Please join us for Law Seminar International's Columbia River Treaty Conference, which will be held here in Seattle on September 22 & 23, 2014. The conference is particularly timely because, as we've discussed at length here, September marks a critical turning point for the Treaty, which is one of the cornerstones of our regional economy, and a major factor in issues ranging from salmon restoration to water quality and flood control. We're pleased to announce that GTH partner Jim Waldo will co-chair the conference and GTH partner Eric Christensen will be speaking. We hope to see you there!
Recently in Clean Water Act Category
Recent legal developments in climate litigation and regulation suggest that the legal landscape related to climate change is continuing to evolve, with adaptation to climate change and ocean acidification recently taking center stage. Adaptation is the idea that cities, utilities, and the builders and owners of other critical infrastructure should take steps to protect the public from rising sea levels, increasingly intense storms, and other impacts predicted by climate science. Ocean acidification is, in addition to climate disruption, a side-effect of increasing atmospheric carbon concentrations. As carbon from the atmosphere is absorbed into ocean water, the acidity of the ocean rises, with potentially serious consequences for ocean food chains and fisheries. As reported in a lengthy series published by the Seattle Times, the effects of increased ocean acidity are already beginning to appear along Washington's coast.
Climate adaption has come to the fore recently in two high-profile matters. First, the New York Public Service Commission ("NYPSC") recently approved a rate case settlement involving Consolidated Edison that will require Con Ed to undertake state-of-the-art planning and hardening of its assets to protect them from the increasingly severe weather events predicted to result from a changing climate. The hardening measures are predicted to cost approximately $1 billion. Because of its highly-criticized response to Hurricane Sandy, Con Ed may be have been an easy target, but it is likely that the NYPSC's action will serve as a model for other utility commissions concerned about utlity storm response and the resiliency of the electric system in the face of increasingly severe weather events. The NYPSC matter is nicely summarized here by Columbia Law School's Center for Climate Change Law.
EPA Issues Final Rule on Cooling Water Intake, Significantly Affecting Electric Power Generation and Water-Intensive Manfacturing
Yesterday, the U.S. Environmental Protection Agency ("EPA") issued a Final Rule under Section 316(b) of the Clean Water Act ("CWA") designed to reduce damage to aquatic organisms from entrainment or impingement in large cooling water intake structures. The rule covers facilities that are designed to withdraw more than two million gallons per day ("mgd") from "waters of the United States" and that withdraw at least 25% of their cooling water from those waters. EPA estimates the rule will cover more than 1,000 major facilities, about half of which are power plants and the other half manufacturing plants. Smaller facilities that do not meet the 2 mgd threshhold but are otherwise subject to the CWA will remain subject to Section 316(b), with specific requirements to be developed in a case-by-case basis.
In contrast to most other provisions of the CWA, which regulate discharges of pollutants, Section 316(b) regulates the intake of water. Section 316(b) requires that "the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact." To carry out this statutory mandate, the Final Rule has three major features. First, facilities meeting the 2 mgd threshold are required to select one of seven design options for the cooling water intake structures in order to meet Section 316(b)'s "best technology available" requirement for minimizing damage to aquatic ecosystems. Second, facilities withdrawing very large quantities of water -- 125 mgd or more -- must conduct studies to help permitting authorities identify site-specific measures that meet Section 316(b)'s requirements.
We're pleased to announce that Eric Christensen will be speaking at Law Seminars International's 14th Annual Comprehensive Conference on Clean Water and Stormwater. Eric will be participating in a panel discussing renewal of the Columbia River Treaty and how this may affect water flows and water quality in the Columbia. We hope to see you there!
In its latest effort to put to rest the years-long controversy that has swirled around its efforts to address excessive electricity production during periods when high winds coincide with high water in the Columbia River system, the Bonneville Power Administration ("BPA") recently issued a draft Record of Decision ("ROD") allocating the costs of such events. While wind generators argued for allocating all such costs to BPA's power customers and BPA's power customers urged BPA to assign all such costs to its transmission customers, BPA chose a third path. In the recent draft ROD, issued by newly-minted BPA Administrator Elliot Mainzer, BPA concluded that it should allocate oversupply costs to those generators operating within its balancing authority area that have scheduled power during an oversupply event. BPA's chosen alternative was supported by only one out-of-region entity, so it is unlikely to end either the controversy or the protracted litigation that has resulted.
As we have previously reported, the oversupply problem is an unintended consequence of the rapid expansion of wind generation in the Pacific Northwest. The wind fleet's capacity in the region now exceeds 7,000 MW, with 4,500 operating in BPA's balancing authority area. The oversupply problem arises when strong spring winds coincide with high spring runoff in the Columbia River Basin. In this situation, the combined electric power produced by federal dams on the Columbia River and wind generators in the region can exceed electrical loads. Further, the obligation to maintain dissolved gases within limits set by environmental authorities in order to avoided gas bubble trauma in fish (especially endangered salmon and steelhead runs), limits the amount of water dam operators can release over spillways, which adds to dissolved gas loads, requiring them instead to run the water through generators.
Fish Hatcheries, the Federal Reclamation Act, and State Water Law: Ninth Circuit Rejects Lawsuit, Reaffirming Primacy of State Water Law
The U.S. Court of Appeals for the Ninth Circuit today rejected a claim brought by environmental advocates who asserted that the Leavenworth National Fish Hatchery has been operating illegally because it has not obtained permits to divert water as required under Washington law. While the decision leaves the door ajar for the environmental advocates to pursue their claims in state forums, the decision strongly reinforces the long-held principle that federal reclamation facilities must abide by state law governing water rights. Wild Fish Conservancy v. Jewell, No. 10-3503 (issued Sept. 11, 2003).
The central question raised by the environmental plaintiffs is weather the Leavenworth hatchery, which was constructed to mitigate for damage to fisheries caused by construction of the Grand Coulee Dam, is required by Section 8 of the Reclamation Act of 1902 to obtain water rights under Washington law before it can divert water from Icicle Creek. Icicle Creek is a major tributary of the Wenatchee River, which, in turn, is a major tributary of the Columbia River. Reflecting a long-held tenet of federal policy that federal projects should generally comply with state water law, Section 8 requires the federal government to "proceed in conformity" with state water law and also includes strong language protecting the water rights of landowners, appropriators, government entities, and others established under state law. The court rejected the environmental plaintiffs' claim, concluding that the plaintiffs lacked standing. While standing decisions often leave the substantive question unaddressed, the court's reasoning in today's case reinforces the primacy of state law under Section 8. The decision therefore is likely to prove significant for federal facilities constructed under the Reclamation Act, as well as for facilities subject to other federal statutes containing language similar to Section 8. These include, among many others, Section 27 of Federal Power Act (16 U.S.C. Sec. 812) and Section 10(h) of the Northwest Power Act (16 U.S.C. Sec. 839g(h).
Washington Supreme Court: Water Pollution Control Act Covers Non-Point Pollution, Takings Claim Rejected
The Washington Supreme Court today issued an opinion reading the state's Water Pollution Control Act ("WPCA") broadly to cover non-point sources and concluding that the Washington Department of Ecology ("Ecology") is authorized to issue orders to control non-point sources even without definitive proof that the non-point source is a direct cause of water pollution. The Court also rejected a claim of an unconstitutional "taking" for lack of a sufficient evidence. The opinion substantially strengthens Ecology's hand in dealing with non-point sources, and may result in stronger enforcement action aimed at, for example, requiring landowners to implement "Best Management Practices" to help control non-point pollution. (Lemire v. State of Washington, Dept. of Ecology, No. 87703-3 (issued Aug. 15 2013)).
The case arises from a lengthy dispute between Ecology and Columbia County rancher Joseph Lemire concerning pollution in Pataha Creek, which runs through Lemire's property. Ecology identified Pataha Creek as polluted under the state's water quality assessment, which is required under the federal Clean Water Act. In a 2003 evaluation of Columbia County's watersheds, Ecology and the Columbia Conservation District identified conditions on Lemire's ranch that were detrimental to water quality. These included, for example, overgrazing, damage to riparian vegetation, and excrement in the riparian zone, which Ecology believes likely contributed to high water temperatures, reduced dissolved oxygen, damage to aquatic life, and the presence of pathogens in the water. To remedy these problems, Ecology recommended measures such as construction of fences to exclude cattle from the riparian zone and off-stream watering troughs. Eventually, after unsuccessfully negotiations with Lemire, Ecology ordered him to implement these measures, relying on the WPCA to justify its action.
As Decision Day for the Columbia River Treaty Looms, BPA and Corps Seek Comments On Draft Recommendations
As previously discussed here, the impending decision about whether to seek termination or renegotiation of the Columbia River Treaty next year carries with it enormous long-term implications for the Pacific Northwest and the region's power industry. In preparation for this decision, the "U.S. Entity" -- Treaty-speak for the Bonneville Power Administration and the U.S. Army Corps of Engineers, which jointly administer the Treaty on behalf of the U.S. -- is seeking comments by August 16 on the its "Working Draft of a Regional Recommendation: Improving the Columbia River Treaty Post-2024", which was released late last month.
The Working Draft Recommendation is primarily the product of input from the "Sovereign Review Team," composed of representatives from the four Columbia Basin states, eleven federal agencies, and fifteen Native American tribes. Those entities have not yet reached full agreement, so the Draft remains a work in progress. The comments the U.S. Entity solicited will be part of an ongoing process of refining the recommendations that will be made by the U.S. Entity to the Department of State in December 2013. Ultimately, the Department of State will be responsible for terminating or renegotiating the Treaty.
Poles Left Standing: Ninth Circuit Rejects Claim That Utility Poles Must Be Regulated Under the Clean Water Act and the Resource Conservation and Recovery Act
In an important victory for users of treated wooden poles, the U.S. Court of Appeals for the Ninth Circuit last week concluded that wooden utility poles are neither a "point source" subject to regulation under the Clean Water Act ("CWA") nor a "solid waste" subject to regulation under the Resource Conservation and Recovery Act ("RCRA"). The decision is an important landmark for electric utilities, telecommunications carriers, and other companies using treated wooden poles. If the court had reached the opposite result, these industries could have been subject to burdensome new regulation under both the CWA and RCRA.
The Ninth Circuit's decision, Ecological Rights Foundation v. Pacific Gas & Electric Co., rejects a lawsuit brought under the citizen suit provisions of the CWA and RCRA by a California environmental organization. The environmental plaintiff claimed that PCP and other wood treating chemicals are washed into the environment by rainwater, resulting in a "discharge" of a pollutant requiring the owner of wood poles to obtain a NPDES permit under the CWA. Relying on the U.S. Supreme Court's recent decision rejecting a similar claim with respect to logging roads, the Ninth Circuit rejected this claim, as well. The court found that wooden poles are not a "point source" subject to CWA regulation. In particular, under EPA's approach to regulation of stormwater discharges, governed by 1987 amendments to the CWA, no NPDES permit is required because wood poles are not "associated with industrial activity," as would be the case at an industrial plant or storage area where rainwater is captured and channeled.
U.S. Supreme Court Rules That Logging Roads Do Not Require NPDES Permits; Scalia Dissent Suggests Major Change Afoot in Administrative Law
On March 20, the U.S. Supreme Court ruled that the discharge of channeled stormwater runoff from logging roads is not a "point source," and logging operators therefore are not required to obtain a permit from the Environmental Protection Agency ("EPA") under the Clean Water Act ("CWA"). Although important to a key Northwest industry, the decision is not unexpected. Under its "Silviculture Rule" (40 C.F.R. Sec. 122.27(b)(1)), an administrative interpretation of the "point source" requirement, EPA has long held that stormwater runoff from logging roads is not a point source, and timber harvesters are therefore not required to obtain an NPDES permit before constructing roads. The decision, Decker v. Northwest Environmental Defense Center, also follows a pattern that has become almost routine in recent years -- the Supreme Court reversing the Ninth Circuit in an environmental case where the Ninth Circuit embraces a novel reading of the relevant statute. In fact, as previously noted here, the Supreme Court this term has already reversed a Ninth Circuit decision on the "point source" question in a case with strong implications for operators of dams, flood control facilities, canals, and other kinds of water works.
More surprising are strong suggestions in the concurring and dissenting opinions that the Court's conservative wing may be ready to re-examine one of the foundational principle of administrative law -- that an agency's interpretation of its own regulation is entitled to deference from the courts. Justice Scalia's dissent in Decker attacks this rule as an affront to "a fundamental principle of separation of powers -- that the power to write a law and the power to interpret it cannot rest in the same hands." Stepping past the EPA's interpretation, Justice Scalia sides with the environmental plaintiffs (and the Ninth Circuit), concluding that runoff from logging roads that is channeled into ditches and culverts is a "point source" under the statutory definition, which includes any "pipe, ditch, channel, tunnel, [and] conduit."
U.S. Supreme Court Rejects Ninth Circuit Determination That Moving Water Through A Conduit Is a "Discharge": Dam Operators Remain Safe From Clean Water Act Liability
In a short and unanimous ruling issued yesterday, the U.S. Supreme Court in Los Angeles County Flood Control District v. Natural Resources Defense Council (No. 11-460) rejected the Ninth Circuit's holding that a "discharge" of pollutants occurs when water is moved through a concrete flood control channel into a navigable river. As noted in our November 2 post, this is one of two cases of particular concern to dam operators on the Supreme Court's current docket. The Supreme Court's opinion reaffirms the long-standing doctrine that dams and other water control structures do not "discharge" pollution, the primary test of liability under the Clean Water Act ("CWA"), where those structures merely pass polluted water through the dam works without adding new pollutants. Operators of such facilities can now breath a sigh of relief because the Ninth Circuit's inroad into this doctrine has been eliminated.
The case arises from a citizen suit filed by environmental groups claiming that the L.A. County Flood Control District violated its Clean Water Act ("CWA") permit by allowing excessive levels of pollution in its municipal storm water control system. The District Court rejected the suit, concluding that the Flood Control District had not "discharged" a "pollutant" into the water so as to violate the CWA, but had only transported already-polluted water in the flood control channels, relying on the Supreme Court's holding in South Florida Water Management District v. Miccosukee Tribe. In that case, the Supreme Court held unanimously that no addition of a pollutant occurs that could trigger liability under the CWA when a conveyance merely transfers water from one part of a water body to another without adding any pollutants.
A Lump of Coal in Bonneville's Stocking: FERC Rejects BPA's Plans to Address Overgeneration During High-Wind/High-Water Events
As it was wrapping up business for 2012 and heading off for the holidays, the Federal Energy Regulatory Commission ("FERC") left a lump of coal in Bonneville Power Administration's stocking in the form of two orders rejecting Bonneville's efforts to address wind generation curtailments during periods of over-generation. Together, the orders put Bonneville's efforts to address the over-generation problem nearly back to square one.
As we have previously explained in greater detail, the rapid growth of the Pacific Northwest's wind industry in the last decade has, at times, produced too much of a good thing. When high spring-time flows on the Columbia coincide with high winds in the Columbia Gorge, the combined output of the region's wind generation fleet and the hydroelectric dams exceeds regional electric demand. The situation is further complicated because Clean Water Act standards on dissolved gases designed to prevent gas bubble trauma in aquatic species limit the extent to witch Bonneville can spill water, requiring it to run water through hydroelectric turbines instead.
Wind War Subplot: Challenge to Washington Gas Limits Fails, Barrier to Increased Spill Remains in Place
Washington State's Court of Appeals recently upheld the Washington Department of Ecology's decision to retain existing water quality standards limiting dissolved gases at hydroelectric dams. The decision carries significance well beyond the specific dispute resolved by the court because it limits one avenue -- increased spill -- that may have relieved some of the pressure on the Bonneville Power Administration ("BPA") to integrate increasing amounts of variable wind generation into the regional grid. As we have previously reported, BPA's decision to require curtailments of wind generation during high-wind/high-water events has produced contentious litigation, pitting the Northwest's wind generators against BPA and its public power customers. Although it does not directly address the issues involved in that litigation, the Court of Appeals decision nonetheless has significant bearing on the BPA litigation because it means that BPA's non-curtailment options will continue to be limited.
The Court of Appeals case, Northwest Sportfishing Industry Association v. Department of Ecology, arose from a petition filed by a group of fisheries and environmental advocates asking the Department of Ecology to raise its Total Dissolved Gas ("TDG") standards to accommodate greater flows over the dams. TDG standards are aimed at preventing damage to fish and other aquatic species from gas-bubble trauma. Gas-bubble trauma occurs when excessive levels of atmospheric gases in the water column are absorbed by aquatic creatures and then released in their tissues as gas bubbles, much like "the bends" in a human diver. Gas-bubble trauma can cause significant physiological damage or even death, and is therefore of concern for the Columbia Basin's salmon and steelhead runs, including several listed under the Endangered Species Act. The fisheries advocates who filed the petition believe that TDG limits can be raised by the Department of Ecology without threatening significantly greater damage to fisheries from gas-bubble trauma, and that higher TDG limits will accommodate greater spill over the Columbia Basin's dams, leading to an improvement in the survival of salmon smolts migrating downstream.
Greater latitude for spill would also give BPA some additional flexibility to manage springtime conditions, in which high run-off in the river system often coincides with high winds and high power production from the region's wind fleet. In such conditions, BPA has sometimes curtailed production from wind generators because generation during periods of high wind combined with production from federal dams in the region exceeded the demand during that period. An additional margin for spill would allow BPA to spill additional water over the Columbia Basin's dams rather than running it through turbines (which produces significantly lower concentrations of dissolved gas but also power when it is not always needed). Because less power would then be produced by hydroelectric turbines, there would be a greater margin for allowing wind generators to produce without curtailments.
Floodgates Open to Takings Claims? Supreme Court Finds That Even Temporary Flooding From Government-Owned Dams May Constitute a "Taking"
As reported in our posting of November 2, the U.S. Supreme Court this term is considering two cases of particular significance for dam operators. The first, Arkansas Fish & Game Commission v. United States, was decided last week. The court rejected the proposition that no Fifth Amendment taking can occur from temporary flooding caused by a government-owned dam. This result will give little comfort to dam operators since takings claims will now be decided on a fact-intensive balancing test rather than on the basis of a per se rule that takings can arise only from permanent or predictable periodic flooding.
The case arose from seasonal flooding at the Donaldson Black River Wildlife Management Area ("WMA") in northwest Arkansas caused the U.S. Army Corps of Engineers' Clearwater Dam, located 115 miles upstream in Missouri. In the 1990s, the Corps began to deviate from its accepted operating plan for the Clearwater reservoir in order to reduce damage to crops upstream from the dam. Arkansas sued the Corps, asserting that deviations from operating rules increased flooding in the WMA, damaging hardwoods and reducing the value of the habitat in the WMA. The claim succeeded in the lower court, but the U.S. Court of Appeals for the Federal Circuit, in a split en banc decision, reversed, holding that the flooding was only temporary and therefore could not support a takings claim. This holding was primarily based on Supreme Court takings precedents from 1924 and 1917 involving dams.
Two cases of great importance to operators of dams, storm sewers, and other water works will be decided in the U.S. Supreme Court's current term. The first, Arkansas Fish & Game Commission v. United States (No. 11-597), involves a takings claim for flooding caused by a U.S. Army Corps of Engineers ("Corps") dam. The second, Los Angeles County Flood Control District v. Natural Resources Defense Council (No. 11-460), addresses whether a the operator of a municipal storm sewer system violated its permit under the Clean Water Act ("CWA") where its flood control structures channeled an already-polluted river, passing the polluted water through a man-made structure, but without adding new pollution.
In Arkansas Fish & Game, the state successfully asserted a claim that periodic flooding from a Corps dam, which caused significant damage at a wildlife refuge downstream from the dam, constituted a compensable "taking" under the Fifth Amendment of the U.S. Constitution. The property at issue, the Donaldson Black River Wildlife Management Area ("WMA") in northwest Arkansas, contains rare and important bottomland hardwood habitat. It is located approximately 115 miles downstream from the Corps' Clearwater Dam in Missouri, which was constructed in the 1940s as part of efforts to control flooding in the Mississippi Basin. In the 1990s, the Corps began to deviate from its accepted operating plan for the Clearwater reservoir in order to reduce damage to crops upstream from the dam. Arkansas claimed that the deviations from operating rules increased flooding in the WMA, damaging hardwoods and reducing the value of the habitat in the WMA.