Northwest Resource Information Center, Inc. v. Northwest Power & Conservation CouncilNorthwest Resource Information Center, Inc. v. Northwest Power & Conservation Council
Lead Opinion
OPINION
The present case is the latest round of environmental litigation in the 33-year history of the Pacific Northwest Electric Power Planning and Conservation Act (the Power Act),
The Power Act was designed to resolve the conflict between the Columbia River Basin’s two great natural resources: hy-dropower and salmon. Nw. Res. Info. Ctr. v. Niv. Power Planning Council,
This case presents a challenge by an environmental group, the Northwest Resource Information Center (NRIC), to the Sixth Northwest Power Plan (the Plan) that the Council adopted in May 2010. NRIC’s key complaint is that the Council failed to give due consideration to the accommodation of fish and wildlife interests when it adopted the Plan. For the reasons set forth below, we AFFIRM the Plan with respect to NRIC’s “due-consideration” challenge, but REMAND the Plan to the Council for the limited purposes of (1) allowing public notice and comment on the proposed methodology for determining quantifiable environmental costs and benefits, and (2) reconsidering the inclusion in the Plan of a market-price-based estimate of the cost of accommodating fish and wildlife interests.
I. BACKGROUND
A. Statutory background
Prior decisions of this court have discussed the history, purpose, and operation of the Power Act. See, e.g., Nw. Envtl. Def. Ctr. v. Bonneville Power Admin.,
The “devastating losses of salmon and steelhead in the mid-1970s” prompted
Under the Power Act, the Council must first develop and adopt a fish and wildlife program. See
After these recommendations undergo a public notice-and-comment process, see
In the event that stakeholder recommendations conflict, the Council is charged with resolving any inconsistency by “giving due weight to the recommendations, expertise, and legal rights and responsibilities of the Federal and the region’s State fish and wildlife agencies and appropriate Indian tribes.”
Congress also set forth in the Power Act a substantive mandate for the fish and
(A) complement the existing and future activities of the Federal and the region’s State fish and wildlife agencies and appropriate Indian tribes;
(B) be based on, and supported by, the best available scientific knowledge;
(C) utilize, where equally effective alternative means of achieving the same sound biological objective exist, the alternative with the minimum economic cost;
(D) be consistent with the legal rights of appropriate Indian tribes in the region; and
(E) in the case of anadromous fish—
(i) provide for improved survival of such fish at hydroelectric facilities located on the Columbia River system; and
(ii) provide flows of sufficient quality and quantity between such facilities to improve production, migration, and survival of such fish as necessary to meet sound biological objectives.
The fish and wildlife program exists apart from, but is also mandatorily incorporated into, the regional conservation and electric power plan that the Power Act requires the Council to adopt. See
Procedurally, the Council must review its power plan at least once every five years.
The Power Act also prescribes general substantive requirements for the power plan, starting with prioritizing resources into a hierarchy. “Priority shall be given: first, to conservation; second, to renewable resources; third, to generating resources utilizing waste heat or generating resources of high fuel conversion efficiency; and fourth, to all other resources.”
The power plan must also establish a “general scheme” for the BPA to meet its power-providing obligations through conservation and resource acquisition.
(A) environmental quality, (B) compatibility with the existing regional power system, (C) protection, mitigation, and enhancement of fish and wildlife and related spawning grounds and habitat, including sufficient quantities and qualities of flows for successful migration, survival, and propagation of anadromousfish, and (D) other criteria which may be set forth in the plan.
Id.
The Power Act then lists seven specific items that the power plan must include: (1) an energy conservation program that includes model conservation standards, (2) research and development recommendations, (3) “a methodology for determining quantifiable costs and benefits,” (4) “a demand forecast of at least twenty years ... and a forecast of power resources estimated by the Council to be required to meet the [BPA’s] obligations,” (5) “an analysis of reserve and reliability requirements and cost-effective methods of providing reserves designed to insure adequate electric power at the lowest probable cost,” (6) the fish and wildlife program adopted pursuant to
B. The Sixth Northwest Power Plan (the Plan)
In December 2007, the Council published a paper that identified the major issues for consideration in its next power plan. The Council also asked for stakeholder feedback on those issues and other relevant topics. Meanwhile, the Council’s primary focus was on the fish and wildlife program, culminating in the June 2009 adoption of a new program (the 2009 Program).
Unlike past programs, the 2009 Program did not include plans of detailed hy-drosystem operations for fish and wildlife because the federal agencies that operate and regulate the federal dams in the Columbia River Basin had already produced detailed plans for the operations of each facility intended to improve conditions for fish and wildlife affected by the hydrosys-tem. These plans, set forth and reviewed in biological opinions from the National Oceanic and Atmospheric Administration Fisheries and the U.S. Fish and Wildlife Service, focus on benefitting fish populations listed as threatened or endangered under the Endangered Species Act.
Rather than prescribe specific operations, the 2009 Program lays out biological objectives, principles, and strategies designed to benefit fish and wildlife. These strategies included transporting and providing safe bypasses for fish around dams, as well as spilling water over dams to allow for their passage. NRIC did not submit any recommendations or comments during the public process that led to the 2009 Program, nor did it seek judicial review once the 2009 Program was adopted.
In September 2009, the Council issued a draft version of the Plan. A period for public comments followed, and the Council held public hearings in Idaho, Montana, Oregon, and Washington. The Plan notes that the Council consulted “with various governments, entities and individuals in the region, and accepted and considered substantial written and oral comments.” In February 2010, the Council voted to adopt the Plan, and notice of that adoption was published on May 4, 2010.
Pursuant to the Power Act, the Plan incorporates by reference the 2009 Program and provides a power-demand forecast, an assessment of current and potential resources, a conservation program, an analysis of reserve and reliability requirements, and an appendix describing a methodology for determining quantifiable environmental costs and benefits. The methodology appendix, however, did not appear in the September 2009 draft version of the Plan, an omission first brought to light by public comments.
C. Procedural background
NRIC timely filed its petition to challenge the Plan in this court after the Council published its notice of adoption. See
II. ANALYSIS
A. Standard of review
The Administrative Procedure Act,
In contrast, this court generally reviews de novo any legal questions arising from an agency decision, such as the proper interpretation of a statutory provision. Seattle Master,
B. Due consideration
NRIC first argues that the Plan fails to give “due consideration ... for ... protection, mitigation, and enhancement of fish and wildlife” as the Power Act requires. See
The Council agrees with NRIC “that the consideration due under the [Power] Act is a serious substantive obligation” and in the past has recognized that such consideration is in addition to the Power Act’s mandate of adopting a fish and wildlife program. But it rejects NRIC’s contention that the Power Act requires, or even allows, the Council to revisit the fish and wildlife measures adopted in the 2009 Program. The Council instead argues that it gave fish and wildlife interests due consideration in three ways: (1) through the evaluation of two of the many alternative power-resource scenarios analyzed for inclusion in the Plan, (2) by developing a resource plan that accommodates the 2009 Program’s fish and wildlife measures, and (8) by considering the impact of potential new power resources both on environmental quality and on fish and wildlife.
But the Council’s first and second suggested methods for providing due consideration to fish and wildlife interests miss the mark. The first method is easily dismissed because the Council fails to show how its evaluation of two particular power-resource scenarios was at all relevant to its due-consideration obligation, particularly with respect to providing “sufficient quantities and qualities of [river] flows for successful migration, survival, and propagation of anadromous fish.” See
The Council contends that its due-consideration obligation did not require an analysis of either scenario. It further argues that it is not authorized to include in a power plan’s resource scheme a recommendation to shut down an existing power resource. But an analysis of resource scenarios that the Council claims is beyond its power to adopt has only a tenuous bearing on the Council’s duty to set forth a resource scheme that gives due consideration to fish and wildlife interests. The Council itself notes that “[t]he resource scheme actually adopted by the Council in the power plan did not call for or assume that the events would happen; these alternative scenarios (and others) were developed to provide useful information to the region to inform further thinking and planning.” In other words, the alternative scenarios were not developed to give due consideration to fish and wildlife interests in the resource scheme actually adopted. A post-hoc reliance on these alternative-scenario analyses is thus unavailing.
The Council’s second argument—that it provided due consideration to fish and wildlife enhancements through its adoption of the 2009 Program—is likewise inadequate. Developing a resource plan that accommodates the fish and wildlife program satisfies the two statutory mandates listed below and thus cannot constitute complying with the due-consideration mandate if that mandate is properly understood as an independent obligation. See Kenaitze Indian Tribe v. Alaska,
The Council further argues that the 2009 Program places “hard nonpower constraints on the hydrosystem,” thus demonstrating the Council’s due consideration. But the two separate Power Act provisions identified above already require building the power plan around those measures. Moreover, the fish and wildlife measures in the 2009 Program account for the Power Act’s command that fish and wildlife protection not jeopardize an efficient and reliable power supply. See
So while the Council equates accounting for the measures in the 2009 Program with providing due consideration for fish and wildlife interests, those measures in fact are already limited by the Power Act’s countervailing interest in assuring that the region has appropriate power resources. Characterizing those measures as “hard nonpower constraints on the hydrosystem” thus belies the fact that the measures themselves already reflect both fish and wildlife interests and power interests.
Finally, the Council suggests that it provided due consideration to fish and wildlife interests and to environmental quality by assessing the impact that potential new power resources might have on those interests. The Council’s “primary example” of this method of due consideration is the “Protected Areas” policy, which guards 44,000 miles of regional streams against new hydroelectric development. But that policy, as the citation in the Council’s response brief indicates, is part of the 2009 Program. The Council does not explain how one aspect of the 2009 Program can satisfy an obligation in the power-plan process that the Council has recognized is separate from its duty to adopt and incorporate a fish and wildlife program into the power plan.
Putting the Protected Areas policy aside, however, the Council’s basic point holds true: The Power Act’s due-consideration requirement is aimed specifically at new power-resource acquisitions, not at existing resources. This is reflected in the statute’s requirement that “[t]he plan shall set forth a general scheme for implementing conservation measures and developing resources pursuant to
The language of
NRIC has shown why consideration of additional fish and wildlife measures in the existing hydrosystem is not an unreasonable proposition. From the Fifth Northwest Power Plan to the current Plan, the amount of power that the Council estimates that the region can conserve in a cost-effective manner has doubled from approximately 2,950 average megawatts to 5,900 average megawatts, such that conservation alone can meet 85 percent of the region’s demand growth for the next 20 years. In comparison, fish and wildlife measures in the 2009 Program “reduce hydroelectric generation by about 1,200 average megawatts relative to operation with no constraints for fish and wildlife.” The increase in estimated conservation capacity from the last power plan to the current Plan is therefore more than double the power impact that current fish and wildlife measures have on the hydrosystem.
Assuming that the new conservation estimates were unknown to the Council when formulating the 2009 Program, that program underestimated the degree to which the region could accommodate fish and wildlife measures while maintaining an adequate power supply. The Plan itself notes that fish and wildlife measures must take into account the region’s power supply, but that evaluations of the power system are “necessarily preliminary” during the consideration of the fish and wildlife program. And although total electricity demand is not the only relevant factor when evaluating the power system—the Council must account for variables like peak demand periods and fluctuating wind generation—a substantial increase in potential conservation should nonetheless be relevant to fish and wildlife planning.
But articulating a retroactive approach that the Council chose not to follow is insufficient to meet NRIC’s burden of showing that the Council acted in a manner that was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” See
C. Methodology
NRIC next argues that the Council’s failure to include a methodology for evaluating environmental costs and benefits in the draft version of the Plan was both contrary to the Power Act and arbitrary and capricious. It also contends that the methodology included in Appendix P of the final version of the Plan “fails to provide a rational method for calculating environmental costs and benefits of resources or measures necessary to meet the goals of the [Power] Act.”
“The choice of methodology is a highly technical question which falls within the unique expertise of the Council.” Seattle Master Builders Ass’n v. Pac. Nw. Elec. Power & Conservation Planning Council,
One of the required elements of a power plan is “a methodology for determining quantifiable environmental costs and benefits under section 839a(4) of this title.”
1. Procedural challenge
No methodology for determining quantifiable environmental costs and benefits appeared in the draft plan, and the Council did not submit for public comment the methodology it included in Appendix P to the final version of the Plan. The Council acknowledges that the omission of its methodology from the draft plan was an “unfortunate error,” but characterizes the omission as an irrelevant procedural point. Essentially, the Council asks us to find that its error was harmless. This court has held that “[a]n agency may rely on harmless error only when its mistake is one that clearly had no bearing on the procedure used or the substance of [the] decision reached.” Sagebrush Rebellion, Inc. v. Hodel,
Omission of the methodology from the draft plan was harmless, the Council argues, because its methodology was self-evident from the draft plan. The Council, however, has cited no part of the draft plan to support that assertion. Rather, the citations to the record in the Council’s brief reflect the Council’s recognition of the omission and its decision to include the methodology as an appendix to the final version of the Plan.
The Council likewise contends that no amount of additional public notice and comment would have led the Council to adopt the type of methodology that NRIC argues is appropriate. But that post-hoc litigation position, even if true, is insufficient to demonstrate that the error “clearly had no bearing on the procedure used or the substance of [the] decision reached.” See Sagebrush Rebellion,
Including the methodology in the draft version of the Plan, which draft went through the notice-and-comment process, might not have produced any substantial differences from the methodology that appears in the final version of the Plan, but the Council has not clearly established that this is so. See Riverbend Farms, Inc. v. Madigan,
2. Substantive challenge
NRIC also challenges the substance of the methodology adopted by the Council, arguing that the methodology “fails to provide a rational method for calculating environmental costs and benefits of resources or measures necessary to meet the goals of the [Power] Act.” Because we hold that this aspect of the Plan must be remanded to remedy the procedural defect, and because the notice-and-comment process might result in a change to the substantive methodology, we decline to address NRIC’s challenge based on the current wording of Appendix P.
NRIC’s final challenge to the Plan centers on the Council’s decision to include the BPA’s estimate that the cost of the 2009 Program totals $750-$900 million per year. That estimate, based in part on market prices applied to foregone power generation, appears in the Plan at least four times. No other estimate of the financial cost of the fish and wildlife program to the BPA’s operation of the hydro-system appears in the Plan. NRIC argues that the inclusion of what it calls an “inflated” cost estimate will influence the Council’s and the public’s perception of what fish and wildlife measures are possible while maintaining a power supply that is economical.
In contrast, the draft version of the Plan included a much lower estimate of the 2009 Program’s cost ($300 million), which reflects “a long-term amortized replacement resource cost.” The draft of Appendix M then noted that assessing the costs in terms of market prices is “sometimes” important, such as when the BPA calculates the credit it receives for expenses made for nonpower-related operations. Finally, the draft noted that “[t]he traditional ‘market price’ calculation of the total effect on generation from fish and wildlife operations is essentially irrelevant to the power plan’s resource development efforts.”
The reason for removing the discussion of fish and wildlife costs from Appendix M, according to the Council, was that the discussion elicited contentious comments on a subject that the Council deemed irrelevant. Concentrating on the cost issue arguably “threatened to interfere with the Council’s focus on ... the resource strategy.” But that reasoning does not explain why the Council retained the BPA’s cost estimate in Appendix M and also inserted it elsewhere in the Plan. The Council provides no reasoned basis, either in the record or in its brief, for why it eliminated the lower, resource-replacement cost estimate but mentioned the BPA’s higher, market-rate estimate multiple times.
A decision by an agency is arbitrary when it fails to “articulate a satisfactory explanation for its action[,] including a rational connection between the facts found and the choice made.” Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
To be sure, “we must take ‘due account’ of the harmless error rule” when we review agency final actions under the Administrative Procedure Act. Cal. Wilderness Coal. v. U.S. Dep’t of Energy,
The Council argues that it “did not consider or rely on how [the BPA] reports the costs of the Council’s fish and wildlife program in developing or adopting the resource strategy or other required elements of the Sixth Power Plan.” But even if we assume that assertion to be true, the decision is nonetheless harmful because the final action that we are obligated to review under
As much as the Council stresses both in the Plan and in its brief before this court that the financial cost of the 2009 Program was irrelevant to the development of the Plan’s resource decisions, assessing that cost remains important. The Council itself identified “at least four different purposes for assessing the cost of fish and wildlife operations” in the draft of the Plan that was submitted for public comment. Moreover, the overarching purpose of the Power Act is the protection of fish and wildlife while maintaining an adequate and economical power supply. See Nw. Res. Info. Ctr. v. Nw. Power Planning Council,
The Council’s implicit endorsement of a cost estimate of fish and wildlife measures that is more than double the estimate produced by an alternative methodology is directly relevant to the fundamental balance that the Power Act commands the Council to achieve. Whether those measures cost $750 million annually rather than $300 million annually will quite likely affect where that balance is struck when the Council and the region’s stakeholders develop future fish and wildlife programs and power plans. The Council’s contention that the BPA cost estimate had “no bearing” on the Plan as a whole thus rings hollow when in fact the Council incorporated the estimate multiple times into both the Plan’s body and Appendix M.
Because the Council has provided no basis for adopting the BPA’s cost estimate throughout the Plan, and because “[w]e may not supply a reasoned basis for the agency’s action that the agency itself has not given,” Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm, Mut. Auto. Ins. Co.,
This conclusion, however, does not require setting aside the entire Plan. On remand, the Council must reconsider the parts of the Plan that contain the BPA’s cost estimate. The Council is not foreclosed from including that estimate in the Plan, but it must develop a reasoned basis for doing so. Nor is the Council required to include the resource-replacement cost estimate developed in the draft of Appendix M, but the decision to include or exclude that estimate must be grounded in reasoning reflected in a record that this court may review. See, e.g., Ariz. Cattle Growers’ Ass’n v. U.S. Fish & Wildlife, Bureau of Land Mgmt.,
As a final note, we respectfully disagree with the partial dissent’s characterization of our analysis on this issue as one of “passion” and “zeal” to edit the Council’s work product. We instead view the Council’s unexplained inclusion of the BPA’s cost estimate to the exclusion of the substantially lower resource-replacement cost estimate as both an implicit finding of fact under
III. CONCLUSION
For all of the reasons set forth above, we AFFIRM the Plan with respect to NRIC’s due-consideration challenge, but REMAND the Plan to the Council for the limited purposes of (1) allowing public notice and comment on the proposed methodology for determining quantifiable environmental costs and benefits, and (2) reconsidering the inclusion in the Plan of the BPA’s estimate of the 2009 Program’s cost to hydrosystem operations. Each party will bear its own costs on appeal.
Concurrence in Part
concurring in part and dissenting in part:
“No passion in the world is equal to the passion to alter someone else’s draft.”
The work product at issue here is a regional conservation and electric power plan, which Congress has directed the Pacific Northwest Electric Power and Conservation Planning Council (the Council) to prepare and adopt.
The majority detects three errors in the plan. First, the majority correctly concludes that the Council failed to circulate the statutorily required methodology section for notice and comment. Maj. Op. at 1019-20. Although this error was undoubtedly harmless, our case law requires us to presume prejudice when there is a procedural error that results in lack of notice and comment. See Cal. Wilderness Coal. v. U.S. Dep’t of Energy,
Bonneville estimates that the total financial effect of replacing lost hydropower capability and funding direct fish and wildlife program expenditures totals from $750 million to $900 million per year (a range affected by, among other things, water conditions and electric prices). The power system is less economical as a result of fish and wildlife program costs, but still economical in a broad affordability sense when compared to the costs of other reliable and available power supplies.
It is not surprising that the appellant here, Northwest Resource Information Center (NRIC), objects to BPA’s cost estimate for the environmental program. After all, NRIC asserts that its “corporate function and purposes and continued existence depend substantially on the salmon’s continued survival and eventual restoration,” and describes itself as a major player in the struggle to protect anadromous salmon and steelhead in the Columbia River. An organization founded in response to threats to the Northwest region’s salmon population may rightly be concerned that BPA’s cost estimate will have a “chilling effect” on efforts to expand the Council’s fish and wildlife program beyond its current scope.
But the Council’s decision to report BPA’s cost estimate is well within the scope of editorial choices an agency may make when writing a congressionally mandated plan, and any inferences this language raises are irrelevant to judicial review under the Administrative Procedures Act. Our review extends only to “agency action, findings, and conclusions.”
The majority struggles to find a rationale for invalidating the Council’s report of BPA’s cost estimate, asserting the Council’s action was arbitrary because it “will quite likely affect where [the] balance is struck when the Council and the region’s stakeholders develop future fish and wildlife programs and power plans.” Maj. Op. at 1021. This speculative prediction, whether or not true, does not give the majority a legal basis for requiring the Council to edit the statement out. A federal court may reverse agency action under the APA standard only if “the agency relied on factors Congress did not intend it to consider, entirely failed to consider an aspect of the problem, or offered an explanation that runs counter to the evidence before the agency or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Greater Yellowstone Coalition v. Lems,
In short, despite the majority’s editorial zeal, a federal court cannot strike down a sentence in an agency’s report because it does not like its spin. We are not yet commissioned to serve as a Judicial Editorial Review Board. Therefore, I dissent from the rest of the majority’s decision.
Notes
. Attributed to H.G. Wells. See A Letter from the Publisher, Time Magazine, Sep. 25, 1972.
. I also disagree with the majority's failure to accord the proper deference to the Council’s explanation of how it provided due consideration for fish and wildlife in the plan. The Council stated that it provided due consideration by incorporating the environmental program required by