Eastern Niagara Public Power v. FERC

Mar 13: In the U.S. Court of Appeals, D.C. Circuit, Case No. 07-1472. From 1958 to 2007, the New York Power Authority (NYPA) operated the Niagara Power Project, a hydroelectric facility about five miles downriver from Niagara Falls, pursuant to a 50-year license granted by what is now the Federal Energy Regulatory Commission (FERC). In 2007, FERC approved NYPA’s relicensing application and granted a new 50-year license. Several communities in western New York have challenged FERC’s 2007 licensing decision as arbitrary and capricious and unsupported by substantial evidence. However, the Appeals Court decided, "We deny their petition because FERC’s decision to issue the new license was reasonable and reasonably explained."

Petitioners argue that a 50-year license is too long and inconsistent with Agency practice regarding the terms of licenses, but the Appeals Court said, "FERC possesses express statutory authority to set license terms between 30 and 50 years." Second, petitioners argue that FERC undervalued the project’s output in considering the appropriate length of the new license, but the Appeals Court said, "Applying the deferential arbitrary-and-capricious standard, we have no room to overturn that reasoned and reasonable determination."

Third, petitioners contend that FERC, as a condition of granting the license, should have required NYPA to mitigate certain adverse environmental impacts allegedly caused by the project, but the Appeals Court said, "FERC mandated measures to mitigate any such impact. In short, FERC acted entirely reasonably in addressing possible adverse environmental impacts."
Fourth, petitioners assert that FERC should have considered the consequences of “off-license” agreements that NYPA reached with interested communities and organizations in the area saying, the "agreements represented NYPA’s not-so-subtle efforts to buy off community opposition." (e.g. NYPA promised to pay the Tuscarora Nation tribe, $21.8 million if FERC approved NYPA’s relicensing). The Appeals Court said, "But the off-license agreements are not related to project operations and are irrelevant to FERC’s statutorily mandated assessment of the relicensing application. . . Therefore, FERC properly refused to consider the off-license agreements in deciding whether to reissue the license to NYPA."

Finally, petitioners also appear to directly challenge the off-license agreements as "unlawful." The Appeals Court said, "The source of law on which petitioners are relying for this argument is rather murky. In any event, petitioners lack standing to bring such a claim against FERC. The parties to the off-license agreements were NYPA and certain communities and organizations affected by the project. FERC did not approve those agreements, and FERC does not and cannot control the agreements’ terms."

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