`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`
`
`
`
`
`
`No. 20-72432
`
`
`
`No. 20-72452
`
`FERC Nos.
`2266-102
`2266-118
`
`
`
`CALIFORNIA STATE WATER
`RESOURCES CONTROL BOARD,
`Petitioner,
`
`v.
`
`
`FEDERAL ENERGY REGULATORY
`COMMISSION,
`
`Respondent,
`
`
`NEVADA IRRIGATION DISTRICT,
`Intervenor.
`
`
`
`
`
`SOUTH YUBA RIVER CITIZENS
`LEAGUE; CALIFORNIA SPORTFISHING
`PROTECTION ALLIANCE; FRIENDS OF
`THE RIVER; MOTHER LODE CHAPTER
`OF THE SIERRA CLUB,
`
`Petitioners,
`
`v.
`
`
`FEDERAL ENERGY REGULATORY
`COMMISSION,
`
`Respondent,
`
`
`NEVADA IRRIGATION DISTRICT,
`Intervenor.
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`2
`
`
`
`
`
`
`
`
`No. 20-72782
`
`No. 20-72800
`
`FERC No.
`2246-086
`
`
`
`CALIFORNIA STATE WATER
`RESOURCES CONTROL BOARD,
`Petitioner,
`
`v.
`
`
`FEDERAL ENERGY REGULATORY
`COMMISSION,
`
`Respondent,
`
`
`YUBA COUNTY WATER AGENCY,
`Respondent-Intervenor.
`
`
`
`SOUTH YUBA RIVER CITIZENS
`LEAGUE; CALIFORNIA SPORTFISHING
`PROTECTION ALLIANCE; FRIENDS OF
`THE RIVER; MOTHER LODE CHAPTER
`OF THE SIERRA CLUB,
`
`Petitioners,
`
`v.
`
`
`FEDERAL ENERGY REGULATORY
`COMMISSION,
`
`Respondent,
`
`
`YUBA COUNTY WATER AGENCY,
`Respondent-Intervenor.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`3
`
`
`
`
`
`
`
`No. 20-72958
`
`FERC Nos.
`2179-043
`2467-020
`2179-048
`2467-022
`
`No. 20-72973
`
`FERC No.
`2179-043
`
`
`OPINION
`
`v.
`
`CALIFORNIA STATE WATER
`RESOURCES CONTROL BOARD,
`Petitioner,
`
`
`
`FEDERAL ENERGY REGULATORY
`COMMISSION,
`
`Respondent,
`
`
`MERCED IRRIGATION DISTRICT,
`Respondent-Intervenor.
`
`CALIFORNIA SPORTFISHING
`PROTECTION ALLIANCE; FRIENDS OF
`THE RIVER; SIERRA CLUB AND ITS
`TEHIPITE CHAPTER,
`
`Petitioners,
`
`
`
`v.
`
`
`FEDERAL ENERGY REGULATORY
`COMMISSION,
`
`Respondent,
`
`
`MERCED IRRIGATION DISTRICT,
`Respondent-Intervenor.
`
`On Petition for Review of an Order of the
`Federal Energy Regulatory Commission
`
`Argued and Submitted May 12, 2022
`Pasadena, California
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`4
`
`
`Filed August 4, 2022
`
`Before: Paul J. Watford and Michelle T. Friedland, Circuit
`Judges, and Carol Bagley Amon,* District Judge.
`
`Opinion by Judge Friedland
`
`
`
`
`
`
`
`SUMMARY**
`
`Federal Energy Regulatory Commission
`
`The panel granted petitions for review, and vacated
`orders issued by the Federal Energy Regulatory Commission
`(“FERC”) in which FERC held that the California Water
`Resources Control Board (the “State Board”) had waived its
`authority to ensure that certain hydroelectric projects
`complied with state water quality standards.
`
`Section 401 of the Clean Water Act requires states to
`provide a water quality certification before a federal license
`or permit can be issued for activities that may result in any
`discharge into intrastate navigable waters. Under Section
`401, states may impose conditions on federal licenses for
`hydroelectric projects to ensure that those projects comply
`with state water quality standards. States must act on a
`request for water quality certification within one year of
`
`
`* The Honorable Carol Bagley Amon, United States District Judge
`for the Eastern District of New York, sitting by designation.
`
`** This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`
`
`receiving it to avoid waiving their Section 401 certification
`authority.
`
`5
`
`In three FERC orders, FERC found that the State Board
`had engaged in coordinated schemes with the Nevada
`Irrigation District, the Yuba County Water Agency, and the
`Merced Irrigation District (“Project Applicants”) to delay
`certification and to avoid making a decision on their
`certification requests. According to FERC, the State Board
`had coordinated with the Project Applicants to ensure that
`they withdrew and resubmitted their certification requests
`before the State’s deadline for action under Section 401 in
`order to reset the State’s one-year period to review the
`certification requests. FERC held that, because of that
`coordination, the State Board had “fail[ed] or refuse[d] to
`act” on requests and therefore had waived its certification
`authority under Section 401 of the Clean Water Act. See
`33 U.S.C. § 1341(a)(1).
`
`The panel held that FERC’s findings of coordination
`were unsupported by substantial evidence. Instead, the
`evidence showed only that the State Board acquiesced in the
`Project Applicants’ own unilateral decisions to withdraw
`and resubmit their applications rather than have them denied.
`The panel held
`that, even assuming
`that FERC’s
`“coordination” standard was consistent with the statute, the
`State Board’s mere acquiescence in the Project Applicants’
`withdrawals-and-resubmissions could not demonstrate that
`the State Board was engaged in a coordinated scheme to
`delay certification. Accordingly, FERC’s orders could not
`stand. The panel remanded for further proceedings.
`
`
`
`
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`6
`
`
`COUNSEL
`
`
`Jennifer Kalnins Temple (argued), Adam L. Levitan, Kristin
`K. McCarthy and Julia K. Forgie, Deputy Attorneys
`General; Eric M. Katz, Supervising Deputy Attorney
`General; Robert W. Byrne, Senior Assistant Attorney
`General; Rob Bonta, Attorney General; Office of the
`Attorney General, Los Angeles, California; for Petitioner
`California State Water Resources Control Board.
`
`Julie Gantenbein (argued), Water and Power Law Group PC,
`Berkeley, California; Andrew M. Hawley, Western
`Environmental Law Center, Seattle, Washington; for
`Petitioners South Yuba River Citizens League, California
`Sportfishing Protection Alliance, Friends of the River, and
`Sierra Club and its Mother Lode and Tehipite Chapters.
`
`Jared B. Fish (argued), Attorney; Robert H. Solomon,
`Solicitor; Matthew R. Christiansen, General Counsel;
`Federal Energy Regulatory Commission, Washington D.C.;
`for Respondent Federal Energy Regulatory Commission.
`
`Michael A. Swiger (argued), Michael F. McBride, and Ani
`Esenyan, Van Ness Feldman, LLP, Washington, D.C.; for
`Respondent-Intervenors Nevada Irrigation District and Yuba
`County Water Agency.
`
`Thomas M. Berliner and Jolie-Anne S. Ansley, Duane
`Morris LLP, San Francisco, California; Phillip R.
`McMurray, General Counsel, Merced Irrigation District,
`Merced, California; for Respondent-Intervenor Merced
`Irrigation District.
`
`Jonathan D. Brightbill and Lauren Gailey, Winston &
`Strawn LLP, Washington, D.C.; Andrew R. Varcoe and
`
`
`
`7
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`
`
`Stephanie A. Maloney, United States Chamber Litigation
`Center, Washington, D.C.; for Amicus Curiae Chamber of
`Commerce of the United States of America.
`
`Andrea W. Wortzel, Troutman Pepper Hamilton Sanders
`LLP, Richmond, Virginia; Charles R. Sensiba and Morgan
`M. Gerard, Troutman Pepper Hamilton Sanders LLP,
`Washington, D.C.; for Amici Curiae National Hydropower
`Association and Northwest Hydroelectric Association.
`
`Gabrielle Gurian and Kelly Thomas Wood, Assistant
`Attorneys General; Robert W. Ferguson, Attorney General;
`Office of the Attorney General, Olympia, Washington; Jill
`Lacedonia, Assistant Attorney General; William Tong,
`Attorney General; Office of the Attorney General, Hartford,
`Connecticut; Scott W. Boak; Aaron M. Frey, Attorney
`General; Office of the Attorney General, Augusta, Maine;
`Gillian Wener; Dana Nessel, Attorney General; Office of the
`Attorney General, ENRA Division, Lansing, Michigan;
`Peter N. Surdo, Special Assistant Attorney General; Keith
`Ellison, Attorney General; Office of the Attorney General,
`Saint Paul, Minnesota; Kristina Miles, Deputy Attorney
`General; Andrew J. Bruck, Acting Attorney General; Office
`of the Attorney General, Environmental Permitting and
`Counseling, Trenton, New Jersey; William Grantham,
`Assistant Attorney General; Hector Balderas, Attorney
`General; Office of the Attorney General, Consumer and
`Environmental Protection Division, Albuquerque, New
`Mexico; Taylor H. Crabtree and Asher P. Spiller, Assistant
`Attorneys General; Daniel S. Hirschman, Senior Deputy
`Attorney General; Joshua S. Stein, Attorney General;
`Department of Justice, Raleigh, North Carolina; Paul
`Garrahan, Attorney-in-Charge; Ellen F. Rosenblum,
`Attorney General; Natural Resources Section, Department
`of Justice, Salem, Oregon; Laura B. Murphy; Thomas J.
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`8
`
`Donovan, Jr., Attorney General; Office of the Attorney
`General, Montpelier, Vermont; Brian R. Caldwell; Karl A.
`Racine, Attorney General; Public Advocacy Division,
`Washington, D.C.; Turner H. Smith, Deputy Chief; Matthew
`Ireland, Assistant Attorney General; Maura Healey,
`Attorney General; Office of
`the Attorney General,
`Environmental Protection Division, Boston, Massachusetts;
`Donald D. Anderson, Deputy Attorney General; David C.
`Grandis, Chief, Environmental Section; Mark R. Herring,
`Attorney General; Office of
`the Attorney General,
`Richmond, Virginia; for Amici Curiae States of Washington,
`Connecticut, Maine, Michigan, Minnesota, New Jersey,
`New Mexico, North Carolina, Oregon, Vermont, the District
`of Columbia, and the Commonwealths of Massachusetts and
`Virginia.
`
`
`
`
`
`
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`9
`
`OPINION
`
`FRIEDLAND, Circuit Judge:
`
`Section 401 of the Clean Water Act gives states the
`authority to impose conditions on federal licenses for
`hydroelectric projects to ensure that those projects comply
`with state water quality standards. In these consolidated
`cases, we consider several petitions for review of decisions
`by the Federal Energy Regulatory Commission (“FERC”)
`holding that the California Water Resources Control Board
`(the “State Board” or “State Water Board”) waived that
`authority for certain hydroelectric projects in federal
`relicensing proceedings. FERC found that the State Board
`had engaged in coordinated schemes with the Nevada
`Irrigation District, the Yuba County Water Agency, and the
`Merced Irrigation District (collectively,
`the “Project
`Applicants”) to delay certification and to avoid making a
`decision on their certification requests. FERC held that,
`because of that coordination, the State Board had “fail[ed] or
`refuse[d] to act” on the requests and had therefore waived its
`certification authority. See 33 U.S.C. § 1341(a)(1). We hold
`that FERC’s findings of coordination are unsupported by
`substantial evidence. We therefore grant the petitions for
`review and vacate FERC’s orders.
`
`I.
`
`A.
`
`The Clean Water Act provides that “[i]t is the policy of
`the Congress to recognize, preserve, and protect the primary
`responsibilities and rights of States” to “prevent, reduce, and
`eliminate pollution” and to “plan the development and use
`(including restoration, preservation, and enhancement) of
`land and water resources.” 33 U.S.C. § 1251(b). To achieve
`
`
`
`10 CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`those goals, Congress has enacted a scheme of cooperative
`federalism that gives states an important role in regulating
`water quality. “The states remain, under the Clean Water
`Act, the ‘prime bulwark in the effort to abate water
`pollution.’” Keating v. FERC, 927 F.2d 616, 622 (D.C. Cir.
`1991) (quoting United States v. Puerto Rico, 721 F.2d 832,
`838 (1st Cir. 1983)).
`
`As relevant here, Section 401 of the Clean Water Act
`“requires States to provide a water quality certification
`before a federal license or permit can be issued for activities
`that may result in any discharge into intrastate navigable
`waters.” PUD No. 1 of Jefferson Cnty. v. Wash. Dep’t of
`Ecology, 511 U.S. 700, 707 (1994) (citing 33 U.S.C.
`§ 1341). States may adopt water quality standards that are
`more stringent than federal law requires, and any limitation
`included in the state certification becomes a condition on any
`federal license. Id. at 705, 708. That certification process is
`“essential in the scheme to preserve state authority to address
`the broad range of pollution” that might affect water quality.
`S.D. Warren Co. v. Me. Bd. of Env’t Prot., 547 U.S. 370, 386
`(2006).
`
`To prevent a state from “indefinitely delaying a federal
`licensing proceeding by failing to issue a timely water
`quality certification,” Section 401 includes a deadline by
`which the state must act to avoid waiving its certification
`authority. Alcoa Power Generating Inc. v. FERC, 643 F.3d
`963, 972 (D.C. Cir. 2011). The relevant statutory language
`reads:
`
`If the State . . . fails or refuses to act on a
`request for certification, within a reasonable
`period of time (which shall not exceed one
`year) after receipt of such request, the
`certification requirements of this subsection
`
`
`
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`11
`
`shall be waived with respect to such Federal
`application. No license or permit shall be
`granted until the certification required by this
`section has been obtained or has been waived
`as provided in the preceding sentence. No
`license or permit shall be granted
`if
`certification has been denied by the State.
`
`through regulations
` FERC,
`33 U.S.C. § 1341(a)(1).
`governing hydropower licensing proceedings and through
`agency adjudication, has interpreted the “reasonable period
`of time” for action under Section 401 to be the statutory
`maximum of one year from the receipt of the request.
`18 C.F.R. §§ 4.34(b)(5)(iii), 5.23(b)(2); Const. Pipeline Co.,
`162 FERC ¶ 61,014, at P 16 (Jan. 11, 2018).
`
`The consequences of a waiver are potentially significant.
`Federal licenses for hydroelectric projects can last up to fifty
`years, and the default term is forty years.1 16 U.S.C. § 799;
`Policy Statement on Establishing License Terms for
`Hydroelectric Projects, 82 Fed. Reg. 49501, 49503 (Oct. 26,
`2017). Accordingly, if a state waives its authority to impose
`conditions on a hydroelectric project’s federal license
`through Section 401’s certification procedure, that project
`may be noncompliant with prevailing state water quality
`standards for decades.
`
`issuing water quality
`for
`criteria
`California’s
`certifications often make it impracticable for a certification
`to issue within one year of a project applicant’s submitting
`
`
`1 If a project’s initial license expires while the relicensing process is
`ongoing, FERC may issue annual, interim licenses under the same terms
`and conditions as the initial license. 16 U.S.C. § 808(a)(1); 18 C.F.R.
`§ 16.18.
`
`
`
`12 CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`its request. The main cause of delay appears to be
`California’s
`requirement, pursuant
`to
`the California
`Environmental Quality Act (“CEQA”), that the State Board
`receive and consider an analysis of a project’s environmental
`impact before granting a certification request.2 See Cal. Pub.
`Res. Code § 21100(a) (requiring completion of “an
`environmental impact report on any project . . . that may
`have a significant effect on the environment”); Cal. Code
`Regs. tit. 23, § 3856(f) (“[T]he [Section 401] certifying
`agency shall be provided with and have ample time to
`properly review a final copy of valid CEQA documentation
`before taking a certification action.”). California law assigns
`a “lead agency” (here, the Project Applicants) to prepare the
`CEQA evaluation and designates a “responsible agency”
`(here, the State Board) that must “consider[] the [evaluation]
`prepared by the lead agency” and decide “whether and how
`to approve the project involved.”3 Cal. Code Regs. tit. 14,
`§ 15096(a). For complex projects like the ones at issue here,
`
`
`2 After FERC issued the waiver orders challenged here, the
`California legislature authorized the State Board to issue certifications
`before completion of CEQA review where failure to issue the
`certification “poses a substantial risk of waiver of the state board’s
`certification authority” under Section 401.
` Cal. Water Code
`§ 13160(b)(2); see also 2020 Cal. Stat. 1379. The new provision directs
`the State Board, “[t]o the extent authorized by federal law,” to “reserve
`authority to reopen and . . . revise the certificate” as necessary after
`CEQA review is eventually completed. Cal. Water Code § 13160(b)(2).
`Because that amendment took effect after the events at issue here, it has
`no bearing on our analysis.
`
`3 In cases like ours, where the project applicant is a public agency,
`the project applicant is the “lead agency” that must complete the CEQA
`evaluation. By contrast, in cases where the project applicant is a private
`entity, the State Board is both the “lead agency” and the “responsible
`agency” and, accordingly, must complete the CEQA process itself. See
`Cal. Code Regs. tit. 14, § 15051.
`
`
`
`13
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`
`
`the CEQA process itself can often take more than a year to
`complete. If the materials required for CEQA are not
`submitted until late in the State Board’s Section 401 review
`period, the State Board is unlikely to be ready to issue a
`certification within the one-year deadline.4 If the project
`applicants do not give the State Board a sufficient
`opportunity to “receive and properly review the necessary
`environmental documentation” under CEQA by the end of
`the review period, California regulations require the State
`Board to “deny without prejudice certification . . . unless the
`applicant in writing withdraws the request for certification.”
`Id. tit. 23, § 3836(c).
`
`Because it is often not feasible for a Section 401
`certification to issue within one year of its submission, a
`practice has developed over the last several decades—in
`California and in other states—whereby project applicants
`withdraw their requests for certification before the end of the
`one-year review period and resubmit them as new requests,
`rather than have their original requests denied. The theory
`behind this practice is that a withdrawn-and-resubmitted
`request starts a new one-year review period, affording the
`project applicant more time to comply with procedural and
`substantive prerequisites to certification and the state more
`time to decide whether and under what conditions it will
`grant the certification request. Although FERC expressed
`misgivings
`in
`some orders
`that withdrawal-and-
`resubmission could lead to delays in federal licensing, FERC
`
`4 FERC used to “deem the one-year waiver period to commence
`when the certifying agency found the request acceptable for processing,”
`but it has since departed from that interpretation. See California ex rel.
`State Water Res. Control Bd. v. FERC, 966 F.2d 1541, 1552 (9th Cir.
`1992). Apparently as a result, submitting a Section 401 certification
`request in California does not require the project applicant to provide all
`the materials that the State Board will eventually need for final approval.
`
`
`
`14 CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`accepted the withdrawal-and-resubmission practice for
`many years. See, e.g., Barrish & Sorenson Hydroelectric
`Co., 68 FERC ¶ 62,161, 64,258 (Aug. 12, 1994) (noting that
`the applicant “withdrew and refiled” its Section 401 request
`the day before the one-year review deadline); Bradwood
`Landing LLC, 126 FERC ¶ 61,035, at P 24 n.26 (Jan. 15,
`2009) (observing that the project applicant’s withdrawal-
`and-resubmission of its request for certification from the
`state of Oregon “restarted the statutory one-year period” for
`the state certifying agency); Const. Pipeline Co., 162 FERC
`¶ 61,014, at P 23 (Jan. 11, 2018) (“We reiterate that once an
`application is withdrawn, no matter how formulaic or
`perfunctory the process of withdrawal and resubmission is,
`the refiling of an application restarts the one-year waiver
`period under section 401(a)(1).”), reh’g denied, 164 FERC
`¶ 61,029, at P 17 (July 19, 2018) (reaffirming
`that
`conclusion).
`
`In 2019, however, the D.C. Circuit held that California
`and Oregon had waived their certification authority by
`entering a formal contract with a project applicant to delay
`federal
`licensing proceedings
`through
`the continual
`withdrawal-and-resubmission of the applicant’s certification
`requests. Hoopa Valley Tribe v. FERC, 913 F.3d 1099
`(D.C. Cir. 2019). The court held that the states’ engagement
`in a “coordinated withdrawal-and-resubmission scheme”
`constituted a “failure” or “refusal” to act under the meaning
`of Section 401. Id. at 1104–05. In response to Hoopa
`Valley, FERC changed its position. In a series of orders,
`including those at issue here, FERC concluded that states
`had waived their Section 401 certification authority by
`coordinating with project applicants on the withdrawal-and-
`resubmission of Section 401 certification requests, even in
`the absence of an explicit contractual agreement to do so.
`
`
`
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`15
`
`B.
`
`These petitions for review challenge three orders issued
`by FERC holding that California waived its authority to
`issue water quality certifications for the Yuba-Bear Project
`(operated by the Nevada Irrigation District5), the Yuba River
`Project (operated by the Yuba County Water Agency), and
`the Merced River and Merced Falls Projects (together, the
`“Merced Projects”) (operated by the Merced Irrigation
`District). We now summarize the relevant facts underlying
`each of those three orders.
`
`1.
`
`In 1963, FERC issued the Nevada Irrigation District
`(“NID”) a fifty-year license to operate the Yuba-Bear
`Hydroelectric Project on the Middle Yuba, South Yuba, and
`Bear Rivers, in Sierra, Placer, and Nevada Counties,
`California. In 2011, two years before the license expired,
`NID applied for a renewal of the license, as required by
`statute. The relicensing application is still pending,6 and
`since the original license expired in 2013, NID has operated
`the Yuba-Bear Project on interim, annual licenses under the
`original license terms.7 Because FERC licensed the Yuba-
`Bear Project before the enactment of Section 401, those
`
`
`5 The word “Nevada” in Nevada Irrigation District refers to Nevada
`County, California.
`
`Federal Energy Regulatory Commission,
`6 Licensing,
`http://www.ferc.gov/licensing (follow hyperlink entitled “Pending
`License, Relicense, and Exemption Applications” (updated July 15,
`2022)).
`
`7 See supra note 1.
`
`
`
`16 CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`interim licenses are not subject to state-imposed conditions
`under a Section 401 water quality certification.
`
`On March 15, 2012, NID submitted a request for water
`quality certification to the State Board. The request stated
`that “NID intends to be the Lead Agency for the purpose of
`compliance with the requirements of [CEQA], and will
`coordinate with the [State] Board and other responsible
`agencies.” The State Board acknowledged receipt of the
`request, confirmed that the request met the state’s filing
`requirements, and notified NID that the request was pending
`before the State Board. The State Board reminded NID that,
`“[a]lthough a final CEQA document is not required for [a]
`complete application for certification, CEQA requirements
`must be satisfied before the State Water Board can issue
`certification.”
`
`NID apparently never prepared the CEQA evaluation
`required by California regulations. According to a status
`report sent by the State Board to FERC, the State Board was
`still “[a]waiting commencement of [the] CEQA process by
`[NID]” as of December 2019, more than seven years after
`NID submitted its initial certification request.
`
`On March 1, 2013—two weeks before the State Board’s
`deadline to act on the certification request—NID filed a
`letter with the State Board withdrawing and resubmitting its
`application for water quality certification. NID reiterated its
`intent to act as the lead agency for CEQA purposes. The
`State Board acknowledged receipt of the withdrawal-and-
`resubmission and stated: “The new deadline for certification
`action is February 28, 2014.”
`
`Soon after, FERC issued a draft of its own environmental
`impact statement, as required by federal law. The draft noted
`NID’s withdrawal-and-resubmission and the State Board’s
`
`
`
`17
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`
`
`new February 2014 deadline to act on the certification
`request. The State Board submitted comments on the draft,
`including both substantive comments on various water
`quality concerns and comments attempting to clarify the
`expected timeline for a Section 401 certification. The latter
`set of comments stated:
`
`The CEQA process has not started, and will
`not be finished by the spring of 2014. The
`most likely action will be that the Licensees
`will withdraw and resubmit their respective
`applications for water quality certification
`before the one year deadline if the State
`Water Board is not ready to issue its water
`quality certifications. Otherwise, the State
`Board will deny certification without
`prejudice.
`
`As noted above, NID never prepared a CEQA evaluation.
`Instead,
`it continued
`to withdraw and resubmit
`its
`certification request each year, for the five years between
`2014 and 2018. In response to each withdrawal-and-
`resubmission, the State Board acknowledged receipt and
`conveyed the new deadline for certification action.
`
`In 2019, on the day the D.C. Circuit decided Hoopa
`Valley, the State Board denied without prejudice NID’s last
`request for Section 401 certification. In the letter notifying
`NID of the denial, the State Board explained that “[w]ithout
`completion of the CEQA process, the State Water Board
`cannot issue a certification.” NID then sought a declaratory
`order from FERC that the State Board had waived its Section
`401 certification authority.
`
`FERC granted NID’s request, holding that the State
`Board had waived its certification authority for the Yuba-
`
`
`
`18 CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`Bear Project. FERC reasoned that, although Hoopa Valley
`had involved a formal contract between the parties to defer
`certification and delay federal licensing proceedings, “an
`explicit agreement to withdraw and refile is not necessary”
`to a finding of waiver. Rather, evidence of a “functional
`agreement” or evidence of “the state’s coordination with the
`licensee” would suffice to show that the state had “fail[ed]
`or refuse[d] to act” under Section 401. Turning to the
`evidence in the instant case, FERC first noted that the State
`Board had consented to NID’s decision to continually
`withdraw and resubmit its certification requests rather than
`issue a denial. As evidence of the State Board’s coordination
`in a withdrawal-and-resubmission scheme, FERC pointed to
`the State Board’s comments on FERC’s draft environmental
`impact statement, quoted above, describing the State
`Board’s expectation that NID would withdraw and resubmit
`its request. FERC also asserted that California regulations
`“codify” the withdrawal-and-resubmission practice. Finally,
`FERC found it “[t]elling[]” that the State Board had “failed
`to dispute NID’s repeated statements” in its withdrawal-and-
`resubmission letters that “the Board had all of the
`information it needed to act.”
`
`2.
`
`The administrative record underlying FERC’s Yuba
`River Project order is similar to the record from the Yuba-
`Bear Project. In 1963, FERC issued the Yuba County Water
`Agency (“YCWA”) a fifty-year license to operate the Yuba
`River Development Project on the Yuba, North Yuba, and
`Middle Yuba Rivers in Sierra, Yuba, and Nevada Counties.
`YCWA filed an application for a new license in June 2017.
`As with the Yuba-Bear Project, the Yuba River Project has
`been operating under interim, annual licenses while its
`
`
`
`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`
`
`relicensing application is pending, and those interim licenses
`are not subject to state-imposed Section 401 conditions.8
`
`19
`
`On August 24, 2017, YCWA submitted a request for
`water quality certification to the State Board and affirmed its
`role as the lead agency for CEQA compliance. The State
`Board acknowledged receipt of the request and stated that
`the deadline for certification action was one year later.
`
`On July 25, 2018, a month before the end of the one-year
`review period, a member of the State Board’s staff emailed
`YCWA to remind it of the upcoming deadline. The email
`stated:
`
`YCWA’s water quality certification action
`date for the Yuba River Development Project
`(FERC No. 2246) is August 24, 2018. A final
`CEQA document for the Project has not been
`filed; therefore, the State Water Board cannot
`complete the environmental analysis of the
`Project that is required for certification.
`
`Please submit a withdraw/resubmit of the
`certification application as soon as possible.
`Let me know if you have any questions.
`
`YCWA responded that it planned to submit the withdrawal-
`and-resubmission letter on August 20. The State Board staff
`member replied: “My management usually gets a little antsy
`when our action date gets below 3 weeks because a ‘deny
`without prejudice’ letter takes time to route to our Executive
`
`8 See supra notes 1 & 6.
`
`
`
`
`
`20 CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`Director. If possible, please submit the letter by next
`Friday.”
`
`On August 3, 2018, YCWA filed a withdrawal-and-
`resubmission letter with the State Board, reiterating its intent
`to act as the lead agency for CEQA purposes. The State
`Board acknowledged receipt of
`the withdrawal-and-
`resubmission letter and stated: “The new deadline for
`certification action is August 3, 2019.”
`
`Like NID, YCWA apparently never prepared a CEQA
`evaluation. A State Board status report to FERC indicated
`that it was still “[a]waiting commencement of [the] CEQA
`process by YCWA” in December 2019. After the D.C.
`Circuit decided Hoopa Valley, the State Board denied
`without prejudice YCWA’s
`resubmitted
`request
`for
`certification, relying on YCWA’s failure to begin the CEQA
`process. YCWA then sought a declaratory order from FERC
`that the State Board had waived its Section 401 certification
`authority.
`
`FERC concluded that the State Board had waived its
`certification authority for the Yuba River Project, employing
`essentially the same reasoning as in its Yuba-Bear Project
`order. This time, FERC found evidence of coordination in
`the email exchange between the State Board’s staff member
`and YCWA, reasoning that YCWA’s “withdrawal and
`refiling of its application was in response to the [State]
`Board’s request that it do so.” FERC asserted that “[t]he
`coordination” demonstrated by that exchange “alone [was]
`sufficient evidence that the [State] Board sought the
`withdrawal and resubmittal of the Yuba River application to
`circumvent the one-year statutory deadline for the state
`agency to act.” As in the Yuba-Bear Project order, FERC
`also pointed
`to California’s “codification” of
`the
`withdrawal-and-resubmission practice in its regulations and
`
`
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`CAL. STATE WATER RES. CONTROL BD. V. FERC
`
`
`
`to the State Board’s failure to “dispute Yuba County’s
`statements that . . . the [State] Board had all of the
`information it needed to act.”
`
`21
`
`3.
`
`The administrative record underlying FERC’s Merced
`Projects order resembles the administrative records from the
`Yuba-Bear and Yuba River Projects. In 1963 and 1969,
`respectively, FERC issued licenses to the Merced Irrigation
`District (“MID”) to operate the Merced River Hydroelectric
`Project for a fifty-year term and to its predecessor licensee,
`Pacific Gas and Electric Company (“PG&E”), to operate the
`Merced Falls Hydroelectric Project for a forty-five-year
`term. The Merced Projects are located on the Merced River
`in Merced and Mariposa Counties. As with the Yuba-Bear
`and Yuba River Projects, the Merced Projects are currently
`operating under interim, annual licenses while relicensing is
`pending.9
`
`On May 20 and May 21, 2014, MID and PG&E10
`submitted to the State Board requests for water quality
`certifications for the Merced Projects. The State Board
`acknowledged receipt of the requests, conveyed the one-year
`deadline for action, and warned that, “[i]f the information
`necessary for compliance with CEQA is not provided to the
`
`9 See supra notes 1 & 6.
`
`
`
`10 PG&E transferred its license for the Merced Falls Project to MID
`in 2017, making MID the applicant in the relicensing proceeding before
`FERC. For the Merced Falls Project, between the initial certification
`request in 2014 and the license transfer in 2017, it was the State Board—
`not PG&E—that was the lead agency for the purpose of CEQA
`compliance.
`
`
`
`22 CAL. STATE WATER RES. CONTROL BD. V. FERC
`