PipelineLaw: During Oral Argument, D.C. Circuit Suggests Waiver Period For State Water Quality Certification May Be Less Than One Year

In recent litigation involving the development of interstate natural gas pipelines, one of the key issues has been whether the state has waived its authority under Clean Water Act (CWA) section 401 by exceeding the one-year time period.1 In a separate case involving a series of hydroelectric facilities, the waiver period was again directly at issue. On October 1, at oral argument before the U.S. Court of Appeals for the D.C. Circuit, the parties addressed whether California and Oregon had waived their water quality certification authority by having the applicant withdraw and resubmit its request for certification over a number of years. Notably, the judges seemed to agree that the Federal Energy Regulatory Commission (FERC) could make a waiver determination before the end of the one-year time limit and that withdrawing and resubmitting an application may not always restart the clock.

The case, Hoopa Valley Tribe v. FERC, No. 14-1271 (D.C. Cir. 2018), involves a dispute over the operation of the Klamath Hydroelectric Project (KHP), a series of dams and reservoirs on both sides of the California-Oregon border. The project obtained its original 50-year operating license in the 1950s. Set to expire in 2006, PacifiCorp (KHP's operator) submitted its relicense application to FERC in 2004. In 2007, FERC completed its environmental review and concluded that a new license would likely need to incorporate costly fish passage requirements for the protection of local salmon species. In 2010, PacifiCorp negotiated and signed an agreement with 48 interested parties (e.g., the Governors of Oregon and California, local tribes and counties, farmers, conservation groups, etc.) to decommission and remove the dams by 2020. As part of the agreement, PacifiCorp agreed to withdraw and resubmit its CWA section 401 requests every year to avoid waiver.

In 2012, the Hoopa Valley Tribe petitioned FERC for a declaratory order that California and Oregon had waived their 401 authority, and argued that FERC had violated its statutory duties for failing to act on the KHP relicense application. FERC found that, while the circumstances are "far from ideal," PacifiCorp's withdrawals and re-submission of its requests for certification (from 2008-2014) restarted the one-year deadline each year.2 Hoopa Valley appealed FERC's determination to the D.C. Circuit.

Under the CWA, a state waives its authority if the agency "fails or refuses to act on a request for certification, within...