Denver Water Files Complaint in Federal Court, Seeking Preemption of Boulder County Regulation Due to FERC Hydroelectric Project License

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On July 14, 2021, the City and County of Denver, Colorado, acting through its Board of Water Commissioners (“Denver Water”), filed a Complaint in the United States District Court for the District of Colorado, requesting declaratory and injunctive relief against Boulder County over the County’s alleged efforts to delay and obstruct Denver Water’s expansion of the Gross Reservoir Hydroelectric Project.

Gross Reservoir and Dam are located on federal land in Boulder County, northwest of Denver, that was reserved by a 1910 Presidential Proclamation for hydroelectric power development.  In the 1950s, Denver Water constructed Gross Reservoir and Dam primarily as a source of water supply for the City of Denver.  The Federal Energy Regulatory Commission’s “FERC”) predecessor, the Federal Power Commission, issued an original license for the Project in 1951.  The Complaint explains that, in the early 2000s, Denver Water undertook an assessment to determine how to increase water supply to the residents of Denver, following an increase in population as well as droughts, wildfires, and other water shortages.  After considering over 300 alternatives, Denver Water decided to pursue an expansion of Gross Reservoir and Dam via an amendment to its FERC-issued license.  The expansion project would increase the height of Gross Dam by 130 feet and the storage capacity of the reservoir by approximately 77,000 acre-feet.

Denver Water’s Complaint states that, prior to requesting a license amendment from FERC, Denver Water engaged with FERC and the Army Corps of Engineers (“Corps”) as well as other federal and state agencies, including Boulder County, on the Project plans and specifications, environmental analysis and mitigation, property acquisition, roadway improvements, and a variety of other factors.  Denver Water filed an amendment application with FERC in 2016, and FERC approved the proposed amendment in July 2020.  Among other things, FERC’s order approving the amendment provided that Denver Water is required to commence Project construction by July 2022 and complete construction by July 2027.  Denver Water’s Complaint states that in order to meet those deadlines, a long list of pre-construction activities must occur, including a “1041 permit process,” which gives local governments—Boulder County, in this case—the ability to conduct public hearings and review the proposed Project pursuant to Colorado law governing “Areas and Activities of State Interest” (Colo. Rev. Stats. § 24-65.1-101).

Denver Water’s Complaint states that, despite its good faith effort to engage, Boulder County has used the 1041 process “to frustrate and prevent Denver Water from proceeding with the Expansion Project,” including by repeatedly requesting additional information and finding that Denver Water’s submissions were not satisfactorily responsive to the County’s comments.  The Complaint also argues that the County’s 1041 permit process is preempted by the Federal Power Act (“FPA”), which establishes a “comprehensive federal scheme” for regulating hydroelectric power projects and gives FERC “exclusive authority to regulate such projects.”

In its Complaint, Denver Water requests a declaration by the Court that the County’s 1041 permit process is preempted by the FPA and an injunction prohibiting the County from any additional attempts to assert 1041 permitting authority over the Expansion Project.  With respect to its preemption argument, Denver Water states that the 1910 Presidential Proclamation reserving the Project area specifically for hydroelectric power production means that FERC—not the County—has the exclusive authority to license and regulate activities within the “federal power site reservation.”  Denver Water’s Complaint also requests the Court to enjoin the County from refusing to issue other permits or approvals that may be required to complete the Project, such as building or grading permits or approvals to enlarge roads to access the Project site.

Denver Water’s July 14 Complaint is available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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