NC0024911_denial_19891220

B 7—C - C 7J
4 9 FERC 1 61,s 7 s
UNITED STATES OF AMERICA Project No. 7497-004 -2-
FEDERAL ENERGY REGULATORY COMMISSION
Before Commissioners: Martin L. Allday, Chairman; and the U.S. Fish and Wildlife Service (FWS) both submitted
Charles A. Trabandt, Elizabeth Anne Moler conditions, incorporated by reference in standard article 2 of
and Jerry J. Langdon. the exemption, .5/ including a condition that the District
maintain a minimum flow of 460 cubic feet per second (cfs) from
Metropolitan Sewerage District ) Project No. 7497-004 July 1 through January 31 and 840 .efs from February 1 through
of Buncombe County, North Carolina) June 30. Both agencies provided that these flows could be
modified pursuant to site-specific studies acceptable to both
ORDER DENYING APPEAL agencies and the North Carolina Office of Water Resources. J
(Issued December 20, 1989)
On March 8, 1989, the Director, Division of Project A/(...continued)
Compliance and Administration (Director), issued an order condition, infra n. 6, is now called the Division of Water
directing Metropolitan Sewerage District of Buncombe County, Resources, and is a part of the Department of Environment,
North Carolina (District) to comply with the minimum flow regime Health, and Natural Resources.
required by the terms of the exemption from licensing issued for
the District's hydroelectric project. 1,/ The District filed a / The District received a small hydroelectric power project
timely appeal of the Director's order, 2/ asserting that its (5 MW) exemption pursuant to Section 405(d) of the Public
minimum flow regime was in compliance with the terms of its Utility Regulatory Policies Act of. 1978, 16 U.S.C.
exemption. For the reasons stated below, we deny the District's § 2705(d) which, in 1984, provided that the exemption shall
appeal. be subject to such terms and conditions as FWS and the state
fish and wildlife agency each determine ar-p''appropriate to
BACKGROUND prevent loss of, or damage to, fish and Wildlife resources
and to otherwise carry out the purposes of the Fish and
On January 25, 1984, the District was granted an exemption Wildlife Coordination Act, 16 U.S.C. § 661 !at sea. This
from licensing for the Craggy Dam Hydroelectric Project, to be requirement was reflected in standard article 2 of the
located on the French Broad River in Buncombe County. 2/ The exemption (set forth at 18 C.F.R. § 4.106(b.?- (1983)).
North Carolina Wildlife Resources Commission (NC Resources)
C,/ The condition submitted by the NC Resources states:
A minimum instantaneous flow of 460 cfs from
J 46 FERC 1 62,246 (1989). July through January and 840 cfs from
February through June [shall] be maintained
2/ The Director's order also required the District to submit at the base of the dam. In the event that
plans for a fish mortality study and for monitoring the inflow is less than the above flows,
minimum flow releases. The District did not appeal that instantaneous outflow shall equal inflow.
part of the order. The Commission will accept alternative flows
which may be determined by the applicant via
J 26 FERC 1 62,040 (1984). The project uses an existing 13- utilization of site-specific studies approved -
foot-high, 700-foot-long masonry dam and an existing 40-acre by the Wildlife Resources Commission and the
reservoir. The exemption authorized a 2600-foot-long U.S. Fish and Wildlife service.
concrete flume diverting water to the powerhouse and 2.4 MW
of installed capacity. The condition submitted by the FWS states:
4 J The North Carolina Wildlife Resources Commission is an Minimum instantaneous flows determined by an
independent commission within the North Carolina Department applicant-sponsored study acceptable to the
of Environment, Health, and Natural Resources, which, before Fish and Wildlife Service (FWS), the North
1989, was called the North Carolina Department of Natural Carolina Wildlife Resources Commission
Resources and Community Development. The North Carolina (NCWRC) and the North Carolina Office of
Office of Water Resources, referenced in the FWS exemption Water Resources (NCOWR) shall be maintained
(continued...) (continued...)
DC-A-45

Project No. 7497-004 -3- Project No. 7497-004 -4-
On July 19, 1988, an engineer from the Atlanta Regional In its September 19, 1988 response, the District
Office inspected the project, which had commenced operation on acknowledged that on June 13, 1988, it had reduced its minimum
February 1, 1987, and found that the District was maintaining a flows to 100 cfs, but asserted that such reduction was consistent
100 cfs minimum flow during project operation. By letter dated with the terms of its exemption, in that the District had
August 30, 1988, the Director notified the District that it was notified the pertinent agencies and the Commission by letter of
not complying with standard article 2 of its exemption, in that May 10, 1988, that it had completed a site-specific study which
only FWS and NC Resources could modify the flows they had supported a conclusion that 100 cfs was the optimum flow for
stipulated. J The Director instructed the District to submit, maintaining a viable fishery habitat in the river. Citing to the
among other things, a complete accounting of the minimum flow language of NC Resource's condition, the District asserted that,
releases at the project since operations began, and copies of all once the pertinent agencies had approved its study methodology,
communications between the District and the two agencies. J they were obligated to accept the results that the District
derived therefrom.
J
In his March 8, 1989 compliance order, the Director stated(...continued) that review of the District's September 19, 1988 filing showed
in the river channel at the base of the dam. that the District had not yet completed the flow study that was
Should the study not be completed prior to to form the basis of revised minimum flows. The Director
commencement of plant operation, interim therefore concluded that reduction of the flow constituted a
instantaneous flows of 460 cubic feet per violation of article 2 of the exemption and could be having
second (cfs) from July through January and adverse effects on fish in the bypass reach. The Director
840 cfs from February through June shall be therefore ordered the District to immediately restore the
maintained except when inflow to the 460/840-cfs flow regime required by the agencies and to maintain
reservoir is less than that amount. At such such flows until the District, FWS, and NC Resources all agree on
times, outflow in the river channel at the a permanent minimum flow regime.
base of the dam shall equal inflow to the
reservoir. In its appeal of the Director's March 8 order, the District
repeats its argument that the conditions imposed by FWS and NC
The 460 cfs flow represents the 7-day, 10-year low flow Resources unambiguously allow the District to determine the
(7Q10) . See October 2, 1987, and October 8, 1986 letters to minimum flow regime, so long as the determination is based on an
the District from the North Carolina Department of Natural agency-approved study. The District states that its study used
Resources and Community Development, attached to the the Instream Flow Incremental Method (IFIM), J and that the
District's September 19, 1988 filing. Average flows in the parameters of the study were expressly approved by the agencies.
French Broad River are about 1300-1500 cfs from July through
January and 2200-2600 cfs from February through June. The District also asserts that the Director's unexplained
statement that the District had not yet completed its flow study
J The Director also stated that if an exemptee wishes to is erroneous, inasmuch as it submitted its completed study to the
modify operation of its project it must, pursuant to 18 agencies in September of 1987. The District argues that,
C.F.R. § 4.104(b) (1988), obtain the concurrence of FWS and assuming that the Director considered the study to be incomplete
NC Resources that the modification would not violate the because the agencies did not agree with the results, he is in
exemption terms that they had imposed. However, were the error, because the exemption conditions give the agencies control
District correct that its exemption conditions allow it to over the study methodology only, and require them to accept the
revise unilaterally minimum flows based on a study study results obtained thereunder. The District argues that a
methodology approved by the pertinent agencies, then Section contrary interpretation would permit the agencies to prevent flow
4.104, governing amendments to exemptions, would not come modifications, even if their reason for doing so is arbitrary and
into play, since the flows would be revised pursuant to the
existing terms of the exemption.
J The IFIM is a methodology developed by FWS and other federal
J The Director advised the District that non-compliance with agencies and is designed to determine the amount of usable
exemption articles may subject it to the enforcement and habitat that would exist in the river at various flows for
penalty provisions of Section 31 of the FPA. the life stages of specified fish.

Project No. 7497-004 -5- Project No. 7497-004 -6-
capricious. 1W While asserting its right to release 100 cfs, FWS's condition states in pertinent part: I/
the District states that on October 11, 1988, it restored the
460/840 cfs flow regime pending the outcome of negotiations with Minimum instantaneous flows determined by an
the agencies. The District states that it submitted a applicant-sponsored study acceptable to the
comprehensive "mitigation and management plan" to the agencies on Fish and Wildlife Service the North
February 1, 1989, proposing flows at levels ranging from 100 to Carolina Wildlife Resources Commission .400 cfs. and the North Carolina Office of Water
Resources . shall be maintained in the
DISCUSSION river channel at the base of the dam.
NC Resource's condition states in pertinent part: 11 Both agency conditions specify that alternative flows may be
"determined" by a study approved by or acceptable to the
(t3he Commission (12/] will accept agencies. The NC Resources condition states that alternative
alternative flows which may be determined by flows may be determined "by the applicant via utilization of"
the applicant via utilization of site- such study, while the FWS condition states only that flows may be
specific studies approved by the wildlife determined "by" such study. To the extent these two conditions
Resources Commission and the U.S. Fish and do not produce the same result, the stricter condition
Wildlife Service. governs. W The District argues that the "plain language
meaning" of FWS' condition is that the District is allowed to
determine the flow so long as the determination is based on an
agency-approved study. We see no such plain meaning; the FWS
condition could just as arguably provide that the agencies are to
make the determination. 25/
10 The District asserts, apparently in the alternative, that it The pre-exemption correspondence between the District and
is for the Commission to evaluate the agencies' objections FWS does not provide a specific explanation of FWS' intent with
to the District's minimum flow study results. The District regard to the operation of its minimum flow condition. I
argues that the agencies' objections are arbitrary and However, the correspondence in the record, both before and after
capricious and that its 100 cfs flow regime is reasonable
and should be sustained. However, since in this order we
find that the agencies retained the authority to approve 13/ The entire condition is set forth in note 6, supra.
revised minimum flows, the agencies grant or denial of
approval is a part of their mandatory conditioning authority 1_4/ See Sierra Pacific Power Co., 18 FERC $ 61,246 (1982); Van
under Section 30(c) (1) of the FPA and is not subject to Buren Township, 19 FERC 1 61,251 (1982).
Commission review. See, e.g., Southern Pacific Land Co.,
19 FERC 1 61,297 (1982). Exemption orders state that the L5J The District argues (at p. 3 of its appeal) that "at no time
Commission will resolve issues as to whether fish and has either agency indicated that there was even a subtle
wildlife conditions are outside the scope of article 2, difference between their conditions." This appears to be
i.e., outside the scope of Section 30(c) (1) of the FPA. correct, except that both agencies assumed that they would
See, e.g., the exemption in this case, 26 FERC 9 62,040 at have to approve any modified flow regime. See the
p. 63,069. The minimum flow issue in this proceeding does discussion, infra.
not pose such a question.
16/ See the District's August 2, 1983 exemption application,
1�ij The entire condition is set forth in note 6, supra. Appendix C, which contains seven letters from FWS to the
"Commission" District discussing minimum flows (letters dated March 18,
12 The term Commission appears to refer to the Resources 1982, April 19, 1982, May 24, 1982, June 25, 1982,
Commission; the three conditions submitted by NC Wildlife in September 16, 1982, January 4, 1983, June 8, 1983); and four
its November 15, 1983 letter appear to refer to NC Wildlife letters from the District to FWS referencing flows letters
interchangeably as "the Commission" or the "Wildlife dated April 6, 1982, August 17, 1982, December 13, 1982,
Resources Commission. April 21, 1983).

Project No. 7497-004 -7- Project No. 7497-004 -8-
issuance of the exemption, IZ/ reflects marked and continued review the study but that it anticipated the need to confer with
disagreement between the District and FWS with regard to the the District's consultant "prior to completion of the
appropriate minimum flow. In any event, it appears unlikely that submissionE process and
of recommendations to the [FERC]." 2�/
FWS, which has mandatory conditioning authority over the
exemption with respect to fish and wildlife, would have intended By letter dated February 29, 1988, FWS advised the District
to give the exemptee unilateral power to revise the minimum flow that it had completed review of the District's instream flow
regime without FWS approval of such flow regime. study. ZV FWS stated that "the field data acquisition and
compilation were competently conducted and that the habitat-
A review of the agency/exemptee correspondence indicates discharge relationships established accurately reflect conditions
that the agencies considered the selection of an appropriate flow in the Craggy Dam project area." FWS concluded that the 460/840
to be part and parcel of the minimum flow study, and that the cfs minimum flow regime was inade
agencies would have to agree to any revised flows. g quate, and specified instead
monthly minimum flows ranging from cfs to 8 cfs. By letter
By letter to the District dated October 8, 1986, the Division of dated June 6, 1988, NC Resources specified
same the same minimum flow
Water Resources of the North Carolina Department of Natural regime as that set forth in FWS' February 29 letter. 2
Resources and Community Development (NC Department 18 ) —4/
reiterated that the 460/840 cfs flow regime stipulated in the In response to a May 10, 1988 letter 25 in which the
exemption must be maintained "[u]ntil such time as the [instream Distit apparently asserted that the FWS flows were unreasonable
upon.." 1J
flow study is completed and any new conditions are agreed District
that the agency was obliged to accept the 100 cfs flow
proposed by the District, FWS, in a letter dated July 19, 1988,
Representatives of the District and FWS met on May 5, 1987, stated the following: 261
and discussed the exemption conditions and the instream [T]he District decided to employ an instream flow
study. 2-0/ The District began field measurements for its IFIM assessment technique at the
study in July 1987 and forwarded its study results to FWS and NC project site. The Service
[FWS], North Carolina Wildlife Resources Commission,
Resources in September 1987. By letter to the District dated
and North Carolina Division of
October 2, 1987, the NC Department stated that it had begun its at Water Resources reviewed
review of the District's study, but that "additional discussion, the study proposal and the latter provided extensive
assistance in the field aspects of the study. The
clarification, and technical information may be needed before the
consultant's report is finalized." 21 By letter to the District Product of a study of this type is a time series
dated October 13, 1987, FWS also indicated that it had begun to relationship of habitat units versus discharge for one
or more species and life stages of aquatic organisms.
This information is used to determine the flows
1� See note 16, supra, and discussion in text, infra, necessary to meet river resource management needs.
These study results, the discharge-habitat relationship
18 See note 4, supra. produced by the study, were accepted by the Service and
other review agencies. Please note that the result of
See attachment to the District's September 19, 1988 filing. this type of study is not a target flow volume. The
See also the NC Department's August 20, 1987 letter to the
District, reiterating the required minimum flow release 22J Id.
regime "until State and Federal agencies review the results
of the on-going instream flow study and make 23 Id.
recommendations," and the NC Department's September 3, 1987
letter to the District's consultant, RMC Environmental Z4J mod.
Services, both attachments to the District's September 19,
1988 filing. 25J This letter does not appear in the Commission's files for
20/ See FWS' May 18, 1987 letter to the District, attached to this proceeding.
the District's September 19, 1988 filing. 2-6-/ See pages 1-2 of the July 19, 1988 letter from FWS to the
2� See attachment to the District's September 19, 1988 filing. District, attachment C to the District's September 19, 1988
9. filing.
r

Project No. 7497-004 -9- Project No. 7497-004 -10-
study is not designed or capable of producing a "flow The C mmissio orders:
number" which your letter asserts that we must accept.
The "flow number" the District proposes was derived The appeal filed in this proceeding by the Metropolitan
through an irrelevant and biologically insupportable Sewerage District of Buncombe County, North Carolina, on April 7,
technique superimposed on the study framework. 1989, is denied.
FWS also rejected the District's assertion that its consultant
had used standard FWS-approved methodology to conclude from the BY the Commission.
study that the optimum flow would be 100 cfs: a7 ( S E A L )
The point of inflection methodology utilized by
RMC Environmental Services [the District's consultant]
is not a part of any Service instream flow incremental �{/ (
methodology. Therefore, this point of inflection
method has no habitat-discharge relevancy. Lois D. Cashell,
Secretary.
In light of the above, we conclude that the District is required,
by the FWS condition in its exemption, to maintain the 460/840
cfs minimum flow regime at its project until such time as FWS, NC
Resources, and the Division of Water Resources all approve a
different flow regime.
2/ Id. at p. 3. FWS' letter also contained rebuttals to
various other technical assertions, some of which are
repeated in the District's April 7, 1989 appeal.
As noted above, in February 1989 the District submitted to
the agencies a mitigation and management plan, proposing
minimum flows at levels ranging from 100 to 400 cfs. On
April 10, 1989, the District filed with the Commission FWS'
April 5, 1989 comments on the District's proposed plan. FWS
found the plan's minimum flows to be unacceptably low, and
posited two options for resolution of the issue: imposition
of the flows set forth in FWS' February 29, 1988 letter
(500-840 cfs), or imposition of a lesser flow and adoption
of mitigative measures which would offset habitat value loss
resulting from such lesser flows. By letter dated June 30,
1989, and filed on July IS, 1989, the District advised the
Commission that it was working with FWS and the state
agencies to develop a revised mitigative plan.