In re Clyde River Hydroelectric Project

In re Clyde River Hydroelectric Project (2004-101); 179 Vt. 606; 895 A.2d 736

2006 VT 11

[Filed 17-Jan-2006]

                                 ENTRY ORDER

                                 2006 VT 11

                      SUPREME COURT DOCKET NO. 2004-101

                             FEBRUARY TERM, 2005

  In re Appeal of Clyde River	       }	APPEALED FROM:
  Hydroelectric Project	             }
                                     }
       	                         }	Water Resources Board
                                     }	
  	                               }
                                     }	DOCKET NO. WQ-02-08(A) & (B)

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  This appeal arises from the issuance of a water quality
  certification by the Vermont Water Resources Board for operation of the
  Clyde River Hydroelectric Project in northern Vermont.  The Vermont Natural
  Resources Council and the Northeast Kingdom Chapter of Trout Unlimited
  (appellants) contend the Board's decision: (1) violates provisions of the
  Vermont Water Quality Standards; (2) is unsupported by the evidence; and
  (3) contravenes the Public Trust Doctrine and the Common Benefits Clause of
  the Vermont Constitution.  We affirm.

       ¶  2.  In support of its request to the Federal Energy Regulatory
  Commission (FERC) for relicensure of the Clyde River Hydroelectric Project,
  applicant Citizens Communications Company  submitted a water quality
  certification application to the Agency of Natural Resources. See 10 V.S.A.
  § 1004 (designating the Agency of Natural Resources as the State's
  certifying agency for purposes of § 401 of the Federal Clean Water Act).  
  The Agency granted the certification, which was then appealed to the Board
  for de novo review. The Board received extensive pre-filed testimony,
  conducted a site visit, and held an evidentiary hearing over several days
  in April 2003.  In July 2003, the Board issued a written decision, granting
  the certification with certain added conditions.  In response to
  appellants' subsequent motion to alter, the Board amended its decision but
  otherwise denied the motion.  This appeal followed.  

                                     I.
   
       ¶  3.  To better understand and evaluate the underlying facts and
  claims on appeal, a brief preliminary review of the regulatory backdrop is
  useful. Vermont's Water Quality Standards (hereafter "Standards") were
  enacted under the authority of the Federal Water Pollution Control Act, 33
  U.S.C. §§ 1251-1387, commonly known as the Clean Water Act (Act), to
  implement the Act's principal goal of "restor[ing] and maintain[ing] the
  chemical, physical, and biological integrity of the Nation's waters," id. §
  1251(a), including the attainment of "water quality which provides for the
  protection and propagation of fish, shellfish, and wildlife."  Id. §
  1251(a)(2).  The Act permits each state, subject to federal approval, to
  adopt comprehensive water quality standards establishing designated uses
  and water quality criteria for all navigable intrastate waters. Id. §§
  1311(b)(1)(C), 1313(c)(2)(A); P.U.D. No. 1 of Jefferson County v. Wash.
  Dep't of Ecology, 511 U.S. 700, 704 (1994); In re Town of Sherburne, 154
  Vt. 596, 601, 581 A.2d 274, 277 (1990).  Under section 401 of the Act, an
  applicant for a federal permit to conduct activities that may result in a
  discharge into state waters must present to the federal agency (in this
  case the FERC) a certification from the State "that any such discharge will
  comply with the applicable provisions of" the State's water quality
  standards.  33 U.S.C. § 1341(a).  Thus, Citizens, as an applicant for
  relicensure of its hydroelectric facility on the Clyde River, was required
  to obtain a § 401 certificate from the State. (FN1)

       ¶  4.  Consistent with its mandate under the Act, the State of
  Vermont has adopted comprehensive water quality standards under which all
  waters above 2500 feet and all waters used for public drinking water are
  Class A waters, 10 V.S.A. § 1253(a), and all other waters are Class B
  unless otherwise reclassified by the Board.   Id. § 1253(b).   The Clyde
  River has been designated as Class B under the Standards.  Vermont Water
  Quality Standards § 4-17(B).   Designated uses for Class B waters include
  "aquatic biota and wildlife sustained by high quality aquatic habitat," id.
  § 3-04(A)(1), water character, flows, level, and bed and channel
  characteristics "exhibiting good aesthetic value," id. § 3-04(A)(2), and
  "[b]oating, fishing, and other recreational uses." Id. § 3-04(A)(6). 
  Criteria that must be met for such uses include the following: "No change
  from the reference condition that would prevent the full support of aquatic
  biota, wildlife, or aquatic habitat uses.  Biological integrity is
  maintained and all expected functional groups are present in a high quality
  habitat.  All life-cycle functions, including overwintering and
  reproductive requirements are maintained and protected."  Id. § 3-04(B)(4). 
  In addition, the Standards require "no change from reference conditions
  that would have an undue adverse effect on the composition of the aquatic
  biota, the physical or chemical nature of the substrate or the species
  composition or propagation of fishes."  Id. § 3-04(B)(4)(d).

                                     II.
   
       ¶  5.  With this regulatory framework in mind, we turn to
  consideration of the certification on appeal.  Applicant's project consists
  of an existing hydroelectric facility located on the Clyde River, a river
  that meanders for some thirty miles in a northwesterly direction through
  northern Vermont to empty into Lake Memphremagog in the City of Newport.
  The Clyde has been harnessed for waterpower since the early nineteenth
  century, and contains numerous historic mill sites and dams.  The
  hydroelectric facility at issue in this case was originally licensed in
  1963, and consists of four separate dams, although the instant appeal is
  solely concerned with the dam known as Newport 1,2,3 in the Town of Derby
  and the related powerhouse located downstream in the City of Newport.  The
  Newport 1,2,3 dam was originally constructed in 1918, but has since been
  modified and repaired on several occasions, most recently in 1990.  

       ¶  6.  The Newport 1,2,3  facility bypasses approximately 1800 feet
  of the river in order to channel water from the dam to the powerhouse, at
  which point the water is discharged back into the river at the tailrace.  A
  key issue during the certification process before the Agency and Board
  concerned the minimum stream flow necessary to comply with water quality
  standards by restoring and maintaining fish habitat in the bypass reach. 
  Studies had indicated that salmon, which had been periodically stocked in
  the Clyde River since the 1860's, and other cold water fish had
  historically returned from colder and deeper waters in Quebec to spawn in
  the Clyde and other Vermont streams and rivers.  At the time of the
  relicensure application, however, the number of fish returning to spawn in
  the Clyde had decreased dramatically. (FN2)

       ¶  7.  Since the project's inception, the bypass had been largely
  dry, generally receiving very small amounts of water from leakage over the
  dam for a measured flow of about 2.0 cubic feet per second (cfs).  To
  restore fish habitat in the bypass, applicant proposed to maintain a
  minimal flow of 5 cfs in the bypass channel.  However, based on stream flow
  studies of the Newport 1,2,3 bypass and the Agency's general guidelines for
  minimum stream flows at hydroelectric projects, the Agency concluded that
  applicant's proposal for 5 cfs would not provide adequate habitat for
  cold-water fish.  Instead, the Agency determined that a minimum flow of 30
  cfs was necessary and sufficient to support aquatic habitat and comply with
  water quality standards. The Agency also approved applicant's proposal to
  construct a pipeline and trap-and-truck operation to facilitate the passage
  of fish upstream and downstream of the Newport 1,2,3 facility, where
  potential spawning and nursery habitat was much greater than within the
  bypass reach itself.     
   
       ¶  8.  On appeal, the Board concurred in the Agency's finding that
  30 cfs would meet water quality standards, finding that it represented a
  significant improvement over existing and past conditions in the bypass
  channel.  The Board acknowledged, however, that the provision of 30 cfs
  would not support all life stages of salmonid (i.e., trout and salmon) in
  the bypass; specifically it would not support spawning and incubation
  habitat.   Nevertheless, the Board found that this deficiency did not
  violate the Standards because it did not represent a change from the
  River's "reference condition," defined in § 101(B)(39) of the Standards as
  "the range of chemical, physical, and biological characteristics of waters
  minimally affected by human influences."  To determine the range of
  chemical, physical, and biological characteristics that one might expect in
  a river like the Clyde in its natural state, the Board looked at studies of
  three northern Vermont rivers sharing characteristics similar to the Clyde,
  as well as those physical features of the Clyde itself that might have had
  an impact on its historical use for aquatic habitat, particularly the
  potential obstruction to migrating salmonids posed by a steep bedrock
  cascade within the bypass reach known as Arnold Falls. 


       ¶  9.  Based on this evidence, the Board was not persuaded that
  salmonids ever had, or ever could, utilize significant portions of the
  bypass for spawning purposes even with significantly increased stream flow. 
  Furthermore, based on hydrological studies, the Board found that segments
  of the River both upstream and downstream from the bypass provided more
  extensive and superior spawning habitat, and that applicant's proposal to
  facilitate passage of fish from the bypass to these areas through a
  pipeline and a trap-and-truck operation would provide the best means of
  achieving a self-sustaining population of migratory salmonids in the River.
  (FN3)  These conditions were sufficient, the Board concluded, to maintain
  high quality aquatic habitat consistent with the range of biological 
  characteristics that would be expected of the Clyde in its natural state. 
  Accordingly, the Board concluded that the certificate issued by the Agency,
  as amended, complied with the Standards. (FN4) 

                                    III.

       ¶  10.  Appellants' principal claim on appeal is that the Board's
  approval of the 30 cfs flow for the 1800-foot bypass reach between the
  Newport Dam and the hydroelectric powerhouse violates the Standards by
  failing to provide a high quality habitat for fish and other aquatic life. 
  In addressing this claim, it is important to bear in mind the limited
  nature of this Court's review of the certification process. We assess the
  Board's decision solely to determine whether it acted arbitrarily,
  unreasonably, or contrary to law.  Town of Groton v. Agency of Natural
  Res., 172 Vt. 578, 579, 772 A.2d 1103, 1105 (2001) (mem.); In re Town of
  Sherburne, 154 Vt. at 604, 581 A.2d  at 278.  As we have explained, this
  requires us to determine whether "the decision makes sense to a reasonable
  person," the factual findings are supported by substantial evidence, and
  the ruling is consistent with governing statutes and prior Board policy. 
  In re Town of Sherburne, 154 Vt. at 605, 581 A.2d  at 279.  Where the
  Board's findings are supported they may not be disturbed, even if the
  record contains conflicting evidence.  Id. at 606-07, 581 A.2d  at 279-80. 
  Furthermore, we accord substantial deference to the Board's expertise in
  the area of water quality control, and to the Board's construction of its
  own regulations and enabling legislation. See id. at 607, 581 A.2d  at 280
  (reviewing court will more readily defer to administrative body deciding
  technical matters); In re Killington, Ltd., 159 Vt. 206, 210, 616 A.2d 241,
  244 (1992) (absent compelling indication of error, we will sustain agency's
  interpretation of its own rules and enabling legislation).
   
       ¶  11.  Assessed in light of these standards, the Board's decision
  readily withstands review.  Appellants assert that the provision of a 30
  cfs flow in the bypass reach is tantamount to a habitat "write-off" or
  "sacrifice zone," and there was some evidence to support the claim.  The 
  Board expressly considered and rejected the argument, however, finding that
  a 30 cfs flow was adequate to support fish and other aquatic biota in the
  bypass, and there is substantial record evidence to support the Board's
  finding.  For example, Mary Nealon, an expert aquatic biologist, testified
  specifically that the 30 cfs flow was "not a habitat write-off," but rather
  would support trout, non-recreational fish, and a variety of
  macroinvertebrates, including flies considered to be sensitive to
  inadequate oxygen levels and pollution, such as may flies, stone flies, and
  cattis flies.  As the Board's finding was well within its area of
  expertise, and was adequately supported in the record, it must be upheld.    

       ¶  12.  Appellants also contend the Board erred in approving
  applicant's trap-and-truck proposal to allow fish to spawn in areas
  upstream of the bypass.  They assert that the Board should have adopted
  their alternative proposal to increase flows into the bypass, encourage
  fish to spawn there, and determine whether-over time-fish could
  successfully ascend Arnolds Falls and a proposed fish ladder over the dam
  to reach spawning areas in the upper reaches of the River.  Again, however,
  the Board expressly considered both proposals and found that the
  trap-and-truck operation was preferable, citing  evidence that the bypass
  provided relatively little viable spawning habitat, that the ascent of
  Arnold's Falls would pose a substantial risk of death or injury to
  migrating fish, and that the trap-and-truck operation could be accomplished
  with relatively less risk. The Board's findings are supported by
  substantial evidence, and therefore must be upheld.  Id.

       ¶  13.  Appellants also claim that the Board violated the Standards
  by applying different criteria to the bypass reach from the rest of the
  River.  The claim is unpersuasive for two reasons.  First, as the Board
  noted, the Standards contain a specific "Hydrology Policy" for existing
  dams, which states that the rules are intended to provide a "a means for
  determining conditions which preserve, to the extent practicable, the
  natural flow regime of waters."  Vermont Water Quality Standards §
  1-02(E)(1) (emphasis added).  To this end, the Standards provide hydrology
  criteria authorizing the Agency to adopt standards and constraints relating
  to streamflow protection, and the Board found that the 30 cfs flow for the
  bypass was consistent with the Agency's Streamflow Procedure for
  hydroelectric bypasses and the Standards.  

       ¶  14.  Second, as the Board also noted, the Standards require the
  maintenance of high quality aquatic habitat to the level of the "reference
  condition," defined as "the range of chemical, physical, and biological
  characteristics of waters minimally affected by human influences."  Id. §
  1-101B(b)(39). Based on comparative and historical hydrologic studies of
  the Clyde and other comparable rivers, the Board found that this
  requirement necessitated the restoration of habitat conditions to support
  all life cycle functions of migrating salmonid, including spawning and
  growth.  It also found, as noted, that this could best be accomplished by
  facilitating access to large areas amenable to salmonid spawning upstream
  and downstream from the bypass reach.     
       
       ¶  15.  The Board's decision demonstrates that it applied a uniform
  standard to the Clyde River to achieve the goal of restoring and
  maintaining a high quality aquatic habitat to the level of the range of
  characteristics one would expect to see in a river of this kind in its
  natural state.  It accomplished this goal by identifying areas of the River
  suitable for the full range of salmonid life-cycle functions, including
  spawning and growth, and approving methods designed to support these
  functions. We find nothing in the Standards, the statutory scheme, or the
  evidence  requiring that the Board impose a stream flow sufficient to
  support a full life-cycle salmonid fishery in every part of the River,
  including the bypass reach, where the Board found, and the evidence
  disclosed, that it was questionable whether the bypass had ever
  accommodated such a fishery, where the evidence supported a finding that
  the 30 cfs flow is consistent with Agency procedures and will support high
  quality aquatic habitat, including migratory salmonids, and where other
  areas of the River will provide high quality spawning and nursery habitat. 
  In short, the means that the Board chose to accomplish the objective of
  restoring a high quality aquatic habitat to the Clyde River-the particular
  configuration of minimal stream flows within, above, and below the bypass
  reach and the choice of specific migratory aids-was well within the Board's
  discretion and expertise.  Accordingly, we discern no basis to disturb its
  decision.    

       ¶  16.  Appellants' remaining claims concerning the Public Trust
  Doctrine and the Common Benefits Clause are predicated largely on their
  argument that the Board's decision violates provisions of the Water Quality
  Standards.  As we have rejected this argument, the predicate claims must
  also fail. 

       Affirmed.  

                                       BY THE COURT:


                                       _______________________________________
                                       Paul L. Reiber, Chief Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice
     
                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       _______________________________________
                                       Brian Grearson, District Judge,
                                       Specially Assigned

                                       _______________________________________
                                       Frederic W. Allen, Chief Justice (Ret.),
                                       Specially Assigned
   

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                                  Footnotes


FN1.  In P.U.D. No. 1, the United States Supreme Court rejected a challenge
  to a state's authority under the Clean Water Act to impose minimum stream
  flow requirements within segments of a river to be used for a proposed
  hydroelectric facility, and further noted that there was no dispute that
  the discharge of water from a hydroelectric powerhouse into a river after
  it has been used to generate electricity is a "discharge" within the
  meaning of the Act.  511 U.S.  at 711-15.

FN2.  Although the parties disputed whether salmon were originally stocked
  or were indigenous to the Clyde, the Board assumed that they were entitled
  to protection under the Standards and the Act regardless of origin, and we
  discern no basis to disturb that assumption. 

FN3.  Based on analyses of the Clyde, the Board found in this regard that
  "the Newport 1,2,3 bypass may contain some usable habitat for salmonid
  spawning and nursery, but it is fragmented and isolated.  At best, there
  are only 58 habitat units in the bypass reach, as compared with 231 habitat
  units immediately below the Newport 1,2,3 powerhouse, and another 1,345
  units above the Newport Dam."   

FN4.  The Board added conditions to the certificate requiring that the
  Agency provide public notice and an opportunity to comment on studies
  assessing the effectiveness of the plan to transport migrating fish
  upstream safely and efficiently.