Title

United States Forest Washington 14th & Independence SW

Department of Service Office P.O. Box 96090

Agriculture Washington, DC 20090-6090

File Code: 1570-1(L)

97-13-00-0051-A215

Date: April 21, 1997

Annette Faraglia, Attorney

Pacific Gas and Electric Company

P.O. Box 7442

San Francisco, CA 94120 CERTIFIED MAIL - R.R.R.

Dear Ms. Faraglia:

I have completed review of your appeal filed on March 5, 1997, of Regional Forester (RF) G. Lynn Sprague's January 15, 1997, decision notice concerning the section 4(e) conditions for relicensing the Haas-Kings River Hydroelectric project (FERC No. 1988). This review was conducted in accordance with 36 CFR 215 of the Secretary's Appeal Procedure Regulations.

The Haas-King River Hydroelectric Project occupies federal land managed by the USDA Forest Service (USFS) (Sierra National Forest), the U.S. Army Corps of Engineers, and the Bureau of Land Management. The RF is adopting the EA that was prepared by the Federal Energy Regulatory Commission (FERC) and made available on November 6, 1996. The RF is providing the 4(e) conditions to FERC to be included in the license for the protection and utilization of National Forest System (NFS) land. This decision was in response to a request by Pacific Gas and Electric Company (PG&E) for a new license for the continued regulation of water for the operation of the Haas-Kings River hydroelectric project.

On March 24, 1997, Mr. Richard Roos-Collins, Natural Heritage Institute, requested interested party status and filed written comments on PG&E's notice of appeal.

PG&E is appealing the RF's decision on the grounds that:

I. The conditions exceed the lawful scope of section 4(e):

A. section 4(e) does not apply to relicensing of hydropower projects such as the Haas-Kings River Project;

B. section 4(e) conditions must relate to the purposes for which a National Forest was created, not subsequently adopted legislation or Forest Plans;

C. the USFS should recognize FERC as the sole and exclusive regulator of hydroelectric power and avoid duplicating FERC's role;

D. the USFS should not impose as section 4(e) conditions matters which are duplicative of existing law; and

E. Congress has expressly repealed the USFS authority to issue USFS permits for certain hydroelectric projects and the USFS may not use section 4(e) to do indirectly what Congress has forbidden it to do directly.

II. The USFS must establish a record justifying each condition. Specifically,

A. the USFS cannot rely on "standard" conditions without compliance with the Administrative Procedures Act (APA);

B. the conditions must be supported by a complete record when provided to FERC; and

C. the USFS missed the FERC deadline to submit final 4(e) conditions.

In accordance with 36 CFR 215.19, the Appeal Reviewing Officer (ARO) has reviewed the appeal record and has provided a written recommendation on the disposition of the appeal. I have enclosed a copy of the ARO's recommendation.

In accordance with 36 CFR 215.16, an informal disposition meeting was held with PG&E. The initial meeting was held on March 27, 1997. On April 17, 1997, the RF provided results from continued discussions with the appellants. The RF has made minor corrections or clarifications in the language of a number of 4(e) conditions. The RF will also issue a new Decision Notice to add flow requirements below Balch Afterbay and at Dinkey Creek Siphon. Flow requirements for these sections were not included in the Decision Notice now under appeal.

I. THE CONDITIONS EXCEED THE LAWFUL SCOPE OF SECTION 4(e).

A. Section 4(e) does not apply to relicensing of hydropower projects such as the Haas-Kings River Project.

PG&E has for some time been asserting that the USFS's authority to impose mandatory conditions upon a FERC jurisdictional hydroelectric project under the Federal Power Act (FPA) section 4(e) is inapplicable to relicensing proceedings. Since the Haas-Kings project is an application for a new license, rather than an original license, there is no present opportunity for the USFS to impose mandatory section 4(e) conditions.

Section 4(e) provides the USFS authority to impose conditions which the Secretary deems necessary for the adequate protection and utilization of NFS lands (reservations) for relicensing actions authorized under Section 15 of the FPA. Authority for relicensing hydropower projects is defined by reading the entire FPA as a whole, not by reading particular sections in isolation. The need for the conditions exists whether a hydropower project is operating under an original license or a reissued license.

Section 15 addresses in part FERC's authority for issuing new licenses under the FPA. Section 15 provides for a new license to be issued under the "existing laws and regulations." and does not limit the law applicable to a relicensing action to any particular section of the FPA. Additionally, Sections 4 and 15 refer to a licensee which is defined to include both the original holder of the license and any successor in interest, providing further support for the application of the same law to an original license and a relicense. See section 3(5) of the FPA. Finally, the 1986 amendments to section 4(e) require the Commission to apply certain factors equally to any license issued under "this part" which is a reference to more than one section of the FPA and corresponds to Subchapter I of the Act. Placement of this amendment under Section 4 of the FPA, the General Powers of the Commission section of the Act, further indicates that Congress intended the Commission to administer all license actions under the same laws. Moreover, it is reasonable to assume that Congress intended that continuing projects adjust their operations to accommodate current on-the-ground conditions versus blindly operating as though nothing had changed over the course of the original license.

The RF and Forest Supervisor followed law, regulation, and USFS policy in preparing and forwarding mandatory section 4(e) conditions to FERC for the relicensing of the Haas-Kings River Hydroelectric Project.

B. Section 4(e) conditions must relate to the purposes for which a National Forest was created, not subsequently adopted legislation or Forest Plans .

PG&E states that even if section 4(e) conditions were to apply, the appropriate scope of USFS conditioning authority is limited by the plain language of section 4(e) to protect the purposes for which a specific reservation was created or acquired. The Sierra National Forest was not created or reserved for the types of 4(e) conditions the USFS is attempting to impose. PG&E further explains that the Forest was created solely for the purposes established in the Organic Administration Act - to conserve water flows and to furnish a supply of timber - and that none of the 4(e) conditions are related to these purposes. PG&E cites United States vs. New Mexico as stating that Congress did not intend for National Forests (NF's) to be created for aesthetic, environmental, recreational or wildlife-preservation purposes (438 U.S. at 708), providing minimum instream flows for fish, or generally improving and protecting the forest (438 U.S. at 710-11).

PG&E is correct in that the purposes for which NF's were established are defined in the Organic Administration Act of 1897 (16 U.S.C. 473). I believe, however, that these purposes were expanded by the Multiple-Use Sustained Yield Act (MUSYA) (16 U.S.C. 528) and subsequent acts (FSM 2701.1). Section 1 of the MUSYA directs that:

"...National Forests are established and shall be administered for outdoor recreation, range, timber, watershed, and wildlife and fish purposes. The purposes of this Act are declared supplemental to, but not in derogation of, the purposes for which the National Forests were established as set forth in the Act of June 4, 1897."

The MUSYA expanded the defined purposes of the NF's from those identified in the Organic Administration Act of 1897. Unlike the operative facts in United States v. New Mexico, 438 U.S. 696 (1978), the relicensing of this project has occurred after the passage of the MUSYA making the Act clearly applicable to the present situation.

C. The USFS should recognize FERC as the sole and exclusive regulator of hydroelectric power and avoid duplicating FERC's role.

PG&E states that it has long been established that FERC has sole licensing authority over hydroelectric projects. The USFS provides mandatory conditions necessary for the protection and utilization of NFs under section 4(e). Many of the USFS conditions would vest in another entity the authority to approve or disapprove changes in project construction, maintenance, and operations. Most of the conditions do not limit the exercise of USFS authority to NFS lands. In innumerable respects, many of the conditions duplicate the FERC's licensing authority.

The USFS does not duplicate FERC's role in the hydropower licensing process. Rather, the USFS and FERC have different roles that are clearly defined in the FPA, Section 4(e) which states in part:

"The Commission is hereby authorized and empowered to issue licenses ... for the purpose of constructing, operating, and maintaining dams, water conduits, ... provided that licenses shall be issued within any reservation only after a finding by the commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired, and shall be subject to and contain such conditions as the Secretary of the Department ... shall deem necessary for the adequate protection and utilization of such reservation."

FERC issues and administers the license. The USFS submits to FERC those conditions (to include in the license) necessary for the protection and utilization of the NFS lands.

To avoid unnecessary duplication, the USFS cooperates with FERC in its National Environmental Policy Act (NEPA) analyses in determining proper mitigating conditions to include in the license. The USFS does not have the "authority to exercise licensing jurisdiction over hydroelectric projects," however, FERC must include in its licenses any mandatory 4(e) conditions submitted by the agency. These conditions cannot be changed except as ordered by the Court of Appeals or as approved by the USFS.

Conditions 1 through 3

PG&E states condition 1 duplicates FERC authority to monitor and approve all construction activities. PG&E states this condition would prevent the licensee from taking action authorized by its FERC license, absent express approval by the USFS.

PG&E states the use of the word any in condition 2 is clearly inappropriate. This condition would prevent licensee from making any changes in the location of any constructed project features or facilities without prior USFS approval.

The inclusion of these two conditions in the license does not displace FERC's final approval authority over all project activities. Because portions of the project are located on NFS land, it is reasonable for the USFS to have theopportunity to evaluate the impact of post-licensing changes in the project on NFS resources affected by the project. Conditions 1 and 2 apply only to project works that are located on or affect reservation lands. FERC applies criteria independent of the USFS interest in a project in passing judgement on the propriety of final design plans or project changes.

PG&E states that it does not object to consulting with the USFS. However, condition 3 requires PG&E to file with FERC USFS recommendations. The USFS is free to make recommendations itself. Further, the USFS may not impose a reopener provisions using the authority it has under section 4(e).

The license approved by FERC reserves the right to the Commission to require changes in a project and its operation. Absent such a clause, FERC could be precluded from requiring changes in an approved license. See Platte River Whooping Crane Critical Habitat Maintenance Trust v. FERC , 962 F.2d 27 (D.C. Cir. 1992).

The USFS policy is that conditions 1 through 3 be imposed in all licenses involving NFS lands. Requirements in conditions 1 through 3 are included in all FERC licenses to provide for review of subsequent changes in project design and implementation which could result in unforeseen resource impacts. They provide for continued dialogue and negotiation between USFS and licensee and allow for adjustment of appropriate mitigation strategies which may be proposed by either party. They are important procedural conditions necessary for the adequate administration and utilization of forest lands. Conditions 1 through 3 will not substantially affect project economics (70 FERC 1,130).

Condition 4 - Minimum Streamflow Requirement

PG&E believes that the refusal of the USFS to require a 10 cfs, instead of 15 cfs, minimum flow in the North Fork Kings River below Wishon Dam during the winter from December 1 to March 31 conflicts with the record and is not well-founded, given the adequacy of the 10 cfs flow for the trout fishery.

On April 17, 1997, the RF, as a result of continued discussions, has changed condition 4 and has reduced the required flow from 15 cfs to 10 cfs with the caveat that water temperature at a specified gage will be monitored. If the temperature exceeds 21 degrees centigrade, flow will be increased to 15 cfs until the temperature stabilizes at 21 degrees centigrade.

The minimum instream flow regime identified in condition 4 as originally designed was to protect fisheries and riparian vegetation affected by the Haas-Kings River project. The Sierra National Forest Land and Resource Management Plan (LRMP) (p. 4-15) identifies fisheries objectives relating to hydroelectric projects. Specifically, standard 42 states that during relicensing, seek flows and habitat more favorable to fish and wildlife on projects where they have obviously been degraded by the project. Adequate flow and habitat conditions will be defined in the 4(e) letter to FERC. Fishery management goals and objectives are described in Enclosure I (pp. 1-3) and Enclosure III (p. 2) of the January 15, 1997, RF letter transmitting section 4(e) conditions to FERC.

The management objective for the reach of stream downstream from Wishon Dam is to maintain flows that provide brown trout and rainbow trout habitat. Trout survival depends on maintaining the water temperature within their thermal tolerance range (21 degrees centigrade). Under the existing license, minimum flow releases are 7.5 cfs year-round during dry years. The EA (pp. 24, 26, and 32-33) shows that although PG&E did not record any temperature exceeding the 21 degree centigrade criterion in 5 years of monitoring, flow models predicted the likelihood of exceedence during dry years. The increase to 10 cfs along with monitoring should prevent water temperature from exceeding 21 degrees centigrade in the bypassed reach. The USFS relied on an independent analysis done by the California Department of Fish and Game (CDFG) (7/22/87) of PG&E's IFIM study results, fish population sampling, temperature considerations, and natural stream hydrology in determining instream flow releases.

On February 27, 1996, the CDFG, in a letter to FERC, revised their recommendation for instream flow releases to 10 cfs. Their revised recommendation was based on the fact that PG&E had revised their proposed project and eliminated the diversions from Teakettle and Rancheria Creeks.

Based on the information contained in the record, fisheries management objectives will be met by providing the flow scenario in revised condition 4.

Condition 5 - Fisheries Monitoring Plan

PG&E states the required monitoring program is unlikely to detect any significant effects on fisheries since the minimum flow requirements below Courtright Dam remain unchanged and the proposed release below Wishon Dam are increased only during the winter months and in dry years.

On April 17, 1997, the RF clarified the language in condition 5. Since condition 4 has been modified, fish habitat monitoring is necessary to ensure the adequate protection and utilization of the reservation. Fish species such as brown and rainbow trout are important NFS resources that are sensitive to environmental changes (e.g. temperature). Therefore, fish habitat conditions must be observed over time to ensure mitigation is effective (DN, p. 2 and EA, pp. 36-40).

Condition 6 - Fish and Wildlife Mitigation Plan

PG&E objects to the fish and wildlife mitigation plan (Condition 6(1)) on the grounds that it duplicates FERC's authority. PG&E also states that the plan is not necessary because project-related impacts to fisheries would likely be undetectable.

PG&E further objects to the need for a comprehensive plan for additive and continuing wildlife impacts (Condition 6(2)) as it relates to the purpose for which the Sierra National Forest was created. PG&E states that many of the activities of the area within which the project is located are not project-related, but are a result of all multiple-use activities. Furthermore, the USFS has included a list of facilities and activities to be reviewed for their additive effect; these activities are not a direct result of the hydroelectric project. It is appropriate to include the assessment of these impacts in a USFS study of the drainage, but not at the licensee's sole expense.

The provisions of condition 6 are necessary to protect fish and wildlife resources. Activities related to the operation and maintenance of the project, as well as construction of project enhancements, affect fish and wildlife habitat. The EA (p. 43) discusses the population declines of mule deer and identifies that the above-ground penstocks have altered migration paths. Further, Enclosure I (pp. 3-4) of the RF's January 15, 1997, letter to FERC discusses ongoing concerns related to alterations in habitat that have an adverse effect on mule deer. The provisions of condition 6 provide a means to address impacts such as disruption of deer migration associated with project features, reduced habitat value from vegetation manipulation near transmission lines, and other items identified in monitoring efforts. Additionally, on April 17, 1997, the RF dropped the listing of specific facilities and added a funding limit.

PG&E states condition 6(3) should be deleted, since it is duplicative of existing laws and regulations which PG&E already follows. Condition 6(3) requires the licensee to prepare a Biological Evaluation before taking actions to construct, operate, or maintain the project that may

affect a USFS sensitive species or its habitat. Similarly, it requirespreparation of a Biological Assessment before taking actions that may affect a proposed or listed species under the Endangered Species Act.

The Decision Notice (p. 4) and EA (pp. 48-49) disclose that the currently proposed project would not have an adverse impact on any known threatened, endangered, or sensitive species. However, the term of the license may be from 30 to 50 years. Condition 6(3) requires that, if, in the course of project construction or operation, a federally listed threatened or endangered species, or a Region 5 sensitive species is discovered on NFS land, the applicant would evaluate the species and the potential impacts on it from the activity(ies). Condition 6(3) is reasonable and supported by the record.

Condition 7 - Recreation Plan and Recreation Survey

PG&E states that condition 7, which requires the licensee to prepare a Recreation Plan and conduct a Recreation Survey, usurps or at least duplicates FERC's jurisdiction over the project.

The licensee is required by FERC to file a recreation plan for the project. This plan provides project-related recreation information and identifies the licensee's responsibilities for recreational development associated with the project. However, the nature of this project is that it will be licensed to operate over the next 30 to 50 years and changes may occur during this time that would require revision of this plan. Changes in user needs, market trends, and laws may require changes in project recreation facilities provided by the licensee. Unless the plan contains an element of flexibility, the project related recreation needs may not be met over time.

On April 17, 1997, the RF clarified the timing and type of survey needed. The Recreational Survey and Report will provide the information required to determine if revision to the FERC recreation plan is necessary.

Condition 8 - Recreation - Facilities and Interpretive Services

PG&E states that the facilities the Licensee installs on project land are the ones it is appropriately responsible for, when it comes to repair and major rehabilitation. Anything beyond that is an attempt to find a deep pocket to fund recreation facilities which, while they may be in the vicinity of this project, are not related to the purposes of the reservation and are not project-induced. PG&E believes the requirements for facility repair and rehabilitation required by condition 8 go beyond PG&E's responsibilities under the license.

Condition 8 is consistent with direction in the LRMP which states project licensees will be responsible for development, operation, maintenance, and replacement of project-related recreation facilities. The requirements of condition 8 are linked to project-induced recreation needs (EA, p. 69-88). The high mountain lakes associated with the project attract many visitors to the forest (EA, pp. 71-77). This

condition provides the opportunity to meet these recreational needs through providing interpretive displays and additional recreation facilities (DN, p. 4).

PG&E contends that the new Wishon Visitor Information Service at the Helms Picnic Area is not necessary.

Lake Wishon is the principal entrance point for most people visiting the project area (EA, p. 81). Visitor information provided in this vicinity would meet the need for interpretive services to explain the presence of the project reservoirs in the otherwise natural landscape.

PG&E does not believe it is safe to provide loading ramps for persons with disabilities at Wishon and Courtright Reservoirs. PG&E states that the existing boat ramps are steeper than can be considered safe for maneuvering boat trailers with disabled occupants in the boats.

The Americans with Disabilities Act (ADA) requires public facilities to be accessible to persons with disabilities. This condition requires the licensee to develop a schedule to bring existing facilities into compliance with the ADA. The new facilities required by this condition will be designed to comply with this law and provide additional recreational opportunities for persons with disabilities (DN, pp. 4-5 and EA, p. 82).

Further, the RF should modify Condition 8, consistent with FERC's recommendation (EA, p. 83), and add a provision as follows: "In order to provide a safe and practical alternative during times of the year when the reservoir at Lake Wishon is drawn down below the end of the existing boat ramp, PG&E should install a sign directing boaters to an alternative boat launch facility managed by PG&E that provides access to the lake when the surface elevation is below the level of the main boat ramp."

Condition 9 - Annual Operating Plan

PG&E disagrees with preparing an annual operating plan by March 15 of each year to cover the upcoming operating season. PG&E says that the weather patterns and snow conditions cannot be predicted with certainty, and the recreation season cannot be predicted by March 15 each year.

The annual operating plan covers needed items such as public health and safety, maintenance responsibilities, etc. However, PG&E is correct in stating that annual weather patterns and snow conditions are uncertain. Therefore, I am directing the RF to modify this condition. PG&E shall provide a PROPOSED operating plan by March 15. A proposal by March 15 will allow the PG&E and the Forest Service to consult on the annual plan prior to the recreation use season. The annual operating plan shall be in place prior to the start of the use season. This flexibility will allow for adjustments based on annual conditions.

Condition 16 - Surrender of License

PG&E states FERC alone has jurisdiction to issue or terminate a license and impose reasonable conditions on the surrender of a license. PG&E states this condition should be removed.

The FS does not have authority to issue or terminate a license; however, the FS does have the authority to impose reasonable conditions on the surrender of a license. There is no stipulation in section 4(e) that places a temporal constraint on when conditions can be provided over the license term. This condition is needed to assure that the area is adequately restored. On April 17, 1997, the RF modified this condition to require that the FS be notified "in advance" of a proposed surrender of the license.

Condition 21 - Signs

PG&E states that USFS section 4(e) authority extends only to project lands on USFS property. They further state that this condition be revised to a consultation requirement and limited to Forest Service lands.

The USFS may impose 4(e) conditions that are necessary for the protection and utilization of affected NFS lands. On April 17, 1997, the RF modified this condition. The modified condition explicitly states: "The Licensee shall consult with the Forest Service prior to erecting signs related to safety issues covered by the license ... The Licensee shall not be required to consult or obtain the approval of the Forest Service regarding signs on Licensee-owned lands that will not be visible from NFS lands."

Condition 24 - Road Use

PG&E states that this condition would permit the Forest Service to deny access to the project by closing access roads regardless of conflicting FERC directions.

This condition, as originally written, could conflict with direction from FERC. On April 17, 1997, the RF modified this condition. The USFS will notify the Licensee prior to any road closures, except in an emergency, in which case notice will be provided as soon as practical. In addition, I am directing the RF to also notify FERC.

In summary, PG&E states that the above conditions attempt to reserve to the USFS the ultimate licensing jurisdiction over hydroelectric projects. The FPA spells out the roles of the USFS and FERC. FERC remains the final approval agency for hydroelectric projects. The USFS is not attempting to serve as the ultimate licensing jurisdiction over these type of projects, but rather as the agency directed to protect the National Forest reservation lands.

D. The USFS should not impose as section 4(e) conditions matters which are duplicative of existing law.

In addition to not duplicating FERC's role of regulating hydroelectric projects, the USFS should not issue 4(e) conditions which duplicate the authority of other federal agencies or simply require the licensee to comply with existing laws.

The USFS has provided section 4(e) conditions as needed for the protection and utilization of the affected NFS lands (1/15/97 RF ltr. and 4/17/97 RF ltr.). Section 4(e) conditions are not duplicative of existing law; these conditions are necessary to avoid or mitigate resource and environmental impacts within existing law, regulations, and USFS policy.

The Forest Service may not require a special use authorization (SUA) for this project, but the agency is certainly within the laws of Congress to use section 4(e) conditions to protect the National Forest reservation lands. The fact that some of the 4(e) conditions may duplicate what has normally been prescribed in a SUA in no way invalidates the purpose of these conditions, which is to ensure adequate protection and utilization of NFS lands and affected resources.

It is imperative that the USFS ensures that these resources, which would normally be protected through SUA clauses, be adequately protected through 4(e) conditions. Section 4(e) of the FPA does not preclude the FS from including such conditions as 4(e) conditions.

II. THE USFS MUST ESTABLISH A RECORD JUSTIFYING EACH CONDITION.

A. The USFS cannot rely on "standard" conditions without compliance with the APA.

Standard 4(e) conditions do not have to be established as rules of general applicability under the APA. The conditions are authorized under the FPA, which grants the USFS the authority to require conditions in a FERC license for hydropower projects on NFS lands.

B. The conditions must be supported by a complete record when provided to FERC.

The USFS submitted specialist reports to FERC during FERC preparation of the EA. This information is included in the FERC record. The RF adopted the FERC EA (DN, p. 1) as the environmental documentation for the 4(e) report. The USFS also provided "Comments of the Application for License" (Enclosure I) and "License Conditions Necessary for Protection and Utilization of the Sierra National Forest" (Enclosure II)

on January 15, 1997. The previous discussion of the appeal points raised also cites specific places in the record that support the 4(e) conditions.

C. The USFS missed the FERC deadline to submit final 4(e) conditions.

FERC'S regulations state that agencies must provide 4(e) conditions within a set timeframe; however, this timeframe can be extended by FERC. FERC recognized (EA, p. viii) that final 4(e) conditions would be issued after the EA was issued. The EA was issued on November 6, 1996, and was received by the USFS on November 25, 1996. Final 4(e) conditions were issued on January 15, 1997.

Conclusion

Based on the above discussion, I am affirming the Regional Forester's decision with the exceptions identified below. Specifically, I am directing the Regional Forester to:

1. Add a provision in condition 8 such as:

"In order to provide a safe and practical alternative during times of the year when the reservoir is drawn down below the end of the existing boat ramp, PG&E should install a sign directing boaters to an alternative boat launch facility managed by PG&E that provides access to the lake when the surface elevation is below the level of the main boat ramp."

This additional provision should be included when the "new" Decision Notice, as referenced in the April 17, 1997, RF letter, is issued.

2. Revise condition 9 such that a proposed annual operating plan will be provided by March 15 each year, so that the licensee and the USFS can consult and the plan can be adjusted based on annual conditions.

3. Revise condition 24 to clarify that before the USFS closes a road, it will notify FERC.

Within 45 days from the date of this decision, the RF should revise conditions 9 and 24 as discussed above.

This constitutes the final administrative determination of the Department of Agriculture (36 CFR 215.18) with respect to the items of appeal.

Sincerely,

/s/ Jack Blackwell

JACK BLACKWELL

Appeal Deciding Officer

Enclosure

United States Forest Washington 14th & Independence SW

Department of Service Office P.O. Box 96090

Agriculture Washington, DC 20090-6090

File Code: 1570-1 Date: April 21, 1997

Route To : *

Subject: Appeal Reviewing Officer Recommendation

(Appeal # 97-13-00-0051-A215)

To: Appeal Deciding Officer

This is my review of the substantive quality of the January 15, 1997 decision made by Regional Forester G. Lynn Sprauge (RF) concerning the Section 4(e) conditions for relicensing the Haas-Kings River Hydroelectric Project (FERC No. 1988) on the Sierra National Forest. The decision was based on a Final Environmental Assessment (FEA) prepared by FERC, in cooperation with the Forest Service (FS), for the project which includes the Section 4(e) conditions.

I have considered the arguments presented in the March 5, 1997 appeal filed by Annette Faraglia, Attorney for Pacific Gas and Electric Company (PG&E). I have also reviewed the decision document, Final Environmental Assessment (FEA), and other documents in the project record.

Appeal Summary

The Appellant believes the Conditions exceed the lawful scope of Section 4(e) in that (a) Section 4(e) does not apply to Hydro Relicensing such as the Haas-Kings River Project, (b) Section 4(e) conditions must relate to the purposes for which a National Forest was created, not subsequently adopted legislation or Forest Plans, (c) The FS should recognize FERC as the sole and exclusive regulator of Hydroelectric Power and avoid duplicating FERC's role, (d) the FS should not impose as Section 4(e) conditions matters which are duplicative of Existing Law, and (e) Congress has expressly repealed the FS authority to issue FS permits for certain Hydroelectric Projects and the FS may not use Section 4(e) to do indirectly what Congress has forbidden it to do directly.

Further, the Appellant asserts the FS must establish a record justifying each Condition, that (a) the FS cannot rely on "standard" conditions without compliance with the Administrative Procedures Act, (b) the Conditions must be supported by a complete record when provided to FERC, and (c) the FS missed the FERC deadline to submit final 4(e) conditions.

The Appellant requests withdrawal of Condition Nos. 4 through 7, and 10 through 25, that Condition Nos. 1, 2, 3, 8, and 9 be modified as suggested, and that any Condition not removed by considered an FPA Section 10(a) recommendation.

Findings

(a) Clarity of the decision and rationale.

I find the clarity of the decision and rationale meets Agency standards. The proposed action is clearly summarized in the Decision Notice (DN) and specifically described in the FEA. The basis for finding of no significant impact on the human environment is clearly stated. The Regional Forester disclosed that the project is consistent with the Sierra National Forest Land and Resource Management Plans. The issues raised by both the public and by agencies/organizations are identified, with the relationship between each issue and the considered alternatives clearly shown. Environmental consequences and mitigation measures are clearly present in the documentation. The DN delineates a final set of FPA Section 4(e) conditions developed by the Forest Service for adequate protection and use of the affected National Forest System lands and resources.

(b) Comprehension of benefits and purpose of the proposal.

The decision clearly documents that the relicensing action will benefit the Forest by providing opportunities to address concerns of environmental effects and associated project-induced recreation use of National forest System land. These concerns have been disclosed.

I find the decision to develop and adopt the Section 4(e) conditions based on the FERC FEA to be consistent with Agency policy, goals of the Forest Plan direction, and supporting information in the record. Further, I find the principles and processes of ecosystem management are reflected, where appropriate, in the design of the Section 4(e) conditions. The Conditions reflect the Regional Forester's intent for the relicensing action to include a balanced mix of recreation enhancements and measures necessary for the adequate protection and utilization of National Forest System resources while maintaining benefits for hydroelectric power generation.

(d) Effectiveness of public participation and use of comments.

The decision clearly states that FERC issued two Scoping Documents, and held two public scoping meetings in March 1995. The California Department of Fish and Game, the US Fish and Wildlife Service and the US Department of Interior had opportunity to make comments and recommendations, but none of these agencies submitted specific recommendations. The FEA includes all written comments that were received, and the responses to those comments.

(e) Requested changes and objections of the Appellant.

The first objection is that the Conditions exceed the lawful scope of Section 4(e) in that (a) Section 4(e) does not apply to Hydro Relicensing such as the Haas-Kings River Project, (b) Section 4(e) conditions must relate to the purposes for which a National Forest was

created, not subsequently adopted legislation or Forest Plans, (c) The FS should recognize FERC as the sole andexclusive regulator of Hydroelectric Power and avoid duplicating FERC's role, (d) the FS should not impose as Section 4(e) conditions matters which are duplicative of Existing Law, and (e) Congress has expressly repealed the FS authority to issue FS permits for certain Hydroelectric Projects and the FS may not use Section 4(e) to do indirectly what Congress has forbidden it to do directly.

After reviewing the record, it is clear that the FPA authorizes the FS to impose conditions which the Secretary deems necessary for adequate protection and utilization of National Forest lands (reservations), whether a hydropower project will operate under an original license or a reissued license. The Multiple Used and Sustained-Yield Act of 1960 (16 USC 528) (MUSYA) expanded the purposes for which the National Forests were established under the Organic Administration Act of 1897 (16 USC 473). Section 1 of the MUSYA directs that:

"...National Forests are established and shall be administered for outdoor recreation, range, timber, watershed, and wildlife and fish purposes. The purposes of the Act are declared supplemental to, but not in derogation of, the purposes for which the National Forests were established as set forth in the Act of June 4, 1897."

Since relicensing of the subject project will occur after passage of MUSYA, the purposes of the Act are clearly applicable. The FPA Section 4(e) describes the FERC and Forest Service roles:

The Commission is hereby authorized and empowered to issue licenses...for the purpose of constructing, operating, and maintaining dams, water conduits,...provided that licenses shall be issued within any reservation only after a finding by the Commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired, and shall be subject to and contain such conditions as the Secretary of the Department...shall deem necessary for the adequate protection and utilization of such reservation."

The Forest Service does not duplicate FERC's role in issuing licenses when providing the conditions to be included in that license which are necessary for the protection and utilization of the National Forest System lands. Further, the FS Conditions do not duplicate other existing laws, but rather implement the direction derived from those laws relative to the particular circumstances of this proposed relicensing. Finally, while some of the Conditions included here might parallel those in Special Use Permits, they are included only as necessary for adequate protection and utilization of the National Forest System lands. The RF followed law, regulation and FS policy in preparing and forwarding mandatory Section 4(e) conditions to FERC for the relicensing of the Haas-Kings River Hydroelectric Project.

The second objection is that the FS must establish a record justifying each Condition, that (a) the FS cannot rely on "standard" conditions without compliance with the Administrative Procedures Act, (b) the .

Conditions must be supported by a complete record when provided to FERC, and (c) the FS missed the FERC deadline to submit final 4(e) conditions

The Section 4(e) conditions are authorized under the Federal Power Act, and are not "standard" conditions applicable under the procedures of the Administrative Procedures Act. The FS submitted specialist reports to FERC in support of the specific Conditions and for preparation of the FEA. These reports are available to PG&E for their review. As agreed with FERC, the timeframe for submittal of Section 4(e) conditions was extended, and the time of submission was accepted by FERC.

Recommendation

As a result of my review, I find the Forest Service was an active cooperating agency in the development of the FEA. There were sound reasons for the Section 4(e) conditions in the FERC FEA and the record. The Regional Forester's decision was within the authority of the Forest Service, the conditions conform to the purposes of the National forest, there was substantial public participation addressing the issues, and the identified measures are appropriate for addressing environmental concerns and project-induced recreation use while meeting the purpose and need of the project. Furthermore, I find the issues raised by the Appellants were adequately addressed in either the decision or in supporting documents.

I recommend the Regional Forester's decision be affirmed.

/s/ Gerald Coghlan

GERALD T. COGHLAN

Acting Director, Engineering