[00:00:40] Speaker 02: Good morning. [00:00:41] Speaker 00: Good morning, your honors may please the court. [00:00:43] Speaker 00: My name is Thane Somerville for the petitioner Hoopa Valley tribe. [00:00:47] Speaker 00: I'd also like to briefly acknowledge the presence of the Hoopa Valley tribal chairman and members of the tribal council who have traveled here from California to attend the hearing today. [00:00:56] Speaker 00: On rehearing, FERC made a legal determination that it could not find waiver of State Section 401 certification authority unless one full year had passed from the date of a certification application. [00:01:10] Speaker 00: This was an erroneous legal interpretation of the Clean Water Act that is not entitled to deference in this court. [00:01:16] Speaker 00: Section 401 provides that state certification authority shall be waived if a state refuses or fails to act within a reasonable period of time, which shall not exceed one year. [00:01:29] Speaker 00: So while the act sets an outer maximum limit of one year, it does not preclude the licensing, the federal licensing agency for making a finding of waiver prior to the expiration of one year. [00:01:46] Speaker 00: Based on this erroneous legal interpretation of the Clean Water Act, FERC ended its analysis at that stage. [00:01:53] Speaker 00: Because in this case, one year had not passed from the date of any given certification application, it found that the letter of the statute, that the actual language of the Clean Water Act precluded it [00:02:05] Speaker 00: from finding waiver in this case, despite its significant concerns that it was being deprived of its federal licensing jurisdiction, and despite that the conduct of the states and the licensee violated the spirit of the Clean Water Act. [00:02:20] Speaker 00: But it was its erroneous legal interpretation that made it stop its analysis without actually evaluating whether or not the underlying conduct did amount to a waiver within a reasonable period of time. [00:02:31] Speaker 04: Does your argument in any way depend upon the successive applications and the agreement to have successive applications, or is it independent of that? [00:02:42] Speaker 00: Our agreement focuses on the state's commitment to not process the pending application that was before it, as well as future applications. [00:02:53] Speaker 00: In addition, they did allow the licensee to submit a one-page letter each year that simultaneously purported to withdraw and resubmit the applications. [00:03:04] Speaker 04: But the focus here is... So the applications, in fact, were identical year after year, right? [00:03:10] Speaker 00: I'm not even sure there was an actual application. [00:03:13] Speaker 00: It was nothing more than a letter, a one-page letter that said. [00:03:18] Speaker 00: that said we withdraw and resubmit, please deem it withdrawn and resubmitted. [00:03:22] Speaker 03: I'm interested in your invocation of the spirit of Section 401. [00:03:31] Speaker 03: We're not too good at discerning spirits here, but we spend more of our time. [00:03:36] Speaker 03: Most of us are. [00:03:36] Speaker 03: Yeah, most of us. [00:03:38] Speaker 03: We spend most of our time looking at language of the text. [00:03:41] Speaker 03: And what is there that violates the language of the text in this process? [00:03:48] Speaker 00: It was first interpretation of the letter of the act. [00:03:51] Speaker 00: If you look in the order on rehearing in paragraphs 20 to 23 on the order of rehearing, it was clear that they felt the language of the act precluded them from making a finding of waiver unless one year had passed. [00:04:06] Speaker 00: That's not what the language of the Clean Water Act actually says. [00:04:10] Speaker 00: The language of the Clean Water Act says that [00:04:12] Speaker 00: waiver shall be found if there's a failure or refusal to act within a reasonable period of time, which shall not exceed one year. [00:04:20] Speaker 00: So our argument is not based on the spirit of the Clean Water Act. [00:04:24] Speaker 00: Our argument is based on the language of the act itself and the fact that FERC misinterpreted it. [00:04:29] Speaker 05: Your argument, I hear you trying to make a more case-specific argument, but I'm having trouble [00:04:37] Speaker 05: seeing a more narrow argument that doesn't depend on a determination that it violates the Federal Power Act to condone the withdrawal and resubmit. [00:04:54] Speaker 05: You are making the argument that it violates the Federal Power Act for [00:05:00] Speaker 05: FERC to fail to find that the states have waived after their 401 certification application has been pending for a year and that that can't be extended through this ruse of withdraw and resubmit. [00:05:15] Speaker 05: That is part of your argument or that is not? [00:05:17] Speaker 00: It was part of the third issue in our case of whether FERC had essentially abdicated its licensing authority in this case under the Federal Power Act by not reasserting itself into the case which could have been done either through a finding of waiver under Section 401 or by dismissing the certification application for lack of timely diligent processing. [00:05:41] Speaker 00: But our Clean Water Act argument is independent of the Federal Power Act. [00:05:47] Speaker 00: What we're saying is that FERC misinterpreted the Clean Water Act by finding that it could not make a declaration of waiver unless one year had passed. [00:05:59] Speaker 03: By its own regulations, it defines a reasonable period of time as being one year, doesn't it? [00:06:06] Speaker 00: FERC regulations track the Clean Water Act in the sense that a waiver will be deemed to have been found if one year passes. [00:06:17] Speaker 00: And that's not controversial. [00:06:18] Speaker 00: That's consistent with the statute. [00:06:20] Speaker 03: Does FERC, by its own regulations, defines a reasonable period of time to mean one year? [00:06:28] Speaker 03: FERC regulations. [00:06:29] Speaker 03: So isn't your argument really they need to change their regulations? [00:06:33] Speaker 00: I don't think so. [00:06:34] Speaker 00: I don't. [00:06:35] Speaker 00: FERC regulations do not. [00:06:36] Speaker 03: Do they have a regulation that says reasonable period of time is one year? [00:06:39] Speaker 03: I don't believe. [00:06:40] Speaker 03: I don't think you've challenged that, have you? [00:06:42] Speaker 00: The FERC regulations do not specifically say that in all cases a reasonable period of time will be one year. [00:06:49] Speaker 00: What it says is that waiver will be found, will be deemed to have been found if one year passes. [00:06:56] Speaker 00: And that's not controversial. [00:06:57] Speaker 00: If one year passes, there's no dispute that waiver will be found. [00:07:01] Speaker 00: We do not read the FERC regulations as precluding FERC from implementing its authority. [00:07:06] Speaker 03: Maybe I'm misreading the regulation. [00:07:07] Speaker 03: We'll ask the FERC attorneys to do it. [00:07:09] Speaker 03: But I thought they defined, I thought their own regulations defined a reasonable period of time as being one year. [00:07:15] Speaker 00: Well, if they did, that's not what they were relying on in the order on rehearing. [00:07:19] Speaker 00: They didn't rely on the regulation. [00:07:22] Speaker 00: I don't read the regulation to preclude them from making a finding that the waiver occurred within a reasonable period of time. [00:07:29] Speaker 05: I'm not sure what... I feel like I've done more talking to you ahead. [00:07:36] Speaker 05: So I'm not sure why we're struggling over whether it's less than a year or a year. [00:07:41] Speaker 05: This has been pending many, many years. [00:07:44] Speaker 05: And so the FERC is acting like its hands were tied. [00:07:50] Speaker 05: But even if you read the regulation, which says, [00:07:53] Speaker 05: in the affirmative that it will be deemed to have waived if they haven't denied by one year, but it doesn't say that they can't do less. [00:08:00] Speaker 05: I understand that that's your position. [00:08:02] Speaker 05: But even just taking it to be well, the routine time, the time when FERC is comfortable making the determination is after a year, because after all, everybody wants to know how much time they have to work with. [00:08:13] Speaker 05: And if FERC comes in in some cases after six months, and in other cases after three, and in other cases after nine, [00:08:18] Speaker 05: People don't know how much time they have to work with, but why are we even talking about FERC's authority to intervene within the year? [00:08:27] Speaker 05: Because it hasn't intervened after a year, or even after two years, or ten years. [00:08:36] Speaker 05: So isn't the question whether FERC should have asserted some supervision over this process because the states had not acted within the time that the Clean Water Act requires them to act? [00:08:51] Speaker 00: We fully agree with that, and we raised a separate claim to the Clean Water Act claim in the Federal Power Act. [00:08:59] Speaker 00: And we believe this entire, that FERC had effectively abdicated its authority over the relicensing by not acting, by letting this process go forward. [00:09:07] Speaker 00: We agree with what you're saying, but that's a different, there are two separate arguments. [00:09:11] Speaker 00: One is based on the Clean Water Act, and one is based on the Federal Power Act. [00:09:14] Speaker 04: That goes back to really what I was asking at the very beginning is you are then in that instance relying on a tacking of the periods involved in the counterfeit multiple applications that we have here, are you not? [00:09:29] Speaker 00: We believe this entire process is absolutely inconsistent with the Federal Power Act and the federal scheme. [00:09:35] Speaker 04: I'm not sure that I'm hearing you begin an answer to the question I'm trying to ask. [00:09:39] Speaker 04: I'm not sure we're understanding each other. [00:09:42] Speaker 04: Is this case dependent upon their refiling of those, is your argument dependent upon the refiling of the application through those letter applications so that we would have the period for one year exceeded, greatly exceeded if we do consider this all as one application for purposes of the litigation? [00:10:05] Speaker 00: The Clean Water Act argument is not based on the success of applications, except that we think that FERC can evaluate the overall context of it when determining whether or not a reasonable period of time has passed within the one year from the certification application. [00:10:22] Speaker 04: For example, if this was the tenth... So then you would say that FERC's error lies [00:10:26] Speaker 04: before we ever get the first final decision or relies in relying upon an interpretation of the act that says they can't do this. [00:10:36] Speaker 04: They're saying that they could not look at context involving the period here because it [00:10:46] Speaker 04: ratcheted to a stop at one point and started back up a day later rather than being a continuous 365 days. [00:10:54] Speaker 04: You're saying that's where the error lay was in the interpretation of the statute and relying on that interpretation. [00:10:59] Speaker 00: That's correct, Your Honor. [00:11:01] Speaker 00: Okay, thank you. [00:11:01] Speaker 00: And I don't believe that the regulation precludes FERC from examining conduct within the one year period. [00:11:10] Speaker 00: And FERC didn't apply any sort of general policy or regulation in this case. [00:11:14] Speaker 00: They expressed significant concern in their order on rehearing that this, again, violated in their view the spirit of the Clean Water Act. [00:11:23] Speaker 00: But in their view, it did not violate the letter of the Clean Water Act. [00:11:26] Speaker 00: Our argument is that interpretation. [00:11:29] Speaker 00: in the order of rehearing actually is inconsistent with how the Clean Water Act works. [00:11:32] Speaker 03: Is it your even stronger argument that they acknowledge that what's going on here isn't in the public interest? [00:11:38] Speaker 03: That ought to have something to do with the way an agency interprets its statutes, don't you think? [00:11:43] Speaker 00: Absolutely, Your Honor. [00:11:44] Speaker 00: And again, if FERC's regulations were interpreted as a bright line rule to say that no matter what, we deem one year to be reasonable in all context, [00:11:55] Speaker 00: it would pose a very significant problem under both the Clean Water Act and the Federal Power Act because, for example, what if a state just hypothetically sent a letter in to FERC two months after an application and said, we refuse to process this application. [00:12:11] Speaker 00: We're not going to deny it. [00:12:13] Speaker 00: We're not going to issue it. [00:12:14] Speaker 00: But we're just letting you know that we refuse to process this application and we are going to allow the licensee to resubmit its application on the 364th day from now until perpetuity. [00:12:26] Speaker 00: If FERC had a bright line rule that said we will never examine what goes on within the one year period, [00:12:34] Speaker 00: For in that context would never be able to obtain this reliance. [00:12:38] Speaker 04: I can almost what happened here. [00:12:40] Speaker 00: Yes. [00:12:40] Speaker 04: The state and state agency the two state entities were part of this agreement to do exactly what you just described. [00:12:50] Speaker 00: It was slightly less explicit than I describe it effectively. [00:12:53] Speaker 00: That's exactly right. [00:12:55] Speaker 05: How do we understand that [00:12:58] Speaker 05: Why would it be better from a public interest perspective to have FERC order decommissioning as compared to having the relicensing corporation deal with it? [00:13:22] Speaker 00: I'm not sure that it is better or worse. [00:13:25] Speaker 00: I mean, the amended KHSA is not part of our suit. [00:13:29] Speaker 00: I recognize that. [00:13:31] Speaker 00: And we actually, the tribe does not oppose that process because it's where it should be. [00:13:36] Speaker 00: It's before FERC. [00:13:37] Speaker 00: They have applied for FERC to transfer and surrender. [00:13:41] Speaker 00: And FERC is going to be the one that oversees it. [00:13:43] Speaker 00: And that's consistent with the federal licensing process. [00:13:45] Speaker 00: Now, whether that works or not, we're not sure whether FERC will ultimately approve the transfer and surrender applications. [00:13:52] Speaker 00: But they are now, the way the process is working now, is they are back where they should be as the federal licensing agency overseeing and making decisions as to whether transfer and surrender will occur if they ultimately decide. [00:14:08] Speaker 05: Wouldn't the relief you're seeking kick a hole in that process? [00:14:12] Speaker 00: Absolutely not. [00:14:12] Speaker 05: Because there's a pending [00:14:14] Speaker 05: application for relicensing of the whole project that's been put in abeyance and there's pending application to have the license for half the project transferred over to the renewal corporation and if on the first FERC were to say the thing that's in abeyance which is relicensing FERC were to say [00:14:36] Speaker 05: states are out of the picture, they waved, let's go full speed ahead with relicensing, then wouldn't that throw up the game board on the other strategy that the parties have been pursuing, which is a division of the license into two and an effort to transfer the decommissioning project to the renewal corporation. [00:14:59] Speaker 00: If this court were to vacate FERC's orders and send it back with a finding that FERC has authority to fine waiver within one year and perhaps the record clearly shows that waiver did occur in this case and the states are out of the picture, FERC would have authority to issue a new license for the project but no obligation to do so. [00:15:19] Speaker 00: FERC could still proceed ahead on its transfer and surrender process as it is now, which Petitioner actually is in support of. [00:15:26] Speaker 00: But that's a controversial process. [00:15:29] Speaker 00: And it's a unique process that hasn't occurred before. [00:15:32] Speaker 00: There's no guarantee that FERC will approve that. [00:15:34] Speaker 00: The benefit of having the states waive their certification authority is that if FERC ultimately decides that it cannot approve the transfer and surrender in the future, [00:15:44] Speaker 00: Then at that time, if the states have waived, FERC can then proceed in the public interest to relicense the project without having to go back to the states and potentially be subject to the same arrangement that they've been subject to for the past 10 years where the proceeding drags on because of this withdrawal and resubmit process. [00:16:01] Speaker 00: So that's one of the primary reasons why this case is still very relevant and would not interfere with the ongoing transfer and surrender proceedings. [00:16:07] Speaker 05: On the legal question of how to read the Section 401 waiver circumstance, we're told that a majority of pending relicensings take much longer than a year. [00:16:27] Speaker 05: Is there authority for a state to apply to FERC for longer? [00:16:32] Speaker 05: If it needs, if we were to say this withdrawn, resubmit, ruse, it's just contrary to the statute. [00:16:40] Speaker 05: Is the whole process going to grind to a halt? [00:16:42] Speaker 05: I mean, I realize that may be Congress's problem, not ours. [00:16:44] Speaker 05: But I'm just trying to understand the practicalities. [00:16:47] Speaker 00: It absolutely won't grind to a halt. [00:16:48] Speaker 00: And the FERC process is set up to accommodate just that. [00:16:52] Speaker 00: Under now the integrated licensing process at FERC, which is the default licensing process, studies on water quality and other issues begin years in advance of even a license application being submitted. [00:17:04] Speaker 00: In this case, water quality studies began six years [00:17:08] Speaker 00: before the first certification application was even submitted to the states. [00:17:13] Speaker 00: So one, there's a built-in process way in advance of the one-year certification proceeding that allows for substantial work to be done. [00:17:23] Speaker 00: Second of all, if there is an actual need for more time, there is a process, and it's a process that was actually implemented under the amended KHSA. [00:17:32] Speaker 00: Which is that if the licensee in the state truly needs more time to work out either a settlement or to work out issues related to the certification, they can ask FERC to put the relicensing in abeyance. [00:17:45] Speaker 00: And then the whole waiver issue goes away. [00:17:48] Speaker 00: But the benefit of that is that FERC is involved. [00:17:50] Speaker 05: Where is that authority? [00:17:51] Speaker 05: That was one of my questions actually. [00:17:53] Speaker 00: I can't cite you to the regulation, but FERC has authority. [00:17:56] Speaker 00: I can ask them. [00:17:57] Speaker 00: I mean, that's what they did in this case under the amended KHSA. [00:18:01] Speaker 00: Exactly. [00:18:02] Speaker 00: And the benefit of that is that FERC regains its place at the table as the licensing authority. [00:18:07] Speaker 00: They're deciding whether or not to grant an abeyance if it's appropriate. [00:18:11] Speaker 00: And it also creates an effectively an appealable decision that the public can participate in. [00:18:16] Speaker 00: Instead of having it be just solely with this agreement between the state and the licensee that neither FERC nor the public can participate in. [00:18:24] Speaker 05: Although everyone has to participate in the end, as you've said, when that's presented to FERC for final approval, you know, there's been a lot of negotiation and then in order to actually go forward under the settlement, they have to [00:18:37] Speaker 05: FERC has to approve the steps that the settlement contemplates, right? [00:18:41] Speaker 05: A decoupling of the upper part and the lower part of the project, made into two licenses, transfer of the decommissioning to a new entity. [00:18:51] Speaker 05: Those are things that the public has to comment on and FERC has to approve, right? [00:18:55] Speaker 00: Under the current process under the amended KHSA, which FERC has overseen, but the primary, one of the primary problems with the prior process, which we've challenged, [00:19:04] Speaker 00: is that the public was not involved. [00:19:06] Speaker 00: FERC was not involved and the public was not involved. [00:19:08] Speaker 00: The states and the licensee could have continued this process of withdraw and resubmit forever. [00:19:13] Speaker 05: That I understand, but once, let's say instead they had sought abans from FERC and FERC had put it in advance and said, work it out guys, we'll give you a little while. [00:19:22] Speaker 05: And they had worked out the settlement. [00:19:26] Speaker 05: Even under the first settlement, at the end of the day when they were happy with what it was they were planning to go forward with, they would have had to come to FERC to get approval. [00:19:35] Speaker 05: Right? [00:19:36] Speaker 05: At the end of the day. [00:19:37] Speaker 05: And I get it, you're saying that's not good enough because it was all done in dark rooms? [00:19:41] Speaker 00: We're saying more than that. [00:19:42] Speaker 00: We're saying under the arrangement between the states and the licensee in this case, [00:19:47] Speaker 00: FERC and the public could have been cut out of the process forever. [00:19:52] Speaker 00: FERC would have never regained its licensing authority if it interprets the Clean Water Act that it can't do anything. [00:19:57] Speaker 05: They could have done it forever, assuming one step less Machiavellian activity on their part that they actually wanted to do something. [00:20:06] Speaker 05: The citizens of the state are saying you need to move on this and the state is participating in a settlement process that it actually wants to conclude. [00:20:14] Speaker 05: If that settlement process did conclude, they couldn't go out and do the decommissioning and the continued operation without getting FERC's permission, right? [00:20:24] Speaker 00: I believe that scenario is right, but first would have never been able to relicense the project or impose conditions because they would have never had their authority to issue a new license. [00:20:38] Speaker 00: They can't issue a new license until certification is issued or denied, but if you're still in this waiver world where the one year just keeps getting put. [00:20:47] Speaker 05: I'm trying to understand the practicalities of this. [00:20:52] Speaker 05: Why is the state participating in this if they didn't need more time to actually come up with the clean water conditions? [00:21:05] Speaker 05: Why is it in their interest to have this up in the air and have their own people in their own environment subject to 1956 lax environmental conditions for more than a decade? [00:21:19] Speaker 00: I'll give them the benefit of the doubt, and maybe they thought that the settlement agreement would ultimately work, that 10 years of continued operation on the 1956 license was worth decommissioning in 2020. [00:21:36] Speaker 00: I don't know their motives, but I'll be willing to give them the benefit of the doubt on that. [00:21:40] Speaker 00: And I don't think it matters, because the point is they're not. [00:21:42] Speaker 05: Right, I understand that. [00:21:43] Speaker 05: I understand that. [00:21:44] Speaker 05: And isn't a big part of what's going on here a question of who's going to pay? [00:21:49] Speaker 05: I mean, isn't that a subtext of everything? [00:21:52] Speaker 00: Yes. [00:21:53] Speaker 00: It's one of the subtexts. [00:21:56] Speaker 00: Yeah. [00:21:56] Speaker 00: I'm well in excess of my time, Your Honors, if there's no further questions. [00:22:01] Speaker 00: OK. [00:22:01] Speaker 02: We'll give you some time back on our vinyl. [00:22:03] Speaker 02: We'll hear from the government now. [00:22:08] Speaker 02: Good morning. [00:22:09] Speaker 01: Good morning. [00:22:15] Speaker 01: I'm Carol Banta for the commission. [00:22:19] Speaker 01: I want to begin with why the commission interprets the act at the maximum one year. [00:22:26] Speaker 01: To be clear, and we do have a regulation, but the explanation is in the rule makings behind that regulation. [00:22:35] Speaker 01: There was a rule making in 1987. [00:22:38] Speaker 01: I don't know if we referenced it in this case, but it is referenced in, I believe, Central Vermont, or no, Constitution Pipeline, which we mentioned in our supplemental brief. [00:22:49] Speaker 01: And it's also cited in the Ninth Circuit case in 1992 in the State of California, XRL, California Water Resources Control Board. [00:23:01] Speaker 01: It was called Order 464, and the commission said, we interpret this [00:23:05] Speaker 01: the Clean Water Act at the maximum one year and not shorter because we want to provide early certainty that everyone knows that it's a year. [00:23:13] Speaker 01: And the Commission has later expounded on that in another rulemaking in 1992, which I think... What about 10 years, 12 years? [00:23:22] Speaker 01: Well, and that's where we'll get to the interpretation of the Clean Water Act because the Commission is in accordance with the [00:23:30] Speaker 01: the letter of the law, these are less than one year periods. [00:23:36] Speaker 03: But the commission itself has recognized the tension here. [00:23:39] Speaker 01: Oh yeah, the commission has said, we're not happy about this. [00:23:41] Speaker 01: The commission has numerous times said, we disfavor the withdrawal and refile. [00:23:45] Speaker 01: Now the Second Circuit has actually said that that's fine. [00:23:48] Speaker 01: And this court saw it. [00:23:49] Speaker 05: Well, in dictum, in a case in which it wasn't really squarely an issue. [00:23:53] Speaker 01: I think it said it was dictum in one case and then it cited it more in another case that said you could actually do this. [00:24:01] Speaker 01: Regardless, the commission has never encouraged or endorsed it. [00:24:06] Speaker 04: Does not the statutory language of the reasonable period which shall not exceed one year imply the authority on part of the agency to deem something unreasonable or find as a fact that a time period is unreasonable, which is less than one year? [00:24:23] Speaker 01: Yes, but the commission has said in its rulemakings and it has I know that the rulemaking this is not a Chevron cases. [00:24:31] Speaker 04: Well, but it will make the rulemaking don't get there. [00:24:34] Speaker 01: No, but in interpreting how it's going to interpret the year, my understanding is interpreting the statute. [00:24:38] Speaker 04: We have to reinterpret it for ourselves and if we think that FERC is wrong, [00:24:42] Speaker 04: In saying that the one year is determinative as opposed to being simply a limitation, then shouldn't we send it back for FERC to reconsider under the proper interpretation of that law? [00:24:54] Speaker 01: I don't think so. [00:24:55] Speaker 04: My understanding is that the EPA has said... Well, you may not think so, but could you tell me why you don't think so? [00:24:59] Speaker 01: My understanding is that we didn't cite it, one of the other parties did, that the EPA has a regulation that says the certifying agency gets to decide what the reasonable period is. [00:25:08] Speaker 01: Now, the commission has said, we don't want to go with anything less than a year because we don't want to create uncertainty. [00:25:15] Speaker 01: And in the constitution order from 2018 that we cited in our supplemental brief, [00:25:20] Speaker 01: The commission said, if we start going case by case to say, well, in this case, something less than a year is reasonable, we create the exact kind of uncertainty that we're trying to prevent. [00:25:31] Speaker 04: Well, the law is all about, in all kinds of different areas of the law, the term reasonable being a case by case term. [00:25:39] Speaker 04: We adjudicate in the courts and in administrative agencies all the time. [00:25:44] Speaker 04: the word reasonable as applied to the facts of the case. [00:25:47] Speaker 04: Now does it not appear that from the language of the statute that Congress contemplated that kind of adjudication when they put a limit on the end but not a limit on the beginning and left it open to the term reasonable that agencies would do precisely that, adjudicate the meaning of reasonable with respect to the facts before them. [00:26:05] Speaker 01: I will say, now the commission said in its order, we, although we do think this is against the spirit of the law and the congressional intent, we do think we're complying with the letter of the law which [00:26:17] Speaker 01: the court in cases like Alcoa and North Carolina has held us to. [00:26:22] Speaker 01: But the commission said in its rehearing order, if the court wants to tell us we're wrong, I mean if the court wants to give FERC more authority, we generally don't say no to that. [00:26:31] Speaker 01: Although I would imagine that defining what is reasonable case by case would create exactly the kind of uncertainty and litigation that the commission was trying to prevent. [00:26:41] Speaker 05: Ms. [00:26:41] Speaker 05: Banta, if we were to accept your view about the importance of working in the one-year unit for purposes of just clarity and notice and expectation, that doesn't really answer why FERC would take the position that the withdraw and resubmit is required by the statute. [00:26:58] Speaker 05: I mean, as I read it, a state is deemed to waive its 401 certification authority if it fails or refuses to act on eight requests for certification [00:27:08] Speaker 05: within a reasonable period of time, which shall not exceed one year after receipt of such request. [00:27:13] Speaker 05: Such request has not changed. [00:27:16] Speaker 05: Has it? [00:27:16] Speaker 05: Well, we don't know that. [00:27:17] Speaker 05: The request has been, hey, keep thinking about that request. [00:27:21] Speaker 05: We sent you two years ago, three years ago, four years ago, five years ago. [00:27:26] Speaker 05: They have not acted within a year of receipt of that request. [00:27:30] Speaker 05: And I understand there's a formality of walking out the door and walking back in. [00:27:35] Speaker 05: I'm just a little confused why everyone thinks that that language so clearly allows that. [00:27:42] Speaker 05: It really doesn't seem that clear. [00:27:44] Speaker 05: At least as a lawyer I could argue to the contrary and you have not. [00:27:51] Speaker 01: And in the past, for instance, in the central Vermont case, parties were arguing to the commission that requiring you to actually take the, because there they had an agreement to withdraw and resubmit and they missed one. [00:28:05] Speaker 01: And when they missed one and went over the year, the commission said, aha, now you've waived. [00:28:10] Speaker 01: And the state there said, well, this is overly formalistic and ministerial. [00:28:15] Speaker 01: And the commission said, that's what the statute says. [00:28:17] Speaker 01: This really is a case where we see a request and such request. [00:28:22] Speaker 01: And if a request is withdrawn before the one year passes, then such request is no longer pending, and there's nothing to be acted on or not. [00:28:31] Speaker 01: But when a layperson reads this or a lawyer, [00:28:34] Speaker 05: the overarching impression you get is that the states are in the driver's seat, they get a year to act, and if they don't act, things move on. [00:28:44] Speaker 05: And that's the basic purpose. [00:28:48] Speaker 05: And then you read this language about a request, is it the same request, is it a different request. [00:28:53] Speaker 05: I mean, help me out here, because I seem to be taking the [00:28:59] Speaker 05: a view that you're not, and I'm trying to understand why. [00:29:03] Speaker 01: And I understand your view, and it really is the agency trying not to be told by a court that a request and such request have meaning. [00:29:14] Speaker 01: But I would say the [00:29:19] Speaker 01: Certainly, if an applicant makes a request and the state doesn't act on it. [00:29:24] Speaker 01: I mean, it does require both of them. [00:29:26] Speaker 01: And in many cases, they aren't both going to have sometimes the state. [00:29:30] Speaker 04: Fails or refuses to act is the language, isn't it, in the statute? [00:29:33] Speaker 01: I'm sorry, what? [00:29:34] Speaker 04: Fails or refuses to act. [00:29:35] Speaker 04: Is that language not in the statute? [00:29:37] Speaker 04: I don't have it in front of me. [00:29:38] Speaker 01: Well, refusing to act on a request that remains pending. [00:29:41] Speaker 04: When they have contracted not to act, isn't that a refusal to act? [00:29:48] Speaker 01: The commission, looking at the statute, as long as there was not a request pending for a full year, the commission found that met. [00:29:56] Speaker 04: The second one gets there on the 365th or sixth day, gets there, and they've already contracted not to do anything about it. [00:30:04] Speaker 04: Isn't that a refusal to act? [00:30:07] Speaker 04: I'm sorry, what? [00:30:07] Speaker 04: They've already entered that agreement not to act. [00:30:11] Speaker 04: Isn't that a refusal to act? [00:30:14] Speaker 04: Am I wrong that there was an agreement here where the state says we're not going to? [00:30:20] Speaker 01: I think they did have an agreement between them not involving FERC to keep the clock ticking, but it did require both. [00:30:29] Speaker 01: I mean, it required both the applicant and the state to do that. [00:30:34] Speaker 03: When did that happen? [00:30:36] Speaker 03: When did the state refuse to act? [00:30:39] Speaker 01: We know what it was. [00:30:42] Speaker 03: It was when the agreement was signed. [00:30:44] Speaker 03: In that agreement, they said, we refuse to act. [00:30:48] Speaker 03: And everything after that was just sort of formality. [00:30:52] Speaker 01: Well, they also agreed to keep what [00:30:55] Speaker 01: what some people have called the formalistic and ministerial act of restarting the period. [00:31:01] Speaker 01: They did agree to do that. [00:31:03] Speaker 05: Let me ask you, if one were to read the statute as giving the states only the year and to disallow the withdrawal and resubmit of the exact same [00:31:14] Speaker 05: application, what would happen to the state's water quality? [00:31:20] Speaker 05: Could they still issue recommended water quality certifications? [00:31:24] Speaker 05: Would they be taken into account in the way that downstream state's information is taken into account? [00:31:29] Speaker 05: Or would they just be? [00:31:31] Speaker 01: I believe so. [00:31:32] Speaker 01: I believe it would be like the, I think it was the airport communities coalition case where, if I'm remembering the right one, where a state had [00:31:40] Speaker 01: But then they tried to add conditions after the fact, and the Army Corps of Engineers took them on a discretionary basis rather than mandatory. [00:31:51] Speaker 01: But again, I find myself in the position of somehow defending something the commission has said we don't like. [00:31:58] Speaker 01: We just think it is under the letter of the law. [00:32:03] Speaker 01: But a state can block a licensing entirely by denying it. [00:32:06] Speaker 01: And what the commission has said, and I think maybe the commission would prefer over this withdrawing and refiling, if you're not done within the year, you deny without prejudice. [00:32:15] Speaker 01: Because then the licensing doesn't move forward until the state [00:32:18] Speaker 01: either waives or grants. [00:32:23] Speaker 01: A denial without prejudice is subject to appeal in state court. [00:32:28] Speaker 01: I don't know for sure. [00:32:29] Speaker 01: I assume. [00:32:30] Speaker 01: I don't know if the without prejudice versus with prejudice makes any difference in that. [00:32:34] Speaker 01: I don't know that. [00:32:34] Speaker 05: In terms of appeal ability or not? [00:32:36] Speaker 01: Yeah, I don't know that. [00:32:37] Speaker 01: Because the appeal would be as to the state. [00:32:38] Speaker 01: It would not be FERCs. [00:32:39] Speaker 05: Where is the, does FERC have authority to put a case in abeyance to, for example, permit a settlement to go forward? [00:32:50] Speaker 01: That's exactly what it did in June. [00:32:52] Speaker 01: I think when we filed the supplemental briefs, the motion was pending maybe, but it was- And the authority to do that is where? [00:32:58] Speaker 01: Oh, I don't know for sure, but I do have the order in which we did it. [00:33:03] Speaker 01: OK, so it'll just be cited in there. [00:33:05] Speaker 05: So theoretically, it sounds like, given the bulk of cases that have been pending from where certifications are being awaited for more than one year, 401 certifications, many, many, many cases, the states take more than a year. [00:33:19] Speaker 01: Can I interject a factual note on that? [00:33:21] Speaker 01: Yes. [00:33:22] Speaker 01: I'd like to update because the briefs are three years old. [00:33:27] Speaker 01: Because the commission actually maintains a list on its website. [00:33:29] Speaker 01: I'd be happy to give you the information or submit it in a letter if you want. [00:33:33] Speaker 01: The commission actually keeps a list open to the public on its website of the current certifications, hydro certifications that are awaiting either Clean Water Act or Endangered Species Act. [00:33:44] Speaker 01: In many cases, it's both. [00:33:46] Speaker 01: On the current list, the ones that are either Clean Water Act alone or both, there are 17. [00:33:51] Speaker 01: I think that's down from the 29 that was in the briefs three years ago, or in the orders four years ago. [00:33:57] Speaker 01: And of the top four that were mentioned in a footnote, I think it's footnote 15 in the rehearing order, two of those are no longer on the list. [00:34:05] Speaker 01: One has been relicensed, and one is moving forward. [00:34:08] Speaker 01: I think it either got or waived. [00:34:10] Speaker 01: The state certification is moving forward. [00:34:13] Speaker 01: So it's not the same ones. [00:34:14] Speaker 01: I just wanted to bring that update. [00:34:15] Speaker 01: So yes, the commission is concerned that there's a lot of delay, and it keeps track of this list of the projects and the states and the federal resource services that are holding things up. [00:34:26] Speaker 01: But I did want to give that update. [00:34:28] Speaker 01: So it keeps track, but under FERC's legal view, it has no power to push them along. [00:34:35] Speaker 01: as long as they keep initiating a new request before that year runs. [00:34:41] Speaker 01: But if you look at central Vermont, I think it was five days after the year and the commission said that's waiver. [00:34:48] Speaker 01: But yeah, the commission does think that the letter of the law ties its hands on that. [00:34:57] Speaker 01: Again, given the state's power to block licensing entirely under the Clean Water Act, it does give states a great deal of power. [00:35:02] Speaker 05: And what's the situation with the upper part of this project? [00:35:05] Speaker 05: I understand that the relicensing for the whole project is in abeyance and that there is pending a question of whether the decommissioning can be transferred for the lower part. [00:35:17] Speaker 05: Is there any license pending for the second half of the original project that is broken in half? [00:35:24] Speaker 01: I believe that would remain under the original license, the one that the commission granted. [00:35:30] Speaker 01: I don't know if we want to call it severing or whatever. [00:35:32] Speaker 05: So it would just be the terms that relate to it. [00:35:35] Speaker 01: I believe it would be subject to relicensing. [00:35:38] Speaker 01: I do want to add another thing that happened that I think is referenced in the supplemental briefs but may have happened shortly after. [00:35:43] Speaker 01: The commission granted a motion to stay the effect of that March 2018 order so that Pacific Corp can keep operating the one license [00:35:53] Speaker 01: And in other words, the split is stayed unless and until there's a transfer to the renewal corps. [00:36:01] Speaker 01: So right now, it continues to be one license. [00:36:04] Speaker 01: But my understanding, I think, is that Pacific Corp would continue to have a license as to, it would be called the Klamath Project as opposed to the new lower Klamath Project. [00:36:14] Speaker 01: That's my understanding. [00:36:15] Speaker 05: And just again, to understand practically what is going on on the ground, [00:36:20] Speaker 05: Is this all about who pays and how do we even begin to understand the implications? [00:36:28] Speaker 01: I don't know if the commission is in a position to know that. [00:36:31] Speaker 01: I do know that the reason the commission didn't grant the transfer right away and is collecting more information is because the commission has to be comfortable that the renewal corporation [00:36:40] Speaker 01: is financially and technically, et cetera, capable of taking the transferred license. [00:36:46] Speaker 01: So the commission takes that responsibility very seriously. [00:36:48] Speaker 01: So as far as who pays in that regard, anything else about the states? [00:36:53] Speaker 01: I mean, there are things in the record about bond approvals, but none of that really involved FERC. [00:36:59] Speaker 01: So I don't know that I can speak to it. [00:37:07] Speaker 05: Apart from putting a whole case in abeyance, is there a process for a state to request from FERC more time to process a 401 certification? [00:37:16] Speaker 01: No, I don't think so. [00:37:22] Speaker 01: Thank you. [00:37:32] Speaker 00: Thank you for the additional time on rebuttal. [00:37:35] Speaker 00: I'll be brief. [00:37:37] Speaker 00: As I've said, I don't believe that the FERC regulations directly address our legal arguments. [00:37:44] Speaker 00: The FERC policy that was referenced by council related to when the one-year clock would commence as opposed to when it would end. [00:37:52] Speaker 00: They were dealing with when they would deem an application submitted. [00:37:56] Speaker 00: So that was what they were talking about with the reliable so everyone would know when the one-year clock started. [00:38:01] Speaker 00: I don't think it addressed the question that we're dealing with is, does FERC have authority to say when it ends, if it's less than one year? [00:38:10] Speaker 00: Also, there's not been a case out there that's addressed this specific question. [00:38:14] Speaker 00: There's no specific circuit court authority on the arguments that we're presenting today, really one way or the other. [00:38:21] Speaker 00: There's been references to withdraw and submit in dicta. [00:38:24] Speaker 00: But there's been no approval one way or the other, or disapproval in a circuit court. [00:38:30] Speaker 00: And I would like to comment on why these relicensing, these hydroelectric relicensing often take so long. [00:38:40] Speaker 00: I mean, there's a significant financial incentive for the licensees if these certification proceedings and the relicensing drag on. [00:38:49] Speaker 00: I mean, the licensee gets to operate on the terms and conditions plus maybe some others that it agrees to for the entire time that the relicensing drags on. [00:38:59] Speaker 00: I think there was evidence cited in the record in this case that that was worth $27 million a year to the licensee in this case. [00:39:05] Speaker 00: So the licensees, while it's the states that have the critical authority, there's a significant push by the licensees to make these proceedings drag out. [00:39:16] Speaker 00: And I think it's important background. [00:39:17] Speaker 05: On the other hand, they have a very mixed interest in the validity or not of withdraw and resubmit because here they [00:39:25] Speaker 05: get automatic licensure under their antique license, which is in their favor. [00:39:33] Speaker 05: But in a case in which they're trying to get a new project licensed to support the withdraw and resubmit notion, if they don't have a license and they want processing to go forward, the states can hold them up indefinitely by the same mechanism. [00:39:48] Speaker 00: That obviously case is not the case we're dealing with here. [00:39:52] Speaker 00: And those issues do not come up as frequently. [00:39:56] Speaker 00: I think if you'll look at the number of cases where there's been this extended time period, I would submit the vast majority of them, if not all, are in cases involving relicensing, where there's existing projects in the ground, not in cases where there's a new application for a project where the dynamics, as you mentioned, are entirely different. [00:40:14] Speaker 00: I'm over my time again. [00:40:15] Speaker 00: Unless there's another question. [00:40:18] Speaker 00: Thank you. [00:40:18] Speaker 03: The case is submitted. [00:40:20] Speaker ?: Thank you. [00:40:20] Speaker 01: Stand please. [00:40:22] Speaker 01: This honorable court now stands adjourned until Wednesday morning at 9 30 a.m.