The Federal Energy Regulatory Commission does not have to consider impacts of previously licensed Butte County dams on threatened Chinook salmon, the Ninth U.S. Circuit Court of Appeals has ruled.

The court rejected the argument that Pacific Gas & Electric (PG&E) Company’s ongoing operation of the DeSabla-Centerville hydroelectric project under a license granted by the federal agency in 1980 constituted “agency action” that would trigger review of the project’s impact on the protected fish.

The DeSabla-Centerville project consists of a system of dams, reservoirs, canals and powerhouses on Butte Creek. The Federal Energy Regulatory Commission (FERC) issued a 30-year license for PG&E to operate the project in 1980. Operation of the system affects the flow of the creek, which provides spawning grounds for Chinook salmon. In 1999, federal authorities listed Chinook salmon in the Sacramento River basin as “threatened” under the Endangered Species Act.

After many fish died in Butte Creek during 2002 and 2003, the National Marine Fisheries Service (NMFS) asked FERC to initiate a “formal consultation” regarding the hydroelectric project’s impact on the protected fish. Under Section 7 of the Endangered Species Act, formal consultation amounts to a review of a project’s impact on a protected species and its habitat, and may lead to project modifications.

After FERC rejected NMFS’s request, the California Sportfishing Protection Alliance in April 2004 petitioned FERC to commence a formal consultation. Again, FERC refused to budge. So the Alliance and the Pacific Coast Federation of Fishermen’s Associations sued FERC. Because the litigation involves a FERC order, it bypassed the District Court and went straight to the Ninth Circuit, which upheld FERC’s position.

The fishing groups argued that ongoing operation of the hydroelectric project under a federal license amounted to an “action” under the Endangered Species Act. If so, the action would trigger the formal consultation requirement. The groups cited the famous snail darter case, Tenn. Valley Auth. v. Hill, 437 U.S. 153 (1978), in which the Supreme Court blocked operation of a new dam because of its potential impact on an endangered species of snail darter.

But the Ninth Circuit read the snail darter case differently. “In Tenn. Valley Authority v. Hill, the Supreme Court looked to the action about to be taken by the agency to operate the dam,” Chief Judge Mary Schroeder wrote for the three-judge Ninth Circuit panel. “The court held that because such action would jeopardize the habitat of the endangered snail darter, the agency could not begin operating the dam. The court thus focused on the potential effect of the government’s contemplated action.”

Schroeder also cited the Ninth Circuit’s decision last year in W. Watersheds Project v. Matejko, 456 F.3d 922. In that case, Schroeder wrote, “the plaintiffs challenged the agency’s failure to consult on whether the agency should regulate certain rights-of-way used by private parties to divert water. In rejecting the plaintiff’s challenge we explained that ‘Ninth Circuit cases have emphasized that § 7(a)(2) consultation stems only from “affirmative actions”’ of an agency. We held that because private parties, and not the government, were diverting the water, there was no agency action triggering a duty to consult.

“This case is materially the same,” Schroeder continued. “PG&E, a private party, operates the hydroelectric project challenged in this case. FERC, the agency, has proposed no affirmative act that would trigger the consultation requirement for current operations.”

The fishing groups pointed to provisions in the 30-year license that permit FERC to reopen the license. They argued that the reopener provisions created discretionary federal control, which amounts to an action. But the Ninth Circuit dismissed the reopener provisions, ruling they “are not sufficient to constitute any discretionary agency ‘involvement or control’ that might mandate consultation by FERC.”

The court noted that the existing hydroelectric project license will expire in 2009, and that the relicensing process — including consultation with NMFS — has already commenced.

The Case:
California Sportfishing Protection Action v. Federal Energy Regulatory Commission, No. 05-73064, 06 C.D.O.S. 11324, 2006 DJDAR 16109. Filed December 12, 2006.
The Lawyers:
For the Sportfishing Protection Alliance: Trent Orr, (415) 665-2185.
For FERC: Carol Banta, (202) 502-6433.
For PG&E: William Madden Jr., Winston & Strawn, (202) 282-5000.