Delaware River Basin Commission and Commonwealth Ofpennsylvania, Petitioners, v. Federal Energy Regulatory Commission, Respondent, 680 F.2d 16 (3d Cir. 1982)

The Delaware River Basin Commission (DRBC) and the Department of Environmental Resources of the Commonwealth of Pennsylvania (DER) petition for review of a Federal Energy Regulatory Commission (Commission) order granting the Borough of Weatherly (Weatherly) a preliminary permit to study the feasibility of developing hydropower on the Francis E. Walter Dam.¹  This court has jurisdiction to review the Commission's actions pursuant to Section 313(b) of the Federal Power Act, as amended, 16 U.S.C. § 825l (b) (the Act).²  We conclude that the Commission's order is supported by substantial evidence and we affirm.

The Francis E. Walter Dam, located on the Lehigh River in Pennsylvania, is a flood control project maintained by the Army Corps of Engineers. Starting in May, 1979 and in chronological order, four applicants filed for a preliminary permit from the Commission's Office of Electric Power Regulation to explore the development of hydroelectric power at the dam: Pennsylvania Hydroelectric Development Corp. (May 8, 1979); Borough of Weatherly (September 12, 1979); Borough of Lehighton (November 5, 1979); DRBC and DER jointly (November 23, 1979). A notice of competing applications was published and comments were submitted thereon. The Office of Electric Power Regulation decided that it could not differentiate among the various proposals because none of the applicants had presented a sufficiently developed plan based on detailed studies. Following the preference hierarchy established by Section 800 of the Act and by Sections 4.33g(2) & (3) of the Commission's regulations, 18 C.F.R. § 4.33g(2) & (3), Weatherly was granted a preliminary permit because it was the first public applicant to file. All other applications were denied.

DRBC and DER appealed the denial of their application. The Commission affirmed the earlier order, Pennsylvania Hydroelectric Development Corp., 15 FERC P 61,152 (1981), and also denied the subsequent petition for a rehearing. Pennsylvania Hydroelectric Development Corp., 16 FERC P 61,025 (1981). Having exhausted their avenues of administrative relief, DRBC and DER now seek judicial review of the Commission's actions. See 16 U.S.C. § 825l (b).

The Commission regulates the development of hydroelectric power from waters under federal jurisdiction. 16 U.S.C. § 796 et seq. This task is discharged by issuing licenses for the construction and maintenance of necessary facilities. 16 U.S.C. § 797(e). To obtain a license, a prospective applicant must provide the Commission with a plethora of information, including feasibility studies, planned compliance with state laws and other relevant data. 16 U.S.C. § 802; 18 C.F.R. § 4.1 et seq. Compliance with statutory and regulatory conditions takes time and money, and an applicant may not be willing to undertake these up-front expenses without some level of protection. To deal with that situation, the Act authorizes the Commission to issue preliminary permits "for the purpose of enabling applicants for a license ... to secure the data and to perform the acts required by section 802 of this title." 16 U.S.C. § 797(f). The preliminary permit gives the holder a measure of priority when a license is ultimately granted. There is also an order of preference for the granting of preliminary permits. Section 7(a) of the Act mandates that as between two equivalent applications, the Commission shall favor a State or municipality, and as between these the "Commission may give preference to the applicant the plans of which it finds and determines are best adapted to develop, conserve, and utilize in the public interest the water resources of the region, if it be satisfied as to the ability of the applicant to carry out such plans."³  16 U.S.C. § 800(a). The Commission regulations adopt the statutory hierarchy and provide, moreover, that "(i)f two or more applications for preliminary permits ... are filed for project work which would develop, conserve, and utilize, in whole or in part, the same water resources, ... and the plans of the applicants are equally well adapted to develop, conserve, and utilize in the public interest the water resources of the region, taking into consideration the ability of each applicant to carry out its plans, the Commission will favor the applicant whose application was first accepted for filing."⁴  18 C.F.R. § 4.33(g) (2). This is a "first in time" rule.

There is no allegation that the Commission's regulations are improper under the enabling statute and, therefore, our task on review is the limited one of determining whether the agency's order is supported by substantial evidence. 16 U.S.C. § 825l (b). See Consolo v. Federal Maritime Commission, 383 U.S. 607, 86 S. Ct. 1018, 16 L. Ed. 2d 131 (1966); see also Universal Camera Corporation v. NLRB, 340 U.S. 474, 488, 71 S. Ct. 456, 464, 95 L. Ed. 456 (1951). The Commission, in the orders denying petitioners' permit application, denying appeal and denying rehearing, set forth meticulously its reasons for rejecting petitioners' application. The Commission determined that there were no significant differences among the various applicants' plans for the Francis E. Walter Dam, and that no plan was sufficiently developed to enable a conclusion to be reached.⁵  The Commission, therefore, granted a permit to the first filer, Weatherly. The record indicates that the Weatherly and the DRBC (and DER) applications had almost equal estimates of capacity and energy output, they were both devoid of data and both pointed to prospective tests and studies to develop the information necessary to determine feasibility and the hard numbers needed to analyze the suggested development project. The petitioners' application does in fact have a section entitled "Manner the Proposed Project Would Develop, Conserve and Utilize, in the Public Interest, Water Resources of the Region," with no counterpart in Weatherly's application. This section, however, adds little to the substance of petitioners' plans for it only sets forth the various water resources projects in which DRBC and DER are involved. The Commission also assessed the relative ability of applicants to carry out the permit obligations. It decided that DRBC's and DER's intimate involvement with and expertise in water management, as well as the regional scope of their concerns, did not put them in a position superior to Weatherly's. The Commission believed that regional considerations together with the various state agencies' concerns and expertise could be adequately channeled through Weatherly, the permit holder, because the permit required Weatherly "to consult with the appropriate agencies in conducting its preliminary permit studies, in the interest of protecting and developing the natural resources and the other environmental values of the project area." Pennsylvania Hydroelectric Development Corp., 15 FERC P 61,152 (1981). Moreover, the petitioners did not allege to the Commission any specific facts to support their position that Weatherly was not a suitable candidate. All this more than satisfies us on review. "Whether we would have reached the same conclusions on this evidence were we to consider the matter ab initio is not determinative." N. Jonas & Co. v. EPA, 666 F.2d 829, 834 (3d Cir. 1981). It suffices that the Commission's decision is supported by substantial evidence.

The petition for review will be denied.