of the possibility of a swift end to the state
proceeding is underscored by North Carolina’s recent revocation
of the 2009 Certification.1 Neither the Commission nor the State
and County intervenors provide any reason to conclude that the
State administrative stay of the 2009 Certification will be lifted
anytime soon. Any institutional interest in deferring
adjudication is thus remote and theoretical.
For these reasons we conclude that any judicial interest in
deferring adjudication is slight and that the waiver issue is
otherwise fit for judicial review.
1
On January 10, 2011, days before oral argument in this
court, the parties advised the court that on December 1, 2010, the
Division of Water Quality, citing “intentionally withheld information”
material to the State’s water quality assessment, issued a Notice of
Revocation of the 2009 Certification. Letter to William Bunker,
Alcoa Power, from Colleen H. Sullins, N.C. Dep’t of Envtl. & Natural
Res. (Dec. 1, 2010). The Notice of Revocation was filed with the
Commission, and in response Alcoa Power advised the Commission
that it intended to “contest its issuance.” Letter to Sec’y, FERC, from
David R. Poe, Counsel to Alcoa Power (Dec. 7, 2010).
12
On the hardship factor, the Commission points out that
Alcoa Power continues to operate the Yadkin Project pursuant
to annual licenses that renew the terms of the original 1958
license for one year at a time, and thus faces no hardship
because its “continued operation of the Project is not called into
question” by this arrangement. Resp’t’s Br. 18. Alcoa Power
observes that this court has held that “where there are no
institutional interests favoring postponement of review, a
petitioner need not satisfy the hardship prong,” AT&T Corp. v.
FCC, 349 F.3d 692, 700 (D.C. Cir. 2003), and hence the court
“need not review” the hardship factor. Pet’r’s Reply Br. 8. But
the court has recognized both approaches are followed “and “we
typically weigh the institutional interests in postponing review
against the hardship delay would cause.” TRT
Telecommunications Corp. v. FCC, 876 F.2d 134, 141 (D.C. Cir.
1989).
Alcoa Power maintains that deferring adjudication of the
waiver issue would impose an undue burden by requiring a
“lengthy and costly state proceeding” that, if it is correct on the
merits, is entirely moot, id. at 9, and that delay in obtaining a
fifty-year renewal denies it the certainty and security required
to make long-term capital investments in the Yadkin Project.
Although “the burden of participating in further administrative
and judicial proceedings does not constitute sufficient hardship”
in a ripeness challenge, AT&T Corp., 349 F.3d at 702, and
business uncertainty resulting from agency action or inaction
may sometimes not be a legally cognizable hardship, see Nat’l
Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803, 811
(2003), this court acknowledged an exception to the proposition
in Exxon Mobil Corp. v. FERC, 501 F.3d 204, 208 (D.C. Cir.
2007). There the court credited the fact that “delaying
resolution . . . [would] tend to inhibit or delay investment” in
large part because “Congress ha[d] made unmistakably clear its
intention to speed construction of” the Alaska Pipeline and “[i]n
13
the unusual circumstances of th[at] case” delay would have been
“a cognizable hardship to the Nation as a whole.” Id. Although
Alcoa Power does not suggest delay in the relicensing of the
Yadkin Project would cause “cognizable harm to the Nation as
a whole,” the statute sets the hydroelectric project license term
at not less than 30 nor more than 50 years, see Federal Power
Act § 15, as amended by Electric Consumers Protection Act of
1986, § 5, 16 U.S.C. § 808(e), revealing congressional
recognition that significant capital investments cannot be made
in hydro power projects without the certainty and security of a
multi-decade license. According some weight to the hardship
that Alcoa Power faces from relicensing delay is, therefore,
justified.
Because the waiver issue is fit for review and the legally
cognizable hardship that Alcoa Power will suffer from delay,
although not overwhelming, suffices to outweigh the slight
judicial interest in the unlikely possibility that we may never
need to decide the waiver issue, we hold the petition is ripe for
review.
III.
Alcoa Power contends that the Commission misinterpreted
Section 401(a)(1) in ruling that North Carolina did not waive its
certification authority because it did not “fail[] or refuse[] to
act,” 33 U.S.C. § 1341(a)(1), within the one-year statutory
period. To the contrary, Alcoa Power maintains, a State only
“act[s]” within the meaning of Section 401(a)(1) when it “issues
a [certification] that is complete and capable of becoming
effective within the one-year period or denies certification
within that time.” Pet’r’s Br. 28. The Commission’s view that
the 2009 Certification is a qualifying “act” under Section 401
even though by its terms the certification is not “effective” until
Alcoa Power secures a $240 million bond, in Alcoa Power’s
14
view, “would allow a state to indefinitely block or delay federal
action” and thus thwart Congress’s intent in imposing a one-year
time limit on a State’s certification authority. Id. Essentially,
Alcoa Power maintains that it would render Section 401(a)(1)’s
time limit nugatory if a State could issue the certification on
time but with conditions that would prevent the Commission
from proceeding with licensing until some point in the future
beyond the one-year date.
A.
We begin with a note on our jurisdiction. In enacting the
Clean Water Act, Congress sought to expand federal oversight
of projects affecting water quality while also reinforcing the role
of States as “the ‘prime bulwark in the effort to abate water
pollution,’” Keating v. FERC, 927 F.2d 616, 622 (D.C. Cir.
1991) (quoting United States v. Puerto Rico, 721 F.2d 832, 838
(1st Cir. 1983)). The certification authority granted States is
“[o]ne of the primary mechanisms” through which they may
exercise this role, as it provides them with “the power to block,
for environmental reasons, local water projects that might
otherwise win federal approval.” Id. If a State denies a water
quality certification request, Section 401(a)(1) provides that no
federal “license or permit shall be granted.” 33 U.S.C.
§ 1341(a)(1). If a State issues a certification contingent on the
applicant’s satisfaction of various conditions, Section 401(d)
requires the agency upon issuing the license to incorporate those
conditions in the final license. Id. § 1341(d). These conditions
may be based on requirements for monitoring or performance
standards under the Clean Water Act, or “any other appropriate
requirement of State law.” Id.
In S.D. Warren Co. v. Maine Board of Environmental
Protection, 547 U.S. 370, 386 (2006), the Supreme Court
construed States’ Section 401 certification authority broadly to
admit few restrictions on a State’s authority to reject or
15
condition certification. For this reason, a State’s decision on a
request for Section 401 certification is generally reviewable only
in State court, because the breadth of State authority under
Section 401 results in most challenges to a certification decision
implicating only questions of State law. See City of Tacoma,
Wash. v. FERC, 460 F.3d 53, 67 (D.C. Cir. 2006). A water
quality certification is reviewable in federal court, however, at
least to the extent Section 401 itself imposes requirements that
a State must satisfy in order for a certification to be a
“certification required by this section,” 33 U.S.C. § 1341(a)(1).
At issue in City of Tacoma was whether the State of Washington
had “establish[ed] procedures for public notice” as required by
Section 401(a)(1). This court vacated the license and remanded
the matter to the Commission to determine whether the State had
established and followed proper public notice procedures. 460
F.3d at 67.
As in City of Tacoma, the question Alcoa Power presents in
its petition for review is whether a State-issued water quality
certification complies with the requirements of Section 401.
Specifically, the question is whether the 2009 Certification is
valid under Section 401 as the State’s “act on a request for
certification” within the statutory one-year period. 33 U.S.C.
§ 1341(a)(1). If it is not, then the 2009 Certification is invalid
under federal law, the State has waived its certification rights,
and the Commission may proceed immediately with licensing.
If the 2009 Certification is valid, then the ongoing challenge to
the certification in the State administrative proceeding is
relevant to the ultimate disposition of Alcoa Power’s license
application; Alcoa Power does not challenge the Commission’s
policy of staying licensing proceedings pending a challenge in
State proceedings to an otherwise-valid water quality
certification. Because the validity of the 2009 Certification
under Section 401 is a question of federal law, the issue was
16
properly put to the Commission, and is now properly before this
court.
B.
Turning to the merits of Alcoa Power’s petition, the
Commission concedes that its interpretation of Section 401 is
entitled to no deference by the court because the Environmental
Protection Agency, and not the Commission, is charged with
administering the Clean Water Act. Ala. Rivers Alliance v.
FERC, 325 F.3d 290, 296-97 (D.C. Cir. 2003). Our review of
the Commission’s interpretation of Section 401 is de novo. Id.
at 297. With regard to Alcoa Power’s contention that the
Commission misinterpreted or misapplied its own regulations,
however, the Commission’s interpretation is entitled to
substantial deference and subject to reversal only if it “is plainly
erroneous or inconsistent with the regulation.” Bluestone
Energy Design v. FERC, 74 F.3d 1288, 1292 (D.C. Cir. 1996)
(quoting Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512
(1994)). The Commission’s factual findings are reviewed under
the deferential arbitrary and capricious standard. See Lichoulas
v. FERC, 606 F.3d 769, 775 (D.C. Cir. 2010).
Section 401(a)(1) requires that a State “act on a request for
certification[] within a reasonable period of time (which shall
not exceed one year) after receipt of such request,” or else “the
certification requirements of this subsection shall be waived
with respect to such Federal application.” 33 U.S.C.
§ 1341(a)(1). In imposing a one-year time limit on States to
“act,” Congress plainly intended to limit the amount of time that
a State could delay a federal licensing proceeding without
making a decision on the certification request. This is clear
from the plain text. Moreover, the Conference Report on
Section 401 states that the time limitation was meant to ensure
that “sheer inactivity by the State . . . will not frustrate the
Federal application.” H.R. Rep. 91-940, at 56 (1970), reprinted
17
in 1970 U.S.C.C.A.N. 2741. Such frustration would occur if the
State’s inaction, or incomplete action, were to cause the federal
agency to delay its licensing proceeding.
Alcoa Power thus correctly maintains that the purpose of
the waiver provision is to prevent a State from indefinitely
delaying a federal licensing proceeding by failing to issue a
timely water quality certification under Section 401. From this
conclusion it follows that the inverse must also be true: if a
certification would allow the Commission to proceed with
licensing, then waiver did not occur. Crucial, then, to Alcoa
Power’s petition is whether the 2009 Certification will allow the
Commission to proceed with licensing without first requiring
satisfaction of a condition contained in the certification. Alcoa
Power points to the clause in the bond condition that the
certification is “only effective” upon its satisfaction as
impermissibly operating to delay Commission proceedings
beyond the statutory one-year period. The provision operates,
Alcoa Power maintains, as a condition precedent to licensing,
and because it was impossible for Alcoa Power to satisfy the
condition within the one-year period set by Section 401 — the
certification having been issued on the final day of that period
— if, indeed, it could ever be satisfied, the certification would
“delay and block” the federal licensing beyond the one-year
period and thereby run afoul of the waiver provision. Pet’r’s
Reply Br. 16.
Alcoa Power’s interpretation assumes, however, that the
“effective” clause means that the bond condition does, in fact,
operate as a condition precedent to licensing. North Carolina,
whose agency issued the water quality certification, claims that
the 2009 Certification had no legal effect until its terms were
incorporated into the federal license, and so “[t]here would have
been no reason or authority for [the Division of Water Quality]
to include a condition that required [Alcoa Power] to do
18
anything before the license was issued.” Respondent-Intervenor
North Carolina Br. 20. The State continues, the only way to
interpret the certification “sensibly is that the bond condition is
simply a condition of the Certification that becomes enforceable
when the Commission issues the license.” Id. at 21. North
Carolina explains that the purpose of the “effective” clause is to
require Alcoa Power to post the bond before it undertakes to
satisfy the various other conditions of the certificate, thereby
ensuring that it does not “commence any programs that it cannot
complete.” Id. It notes that Alcoa Power filed the certification
with the Commission the day after issuance without any mention
of the effectiveness clause or indication that the Commission
would have to wait for it to satisfy a condition precedent prior
to licensing.
The Commission rejected Alcoa Power’s interpretation,
ruling that Section 401 allowed it to proceed with licensing
irrespective of the “effective” clause in the bond condition to the
2009 Certification. The Commission reasoned that the Clean
Water Act requires it only to wait for “the certification required
by this section [to be] obtained,” Section 401(a)(1) (emphasis
added), not for the certification to be effective, and “the
Commission would be free to issue a license, regardless of
whether the certification provided that it was not yet effective.”
Rehearing Order ¶ 15. If Alcoa Power did not post the bond,
then it “might be a failure to meet a condition of the
certification” that could warrant a license suspension or
revocation proceeding, “but it would not require a delay in
Commission action” to issue the license in the first place. Id.2
2
In its brief, the Commission suggested that it did not reach
the question of whether it could issue a license prior to Alcoa Power’s
satisfaction of the bond condition, relying on a footnote in the
Rehearing Order stating that the question was “premature.” Rehearing
Order ¶ 15 n.6. This overreads the footnote, because the Commission
19
As a result, there is no waiver issue because the “effective”
clause would not operate to delay or block the federal licensing
proceeding beyond Section 401's one-year period. The
Commission also rejected Alcoa Power’s contention that the
bond condition “delayed the legal effectiveness” of the 2009
Certification, Pet’r’s Br. 42, in violation of 18 C.F.R.
§ 4.34(b)(5)(iii), which deems a State’s certification authority
waived if the certification is “not denied or granted” within the
one-year period. The Commission read the regulation
consistently with its interpretation of Section 401 that the grant
of certification — even with conditions — qualifies under the
regulation, and thus there was no waiver.
The Commission’s interpretation of Section 401(a)(1) to
allow licensing once a certification has been “obtained,” 33
U.S.C. § 1341(a)(1), even if the certification is not by its terms
immediately “effective,” is consistent with the plain text and
statutory purpose of the provision. It also conforms to the
State’s understanding of when the condition in its certification
is enforceable. Nowhere in Section 401 is it stated that a
certification must be fully effective prior to the one-year period
much less prior to licensing; it requires only that a State “act”
within one year of an application and that a certification be
“obtained.” 33 U.S.C. § 1341(a)(1). The largely unqualified
terms of Section 401 are broader than Alcoa Power suggests and
unrelated to the effectiveness of a certification prior to licensing.
To accept Alcoa Power’s interpretation would require adding
terms to the statute that Congress has not included. See Nat’l
Ass’n of Mfrs. v. Dep’t of Labor, 159 F.3d 597, 600 (D.C. Cir.
quite clearly did rule on rehearing that the “effective” provision in the
bond condition of the 2009 Certification “does not change the fact that
the State has acted and certification has been issued,” and thus “the
Commission would be free to issue a license” upon conclusion of the
State administrative appeal. Id. ¶ 14.
20
1998). It is, moreover, unclear what meaning the “effective”
clause could possibly have prior to licensing; Alcoa Power
appears to agree that the certification itself is not enforceable
(whether or not the disputed clause is present) until its terms are
incorporated by the Commission in an issued license. Instead,
Alcoa Power suggests that by inserting the clause the Division
of Water Quality meant to restrain the Commission from issuing
a license until Alcoa Power satisfied the bond condition. North
Carolina denies that its agency had any such intention, and if it
had, it would have said so more clearly. More likely, just as
North Carolina and the Commission interpret it, the “effective”
clause requires Alcoa Power to satisfy the bond condition within
90 days of license issuance and before it undertakes to satisfy
the remediation and monitoring conditions of the certification.
A failure to do so could constitute a condition violation that
subjects it to suspension or revocation proceedings. See
Rehearing Order ¶ 15. The clause alone, however, does not
purport to restrain the Commission from exercising its federal
authority to proceed with licensing.
It follows that the Commission reasonably interpreted its
regulation consistently with its interpretation of Section
401(a)(1). Because the Commission correctly ruled that it was
free under Section 401 to proceed with licensing
notwithstanding the bond condition, the request for certification
was, for all relevant federal purposes, “granted” before the
statutory and regulatory one-year deadline expired and thus
there was no waiver under the regulation just as there was none
under the statute.
In sum, under Section 401, the State, acting through its
Division of Water Quality, timely issued a water quality
certification that complied with the requirements of Section 401.
The Commission on rehearing made clear that it was free to
commence its licensing proceeding but for its policy to stay such
21
proceedings pending conclusion of the State proceeding, which
policy Alcoa Power does not challenge. Because the “effective”
clause in the bond condition of the 2009 Certification did not
operate to block or delay the federal licensing proceeding, and
it did not contravene Section 401(a)(1)’s waiver provision, much
less the Commission’s regulations, Alcoa Power’s objections to
the substantive content of the 2009 Certification is a matter of
State law that is properly raised in the State proceeding, as
Alcoa Power has done.
Alcoa Power’s additional objection that the Commission
failed to engage in reasoned decision-making by ignoring or
misapprehending certain material facts fails. The allegedly
ignored facts are that (i) the bond condition as written in the
2009 Certification is objectively impossible to satisfy, and (ii)
the Division of Water Quality had ample time to request
satisfaction of the bond condition within the one-year statutory
period in view of the extended procedural history of Alcoa
Power’s requests for certification. These assertions became
irrelevant to the Commission’s waiver analysis once it
concluded that neither Section 401 nor its own regulation
required it to wait until the bond condition was satisfied before
proceeding with Alcoa Power’s license application. The
Commission therefore had no reason to analyze these issues in
greater depth.
Accordingly, we deny the petition for review.