istration’s goal of 100% clean electricity by 2035 and a net-zero-emissions economy by 2050.Maintaining And Enhancing Hydroelectricity IncentivesThe DOE’s Grid Deployment Office administers the Maintaining and Enhancing Hydroelectricity Incentives. The program provides financial support to existing hydropower and pumped storage facilities for capital improvements related to three categories: (1)improving grid resiliency (e.g., integration of wind or solar resources at the facility); (2) improving dam safety to ensure acceptable performance (e.g., spillway upgrades and erosion repair); and (3) environmental improvements (e.g., fish passage and water quality).[1]To apply for the incentive, the facility must be a qualified hydroelectric facility, which means it:(a) Is licensed by FERC or is a hydroelectric project constructed, operated, or maintained pursuant to a permit or valid existing right-of-way granted prior to June 10, 1920, or a license granted pursuant to the Federal Power Act (16 U.S.C. 791a et seq.), or has a FERC-issued exemption;(b) Was placed into service before November 15, 2021; and(c) Is in compliance with all applicable Federal, State, and Tribal requirements, or would be brought into compliance with all applicable Federal, State, and Tribal requirements as a result of the capital improvements carried out using an incentive payment.To be eligible for incentive payments, the facility must have procured the materials or incurred the other costs for the capital improvement after November 15, 2021. Additionally, the available incentive payments cannot exceed 30% of the costs of the capital improvement and the amount of the incentive payment is capped at $5,000,000. A qualified hydroelectric facility cannot receive more than one incentive payment in per fiscal year and all developments within an individual FERC-licensed hydroelectric project are treated as a single hydroelectric facility. Therefore, each FERC-licensed hydroelectric project may receive only one incentiv

ounty Flood Control and Water Conservation District (“Counties”) then filed two lawsuits (later consolidated) against the project. They alleged that the EIR did not adequately address climate change, failed to evaluate fiscal impacts to Butte County, failed to address impacts from mercury and bacteria in the water, wrongly assumed that the dam was currently operated in compliance with applicable water quality standards, and did not account for potential changes to the SWP that could affect dam operations.The trial court rejected the Counties’ claims, and they appealed. On December 20, 2018, the Third District issued its decision in County of Butte v. Department of Water Resources(2018) 30 Cal.App.5th 630 (Butte I). It, too, rejected the CEQA claims. But instead of addressing the substance of those claims as the trial court had done, it held that the application of CEQA to the relicensing of a dam under FERC’s aegis was preempted by federal law pursuant to the Federal Power Act (“FPA,” 16 U.S.C. §791a et seq.). (That decision is discussed in this post.)The defeated Counties then petitioned SCOCA for review. SCOCA granted the petition and ordered that the case be transferred back to the Third District “with directions to vacate its decision and reconsider the case in light of Friends of the Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677.”The Third District did as instructed, and in another published opinion reached largely the same conclusion as it had in Butte I. See, County of Butte v. Department of Water Resources(2019) 39 Cal.App.5th 708 (Butte II). But on December 11, 2019, SCOCA again granted the Counties’ petition for review. (Discussed in this post.) And on August 1, 2022, SCOCA issued its opinion in County of Butte v. Department of Water Resources(2022) 13 Cal.5th 612 (Butte III), holding that CEQA is not fully preempted under the FPA and remanding to the Third District for further review. (See this post.)(There was yet more legal activity after Butte III

In a 5-2 opinion filed August 1, 2022, a divided California Supreme Court held the Federal Power Act (“FPA”; 16 U.S.C. § 791a et seq.) does not “occupy the field” and entirely preempt CEQA’s application to the state’s participation, as applicant and hydroelectric facility owner/operator, in the Federal Energy Regulatory Commission (“FERC”) licensing process the FPA requires to operate such facilities.

This is a highly deferential standard akin in many respects to the business judgment rule applied to corporate fiduciaries.The Federal Power Act, the Filed-Rate Doctrine, the Natural Gas Act, and the Mobile-Sierra DoctrinePublic and privately operated utilities providing interstate utility service within the United States are regulated by the Federal Power Act, 16 U.S.C. §§ 791a et seq. ("FPA"), under FERC's supervision. Although contract rates for electricity are privately negotiated, those rates must be filed with FERC and certified as "just and reasonable" in order to be lawful.

In the order, FERC stated that, "Where a party to a Commission-jurisdictional agreement under the NGA seeks to reject the agreement in bankruptcy, that party must obtain approval from both the Commission and the bankruptcy court to modify the filed rate and reject the contract, respectively."FERC has previously taken the position that it shares jurisdiction with the bankruptcy courts to determine whether contracts subject to FERC regulation under sections 205 and 206 of the Federal Power Act, 16 U.S.C. §§ 791a et seq. ("FPA"), can be rejected in bankruptcy (most notably in connection with the chapter 11 case filed by PG&E Corporation). See NextEra Energy, Inc. v. Pac. Gas & Elec. Co., 166 FERC ¶ 61,049 (2019); Exelon Corp. v. Pac. Gas & Elec. Co., 166 FERC ¶ 61,053 (2019), on reh'g, 167 FERC ¶ 61,096 (2019).

(See my 4/20/20 post.) The issues presented are: (1) to what extent is CEQA preempted by the Federal Power Act when the State acts on its own behalf (“FPA”; 16 U.S.C. § 791a et seq) and exercises discretion in seeking licensing for a hydroelectric dam project:?; and (2) to what extent does the FPA preempt state court actions challenging an EIR prepared under CEQA for a related Clean Water Act (“CWA”) § 401 water quality certification? The extended due date for the Petitioners’ reply brief on the merits is July 29, 2020, and following completion of briefing the case will in due course be set for oral argument.Review Denied And Depublication Ordered In First District Case Upholding Mitigated Negative Declaration.

[1] In re FirstEnergy Solutions Corp., No. 18-3787 (6th Cir. Dec. 12, 2019).[2] 11 U. S. C. §365(a).[3] WSGR Client Alert, June 14, 2019: https://www.wsgr.com/en/insights/bankruptcy-court-denies-ferc-jurisdiction-over-power-purchase-agreements-in-pgande-bankruptcy.html.[4] 16 U.S.C. § 791a, et seq.[5] 16 U.S.C. § 2601, et seq.[6] In re Mirant, 78 F.3d 511 (5th Cir. 2004).

Only a handful of courts have addressed this thorny issue to date, and with conflicting results in a controversy that may ultimately need to be resolved by the U.S. Supreme Court or legislative action. The crux of the problem lies in conflicting jurisdiction conferred upon bankruptcy courts by the Bankruptcy Code, 11 U.S.C. §§ 101 et seq., and related statutes to authorize the rejection of burdensome contracts, on the one hand, and by the Federal Power Act, 16 U.S.C. §§ 791a et seq. (the "FPA"), to FERC, which is granted the "exclusive authority" to determine the reasonableness of interstate utility rates, on the other.The bankruptcy court presiding over PG&E’s chapter 11 cases was the most recent court to weigh in on the debate. In PG&E Corp. v. FERC (In re PG&E Corp.), Adv. Proc.

The Court upheld the dismissal of the complaint in each case, and the Zero Emission Nuclear (ZEN) legislation in New York and Illinois was effectively upheld as not in violation of the Federal Power Act. On January 7, 2019, the Electric Power Supply Association, one of the nation’s leading trade associations representing independent power producers, filed two petitions for writs of certiorari with the U.S. Supreme Court.The writs for cert arise from appeals of a Second Circuit Court of Appeals decision, which is summarized here, and a Seventh Circuit Court of Appeals decision, which is summarized here, that both upheld state subsidies for nuclear power generation facilities in New York and Illinois, respectively.The question presented by both appeals is “[w]hether the [Federal Power Act (FPA), 16 U.S.C. § 791a et seq.] preempts only state subsidies that explicitly require a wholesale generator to sell its output in FERC-approved auctions, or whether the FPA also preempts state subsidies that lack such an express requirement but that, by design, subsidize only generators that sell their entire output via such auctions, thereby achieving the same effect.” Both petitions urged the Court to recognize the great importance of the decisions from the Second Circuit and Seventh Circuit if upheld.

The Federal Energy Regulatory Commission (“FERC”) issues licenses needed to construct and operate hydroelectric dams pursuant to the Federal Power Act (“FPA”; 16 U.S.C. §791a, et seq). Under long-standing law, and with the limited exception of state-issued water quality certifications, the FPA “occupies the field” of licensing a hydroelectric dam, and bars environmental review of the federal licensing procedure in state courts; this preemption is necessary because recognizing a “dual final authority” for such projects would be “unworkable.”