FERC’s Clean Water Action Section 401 Waiver Analysis Continues to Evolve

Troutman Pepper

Troutman Pepper

In 2019, the D.C. Circuit in Hoopa Valley Tribe v. FERC  held that the plain language of Clean Water Act (CWA) Section 401 establishes a bright-line maximum period of one year for States to act on a request for water quality certification and that the Federal Energy Regulatory Commission (Commission) was arbitrary and capricious when it failed to enforce the statutory time-limit.  Since the Hoopa Valley Tribe ruling, the Commission has repeatedly held that a State waives its authority under Section 401 when it has sought to extend the one year review period by requesting or directing the applicant to withdraw and resubmit its application to afford the state reviewing agency more time.  In several recent cases, however, the Commission has found that there may be instances where a withdrawal and resubmission of a water quality certification by the applicant does not result in a State’s waiver of Section 401 certification authority.

In KEI (Maine) Power Management (III) LLC, for example, the Commission held that the withdrawal-and-resubmission that occurred in the relicensing of the Upper Barker Project in Maine did not result in the State’s waiver of Section 401 authority.  There, the Commission determined that the Maine Department of Environmental Protection did not waive its certification authority where the applicant withdrew and refiled its application to pursue settlement negotiations with state and federal resource agencies.  The Commission determined that the purpose of the withdrawal-and-resubmission was not implemented for purposes of giving the State more time to act, but rather to allow time for the license applicant to pursue settlement negotiations with resource agencies.

In Village of Morrisville, the Commission again held that a withdrawal-and-resubmission did not result in Section 401 waiver.  In that case, the Commission held that the administrative record did not reflect that the license applicant had a functional agreement with the Vermont Agency of Natural Resources (ANR) to withdraw-and-resubmit its application to afford the State a longer time period to review the water quality certification application.  Instead, the Commission concluded that the applicant withdrew and refiled its application with Vermont ANR in order to avoid potentially unfavorable water quality certification conditions.  In the Commission’s view, the record of communications between the applicant and Vermont ANR demonstrated that the applicant withdrew-and-refiled its applications to provide additional time for the applicant to consider its studies.

While the D.C. Circuit in Hoopa Valle Tribe broadly established a bright-line test, under a plain language interpretation of Section 401, that States have a maximum time period of one year to act on a request for water quality certification, FERC’s application of Hoopa Valley Tribe has focused on a narrower issue:  whether a State waived authority by attempting to extend the maximum one-year period through withdrawal-and-resubmission.  Several pending cases addressing Section 401 waiver—in the U.S. Courts of Appeals for the 2nd, 4th, and 9th Circuits—may soon provide greater clarity on this issue for the Commission, applicants, States, and interested parties.

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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