State of North Carolina v. Federal Energy Regulatory Commission, the City of Virginia Beach, Virginia, Intervenor

112 F.3d 1175, 324 U.S. App. D.C. 209, 27 Envtl. L. Rep. (Envtl. Law Inst.) 20929, 45 ERC (BNA) 1442, 1997 U.S. App. LEXIS 10604, 1997 WL 231175
CourtCourt of Appeals for the D.C. Circuit
DecidedMay 9, 1997
Docket95-1494, 95-1500
StatusPublished
Cited by35 cases

This text of 112 F.3d 1175 (State of North Carolina v. Federal Energy Regulatory Commission, the City of Virginia Beach, Virginia, Intervenor) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State of North Carolina v. Federal Energy Regulatory Commission, the City of Virginia Beach, Virginia, Intervenor, 112 F.3d 1175, 324 U.S. App. D.C. 209, 27 Envtl. L. Rep. (Envtl. Law Inst.) 20929, 45 ERC (BNA) 1442, 1997 U.S. App. LEXIS 10604, 1997 WL 231175 (D.C. Cir. 1997).

Opinions

Dissenting opinion filed by Circuit Judge WALD.

SENTELLE, Circuit Judge:

Petitioners, the state of North Carolina and the Roanoke River Basin Association (“RRBA”), seek review of the decision of the Federal Energy Regulatory Commission (“FERC” or “Commission”) to amend a FERC license under which a power project is operated within Lake Gaston on the Roanoke River. The amended license allows the City of Virginia Beach, Virginia to build an intake structure within the power project’s boundaries and withdraw water for transport to Virginia Beach. Petitioners maintain that FERC improperly issued the license amendment without first requiring that a water quality certification be obtained from the state of North Carolina. Petitioners further contend that the decision to issue the license amendment was arbitrary and capricious. For the reasons detailed below, we reject each of these arguments and deny the petitions for review.

I. Background

This case arises from the nearly fourteen-year effort of Virginia Beach to secure a new source of water via a 76-mile pipeline originating at Lake Gaston and terminating in Norfolk, Virginia (the “Pipeline Project”). Lake Gaston is located on the Roanoke River, a navigable waterway traversing the states of Virginia and North Carolina. While Lake Gaston is primarily located in North Carolina, the intake structure for the Pipeline Project is to be located at Pea Hill Creek Cove in Virginia. That site is within the boundaries of FERC Project No. 2009, a FERC-licensed power project (the “Power Project”) operated by Virginia Electric and Power Company (“VEPCO”). Upon completion of the Pipeline Project, Virginia Beach will be able to draw up to 60 million gallons per day (“mgd”) of water from Lake Gaston, reducing the discharge of water through the Power Project’s dam turbines in North Carolina by that same amount. The drawn water will then be transported through a 76-mile pipeline. This will result in a net increase of 54 mgd of water to Virginia Beach’s daily water supply, after adjustment for amounts lost during transport.

[1181]*1181Construction of the Pipeline Project’s intake facility was to result in sediment discharges into the waters of Lake Gaston. As a result, Section 403(a) of the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq., otherwise known as the Clean Water Act (“CWA” or “Act”), required Virginia Beach to obtain a dredge-and-fill permit from the Secretary of the Army, acting through the Army Corps of Engineers (“Corps”). 33 U.S.C. § 1344(f)(2). The City filed its application for a Section 403(a) permit with the Corps on July 15,1983.

Section 401(a)(1) of the CWA provides that “[a]ny applicant for a Federal license or permit to conduct any activity ... which may result in any discharge into the navigable waters, shall provide the ... permitting agency a certification from the State in which the discharge originates or will originate____” The certification must provide that the discharge “will comply with the applicable” water quality standards. Id. § 1341(a)(1). As for those states in which the discharge does not “originate” but which may otherwise be “affected” by the discharge, Section 401(a)(2) of the CWA provides a separate set of procedures to ensure compliance with the affected state’s water quality standards. Id. § 1341(a)(2).

Because the Corps’ dredge-and-fill permit is a “Federal license or permit” for purposes of Section 401(a)(1), Virginia Beach was required to obtain a water quality certification from the state of Virginia. Accordingly, Virginia Beach filed an application with the Virginia State Water Control Board (“VSWCB”), requesting certification of the withdrawal of up to 60 mgd of water from Lake Gaston. No certification was sought or received from North Carolina at this time. On September 12,1983, the VSWCB issued a Section 401(a)(1) certification for the Pipeline Project, subject to certain conditions needed to preserve water quality.

Following the issuance of the water quality certification, the Corps held public hearings on Virginia Beach’s application for a dredge- and-fill permit. Both North Carolina and RRBA intervened in this proceeding. Upon conclusion of the hearings, the Corps found that 60 mgd would be needed in the Virginia Beach area by the year 2030, that the Pipeline Project would have no noticeable impact on downstream water quality, and that the project would have no significant impact on the environment. As a result, the Corps issued a dredge-and-fill permit to Virginia Beach. The issuance of this permit was ultimately upheld on appeal. North Carolina v. Hudson, 665 F.Supp. 428 (E.D.N.C.1987), appeal decided after remand, 731 F.Supp. 1261 (E.D.N.C.1990), aff'd sub nom. Roanoke River Basin Ass’n v. Hudson, 940 F.2d 58 (4th Cir.1991), cert. denied, 502 U.S. 1092, 112 S.Ct. 1164, 117 L.Ed.2d 411 (1992).

In 1991, VEPCO filed an application with FERC, requesting that the Power Project license be amended to permit the withdrawal of water for the Pipeline Project. The license for the Power Project was initially issued in 1951 by the Federal Power Commission, the predecessor of FERC. Virginia Elec, and Power Co., Project No. 2009: Application for License Under Federal Power Act, 10 F.P.C. 1 (1951) [hereinafter License Application Order], The Federal Power Act (“FPA”), 16 U.S.C. § 791a et seq., governs amendments to FERC licenses and provides that an amendment may be granted “only upon mutual agreement between the licensee and the Commission after thirty days’ public notice.” 16 U.S.C. § 799. Under VEPCO’s requested amendment to the Power Project license, Virginia Beach would be permitted to withdraw 60 mgd of water from Lake Gaston, decreasing the flow of water through the Power Project dams by the same amount.

North Carolina intervened in the license amendment proceeding and requested that FERC prepare an environmental impact statement (“EIS”) pursuant to the National Environmental Policy Act, 42 U.S.C. § 4321 et seq. On July 23, 1993, FERC issued a draft environmental assessment (“EA”) tentatively concluding that the Pipeline Project would have no immitigable adverse environmental impacts. After receiving numerous comments on the draft EA, FERC staff, on June 23, 1994, issued a final EA finding that the proposed Pipeline Project “constitutes a major federal action significantly affecting the quality of the human environment.” As a result, FERC determined to prepare an EIS [1182]*1182to “reflect updated population and water consumptive projections.” In the meantime, North Carolina had petitioned, the Commission to stay its proceeding until VEPCÓ obtained a Section 401(a)(1) certification from North Carolina’s water control agency. The Commission took no action on the stay request.

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112 F.3d 1175, 324 U.S. App. D.C. 209, 27 Envtl. L. Rep. (Envtl. Law Inst.) 20929, 45 ERC (BNA) 1442, 1997 U.S. App. LEXIS 10604, 1997 WL 231175, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-of-north-carolina-v-federal-energy-regulatory-commission-the-city-cadc-1997.