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HomeMy WebLinkAboutPyramid Creek Unalaska Intervention Order 1994FEDERAL ENERGY REGULATORY COMMISSION § ROUTING CODE _____ WASHINGTON, D.C. 20426 OFFICIAL BUSINESS PENALTY FOR PRIVATE USE, $300 D EGEIVE|) APR 16 2001 AIDEA/AEA pig9-10 94 FERC{ 61.373 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Curt Hébert, Jr., Chairman; William L. Massey, and Linda Breathitt. City of Unalaska, Alaska Docket No. DI99-10-001 ORDER GRANTING INTERVENTION AND DENYING REHEARING (Issued March 29, 2001) Pending before us are several requests for rehearing of an order, issued on February 8, 2001, finding licensing not required for the City of Unalaska's proposed Pyramid Creek Project. The project is proposed to be located on Pyramid Creek on Unalaska Island, in the Aleutian Archipeligo, Alaska. The parties seeking rehearing urge the Commission to find that the project requires licensing because it will affect anadromous fish, and therefore will affect interstate commerce. For the reasons discussed below, we deny rehearing. BACKGROUND On August 25, 1999, the City of Unalaska (Unalaska) filed a declaration of intention, seeking a Commission determination of whether its proposed Pyramid Creek Project is required to be licensed under the Federal Power Act (FPA). The proposed project would tap into an existing water supply pipeline that conveys water from Icy Lake, a storage reservoir on Icy Creek (a tributary of Pyramid Creek), to Unalaska's municipal water treatment facilities. Some of the water would be diverted from the existing pipeline and used to generate approximately 600 kilowatts of power before being returned to Pyramid Creek by way of the project's tailrace. The Commission staff published notice of the declaration of intention on September 2, 1999. On October 7, 1999, the U.S. Department of Commerce's National Marine Fisheries Service (NMFS) filed comments,! NMFS recommended that the ‘Letter from Jeanne L. Hanson, NMFS, to David P. Boergers, FERC (October 7, 1999). The Alaska Department of Natural Resources filed general comments on the status of Unalaska's water rights, but did not otherwise comment on the declaration of (continued...) Docket No. DI99-10-001 -2- Commission find licensing required based on potential adverse effects to anadromous fishery resources and habitat in Pyramid Creek. NMFS did not file a motion to intervene. On May 23, 2000, the Director wrote to the Alaska Department of Fish and Game (Alaska DFG), requesting additional information about the anadromous fishery resources in Pyramid Creek. By letter dated July 7, 2000, Alaska DFG responded to the request, stating that it had limited information but providing what was available.’ On February 8, 2001, the Director of the Commission's Division of Hydropower Administration and Compliance, Office of Energy Projects (Director), issued an order ruling on the declaration of intention and finding licensing not required. The Director found that the proposed project would not occupy any public lands or reservations of the United States, and would not use surplus water or waterpower from a government dam. The Director found insufficient evidence that Pyramid Creek is navigable at the project site. The Director further found that, because the proposed project would not measurably affect anadromous fish, it would not affect the interests of interstate or foreign commence. Alaska DFG, NMFS, the U.S. Department of the Interior, and Trout Unlimited filed timely requests for rehearing, accompanied by late motions to intervene. The Commission generally disfavors intervention after issuance of a dispositive order. However, because the issues raised concern our jurisdiction, we grant the motions and consider the rehearing requests. DISCUSSION Pursuant to Section 23(b)(1) of the FPA, a non-federal hydroelectric project must be licensed if it: (1) is located on "navigable waters of the United States"; (2) occupies lands or reservations of the United States; (3) uses surplus water or water power from a federal dam; or (4) is located on non-navigable waters which are subject to the authority ‘(...continued) intention. See Letter from Buz Kuby, Alaska DNR, to David P. Boergers, FERC (November 8, 1999). Letter from C. Wayne Dolezal, Alaska DFG, to Fred E. Springer, FERC, dated July 7, 2000 (docketed February 2, 2001). 3See Weber Basin Water Conservancy District, 50 FERC { 61,409 (1990). Docket No. DI99-10-001 35 of Congress under the Commerce Clause, affects the interests of interstate or foreign commerce, and undergoes construction after August 26, 1935.4 On rehearing, Alaska DFG, NMFS, Interior, and Trout Unlimited (collectively, Intervenors) raise essentially the same arguments. They do not take issue with the Director's findings regarding the first three bases for mandatory licensing jurisdiction under Section 23(b)(1). Rather, they contest only the findings concerning the project's effect on interstate and foreign commerce.* A project's effect on anadromous fish can constitute an effect on the interests of interstate or foreign commerce within the meaning of Section 23(b)(1) of the FPA.® However, licensing is required for only those projects that have a "real and substantial” effect on interstate or foreign commerce.” If a project does not itself substantially affect commerce, it may nevertheless require a license if it belongs to a class of projects whose activities collectively affect interstate or foreign commerce. The Director found that, in assessing effects on fish, it is not sufficient to consider whether individual fish may be harmed; instead, the inquiry must focus on whether the fish population as a whole may be adversely affected. The Director found that the *16 U.S.C. § 817(1). The Post-1935 construction requirement stems from the specific language and legislative history of Section 23(b)(1). See Farmington River Power Co. v. Federal Power Commission, 455 F.2d 86 (2d Cir. 1972). 5 5 5 F ‘The project will be constructed after 1935, and its proposed location on a Commerce Clause water is not in dispute. Commerce Clause waters are bodies of water that Congress has jurisdiction to regulate under the Commerce Clause of the Constitution. It is well settled that, for purposes of Section 23(b)(1) of the FPA, Commerce Clause streams include the headwaters and tributaries of navigable waters. See Federal Power Commission v. Union Electric Co., 381 U.S. 90, 97 (1965). Pyramid Creek flows into Captain's Bay, a navigable body of water adjoining the Bering Sea, which is part of the North Pacific Ocean. Department of Commerce v. FERC, 36 F.3d 893, 896 (9th Cir, 1994), on remand, Guy M. Carlson, 71 FERC § 61,322 (1995). "City of Centralia, Wash., v. FERC, 661 F.2d 787, 791 (9th Cir. 1981); Alaska Power Co., 82 FERC { 61,331 (1998). 5See Fairfax County Water Authority, 43 FERC 61,062 at p. 61,166 (1988), and cases there cited; Habersham Mills v. FERC, 976 F.2d 1381, 1384 (11th Cir, 1992). Docket No. DI99-10-001 -4- Alaskan anadromous fishery as a whole is very large, and its health is not in doubt. The Director further found that, although the proposed project might have some effect on the anadromous fish in Pyramid Creek, these fish represent an insignificantly small portion of the entire Alaskan anadromous fishery. The Director concluded that there was insufficient evidence that the project, either alone or as part of a class of small projects, would have a measurable effect on interstate or foreign commerce. On rehearing, Intervenors argue that the proposed project will have a real and substantial effect on anadromous fish if it is not designed, constructed, and operated to avoid adverse effects. They also argue that the project is a member of a class of projects that collectively will have such an effect. As explained below, we find that the project's effect on anadromous fishery resources is too insubstantial to constitute an effect on interstate or foreign commerce that would require the project to be licensed under the FPA. We also find insufficient evidence that the project belongs to a class of small projects that could cumulatively have a real and substantial effect on anadromous fishery resources. fects on Anadi Intervenors argue that the proposed project will substantially affect anadromous fish in Pyramid Creek by reducing instream flows in the bypassed reach. This, they maintain, will in turn affect upstream and downstream fish passage, as well as habitat used for spawning, rearing, and incubation of anadromous fish in Pyramid Creek. They argue that reduced instream flows can also affect water temperature, with potentially negative effects on fish development, migration, and ocean survival. They further maintain that dewatering of late-development stage sac-fry and pre-emergent fry can lead to high mortality. For all of these reasons, Intervenors conclude that the proposed project will have a real and substantial effect on anadromous fish in Pyramid Creek, and that this is sufficient to require licensing under the FPA. NMFS raised these same concerns in its comments on the declaration of intention, and the Director considered them in his decision, acknowledging that the proposed project might have some effect on the anadromous fish in Pyramid Creek. Intervenors nevertheless contend that the Director erred in considering these effects in relation to the Alaskan anadromous fishery as a whole. They maintain that, in the Carlson case, we found that a small project had a substantial effect on anadromous fish by blocking access to spawning habitat above the project's tailrace and reducing instream flows in the Docket No. DI99-10-001 -5- bypassed reach, and that a similar finding is dictated by the facts in this case.” They further maintain that the Director's focus on the health of the Alaskan anadromous fishery as a whole was inappropriate for purposes of assessing mandatory licensing jurisdiction under the FPA." Intervenors are correct that, in Carlson, we found the individual project had a substantial effect on anadromous fish, and therefore on commerce. However, we noted that this finding was not necessary to our conclusion that the project was required to be licensed, because we also found that it belonged to a class of projects whose activities substantially affect commerce. Based on the class of projects analysis used in that case, we have no reason to question the validity of our jurisdictional determination for that project. However, developments subsequent to the Carlson decision suggest a need to reevaluate the way we should consider a project's individual effects for purposes of our mandatory licensing jurisdiction. In New Martinsville, a case decided after our Carlson decision, the court held that the Commission may not require compensatory mitigation for fish mortality attributable to project operation, absent a finding of adverse effects on the fish population as a whole.!! As a result, we believe it is important to distinguish a project's effects on fish from its effects on the health of the fishery. A project could affect some members of an anadromous fish population without affecting the fishery as a whole. Even a substantial effect on an anadromous fishery might not constitute a real and substantial effect on interstate or foreign commerce, depending on the particular facts. For example, effects on an anadromous species having no commercial significance would not constitute an °Guy M. Carlson, note 6, supra, 71 FERC at p. 62,258. 'Intervenors maintain that, just as we would not exempt a small interconnected project from licensing based on its relatively small contribution of energy to the electrical grid as a whole, we should not discount the anadromous fish in Pyramid Creek as an insignificant portion of the Alaskan anadromous fishery. This argument overlooks the fact that the generating activity of a small project that is connected to the interstate electrical grid can affect the operation of the system as a whole, and the class of small interconnected projects collectively can substantially affect the grid. See cases cited in note 8, supra. In this case, there is insufficient evidence that the project itself can substantially affect the fishery, or that there is a class of small Alaskan projects that can collectively have a substantial effect on the fishery. "City of New Martinsville, W. Va., v. FERC, 102 F.3d 567 (D.C. Cir. 1996). Docket No. DI99-10-001 -6- effect on interstate or foreign commerce for purposes of our mandatory licensing jurisdiction.'? __ Thus, in light of the New Martinsville decision, a key aspect of our analysis of a project's effects on anadromous fish, and therefore on commerce, is how to define the "fishery," or the relevant fish population. This can vary, depending on the kind of fish in question, where they are found, and where they are caught commercially. In some cases, for example, a particular river or river basin may be the appropriate focus. However, when fish in the basin contribute to a larger fishery, it may be appropriate to focus on a larger geographic area, and to consider whether any effects in the basin could affect the fishery in that larger geographic area. In this case, the Director used the entire Alaskan anadromous fishery as the basis for evaluating effects on anadromous fish, and therefore on commerce. This approach strikes us as reasonable, and we uphold it. Anadromous fish that spawn and rear in numerous rivers throughout Alaska migrate to the ocean, where they commingle, and are managed and caught as part of a state-wide commercial fishery. Implicit in the Director's analysis is the fact that each particular species of salmon constitutes a separate component of the Alaskan anadromous fishery, and thus can be regarded as a separate "fishery." This makes sense, because commerce occurs in particular types of fish, rather than in undifferentiated fish regardless of type. The Director found:! There were over 200 million salmon caught in Alaskan waters in 1999, including 146 million pink salmon and 4.6 million coho salmon. Although the proposed project might have some effect on the anadromous fish in Pyramid Creek, these fish represent an insignificantly small portion of the entire Alaskan anadromous fishery. Thus, in assessing whether the Pyramid Creek Project will affect anadromous fish, we have considered whether the project could affect the entire Alaskan anadromous fishery for each particular type of fish. However, in order to answer Intervenors' arguments on rehearing, we have also found it necessary to consider whether more localized or regional effects, such as those in the Pyramid Creek drainage basin or the Aleutian Islands, could require that the project be licensed under Section 23(b)(1) of the FPA. In doing so, we do not mean to suggest that the fishery as a whole should be more narrowly defined. "See Island Power Co., 75 FERC § 61,126 (1996). 394 FERC at p. 64,186. Docket No. DI99-10-001 7 Intervenors maintain that the Pyramid Creek Project itself will substantially affect anadromous fish in the creek, in much the same way that we found the Carlson Project would. The Carlson Project both blocked significant spawning habitat and killed a substantial number of young fish stocked in Allison Creek. We therefore found that it had a real and substantial effect on anadromous fish. However, in light of New Martinsville, we would not have focused on the project's effects on anadromous fish in Allison Creek, but would instead have examined the effects of the project (or of a class of similarly-situated projects) on the anadromous fishery in the Salmon and Columbia River Basins. In Carlson, there was ample evidence that the class of small hydroelectric projects in those basins, if not properly designed, constructed, and operated, could have a real and substantial effect on the anadromous fishery in those river basins, so a finding of the Carlson Project's individual effects on the fishery as a whole would not have been needed in order to find that the project required a license. The proposed Pyramid Creek Project does not include a dam, and will not block spawning habitat in the creek. The project will operate run-of-river, and thus will not significantly affect flows in the creek. We therefore find that the Project would not significantly affect the anadromous fish resources in Pyramid Creek. 4 Although the project might have some effect on the anadromous fish in Pyramid Creek, by affecting flows and habitat, there is no evidence to suggest that the project could have a measurable effect on the Alaskan anadromous fishery as a whole. pyramid Creek is already bypassed as a result of Unalaska's municipal water treatment facilities. The Director found that the proposed Pyramid Creek Project could affect flows in approximately 1,600 feet of habitat above the proposed powerhouse and tailrace. Beyond that point, impassable falls prevent further passage. Intervenors maintain that, because the project will not include mitigation measures, such as minimum flows in the bypassed reach or a flow-continuation valve, it will substantially affect the anadromous fish in Pyramid Creek. As explained above, it is insufficient to show that the project will affect anadromous fish. In order to require licensing under Section 23(b)(1), we must find that the project will have a substantial effect on the fishery as a whole. Intervenors also maintain that, if the effects of a proposed project would be sufficiently significant to require the preparation of an environmental assessment (EA) for purposes of the National Environmental Policy Act (NEPA), those effects would require the project to be licensed under Section 23(b)(1). This is incorrect. Section 23(b)(1) requires an effect on commerce. An environmental effect, even if sufficient to require analysis in an EA, would not provide a basis for mandatory licensing jurisdiction under the FPA unless we could find that it also constitutes a substantial effect on commerce. Docket No. DI99-10-001 -8- Intervenors further maintain that each anadromous fish run is genetically significant and regionally important, and must be protected to maintain genetic diversity and overall salmon production. While we recognize that maintaining genetic diversity may be of biological significance, we do not see how its curtailment could be a matter of commercial importance. As long as the commercial fishery as a whole is not adversely affected, a reduction in genetic diversity would not provide sufficient basis for exercise of our mandatory licensing jurisdiction under the FPA." Although Intervenors argue that the Director's consideration of the Alaskan anadromous fishery as a whole is overly broad, they offer no meaningful alternatives from a commercial standpoint. For fishery management purposes, Alaska has four regions: Southeast (Region 1), Central (Region 2), Arctic-Yukon-Kuskokwim (Region 3), and Westward (Region 4). The Aleutian Islands are part of the Westward region. According to information provided by Alaska DFG, the two commercially significant anadromous species found in Pyramid Creek (pink salmon and coho salmon), are presumed to contribute to a portion of the Unalaska Bay harvest.'7 However, there is insufficient evidence that these species are currently contributing to the commercial fishery catch. In this context, we note the Director's finding that no salmon have been . 'Sintervenors argue that the focus of the Endangered Species Act (ESA) on genetically distinct sub-species or "evolutionarily significant units" provides a basis for concluding that each distinct salmon run is genetically and regionally significant, and must be protected. They note that the Aleutian Islands pink salmon may be a candidate for such designation, and argue that the Director's reliance on the ESA listings of some of the salmon species considered in Carlson was inappropriate. As explained above, these considerations are of biological rather than commercial significance, and thus do not provide a basis for finding licensing required under the FPA. In Carlson, we considered ESA listings as an indication of the extent of adverse effects on anadromous fish in the basin, not as a basis for exercise of our mandatory licensing jurisdiction. Once a species is listed, commerce in that species is no longer legally possible. Thus, an effect on a listed species would not constitute an effect on commerce. Similarly, any possible effects on salmon as part of the prey base for the endangered Stellar sea lion would not provide a basis for finding that the Pyramid Creek Project must be licensed. See supra n. 13 at Figure 1. "The other anadromous species found in the creek, Dolly Varden char, is not commercially fished in Alaska or elsewhere. Docket No. DI99-10-001 a0. commercially landed in the Aleutian Islands area during the last five fishing seasons for which information was available (1995-1999). More recent information indicates that the same is true for the 2000 fishing season.'* Intervenors discount the significance of this finding, stating that the Aleutian Islands commercial fishery will resume when economic and other conditions are more favorable. However, this information is significant to our jurisdictional inquiry, because it suggests that the fish in Pyramid Creek are not currently contributing to the commercial Alaskan anadromous fishery in the Westward Region. Therefore, unless the anadromous fish using Pyramid Creek are considered as part of the commercial Alaskan anadromous fishery as a whole, they would not currently be of commercial importance in any event.’ Cumulative Effects of a Class of Projects Intervenors argue that the Pyramid Creek Project is a member of a class of small projects in Alaska that cumulatively have a real and substantial effect on anadromous '8See Run Forecasts and Harvest Projections for 2001 Alaska Salmon Fisheries and Review of the 2000 Season: The Short Version (Alaska DFG, March 2001), available at: www.cf.adfg.state.ak.us/geninfo/finfish/salmon/salmhome.htm#catch. Intervenors maintain that the Director overlooked evidence that pink salmon contributed an average even-year commercial catch in the Aleutian Islands area of about 664,850 fish. That average is for the years 1984-1994, when commercial fishing occurred. (Aleutian Islands pink salmon runs tend to be much larger during even-numbered years; often there is no commercial harvest during the odd-numbered years. The odd-year pink salmon catch for 1985-1993 averaged about 1,130 fish.) As noted, the Aleutian Islands have not contributed to the commercial salmon harvest in the Westward Region for the past six years. Even if commercial fishing in the area were to resume, the number of pink salmon that might be involved would still be an insignificantly small portion of the entire Alaskan pink salmon harvest. 'Intervenors take issue with the Director's general statement of the health of Alaska's fisheries, citing the Alaska Governor's July 19, 2000 declaration of a commercial fisheries disaster for the Norton Sound, Yukon, and Kuskokwim areas (in Region 3). See Governor Tony Knowles, Declaration of Disaster Emergency (July 19, 2000), available at: http://www. gov.state.ak.us/Rural/RenewHope/declaration.html. However, periodic weak runs can occur in sustainable fisheries. After an extensive review, the independent Marine Stewardship Council recently certified Alaska's commercial salmon fishery as well managed and sustainable. See Office of the Governor, Press Release, "Alaska's Salmon Fishery Certified as Sustainable" (Sept. 5, 2000), available at: http//www.state.ak.us/adfg/geninfo/press/2000/9-Sgov.htm. Docket No. DI99-10-001 -10- fish. They maintain that, contrary to the Director's finding of 36 existing and proposed projects in Alaska, there are actually 52 existing projects, and as many as 1,144 potential sites for hydroelectric development in the state. In Alaska Power, we examined several possible classes of projects (those in the basin, in Southeastern Alaska, and in the entire state) and concluded that the appropriate focus for our analysis of cumulative effects on anadromous fish was the particular river basin. As explained above, that focus may be appropriate for a fishery that is located only in a particular river basin. However, if the fishery is defined more broadly, as we have decided is required in this case, we must examine the effects of the class of projects on the fishery as a whole. We therefore clarify that, in assessing affects on an anadromous fishery, the geographic scope of the appropriate class of projects should correspond to that of the fishery. Accordingly, we will consider whether the class of existing and proposed hydroelectric projects in Alaska could cumulatively have a real and substantial effect on the Alaskan anadromous fishery as a whole. We conclude that there is insufficient evidence to support such a finding. There are no other projects proposed for development in the Pyramid Creek drainage basin. Therefore, there is currently no class of projects that can cumulatively affect the anadromous fishery resources in the basin.” There are only two proposed projects in the Aleutian Island area of Alaska's Westward Region (Region 4).”! As noted, the Aleutians are not currently contributing to Alaska's commercial salmon fishery. Therefore, we do not believe that these two proposed projects could cumulatively have a real and substantial effect on the Alaskan anadromous fishery, and therefore on interstate or foreign commerce. Whether we consider the 36 existing and proposed projects in Alaska that the Director found, or the 52 existing projects that Intervenors used, we are concerned that this class may be too broad and ill-defined to be used as a basis for requiring that the Pyramid Creek Project be licensed. As we explained in Alaska Power, in order to ?°Intervenors argue that, because Unalaska's water treatment facility has caused two fish kills due to chlorine releases, its proposed Pyramid Creek Project should be licensed to ensure adequate protection of fishery resources in the creek. Unalaska's non- jurisdictional water treatment activities cannot provide a basis to require licensing of its proposed hydroelectric project under the FPA. 2'The other is the City of Atka's proposed Chuniisax Creek Project. The Director found licensing not required for this project. 94 FERC § 62,118 (2001). Rehearing of that decision is pending. Docket No. DI99-10-001 aie constitute a class, the projects to be included should be similarly situated, such that their effects would be of the same general type. Geographic proximity, without more, is insufficient if the projects under consideration are not sufficiently similar to produce cumulative effects on a particular resource.”* Here, we know nothing more about the purported class than that they are existing and proposed. We do not know whether they would be constructed and operated similarly to the proposed Pyramid Creek Project, or whether they could cumulatively affect anadromous fish in the same manner. Although we acknowledge our responsibility to investigate matters of possible jurisdictional significance, we believe that parties also bear some responsibility for alleging facts sufficient to cause us to look further. Assuming, however, that the class of all existing and currently proposed small hydroelectric projects in Alaska would produce similar cumulative effects on anadromous fish, Intervenors have provided no basis for us to conclude that these projects could cumulatively have a real and substantial effect on the entire Alaskan anadromous fishery. Therefore, in view of the large size and sustainability of the Alaskan anadromous fishery, we do not believe that it would be appropriate to require licensing of the Pyramid Creek Project based on the ill-defined and overly broad class of projects in Alaska. Intervenors further maintain that there are over a thousand potential hydroelectric sites in the state, and that recent amendments to the FPA make it likely that hydroelectric development in the state will increase.” These facts, without more, are insufficient to require that the Pyramid Creek Project be licensed. If, in the future, hydroelectric development increases to the point that Alaska's commercial anadromous fishery resources can be substantially affected, the Commission can require licensing of projects previously found not to require Sad 229 FERC at p. 62,315. The "Energy Act of 2000" amendments to the FPA provide for an exemption from the Commission's licensing and regulation of hydropower projects in Alaska with a capacity of 5,000 kilowatts or less. Pub. L. No. 106-469 (2000). Alaska will regulate these small projects, instead of the Commission, if the state's regulatory program is equivalent to the Commission's. We fail to see how this legislation could provide a basis for the exercise of our mandatory licensing jurisdiction for projects in Alaska, if the FPA jurisdictional criteria are not otherwise met. See, e.g., Nantahala Power and Light Co. v. Federal Power Commission, 384 F.2d 200, 203-04, 208 (4th Cir. 1967) (a Commission finding that a proposed facility (continued...) Docket No. DI99-10-001 -12- For all the above reasons, we conclude that the proposed Pyramid Creek Project is not required to be licensed. The Commission orders: (A) The motions for late intervention filed in this proceeding by the Alaska Department of Fish and Game on March 7, 2001; the U.S. Department of Commerce's National Marine Fisheries Service on March 8, 2001; the U.S. Department of the Interior on March 12, 2001; and Trout Unlimited on March 12, 2001; are granted. (B) The requests for rehearing filed in this proceeding by the Alaska Department of Fish and Game on March 7, 2001; the U.S. Department of Commerce's National Marine Fisheries Service on March 8, 2001; the U.S. Department of the Interior on March 12, 2001; and Trout Unlimited on March 12, 2001; are denied. By the Commission. (SEAL) Ath Ferg Secretary. ee, .continued) would not affect interstate commerce is not irrevocable; a change in the facts or law may alter the finding).