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Up & Atom

As William Faulkner once said, “The past is never dead. It’s not even past.” Major infrastructure project developers may feel this way when preparing for environmental reviews as part of licensing action due to a new decision from the US Court of Appeals for the DC Circuit. In American Rivers v. FERC, Case Nos. 16-1195 & 16-2336 (2018), the DC Circuit found that the actions of the Federal Energy Regulatory Commission (FERC) were arbitrary and capricious when the agency issued a renewed operating permit to a hydroelectric plant. The DC Circuit concluded that the supporting environmental analysis treated the continued operation of the plant as the “environmental baseline” and therefore failed to consider the environmental impacts associated with the initial licensing, construction, and operation of the plants.

The facts of American Rivers are straightforward. When a utility applied to relicense its hydroelectric plants along the Coosa River in Alabama, the US Fish and Wildlife Service (USFWS) and FERC were required to analyze the environmental impacts of relicensing by the Endangered Species Act and the National Environmental Policy Act (NEPA). The two government agencies did so, but used the current status of the Coosa River, i.e., with multiple hydroelectric projects already built along the river, as the “environmental baseline” from which the analyses began. By utilizing this baseline, the analyses only considered changes to the current conditions of the river, while environmental groups argued that the existing plants on the river had already had detrimental impacts on various endangered aquatic animals and the environment. Those groups argued that beginning the analyses from the current “degraded” baseline was not permissible and that the analyses needed to consider the impacts from project construction and operation in the past.

The DC Circuit agreed with the environmental groups, stating that the “failure to consider the damage already wrought by the construction of dams” along the river failed to meet the requirements under the Endangered Species Act or NEPA. In the court’s reading, the agencies “gave scant attention to those past actions that had led to and were perpetuating the Coosa River’s heavily damaged and fragile ecosystem.” The court therefore remanded the relicensing proceeding back to FERC and the USFWS to perform new analyses.

The DC Circuit’s decision marks a break from case law in other circuits, as well as the DC Circuit itself, that had found it acceptable to use the existing conditions as the baseline in an environmental analysis. This decision, should it stand, could lead licensees to address and mitigate concerns due to existing environmental disturbances from a project’s history as part of relicensing.