Opening Brief 9th Circuit Court of Appeals

By FOER Attorneys Ellison Folk and David Nawi

INTRODUCTION

This action challenges the decision by the Federal Energy Regulatory Commission (“FERC” or “Commission” )to approve an amendment to the1983 operating license held by Pacific Gas and Electric Company (“PG&E” or “Licensee”) for the Potter Valley Project (“Project” or “PVP”) – a series of dams, reservoirs, diversion tunnels and an electrical power generating station on the Eel River in Northern California.

The Eel River provides essential habitat to three threatened species of anadromous fish, whose populations have been severely depleted by operation of the PVP. In particular, the PVP not only diverts upwards of 160,000 acre-feet of water a year from the Eel River to the Russian River, the twodams that comprise the PVP physically block fish access to over 100 miles of prime spawning grounds and historic habitat that exist in the upper reaches of the River. In 2003, for example, just 75 adult steelhead were counted at Cape Horn Dam on the mainstem of the Eel River. These 75 fi sh accounted for two-thirds of that year’s total run of steelhead.

When it first approved PG&E’s 1983 license, FERC recognized that the PVP was adversely impacting fish species in the Eel River. FERC nonetheless approved the license conditioned on the completion of a ten year study designed to evaluate the Project’s impacts on the Eel River and to require changes to Project structures and operations to protect these fish species. The present action arises out of FERC’s 2004 decision to amend PG&E’s license to require only minor adjustments in Project operations, despite the fact that threatened fish populations have continued to decline dramatically since the 1983 license was granted. As detailed throughout this brief, in approving a license amendment amendment that fails to adequately protect Eel River threatened fisheries, FERC violated the National Environmental Policy Act (“NEPA”), 42 U.S.C. section 4321 et seq., Endangered Species Act (“ESA”), 16 U.S.C. section 1531 et seq., and Federal Power Act (“FPA”), 16 U.S.C. section 791a et seq. Accordingly, FERC must be required to reopen the license proceeding and evaluate and implement a project alternative that will protect the Eel Riverfisheries.

ISSUES PRESENTED

(1) Did FERC violate NEPA by

(a) failing to evaluate a reasonable range of alternatives to the license amendment, and (b) failing to analyze the environmental impacts of its final approval? (2) Did FERC violate ESA by arbitrarily and capriciously relying on NOAA’s Bi-Op, which (a) is based on an invalid regulatory definitionof “adverse modification,”

(b) does not ensure the survival and recovery of threatened fish species in the Eel River, and (c) is not based on the best scientific and commercial data available? (3) Did FERC violate the FPA in approving a license amendment thatdoes not adequately protect Eel River fisheries?

STATEMENT OF THE CASE

On March 31, 1998, PG&E filed its proposal to amend the license for the PVP (the “Proposed Action”). ARI 1a; 1b. On June 15, 1998, FOER, a non-profit membership organization comprised of thousands of conservationists,
filed its motion to intervene in the proceedings. ARI 77. On January28, 2004, FERC issued its Order Amending License, which amended the license for the PVP to incorporate flow requirements and other provisions established by the Reasonable and Prudent Alternative set forth in NOAA’s Bi-Op. ARI 1340:52-66. The main effect of the license amendment is to slightly increase the flows of water in the Eel River downstream of the Project for the remainder of its license, which expires on April 14, 2022. ARI 1340:1 n.1, 52-66. On February 27, 2004, Petitioner timely filed an application for rehearing of the Commission’s Order Amending License on the grounds that the order violated NEPA, ESA, and the FPA. ARI 1353:5- 32. On June 2, 2004, the Commission issued its Order on Rehearing, denying Petitioner’s application for rehearing, clarifying various provisions of its Order Amending License, and further amending the license to delete Article 51, which required installation of a flow gauge. ARI 1380:1, 24-26. FOER filed a Petition for Review of FERC’s Order on Rehearing with this Court on August 2, 2004 (Case No. 04-73862). On July 2, 2004, Petitioner timely filed an application with FERC for rehearing of the Commission’s Order on Rehearing, challenging the deletion of Article 51 on the grounds that it violated NEPA; asking for clarification that there is no financial cap for PG&E’s compliance with license provisions; and stating that rehearing was required due to new information. ARI 1389:2-6. On September 21, 2004, the Commission issued an Order Denying Rehearing, denying Petitioner’s application for rehearing of the Commission’s Order on Rehearing. ARI 1410. FOER filed a Petition for Review of FERC’s Order Denying Rehearing with this Court on October 29, 2004 (Case No. 04-75617). On October 4, 2004, FOER filed a request to reopen the administrative record before FERC to include new legal and factual matters relevant to this action. ARI 1416:1-2. In particular, FOER requested that the record be reopened to include photographs documenting the degraded condition of the Eel River even with the implementation of increased fl ows ordered by the Commission in the amended license. ARI 1416:1-2, Exhibits 1-19. On November 23, 2004, FERC denied Petitioner’s motion to reopen the record. ARI 1431.

Editor’s Note: This is only a portion