20051457 Ver 1_FW SmithEnvironment Blog.pdf.msg_20130923

Strickland, Bev
From: Butch Smith [manager @ccsdwater.com]
Sent: Monday, September 23, 2013 8:09 AM
To: tom.reeder @ncdenr.gov
Subject: FW: Smith Environment Blog.pdf
Attachments: Smith Environment Blog.pdf
FYI
From: Butch Smith [ma i Ito: managerCa)ccsdwater.com]
Sent: Monday, September 23, 2013 7:46 AM
To: abridges re. ionc.org; bcameyCa)hotmail.com; dewey776 yahoo.com; dewey .cookCa)clevelandcounty.com;
3TAYLOR81C)CAROLINA.RR.COM; ibrackett74C)amail.com; iustin(a)timmoorelawoffice.com; cpedersen(a)carolina.rr.com;
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Subject: SmithEnvironment Blog.pdf
! =1telm '
- blog provides + . discussion d analysis of environmental issu_ special o on .e a
and energy policy. The blog has its roots in North Carolina, but follows environmental issues at the state and
national level.
It never seems to amaze me about the freedom of press, tell your side and use the internet.
Also we made the Charlotte Business paper Friday September 20. I will try to get a copy.
Thanks
Butch
Postscript, Saturday I was in a store and a person I knew from Henson Timber (Bill) ask me
about Shelby watershed, I said you mean Cleveland County Reservoir. There were three men
standing around and before Bill could answer me one of the men spoke up. He said if we
don#t start building lakes water is going to get high as oil. Bill responded it the tree hungers
they are destroying our county. I laugh and told them they are right, but I also said the general
public does not realize what it takes to build a Reservoir.

N I - post on Smith Environment B-og
- -Fhe Direction ol'the State's Water Qwmfity 0»rogra00
.�~--
September |P.2O|3. Earlier posts talked obowxvo unusual recent decisions hv the Dcparxncn\,J
Environment and NatUral Resources (DENR) on Section 40 1 Nvater quality certifications under the Clean
VVutcrAu< — unc xoocconin(, Cleveland County's proposal to build u new darn on the First Broad River to
rncNc m reservoir and (he other for fcdcm\ ro|iconsin-of'/\|uoo's existing hydroelectric powerdums on the
YndkinKivcr. You can find the Cleveland County post hwr(� and the Alcoa post hcj'e. Thcquesdonixn/hu/
those two decisions say about the current direction of the p/Ncr quality pro&rom.
The decision to waive the water quality certification for the proposed Cleveland Cwun1)! reservoir — the Oroi
defiberatL waiver in the history oftku N.C. `m8cr quality prngrum — cited x sute rule rOquiriog adcciuiou on
a 40 1 application within 60 days, But the Cleveland C01,1111[V application \.vas not complete and DE'NR made no
effort \u_�o through the revicwpruoeo (which ,vooN have required an environmental hopm1sta1onuoi and o
pvblionn|ico). As reported in the Charlotte Observer, Division of Water Resources Director Toni Reeder gave
odiUercnt explanation of(hep/nivcc "The state o[North Carolina looked at all of this and said ibc»c`x really
no Value added to or getting involved in this whole thing. C|orc|und Coun1y "/ou|d have had 10 spend more
mmncv thnJp/ou|d not go to any good purpose."' The implication was that o sk^1c n/utcrquah\y review would
odd more time and cost when the U.S. /\rmy Corps ofCuAinccry (as the federal por/niidn- ageaoy)opyosed
the pro �co�—rvo�d�ou�hrh�y1u'�vvx\crqnah<yrcvicwuud|hcf�d�m|�mnnArcvicv/osxoOy�o hand in]land
and nc|y on the smncenvironmental Studies.
Where the Cleveland Countyproject proposed cmntnCtionofunrv/darn: Alcoa applied for u state water
quo|dyoeniUCodnn\ocovercmm1inucdnpcm|iuoo[Dnurexis1ingdamyoot6eYudkioHivorthmwcrcbuih
between 50 and 100 ycars ago to gencrate power lor the now-closed Alcoa aluminum snielting plant. After
ocur[y aycorofrevien/and u public hearing, [)ENR Suddenly denied the Alcoa 401 Certification. The denial
letter cited u state rule requiring the -applicant to have ddu to the project site, the permission oftho pnpmr1y
ownermr1hu uhi|i|y/n acquire the property bycondemnation. DENRouUcdmna|awyui1(fi|cd the sumuduy)
claiming state public t1_ugowneohip of the bud of1hn Yadkin Rivet' Under the Nonudmmsio conclude that
Alcoa cooN not shon Udc to the land uodcrthe dams. According to [bc |o(uo� the |ockofnitbcr title or
permission frorn the state would make it ditfiCUIt to assure that Alcoa could ineet water quality COnditiOnS Oil
operation of the darns.
The carlier posts talked about a nUmber of'queslions raised by the Iwo decisions. ']'here are also a few thin-, to
take away:
DENR has Nvaived a 401 Certification without clearly exphiining the reason for the waiver or how
n/mivmcdcc�iooynd\ be nmmdo �o the fn(umc Thedocision letter su��ox�the waipor nsu|�d �on DENQ's
inability to make a decision within 60 days. but the record shows no attempt to gel, the additional information

needed to make the application complete, provide public ow|icooƒde application ordoo onmo|du
review. The Division of Water Resources dircckn |o{cruu that state rovim*vmuld have served no
Purpose giVCD the C01-I)S OfEngincers' objections to the project. F.itlicr reason could also easilN., apply to other
401 applications.
Asmthe first explanation. DFNR denied tlieAlcot-101 applicationone month later aFternearlyaVearof
rCViC* With nuouggcshon that woter quality rules required uwuncr. The second reason o[rercd for the
waiver (O.S. Army Corps of[/ 'muosopposition)aJaoaoo|ico0oNhcr jccts.TbcCorpxufEn�inccmo#on
prcyocyƒedens| permit applicants to look at other alternatives with fewer environmental i'npao1s� The Corps
uxprcsscd similar skepticism about the Ci1y of Raleigh's proposal to build o reservoir on the Little River, but
in that case DENR has continued to work with Raleigh and the Corps n[En&iocors10 look cdalternatives
and address the Corps' concerns. The smnc has been true [oroUhor large commercial development project".
DEND treated the Cleveland County reservoir project diOeondy,ho|huunotpn`vidodaoonoixtcniuxp(ux*ioo
of the decision or criteria K,r future 40| Certification waivers.
Denial of u401 Certification based on in unresolved claim of public trust ownership of the river bed
under the project hmoimmplioudouxwo|1buymmdAkno. |f there isn case oobo made fbrpublic trust
ownership of the upper reaches ofdhc Yadkin River, the same will bc true 6`r many of1be state's inland
rivers. The decision may have implications Fnr dmn yi1cx proposed by Cleveland County and the City of
Raleigh (on the First Broad River and the Little Kivcrrcopccdvdy).
Title 10 the bed of the Yadkin River tinder the Alcoa darns has not yet been determined by the noons, but
uLNR issues both Individual and 0coc/a|40| Ccrtiflicu1ioms for a wide range o[projects known Lobeuostate-
owned pub|icrruyt|undx — inok/dinominin�ucdvi�i�s, utility io6ns/ruumru, murinax'uquauuhum
npco4ioux. shoreline stabilization projects, v/atcr inoikcx, and dams. Tbejosti5oohnn bordcoia| of the Alcoa
401 Certification -- that luck ufowncmbipor permission from the matc10 apply calls into question ,he
upPHcon('o ability tnoo,nply with water quality conditions -- vrou|d apply equally tuthose projects.
DENR has not explainedwhat evidence oftitle will be required ofapplicants proposing to construct a
project in navigable vrutcm. & deed to submerged lands may or may not be valid. Sc* the earlier Py�;LOil
public trust doctrine for mvrc explanation ofpublic bugovmcnhip and the woy title to state-owned public
trust lands can hetransferred. But the existence —nr absence —n[u suite lawsuit c|uimiuc-11 title Under the
Public trumdoo|rinm cannot bo the deciding factor either. Public /rvs| ownership does not arise because ofa
slutu |uwxuit; itisnot nu(Ya<cdbythe absence ufone. Ravin& made public trust o*ncr*|iipu factor in the
iysuonveof40l Certificalions, DENR needs a clear and consistent approach to resolving questions of title to
Iunds under coastal woicm and nurigu6|* rivers; otherwise [lie outcomes wit] be u/bi\rury and subject to
political influence.
The Alcoa dCllial letter Klg&ests that Alcoa needs specific state permission to apply For a 401 CcniDuu|ion|o
confinue operating the Yadkin hydropo\\er clarns, but does not, indicate M hal f�rffl that PCI'MiSSi011 MUSt take,
Some activities on State-OWnCd public trust lands have individual submerged lands leases fi-orn the State

Property Office. but many do not. The state has often relied on environmental permits as the permission to
develop on state- owned Submerged lands. It isn't even clear whether a previous lease to construct Oil state -
owwned public tr'lrst lands would be sufficicnt, since the slatc'� lawsuit claiming ownership olthe Yadkin river
admits that Alcoa had permission to build the four darns.
The precedent set by the Alcoa denial could apply to a number- of ongoing commeircial activities in
coastal waters and state giver -s. One ofthe (several) interesting things about the Alcoa decision is that it
dealt with renewal of an operating; license for dams, built decades a"o with state permission. The DFNR denial
letter sugoests that the state must alve express permission for the renewal of licenses and permits for one_ >oing, .
operations oil state-owned public trust lands -- activities that could include acluaculture, nlarirla operations,
sand minim and other commercial activities. The criteria for granting or denying permission will be another
question.
-] -he troubHn&1 throb- about the Cleveland C'or111t) and Alcoa decisions is the reliance on rule interpretations that
not drily break with bast practice, but are inconsistent with each other. Willi respect to the waiver ofa 401
Certification under the 60 -day rule, DEER needs to reconcile the Cleveland County and futon decisions, 1P
opposition by the Corps of Frigineers was the real reason for the Cleveland County waiver. DFNR should
explain the criteria for waiver ill Situation where the Corps has pressed an applicant for alternatives. DFNR
also needs to provide guidance to applicants proposing projects in coastal waters, and inland
rivers. Otherwise, applicants wwill have little assurance of a clear, consistent and predictable water quality
review,
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1 7�@ `�!`�`k''- <tli 4:ZT'rrn4 >tt. `u3

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September 3.2O13. First a disclaimer: This post will be the first of osehes nn two recent decisions
bv the Department of Environment and Natural Resources (OENR) on water quality certifications
requested under Section 401 of the Clean Water Act. Both decisions have been appealed; these
posts should not be taken ae legal advice to par-ties in these or other cases.
This post explains how Section 401 c0 the Clean Water Act works and describes OENR'sdecision
ho waive the 4O1 Certification for e Cleveland County reservoir project. Thenext post will cover
OENR's denial of 401 Certification forA|ooa'a hydroelectric dams on the Yadkin River. The
|oot post in the series will talk about the implications ofthe Cleveland County and Alcoa decisions
for [}ENR'e water quality certification program. Individually, the decisions are unprecedented;
together, the decisions send a very confusing message about DENR's implementation of Section
4O1Vfthe Clean Water Act.

First, a little background on water quality certifications. Under Section 401 of the Clean Water Act,
an applicant for a federal license or permit that involves any discharge to navigable
waters must provide the federal agency with a certification that the activity will comply with the
water quality standards of the state vvhena the project will he built. Examples of m "diocharge" include
piping wastewater to a stream or river; putting 5U material in the water to build o structure like a
dam nr bulkhead; and releasing water through a hydroelectric dam. A number of federal permits
can trigger the need for o''4O1 CmrtificaUon"; the most common may be permits under Section 4D4of
the Clean Water Act to fill navigable waters; permits issued under Section 1Oof the Rivers and
Harbors Act of 1889 for structures in navigable waters; and Federal Energy Regulatory Commission
(FERC)|icenaee to build oroperate hydroelectric dams,
One important thing ioknow about a4O1 Certification: the state water quality review does not
simply duplicate the federal permitting process. The federal permit decision often focuses onone
part ofthe project and may or may not include consideration of water quality impacts. Under
Section 401 of the Clean Water Aot, the state 1s charged to look at all of the activity's vvahar
quality impacts — including impacts beyond the scope of the federal permit — in deciding
whether the activity will meet water quality standards. The U.S. Supreme Court confirmed the
broad scope ofastate 401 Certification in PUD#/of Jefferson County u Washington State Dept.
of Environmental Quality, 114&Ct.180O.128L.Ed.2d716(19B4). The state rarely stamps a4O1
application "approved" as submitted. More oftem, the state's 401 Certification identifies operating
conditions and mitigation measures needed to prevent m water quality violation. The federal permit
then incorporates the state's water quality conditions and mitigation requirements.
Cleveland County Reservoir. Cleveland County has been trying to get o Section 4O4 permit from
the U.S. Army Corps of Engineers tm dam the First Broad River and create e reservoir since oileast
2805, To issue Section 4O4permit, the Corps of Engineers has tn find that there ismwless
environmentally damaging alternative that can meet the project's intendedpuqz000,C|*vo|mnd
County has argued that the reservoir project isneoeaoarytoaupp|ydrinkingvvotorfortheoounty.
but the Corps of Engineers has not been persuaded that a reservoir is the least environmentally
damaging alternative. There appear to be other drinking water sources available to Cleveland
County – including the purchase of water from existing water systems with excess supply,
The Corps expressed concerns about the Cleveland County reservoir project hnrnthebeginnimQ.
but entered into an agreement with the county describing how a federal permit application would be
processed. An early step would have tnbe preparation ofon Environmental Impact Statement
(EIS) in consultation with the Corps of Engineers to satisfy the National Environmental Policy Act
(NEPA). Since 2005, little progress has been made on the federal permit application and EIS, but in
late April Cleveland County sent DENR's Division of Water Quality an application for a 401
Certification for the reservoir project.
Soon after receiving the Cleveland County application on May 2.DENR'swater
quality staff concluded that the application was incomplete; among other things, the application did
not identify mitigation for stream and wetland impacts, The state also has
an environmental law similar to NEPA. The state Environmental Policy Act (SEPA) requires
an E|5 before a state agency approves a project involving: 1. expenditure of public money or use of
public land; and 2. the potential for significant impacts on the environment. Sae N.C.GS. 113A-
4, Although the Cleveland County reservoir project metaUofihoSEPAtr|ggera. the county did not
submit an EIS with the permit application –another reason to find the application
incomplete. (Usually, the state and federal reviews are coordinated soesingle EIS can bmused

Although water quality staff decided that the Cleveland County application was
incomp|ebe. DENR did not notify Cleveland County of deficiencies in the application. [)n the other
hand. DENR did not acknowledge the application as complete and publish notice of the
application en required under federal law. After the early exchange ofemai|s among [)ENRstaff
about the incomplete app|iootion, radio silence (at least in terms of email communication) for several
weeks. Than. on July 2, 2013 the new director ofDENR's reorganized water programs, Tom
Reeder, sent aletter bn Cleveland County waiving the requirement for m401 Certification onthe
reservoir project, The letter gave one reason: understate rules, [}ENR must act on an application
fora 401 Certification within 60 days or the certification is waived. (See 15A NCAC 02H.0507.
You can find OENF7 documents Vn the Cleveland County reservoir project, including the waiver
Uetter, here. (Be prepared totry the link more than once; the connection sometimes sends mnerror
message.)
Several things about DENR's decision on the Cleveland County 401 Certification:
— OENF< has always interpreted the OO-dmy time period in state rules aa starting vvhenOENR
receives a complete application for the 401 Certification and in th,is case it seems clear that the
Cleveland County application was not complete.
—TheC|aonVVaterAct only assumes the 401 Certification has been waived if the state fails toact
within one year after receiving a 401 application.
—Startingthnreview time based onon incomplete application is inconsistent with DENR'spast
interpretation of the rule and inconsistent with DENR's application of the rule to other projects
currently under review.
— Given the inconsistency with past interpretation, oumen\prooUte and the absence of any effort to
put the Cleveland County application through e normal 4O1 Certification review, [}ENFl seems to
have made a deliberate derision to waive the state's 401 authority for this particular project. The
waiver did not happen by operation of either state or federal law.
— A deliberate waiver of a 401 Certification appears to have no precedent in the N.C. water quality
program and means the state has forfeited the opportunity ho influence permit conditions
and mitigation requirements for the Cleveland County reservoir project to protect water quality.
— Other applicants will question the criteria for a state waiver ofthe 401 Certification. (The City of
Raleigh, which has also proposed a controversial reservoir project, houa|neadymskedforacnpyof
the Cleveland County waiver letter.) Unfortunately, the waiver letter raises more questions than it
answers, since it cites the 60-day rule to waive the 401 Certification for an incomplete application.
OnAugusd21.2013.SVuthonnEnviponmento|LavvCemter/SELC\senta|etteraskingdhmUS.
Environmental Protection Agency to designate the area of the First Broad River inCleveland
County proposed for reservoir construction as unsuitable under Section 404(c) of the Clean Water
Act. Since then. SELC has filed an appeal of the state's waiver ofthe 401 Certification on behalf of
American Rivers.
MITTIM MI

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This entry was posted in General Observations, Water and tagged 401 Certification, Reservoirs,
Water Quality on SepteMber 3 2013 by nvysrnith.
Coastal Policy: Messages from Hurricane Sandy The Uses of a Water Qualm Certification: Alcoa
2 thoughts on "The Uses of a Water Quality Certification: Cleveland County Reservoir"

Environmental Law and ?�olicy from a North Carolina
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a About Smith Environment
The Uses of a Water Quality
Certification: Alcoa
3 Re
September B.2O1O. On August 2.2O13,OENFTe Division of Water Resources denied eSection
401 water quality certification for the relicensing of Alcoa's four hydroelectric dams on the Yadkin
River. (See an earlier post for background nn 401 Certificationo] The denial letter did not cite any
water quality basis for denying the 401 Certification. Instead, the letter referred to a lawsuit filed the
same day by the N.0 Department ofAdministration that: 1. claimed title to the bed of the Yadkin
River under the Alcoa dams ao public trust land; and 2. asked the court to recognized State
ownership of the Alcoa dams based on public trust ownership of the riverbed under the dams. The
significance of the Alcoa 401 Certification denial in that many projects requiring 401 Certifications
are located in waters that may be covered by the public trust doctrine, The Alcoa denial
raises some interesting questions about issuance of 401 Certifications for activities in rivers and
streams in particular. Finst, some history on Aicoe'a dams and the public trust doctrine.
History. Alcoa operates four dams on the Yadkin River to generate electricity, Alcoa bought
an unfinished aluminum smelting plant in the town ofBadinfrom a French company in 1915.
completed the plant and began operation in 1917 powered by the newly constructed Narrows Dam

on the Yadkin River. Aa power demand increased, Alcoa built three more hydroelectric dams onthe
Yadkin - sd the Falls (1810). High Rock (1927) and Tuckertovvn(19O2). After Congress
strengthened the federal role in permitting hydroelectric power projects, Alcoa received a5O-year
federal license ho operate the dams (together known as the "Yadkin Project") in1958. In 2002,
Alcoa began the process of renewing the federal license.
For two years, e group of North Carolina local governments, state agencies (including DENR),
federal agencies, lakefront homeowners associations, and environmental organizations met to
develop recommended license conditions for the Yadkin Project. The group reached agreement
on measures to protect water quality and habitat; provide public access; maintain lake levels and
adequate downstream flows; and create a drought management system for the area affected by the
Yadkin Project. The group submitted the proposed conditions to the Federal Energy Regulatory
Commission (FERC)in2OO7. You can find a description of the 2OO7 ma|ioenaingmett>ernent
agreement here.
Shortly after the settlement agreement had been signed, Alcoa stopped all production at the Badin
aluminum works and eliminated the last 30 jobs at the plant. At its height, the Badin aluminum
works employed about 1,000 people, but production had declined over a ten-year period, As the
demand for power at the Badin works lessened, Alcoa started selling electricity from the Yadkin
Project on the wholesale market, Complete shutdown of the Badln plant set off backlash. 8\on{y
Cwmn1y, which did not sign the re|icensinq settlement agreement, demanded that Alcoa
compensate the county for jobs lost in the shut down ofthe Badin works and raised concerns
about industrial contamination in the area ofA|ooa'o Bodin plant. Stan|y County and others
opposed to renewal o[A|ooa'a FERC|icenee persuaded Gov. Beverly Perdue to intervene inthe
FERC reQoenying and request transfer of the Alcoa license to the State of North Carolina. FEF<C's
decision onre|ioenaimgof the Yadkin Project hasnmmbaenonho|dforsevenaiyearswaitimQfortha
state to make o decision on issuance of 401 Certification for operation of the dams.
In 2009. DEN issued a 401 Certification for the Yadkin Project. The certification required Alcoa
to upgrade the hydroelectric generation facilities and make operational changes to improve
downstream water quality and restore flow io streams affected by operation uf the dams. OVV(J
revoked that 401 Certification in late 2O1O after discovering that information submitted by Alcoa
during the application review may have been misleading. After resolving DVV{}'s concerns, Alcoa
reapplied form 401 Certification |mei year. DVV(]was moving toward issuing m new 401
Certification forthoAVcomdmnms - -thenavvmn m public hearing oma draft 4D1
Certification in May --when OENR suddenly reversed direction and denied the 401 Certification
on August 2, 2013 citing the McCrory administration lawsuit filed the same day. You can find
documents related toAVnoa's recent 401 application (including the denial letter and the complaint in
the McCrory administration lawsuit) hare.
Public Trust Doctrine. Under ancient |avv brought to the American colonies from Eng|and, lands
under navigable waters are owned by the sovereign and held in trust for the public. The "public trust
dottrine" protects the right of the public to use the waters for navigation, fiahing, and
recreation. After independence, the states acquired title to public trust lands previously held by the
King. Since the state holds lands under navigable waters in trust for the use of the public, the state
rarely transfers ownership of those lands outright, On the other hand, the state allows many
private activities on state-owned public trust lands — both commercial and non-commercial, Most of
the docks, piers, marinas, and fish houses in coastal waters have been built on state-owned public
trust lands. You will find other commercial activities in coastal waters, rivers and streams
including mqumou|tureopenationa. rnining, commenoial recreation facilities, and dams (used for
various purposes).

The McCrory administration lawsuit admits that /Ucno had state permission to build hydroelectric
dams on the Yadkin River. |n the late 1Eth and early 2Othcentury, the General Assembly allowed a
number of companies to build hydroelectric dams and mill dams on state rivers by special
legislation. It is not clear that the state claimed ownership of the bed of the Yadkin River at the
time. Some early laws authorizing construction of dams on the Yadkin refer to construction on''non-
nevigab|e~ sections ofthe Yadkin River and a number of state court decisions recognized private
ownership of the bed nf the Yadkin River at specific locations. In Rose u Franklin, 218 N�C. 289.
48.E.2d876(N,C�,183B). the N.C. Supreme Court noted that the par-ties toa title dispute admitted
that the Yadkin River was a non-navigable stream as it passed through the town of Elkin and found
that the plaintiff owned to the center of the river.
Until the 18g0s. court decisions recognized state ownership nf lands Linder: 1. tidal waters (like the
waters of the Atlantic Ocean and the coastal bays and sounds\; and 2. other waters that were
navigable by sea-going vessels. The second category covered rivers that were below the fall line
and deep enough to be navigated by large boats. The public trust cases appeared toallow
private ownership of the beds of other rivers and streams, but recognized m public trust easement
on those that could be navigated bv shallow-draft boats or used tn float logs
downetreann. Decisions like Rose uFranklin fit this understanding uf the |avv-
A 19S5N.O. Supreme Court decision, 8 u State, 484S.E.2dG74.342N.C,
287, abandoned the use of tidal influence oao factor and stated g simple rule: the public trust
doctrine applies tn any water body that'in its natural condiUnn,can be navigated by "useful vessels,
ino\udingsrmo||ormMusedforp|eaeuns^ |t isn't clear whether Gm/athnney completely abandons the
old distinction between waters navigable by sea-going vessels and those Ooebab|mby canoe for
purposes of state ownership Vf the bed, One problem with the Gwathnney case is that it involved
tidal waters and marsh where public trust ownership had historically been recognized. The court just
substituted one grounds for public trust ownership (navigability) for another (tidal influence). The
decision never addressed the impact ofthe new rule on inland rivers where state courts
had recognized private ownership of the river bed. The McCrory administration lawsuit claiming
title to the Alcoa dsrne may require the court to explain hnvv the Gwa&hnneydecinion oPpUioa
to interior rivers and streams.
The 401 Certification Decision. The letter denying the Alcoa 401 Certification offers only one
grounds for the denial — the state's claim of ownership of the Yadkin River bed and the Alcoa dams
built there. Citing a water quality rule, 15A NCAC 02H.0502 (f). the letter says that "signature on the
[401] application 'certifies that the applicant has title to the property, has been authorized by the
owner to apply for certification or is a public entity and has the power of eminent domain'. The
required ownership certification ensures that the applicant owns the project's darnxand
powerhouses and is fully capable of implementing all protections of water quality that may be
imposed ae conditions ina4O1 Certification."
The rule applies to all 4O1 applicants, raising the question of what will now bo required of
applicants proposing development in public trust waters or in hw*ns and streams where public trust
ownership may beinquestion, It is not a standard that seems ho have been applied before to
projects onriveraandatreamn– eveninthevnrynaoenipaet. Just one month earlier, QENRwaived
a 401 Certification for the proposed Cleveland County dam without requiring the county to nhnvv
ownership of the bed of the First Broad River orobtain state permission to apply for federal Clean
Water Act permit to build adam. Beyond dam construction, a 401 Certification may berequired
for other commercial activities like in-stream mining; eguacu|tuna; construction of recreation
facilities; and water intake structures for industry or agriculture. Having invoked the requirement for

AJonm'e hydroelectric dams, [)ENR will need 8z explain how the requirement applies to other
applicants and permit holders:
– Does the standard set |n the Alcoa denial letter apply tnall projects innavigable waters that
require 401 Certification? This is not e trick quesUnm the letter indicates
that ownership or some form of state permission will be necessary tn satisfy DEWRthat the
applicant has sufficient control over apnoject on public trust lands to meet water quality
conditions on a 401 Certification.
–VVhat will en applicant have todokzshow private ownership of land under o river nrstream?
Deciding whether a river or stream is navigable can require a boat trip — literally. Answering the
question o[ public trust ownership will be further complicated by uncertainty about how the
Gwa1h/neydooieinn applies to rivers (or parts pfrivers) that had never been considered navigable
by sea-going vessels. Un the past, many nf those riverbeds had been recognized es private property
subject toa public trust easement for navigation.
–VVithvutpronfnfprivehenwnershipofMhehveroretn*ambed.vvhat kind of state permission will be
needed? |n the 1SQh and early 28#h century, the General Assembly often authorized activities in
rivers and streams by special legislation --as it did for construction of hydroelectric dams on the
Yadkin River. The state issues leases and easements in public trust lands for some purposes,
but those programs developed fairly late in the 2Oth century and have been used for the most pert
in coastal waters. The easement criteria inG.S.145-12 lend themselves more readily to piers and
docks than to more intensive uses such me mining or dam construction.
|n something ofa reverse of the Alcoa 4O1 denial, the state has often relied onenvironmental
permits ao the vehicle for approving activities in public trust waters. UnderG.S. 14O'12, issuance of
a Coastal Area Management Act (C/\K8A) permit for development im coastal waters also gives the
applicant nstate easement. (The State Property Office has am opportunity (o review those CA&1A
applications.) Outside the coastal counties, itie hard to find consistent application uf the easement
requirement. For projects that don't require a CAK4A pennit, there will likely be more uncertainty
about public trust ownership and a less well-trod path b) state approval if the state does own the
submerged lands.
–VVbotstandardawiUbeopp|iedingnantingord ingetatepermissionfnracUvitiesnnpubk:truet
lands? The McCrory administration lawsuit suggests an intent tu tie A|coa's operation of the Yadkin
dams to generate electricity for sale on the wholesale market to compensation for use of the public
trust resources. Outside of leases to mine on submerged lands, state law has not generally
taxed revenue from commercial use nf public trust resources.
–VVhathapponswhenCunonasehaegivenafedero|aQenryauthohh/ to permit an activity in
navigable waters? Under the Federal Power Act, FERC has the authority to license hydroelectric
projects in navigable waters of the United States. The U.S. Army Corps of Engineers has authority to
permit other types of structures in navigable waters under the Rivers and Harbors Act of1880
and issues Clean Water Act permits to fill navigable waters. The Section 401 Certification has
generally served ea the state approval for federally permitted projects in navigable waters. | don't
know that the state has previously required a separate easement or lease. I also don't know
whether the federal agencies believe any other state approval in needed given Congressional
authority to permit these activities in navigable waters.
Many questions. The answers will be interesting.

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Several people responded to the post about denial ofAJcoa's 401 Certification with questions or
comments about public trust law and ownership of the bed cf the Yadkin River. Based onthe
comments, some additional explanation of public trust law (and clarification of the earlier post) may
be helpful. Note: | did not intend to address the merits of the State's claim to the bed of the Yadkin
River under the Alcoa dams in the earlier post and will not do that here --| don't have all ofthe
facts available to Alcoa and the state's lawyers.
Both state and federal court decisions have recognized state ownership of lands under
waters that are navigable for trade and commerce, The American colonies inherited English
common law recognizing the King's ownership of lands under waters subject to the ebb and flow of
the tides. After independence, state courts quickly recognized that using the tides toidentify
navigable waters did not work well in American vvhena |arge, navigable rivers extended far inland. In
Wilson v, Forbes, 130,C�3O (1828). North Carolina became one of the first states to
recognize public trust ownership of lands under all commercially navigable rivers. The case
marked the beginning of North Carolina's use of the "sea vessel" test for state public trust ownership.

By the late 18th century, the U,S. Supreme Court `joined state courts in recognizing public trust
ownership of lands under rivers that were not tidal but were "navigable |nfac[. TheU,S, Supreme
Court has said that waters are navigable in fact if they are "used.pr are susceptible oƒ being used,
in their ordinary condition, as highways for commerce, over which trade and travel are or may be
conducted in the customary modes of trade and travel on water." (From an 1871 U.S. Supreme
Court decision in The Daniel Ball,) Under both etmio and federal court decisions, lands under other
rivers and streams can be privately owned but there may bea public right ufnavigation,
A 201 U.S.5Vpname Coud(PPL Montana, LLCx Montana) highlighted two limitations on
finding state ownership of a river bed under the "navigable in fact" test:
1. For the state to own the bed of a river, the river had to be navigable for commerce at the time of
statehood. Later improvements that make a river segment navigable donot give the state title k>
the river bed. (So admiralty jurisdiction may be broader than state public trust ownership.)
2. The navigability test must be applied fn each discrete segment of the river. The state does not
have public trust ownership of the river bed in river segments that were not navigable for commerce
at the time ofstatehood -- even if most nf the river would b* considered "navigable intac±" So the
need to portage for a significant distance around a natural feature, such as a fall, may cause a
segment of river to fail the test for state ownership of the river bed.
You can find the full U.S. Supreme Court decision inthe Montana case here. The case resulted
from the State of Montana's claim of ownership to the bed of several rivers where a company, PPL
Montana, had operated hydroelectric power generation facilities for decades, The Montana
Supreme Court ruled in the state's favor, but the U.S. 9upnarne Court reversed the state court
decision. The [J.3. Supreme Court directed the Montana court Lo reconsider the case based onthe
two limitations mentioned above —for purposes of state ownership, the river had tobe navigable for
commercial purposes when Montana became astate and navigability must he determined for
each discrete stretch of river.
A few other points about public trust law:
For the most part, public trust law has been developed bv the states. A number of the original
13 states extended public boot ownership to non-tidal commercially navigable rivers well babrna the
U.S. Supreme Court addressed the issue. Since then, the role of the U.S. Supreme Court has
largely been to define the property interest in navigable waters that states joining the Union after
independence acquired atstatehood, Once public trust ownership of a river bed has been
established under the "navigable in fact" standard, state law takes over, The individual
states identify the uses allowed and protected on public trust lands. State law also governs the sale
of public trust lands.
Federal regulatory definitions of "navigable waters" do not determine state public trust
ownership. The term "navigable waters" has also been used io describe federal regulatory
jurisdiction under the Clean Water Act and the Rivers and Harbors Act of1889. but the regulatory
definition of "navigable matero" does not determine state ownership of the river bed. Many water
bodies considered navigable waters under the Clean Water Act do not meet the "navigable in
fact" test for public trust ownership. Public trust decisions recognize two categories ofnavigable
waters--1. those that were navigable for purposes of commerce at the time of independence (or
statehood); and 2. those that were not, Waters that were not commercially navigable otstatehood,
maybe commercially navigable now because of later improvements, Or those waters may he

navigable for more limited purposes (ie,Ooatoblebya canoe, but not bv larger vessels or
navigable for only short distances because of obstructions).
The states own the beds of rivers that fall into the first category, The beds of rivers (or river
segments) that fall into the second category can be privately owned. But Clean Water Act regulatory
jurisdiction applies to navigable waters in both categories and there may be waters inboth
categories that also fall under admiralty jurisdiction, The simple rule to remember — public trust
doctrine on)y gave the state ownership of lands under water bodies that were navigable for
commerce in their natural condition at statehood. (Simple to state, but open tosome interpretation
--and then there is the problem of applying the simple rule to the specific history and condition of
each river.)
Having n deed tu land under coastal waters nr under ariver does not necessarily establish
private ownership. If N.C.ocquired public trust ownership ai independence (and that will bea
quwstionbnbede*[dedbeaedonthe^navigab|einfect~test).on|yaco|onio|grantor express
authorization by the General Assembly could transfer title nf those lands too private property
owner.
More than you ever wanted to know about the public trust doctrine...
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This entry was posted in General Observations, Vyater and tagged ublic trust rights on September
11�ZD13bYILsmith-
< -- The Uses of a Water Quality Certificationi Alcoa The Direction of the State's Wale—roLiLlllty
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