2.2 Several Kings of the Hydropower Mountain

Only FERC may issue a license to construct, operate, and maintain a non-federal hydropower project.  It is ultimately responsible for deciding whether to license a given project, and if so, under what conditions.  As Congress intended in adopting the FPA in 1935, this exclusive jurisdiction helps to ensure that such projects are regulated in a consistent manner in and across our river basins.  However, State and other federal agencies have significant authorities to prescribe or recommend environmental conditions,[1] not preempted by the FPA.[2]  In practice, FERC’s exclusive authority to issue a license is subject to checks and balances administered by other agencies.  The community of agencies involved in licensing proceedings includes the following federal as well as state agencies.

[1]               As discussed below in Section 2.3.4, each license includes duties for project operation, such as release of a minimum flow, for the protection, mitigation, and enhancement of the affected river.  We use the shorthand “environmental condition” or “environmental measure” to describe any such duty in a license. 

[2]               See First Iowa Hydro-Electric Cooperative v. Federal Power Commission, 328 U.S. 152, 181 (“The detailed provisions of the Act providing for the federal plan of regulation leave no room or need for conflicting state controls.”).  FERC and the State where a project is located generally do not share the final decision of any issue in a licensing proceeding.  Id. at 168.  Under the Commerce and Supremacy Clauses of the U.S. Constitution, FPA preempts State law that otherwise would apply to the project, except where it reserves State authority over a specific issue.  Id.; Sayles Hydro Association v. Maughn, 985 F.2d 451, 455 (9th Cir. 1993) (Sayles Hydro).  The primary exceptions are: (A) water quality certification issued under Clean Water Act (CWA) section 401(a); (B) issuance and regulation of water rights necessary for project operation and to prevent injury to prior water rights (FPA section 27, 16 U.S.C. § 821; see Sayles Hydro, 985 F.2d at 455); (C) regulation of retail rates for electrical service (FPA § 19, 16 U.S.C. § 812); and (D) authorization for a State or municipal agency to take over any licensed project, through a condemnation proceeding and on payment of fair market value (FPA § 14(a), 16 U.S.C. § 807(a)).