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In re Morrisville Hydroelectric Project Water Quality

Supreme Court of Vermont

November 22, 2019

In re Morrisville Hydroelectric Project Water Quality Vermont Natural Resources Council, Vermont Council of Trout Unlimited, and Agency of Natural Resources, Appellants

          On Appeal from Superior Court, Environmental Division Thomas G. Walsh, J.

          Thomas J. Donovan, Jr., Attorney General, and Laura B. Murphy, Assistant Attorney General, Montpelier, for Appellant Vermont Agency of Natural Resources.

          Jill Witkowski Heaps, East Amherst, New York, and Kenneth J. Rumelt, Environmental and Natural Resources Law Clinic, South Royalton, for Appellants Vermont Natural Resources Council and Vermont Council of Trout Unlimited.

          James G. Murphy and William M. Kovalchik, Law Clerk (On the Brief), National Wildlife Federation, Montpelier, for Amici Curiae National Wildlife Federation, Sierra Club, Connecticut River Conservancy.

          Gregory M. Eaton and Clara E. Conklin of Primmer Piper Eggleston & Cramer PC, Littleton, New Hampshire, for Cross-Appellants/Appellees Morrisville Water & Light Department.

          Daniel P. Richardson and Ronald A. Shems of Tarrant Gillies & Richardson, Montpelier, for Appellees American Whitewater and Vermont Paddlers' Club.

          PRESENT: REIBER, C.J., SKOGLUND, ROBINSON, EATON AND CARROLL, JJ.

          CARROLL, J.

         ¶ 1. This appeal involves a state water-quality certification pursuant to the federal Clean Water Act (CWA) issued by the Vermont Agency of Natural Resources (ANR) for the operation of hydroelectric dams. ANR certified three dams operated by Morrisville Water and Light (MWL) and imposed conditions, including those to control the minimum amount of water released from each dam to support habitat for fish. MWL appealed these conditions to the Environmental Division. American Whitewater and Vermont Paddlers' Club (collectively the Paddlers) also appealed, arguing that the conditions at one facility did not allow for whitewater boating. The Environmental Division rejected ANR's flow rates and imposed MWL's proposed flow rates, affirmed ANR's conditions regarding a winter drawdown for one site, and imposed scheduled releases of water as requested by the Paddlers. ANR appeals and MWL cross appeals. We conclude that the Environmental Division erred in rejecting ANR's interpretation of its antidegradation policy and methodology for calculating flow rate, and affirm the Environmental Division on the winter drawdown and timed releases for the Paddlers at the Green River facility. Therefore, we affirm in part and reverse and remand in part.

         I. Statutory and Regulatory Framework

         ¶ 2. This appeal involves three hydroelectric facilities operated by MWL on the Lamoille River and its tributaries: the Morrisville, Cadys Falls, and Green River facilities. These facilities were constructed between the 1890s and 1940s. In 1981, the Federal Energy Regulatory Commission (FERC) issued the facilities' original license, which expired in April 2015. To renew its license with FERC, MWL applied for a state water-quality certification from the State of Vermont. See 10 V.S.A. § 1004 (indicating that ANR is certifying agency for CWA).

         ¶ 3. We begin with an overview of the federal and state regulatory framework underlying this certification process. The main objective of the Clean Water Act "is to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). To reach that goal, the CWA requires states to develop water-quality standards that include designated uses for a waterbody and the water-quality criteria necessary to support those uses. Id. § 1313(c)(2)(A). An applicant for a federal license for any activity that may cause a discharge into navigable waters must obtain state certification, known as § 401 certification, that the activity will comply with provisions of the CWA and state law. Id. § 1341(a)(1), (d). The operation of a hydroelectric dam must receive state certification because dams potentially result in a discharge, as that term is used in § 401 of the CWA. S.D. Warren Co. v. Me. Bd. of Envtl. Prot., 547 U.S. 370, 373 (2006).

         ¶ 4. The Vermont Legislature delegated to ANR the responsibility to provide water- quality certification pursuant to § 401 of the CWA. 10 V.S.A. § 1004. ANR also has authority to adopt procedures for certifying hydroelectric projects. Id. § 1006(b). Pursuant to this authority, ANR has adopted the Vermont Water Quality Standards. Agency of Natural Resources, Vermont Water Quality Standards, Code of Vt. Rules 12 030 025 [hereinafter VWQS], http://www.lexisnexis.com/hottopics/codeofvtrules.[1] Any hydroelectric project seeking ANR certification must comply with the VWQS. In re Clyde River Hydroelectric Project, 2006 VT 11, ¶ 3, 179 Vt. 606, 895 A.2d 736 (mem.). As the agency tasked with granting § 401 compliance, ANR may impose reasonable conditions on a permit. PUD No. 1 of Jefferson Cty. v. Wash. Dep't of Ecology, 511 U.S. 700, 712 (1994). These conditions can regulate the quantity of water because stream flow impacts a waterbody's water quality. Id. at 719 (recognizing that "water quantity is closely related to water quality; a sufficient lowering of the water quantity in a body of water could destroy all of its designated uses, be it for drinking water, recreation, navigation or, as here, as a fishery").

         ¶ 5. The CWA and VWQS require water bodies "to achieve and maintain a level of quality that fully supports" the "designated uses" of those waters. VWQS § 3-04(A); see also 40 C.F.R. § 131.10(a). Designated uses are "those uses specified in water quality standards for each water body or segment whether or not they are being attained." 40 C.F.R. § 131.3(f). In Vermont, designated uses are identified for each class of water. See VWQS § 1-01(B)(14) (defining designated use as "any value or use, whether presently occurring or not, that is specified in the management objectives for each class of water"). The waters at issue in this appeal are Class B waters, and the designated use that was the primary focus in this case is the preservation of aquatic biota and wildlife through the establishment and maintenance of "high quality aquatic habitat."[2]VWQS § 3-04(A)(1). The VWQS require "[n]o change from the reference condition that would prevent the full support of aquatic biota, wildlife, or aquatic habitat uses" and protection of "[a]ll life-cycle functions." Id. § 3-04(B)(4).

         ¶ 6. The VWQS also protect existing uses, which are uses that have occurred in the waterbody on or before November 28, 1975. VWQS § 1-01(B)(18). To identify existing uses, ANR must consider at least five factors:

a. Aquatic biota and wildlife that utilize or are present in the waters;
b. Habitat that supports existing aquatic biota, wildlife, or plant life;
c. The use of the waters for recreation or fishing;
d. The use of the water for water supply, or commercial activity that depends directly on the preservation of an existing high level of water quality; and
e.. . . under paragraphs (a) and (b) above, evidence of the use's ecological significance in the function of the ecosystem or evidence of the use's rarity.

Id. § 1-03(B)(1). The VWQS include an antidegradation policy, which requires that waters be managed "to protect, maintain, and improve water quality." VWQS § 1-03(A). The meaning of the antidegradation policy, the definition of habitat "that supports existing aquatic biota, wildlife, or plant life," and the protection to be afforded designated and existing uses are central issues in this case.

         II. Factual and Procedural Background

         ¶ 7. The Environmental Division found the following. MWL's hydroelectric facilities impact three Vermont waters: the Lamoille River, the Green River, and the Green River Reservoir. The rivers support several fish species including brook trout, brown trout, and rainbow trout. Several more species of fish live in the Green River Reservoir. The Reservoir provides habitat for two to three nesting loon pairs. The Morrisville and Cadys Falls facilities are on the Lamoille River. They divert water from the river to generate electricity. The dams at Morrisville and Cadys Falls create bypass reaches, which are parts of the river where water would naturally flow if not diverted to the facilities. 10 V.S.A. § 1006(a)(1) (defining bypass reach). Once the facility has used the water, it returns it to the river downstream at the end of the bypass reach.[3] The Green River facility operates in a store-and-release mode. The Green River Reservoir is upstream of the dam. To generate electricity, the facility draws water from the reservoir and passes it through the facility and down to the Green River, which flows into the Lamoille River.

         ¶ 8. To prepare for the recertification process, MWL hired a consulting firm, Gomez and Sullivan, to study the Morrisville, Cadys Falls, and Green River facilities. ANR and MWL agreed on the study's scope and goals in advance as part of the FERC relicensing. One of the goals was to determine the flow of water necessary to support aquatic habitat. In general, for the Morrisville and Cadys Falls facilities, the study considered how different flows in the bypass reach affected downstream passage, habitat connectivity, water movement, and availability of cover. For the Green River facility, Gomez and Sullivan conducted a habitat flow study in the Green River to assess the relationship between flow and habitat for target species at different life stages. From the data, the study produced habitat flow curves showing the amount of habitat observed under different flows for each life stage of each target species. The researchers converted the habitat information into percentages of the maximum habitat observed in the studies. Both ANR and MWL used these habitat-flow curves to reach their recommended flow regimes for the three facilities.

         ¶ 9. ANR used the data to perform a most-limiting habitat analysis, which shows the flow at which 80% of the maximum habitat is achieved for the most-limiting species at that facility. ANR set a flow rate of 70 cubic feet per second (cfs) at the Morrisville facility to provide 80% of the maximum habitat observed for brook trout, the most-limiting species at that facility. At Cadys Falls, ANR set a flow rate of 100 cfs to provide 80% of the maximum habitat observed for adult rainbow trout, the most-limiting species at that location. At the Green River facility, ANR used a dual-flow analysis to account for rapid-flow fluctuations that can impact fish populations in a variety of ways, including causing dewatering, stranding, disruption of spawning or migration, and habitat loss. The dual-flow analysis identified the percentage of maximum habitat available in different base-peak flow combinations for different life stages of target species. ANR imposed seasonal-flow and reservoir-elevation requirements to assure habitat protection for vulnerable species.[4] ANR set a maximum fluctuation of 0.25 feet from June 1 to December 15 and a winter drawdown limit of 1.5 feet to be refilled by May 1. ANR did not include timed releases for whitewater boating but required natural high flows to be passed downstream from spring to fall to allow for boating.

         ¶ 10. In August 2016, ANR issued a certification with the conditions recited above. Multiple parties appealed ANR's certification to the Environmental Division. MWL appealed, primarily seeking lower flow rates. The Paddlers argued that ANR had committed a legal error by concluding that whitewater boating was not an "existing use" entitled to protection under VWQS. The Vermont Natural Resources Council and Vermont Council of Trout Unlimited argued that ANR's proposed flow rates were too low.

         ¶ 11. Before the Environmental Division, MWL argued that ANR's conditions were in error in part because ANR had not considered the economic and social impacts of the project and how the conditions would impact those concerns. MWL and ANR both moved for summary judgment on whether ANR was required to consider the social and economic impact of the project. The Environmental Division concluded that in a § 401 certification ANR was not required to consider social or economic factors to set conditions that did not meet water-quality standards.

         ¶ 12. The case proceeded to trial, which lasted eight days. The trial centered around whether ANR's conditions were necessary to protect high-quality aquatic habitat and to what extent water quality could be decreased to accommodate operation of the hydroelectric facilities. MWL did not dispute that ANR's flow conditions would fully support the designated use of aquatic biota, wildlife, and aquatic habitat, but argued that the conditions were overly protective. MWL hired a consultant, who created a flow-energy model to evaluate habitat under different flow scenarios compared to a modeled natural flow regime. MWL determined available habitat under different flow regimes by averaging together all species and life stages over time. MWL's proposal included lower minimum bypass flows for the Morrisville and Cadys Falls facilities and a different set of conditions for the Green River facility. Although MWL argued that these lower flows supported high-quality aquatic habitat for the Morrisville and Green River facilities, MWL conceded that the lower flows did not comply with the VWQS for the Cadys Falls facility. Nonetheless, MWL argued that the lower flows at Cadys Falls were necessary to protect the existing use of hydroelectric operation.

         ¶ 13. In a written order, the court rejected the conditions imposed by ANR regarding minimum flow rates and imposed MWL's proposed conditions. The court affirmed ANR's 1.5- foot limit for the winter drawdown of the Green River Reservoir. Finally, the court found that whitewater boating was an existing use and included three scheduled releases per year from the Green River Facility for whitewater boating. A summary of the current conditions, the parties' proposals, and the Environmental Division decision is as follows:

Location

Location Current

ANR Condition

MWL Proposal

Environmental Division Decision

Morrisville

12 cfs

70 cfs One-inch spill

43 cfs No aesthetic flow

43 cfs No spill required

Cadys Falls

No minimum flow

100 cfs One-inch spill

65.5 cfs No aesthetic flow

65.5 cfs No spill required

Green River

5.5 cfs 10-foot winter drawdown

Seasonal regime 1.5-foot limit for winter drawdown No scheduled releases

Seasonal regime 6-foot limit for winter drawdown No scheduled releases

MWL regime 1.5-foot limit for winter drawdown 3 annual scheduled releases

         ¶ 14. ANR appeals, arguing that the Environmental Division failed to afford proper deference to ANR's interpretation of the antidegradation provision of the VWQS and the definition of high-quality aquatic habitat.[5] MWL cross appeals, arguing that the Environmental Division erred by ruling at summary judgment that social and economic issues cannot be considered when issuing a water quality certification. MWL also challenges the court's determination of a 1.5-foot winter drawdown at the Green River Reservoir. Finally, ANR argues that the court erred in setting scheduled releases for whitewater boating.

         ¶ 15. We affirm in part and reverse and remand in part. We conclude that the Environmental Division erred in failing to give deference to ANR's interpretation of the antidegradation provision of the VWQS and ANR's definition of high-quality aquatic habitat and consequently reverse and remand as to the proper flow rates for each facility. We affirm the Environmental Division's conditions related to the winter drawdown. We conclude that ANR was not required to take economic or social factors into account when setting limits or conditions to ...


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