oversight

Comments on Legal Issues Regarding Glines Canyon and Elwha River Dams

Published by the Government Accountability Office on 1990-02-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

       .1-                           -




              Comptroler Geu-al
*   UtER      of the United States
              Washington,
                     _
                            D.C. 20548
                              \
                                                               2dr'¢


             B-236481
             .February 16, 1990

             The Honorable John D. Dingell
             Chairman
             Subcommittee on Oversight and Investigations
             Committee on Energy and Commerce
             House of Representatives

             Dear Mr. Chairmang

             This is in response to your letter dated June 12, 1989, in
             which you asked for our views on three legal issues
             concerning the Glines Canyon and Elwha River Dams:

             (1) Whether the Federal Energy Regulatory Commission (FERC)
             has jurisdiction to issue a new license for the Glines
             Canyon Dam;

             (2) Whether FERC may add conditions to its annual licenses
             on the Glines Canyon Dam for the restoration of fisheries;
             and

             (3) Whether any federal agency may order either dam removed.

             First, we believe that FERC does not have jurisdiction to
             issue a new license for the Glines Canyon Dam.

             Second, because FERC does not have jurisdiction to issue a
             new license for the Glines Canyon Dam, it does not have
             authority to issue annual licenses, much less condition
             their issuance.

             Third, we have concluded that FERC has the authority to
             order either or both dams removed.

             We hope our comments are helpful to you. We have enclosed
             our more detailed analysis of these issues. Under our usual




                                  FILE   C@Y
                                          D    ':u   A
    agreement, this opinion will be available to the public 30
    days from its date, unless you release it sooner. As
    agreed, we will provide you with our analysis of the
    nonlegal issues at a later date.

    Sincerely yours,



Actingcomptroller General
     of the United States

    Enclosure




                                                       B-236481
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ENCLOSURE



                         Analysis

Background

The Elwha River flows for 44 miles from its source in the
Olympic Mountains of Washington State through the Olympic
National Park to the Strait of San Juan de Fuca. There are
two dams along the river: the Glines Canyon Dam, located
wholly within the Olympic National Park, and the Elwha Dam,
located entirely outside the Olympic National Park. These
dams provide electricity to the Daishowa America pulp and
paper mill located in Port Angeles, Washington. The mill
provides employment to 360 people. Daishowa plans to
expand the facility and expects to employ another 150 mill
workers.
During the 19th century, the river was home to eight
different species of anadromous fish.l/ The damming of the
river, early in this century, has kept the fish from
spawning upstream.
The Glines Canyon Dam is located about 14 miles from the
mouth of the Elwha River. It was licensed by the Federal
Power Commission to produce electricity in 1926. When the
dam was licensed, it was located largely within the Olympic
National Forest. Twelve years later, Congress created from
these Forest lands the Olympic National Park, and authorized
the President to establish the Park's outer boundaries. In
1940, the President extended the Park boundaries to include
the Glines Canyon Dam. The dam's license expired in 1976
and has been renewed on an annual basis since then pursuant
to § 15(a) of the Federal Power Act (FPA) (16 U.S.C.
§ 808(a)).
The Elwha Dam is located about nine miles down river from
Glines Canyon and five miles from river's mouth. This dam
has produced electricity since its construction in 1913.
At no time has the dam had a hydroelectric power license.
At the time of its construction, no such license was
required. However, under the Rivers and Harbors Act of
1899, dams across rivers like the Elwha had to be approved


1/ These included all five species of pacific salmon, as
well as steelhead, cutthroat, and Dolly Varden trout.

                                                    B-236481
ENCLOSURE

by, among others, the Army Corps of Engineers. We have
found no evidence to suggest that such permission was ever
obtained. In 1968, the dam owners applied for a license
from the Federal Power Commission (predecessor to the
Federal Energy Regulatory Commission (FERC)). Ten years
later, in 1978, FERC determined that it had jurisdiction
over. the Elwha Dam because the structure is located on a
navigable waterway (FPA § 4(e); 16 U.S.C. § 797(e)). The
license application for the dam is still pending before the
Commission.

Issues
Chairman Dingell raised three issues.
    --First, whether FERC has jurisdiction to issue a new
      license for the Glines Canyon Dam.
    --Second, whether FERC, if it may license the Glines
      Canyon Dam, has authority to add conditions to the
      annual license for the restoration of fisheries.

    --Third, whether any federal agency may order either dam
      removed.
As requested by Chairman Dingell, we obtained the views of
the Department of Interior's Park Service (Park Service)
and FERC. The Department of Interior takes the position
that only Congress can relicense the Glines Canyon Dam.
FERC staff have concluded that their own research and
analysis do not provide a definitive answer to the question
of the Commission's authority to relicense Glines Canyon.
However, they observe that there may be two grounds for FERC
jurisdiction.

Discussion

     1. Whether FERC has jurisdiction to issue a new
license for the Glines Canyon Dam.
The FPA provides FERC with authority to license hydropower
projects on bodies of water that are subject to Congress's




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ENCLOSdRE

constitutional power under the commerce clause2/ or are on
public lands and reservations. Section 4(e), 16 U.S.C.
§ 797(e) provides:

        "The Commission is authorized and empowered--
        "(e) To issue licenses . . . for the purpose of
        constructing, operating, and maintaining dams, water
        conduits, reservoirs, power houses, transmission
        lines, or other project works necessary or convenient
        for the development and improvement of navigation
        and for the development, transmission, and
        utilization of power across, along, from, or in any
        of the streams or other bodies of water over which
        Congress has jurisdiction under its authority to
        regulate commerce with foreign nations and among the
        several States, or upon any part of the public lands
        and reservations of the United States (including the
        Territories), or for the purpose of utilizing the
        surplus water or water power from any Government dam
               ."       (Emphasis added.)

§ 4(e) of the FPA (16 U.S.C. S 797(e)).

In 1935, Congress amended the Federal Water Power Act
(renaming it the Federal Power Act) to exclude national
parks from the definition of the term "reservations."3/ The
Conference Report accompanying these amendments stated
unequivocally that the purpose of changing this definition




2/   The commerce clause, in relevant part, reads as follows:

        "The Congress shall have Power .           .   . to
        regulate Commerce with foreign Nations, and
        among the several States, and with the Indian
        Tribes .    .   .   ."   Article I,   section 8.

3/ The term "public lands" is defined by statute as
excluding lands that may not be acquired and disposed of by
private parties under the public land laws. This excludes
land in national parks. Section 3(1) of the FPA, 16 U.S.C.
§ 796(1).



3                                                             B-236481
ENCLOSURE

was to assure that no hydroelectric projects would be
licensed in national parks.4/
A literal reading of the language of section 4(e) of the FPA
(49 U.S.C. § 797(e)), however, suggests that FERC does have
authority to issue a new license for the Glines Canyon Dam
despite its location within a national park. Section 4(e)
provides FERC with authority to license power projects
     'in any of the streams or other bodies of water
     over which Congress has jurisdiction under its
     authority to regulate commerce with foreign
     nations and among the several States or upon any
     part of the public lands and reservations of the
     United States .   .   .   ."   (Emphasis added.)

Because the two clauses giving FERC jurisdiction are
disjoined by "or," one may insist that they represent
independent alternative grounds for licensing authority.
Thus, although the definitional change of "reservations,"
contained in the 1935 legislation, unquestionably eliminated
one of those jurisdictional grounds, the other was not
addressed. Use of the conjunction "or" arguably leaves
FERC with unrestricted authority to license power projects
on bodies of water over which Congress has commerce clause
power, regardless of whether they are located within




4/   The Conference Report stated:

       'The definition of the former term
       [reservations] has been amended to exclude
       national parks and national monuments. Under
       an amendment to the act passed in 1921, the
       Commission has no authority to issue licenses
       in the national parks or national monuments.
       The purpose of this change in the definition
       of 'reservations' is to remove from the act
       all suggestion of authority for the granting
       of such licenses." H.R. Rep. No. 1318, 74th
       Cong. 1st Sess. 22 (1935). (The language of
       the 1921 Act does not, in our view, purport to
       establish that the Commission lacks authority
       to issue licenses in all National Parks.)

4                                                       B-236481
ENCLOSURE

national parks.5/ According to the Supreme Court, Congress
has commerce clause authority over all navigable waterways.
U.S. v. Appalachian Electric Power Co., 311 U.S. 377 (1940);
U.S. v. Rio Grande Irrigation Co., 174 U.S. 690 (1898).
Thus, assuming the Glines Canyon Dam is located on a
navigable waterway, it could be argued that FERC retains
licensing authority on this basis.

Nevertheless, we are disinclined to place such overriding
importance on the statute's use of the conjunction "or." To
do so requires us to accept the notion that, when Congress
authorized two separate grants of licensing authority in
section 4(e), it intended the first to override any
restrictions in the second, and thereby to effectively annul
those restrictions. This contradicts the explicit
expression of congressional purpose in the Conference
Report.



5/ This argument, which relies heavily on the overriding
significance of Congress's having used the conjunction 'or,"
has some judicial support. In Garcia v. U.S., 469 U.S. 70
(1984), the U.S. Supreme Court was faced with an analogous
question concerning the significance of the conjunction
nor."     In that case, the defendant contended that a criminal
statute, 18 U.S.C. § 2114, was intended to apply only to
crimes involving Postal Service employees. As proof of
Congress's intent, the defense pointed to a floor statement
by the bill's manager. The language of the statute
prohibited assault, with intent to rob, of "any person
having lawful charge, control or custody of any mail matter
or of any money or other property of the United States."
TEmphasis added.FO The Supreme Court rejected the
defendant's contention, stating:
        "The three classes of property protected by § 2114
        are each separated by the conjunction 'or.'
        Canons of construction indicate that terms
        connected in the disjunctive in this manner be
        given separate meanings.'

Id. at 73.

However, the Court also observed that the legislative
history 'would perhaps be controlling if there were
substantial ambiguity in the language Congress had enacted."
Id. at 78.


5                                                      B-236481
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ENCLOSURE

We believe the better view is that the second clause of
section 4(e), with its restricted definition of
"reservations," necessarily qualifies the first clause.
Read in this manner, the 1935 legislation, by eliminating
FERC's authority to license power projects in national
parks, limits the Commission's authority to license such
projects on bodies of water over which Congress has commerce
clause power. That is, FERC indeed retains licensing
authority regarding such bodies of water, but not if they
are located in national parks. Even if this reading of
section 4(e) is not free from doubt, it finds strong support
in the clear statement of congressional purpose regarding
the 1935 amendments, contained in the Conference Report
accompanying those amendments ("The purpose .   .   . is to
remove from the act all suggestion of authority for the
granting of such licenses [in national parks]u).6/
Second, the literal interpretation of section 4(e),
discussed above, would result in less protection for dams
constructed in national parks than for identical projects
constructed on other government lands. For example, in all
instances where FERC is authorized to license dams on
reservations, such as in the case of national forests,
section 4(e) requires FERC to allow the agency with
responsibility for that reservation (e.g., the Forest
Service) the opportunity to impose conditions on the
license. If, however, pursuant to the literal
interpretation, FERC is authorized to license dams on
navigable waters in national parks, those licenses would not
be subject to those conditions, because, by virtue of the
1935 definitional change, national parks are not
reservations.
This would create an anomalous situation whereby dams
licensed by FERC on all government lands, with the single
exception of national parks, would be subject to protective
conditions imposed by other federal agencies. Dams in
national parks would be immune from such conditions. Thus,
under this literal interpretation, Congress, in eliminating
Commission authority to license dams in national parks, left
FERC with fewer restrictions on its authority to license
such dams on navigable waters than if the 1935 legislation

6/ This contrasts with the Garcia case where the Supreme
Court rejected the expression of congressional intent on
grounds that there was no ambiguity in the language of the
statute.

6                                                       B-236481
ENCLOSURE

had not been enacted. We believe it is unlikely that
Congress intended this anomalous result when it determined
to prevent further licensing of dams in national parks.7/

Finally, FERC staff, in memoranda dated August 24 and
October 31, 1989, have concluded that their own research and
analysis do not provide a definitive answer to the question
of the Commission's authority to relicense Glines Canyon.
However, the memoranda observe that there may be two grounds
for FERC jurisdiction.
First, the August 24 memorandum notes that the
jurisdictional issue involves the relicensing of the Glines
Canyon Dam, not the issuance of a new license. The staff
memorandum suggests that, because the Commission had clear
jurisdiction to issue the initial license, FERC may now be
able to relicense Glines Canyon even if the Commission would
lack the authority to issue a new license.

Second, the staff memoranda observe that two special facts
may provide FERC with jurisdiction over Glines Canyon.
(1) The Elwha Dam and the Glines Canyon Dam effectively
function as one project; and (2) a small portion of the
transmission line running from the Glines Canyon Dam crosses
national forest land, outside the national park. The
memoranda suggest that, because FERC licenses projects, not
just dams, the Commission's authority over the Elwha Dam
might give FERC jurisdiction to relicense the Glines Canyon
Dam as well. Similarly, the memoranda suggest that,
because a small portion of the transmission line crosses
national forest land, outside the national park, it may be
licensed and that this transmission line, as a part of the
entire project, might provide FERC with jurisdiction to
license the Glines Canyon Dam.



7/ Also, as the Park Service points out, the 1935
legislation may be susceptible to a construction that
precludes FERC from licensing power projects for bodies of
water in national parks, even if the term "or" is read
disjunctively. That is, even if section 4(e) provides FERC
with authority to license projects on all bodies of water
over which Congress has commerce clause power, including
those located in national parks, it would be difficult to
construct some projects in such parks without constructing
some part of them on the park land. In the case of the
Glines Canyon Dam, the reservoir is located on park land.

7                                                   B-236481
ENCLOSORE

The FERC staff memoranda do not take the position that FERC
has jurisdiction to relicense the Glines Canyon Dam.
(Indeed, as the staff noted, the research and analysis
reflected in the memoranda do not provide a definitive
answer on this issue.) Rather, the points discussed in the
memoranda are offered only as suggestions regarding possible
bases for FERC jurisdiction.8/
We do not believe that the suggestions advanced in the staff
memoranda provide FERC with a sufficient legal basis for
establishing jurisdiction over the Glines Canyon Dam. For
example, the first proposition, that once FERC has licensing
jurisdiction it continues to have relicensing jurisdiction,
does not take into account section 15(a) of the FPA (16
U.S.C. § 808(a)). This provision allows FERC to relicense a
project subject to existing laws.9/ Thus, in the case of
Glines Canyon, if existing law prohibits FERC from licensing
a dam in a national park--as we believe it may--it is
unlikely that FERC would have authority to relicense it.
In our view, the staff memoranda's second suggested basis
for jurisdiction is also inapposite because the Glines
Canyon Dam is located wholly within a national park.
Although Glines Canyon and Elwha may effectively function as
one project, and a small portion of the transmission line
crosses a national forest, outside the national park, it is
doubtful that this would be sufficient to override the 1935
legislation which, through its definitional change, barred
licensing of hydroelectric projects in national parks.

Accordingly, we believe the better view to be that the
Commission lacks authority to issue a new license.


8/ The August 24 staff memorandum also suggests that FERC
may have authority to establish jurisdiction over the Glines
Canyon Dam based on its authority over navigable waterways.
However, the staff memorandum did not pursue this basis for
relicensing authority.

2/   Section 15(a) of the FPA authorizes FERC to,
            issue a new license to the existing
     licensee upon such terms and conditions as may be
     authorized or required under the then existing
     laws and regulations, or to issue a new license
     under said terms and conditions to a new licensee


8                                                   B-236481
ENCLOSURE


     2. Whether FERC, if it may license the Glines Canyon
Dam, has authority to add conditions to the annual license
for the restoration of fisheries.

If, as we concluded above, FERC does not have jurisdiction
to issue a new license for the Glines Canyon Dam, then the
agency does not have authority to issue annual licenses,
much less condition their issuance.

     3. Whether any federal agency may order either dam
removed.

Glines Canyon

If, as we concluded above, it is likely that the Glines
Canyon Dam no longer has a valid federal license, the
project can still be taken over by the United States and
operated, altered, or removed. The Federal Power Act, as
amended, offers two alternatives for taking over a dam that
has been licensed by FERC.
First, § 7(c) of the FPA (16 U.S.C. S 800(c)) covers those
situations where the original license has expired and FERC
has determined that the United States should exercise its
right to take over a dam for public purposes. Under these
circumstances, FERC may not issue a new license, and must
submit its recommendations to Congress. Congress would then
decide whether to permit continued private operation or a
federal take over of the dam.

Second, § 14(a) of the FPA (16 U.S.C. § 807(a)) expressly
authorizes the United States, upon 2 years notice from the
Commission, to take over and thereafter maintain and operate
a hydroelectric project.10/ The government would pay the
licensee for his or her net investment in the project and
for certain damages, as well as assuming responsibility for
any existing contracts approved by FERC. As owner of the
hydroelectric project the government would be able to
operate, remove, or alter the dam.




10/ FERC's licensing authority does not extend to the
federal government. Thus, the statutory provision that
prevents FERC from issuing a license for a dam on park land
does not apply to the federal government.

9                                                   B-236481
ENCLOSURE

Elwha Dam
Incident to an administrative hearing, FERC determined that
the Elwha Dam was on a navigable river and therefore that
the Commission had jurisdiction to license the dam. This
decision, made in 1978, has not been challenged, and we are
not aware of any grounds upon which it reasonably could be
challenged.
As noted above, the dam was apparently built without
receiving requisite approval from the Army Corps of
Engineers. Accordingly it has been operating without legal
authority.11/ In order to maintain and operate the Elwha
Dam, the owners must now obtain a license from FERC.
Pennsylvania Water & Power Co. v. Federal Power Commission,
123 F.2d 155 (D.C. Cir. 1941).12/
The Supreme Court has ruled that, as part of FERC's general
licensing authority, the Commission has the power to order
dams removed when a license has not been issued. In U.S. v.
Appalachian Electric Power, 311 U.S. 377 (1940), the damr
owner refused to accept a hydropower license tendered by the
Commission, claiming the Commission had no jurisdiction and
that, even if the Commission did have jurisdiction, it could
not place conditions unrelated to navigation in the license.
The Commission sued to enjoin construction of the project
and to force the dam owner to remove it if the license was
not accepted.

The U.S. Supreme Court   determined that the Commission had
licensing jurisdiction   over the project because it was
located on a navigable   waterway. The Supreme Court then
ruled that the federal   government had plenary power to


11/ At the time the Elwha Dam was constructed, the FPA had
not been enacted. The owners were required by the Rivers
and Harbors Act of 1899 to obtain approval of their plans
from the Army Corps of Engineers. Pennsylvania Water &
Power Co. v. Federal Power Commission, 123 F.2d 155, 163
(D.C. Cir. 1941).

12/ See, section 23(b)(1) (16 U.S.C. § 817 (1)) of the FPA.
Arthoii-gi the owners of the dam currently operate the dam
without a license, they have submitted an application, which
is pending before FERC. According to FERC officials, in the
past, the pendency of an application has been sufficient to
permit the hydroelectric facility to continue operating
until FERC decides whether to grant a license.
10                                                    B-236481
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ENCLOSURE

exclude structures from navigable waters and had dominion
over water flow and its product, energy. Further, the
United States, in exercise of its power, could make the
erection or maintenance of a structure in a navigable water
dependent upon a license. Finally, Congress had given this
licensing authority to the Commission.

On the±se grounds, the Supreme Court granted the   Commission
an injunction requiring licensing or removal of    the dam
project. Thus, as an incident to its licensing     authority,
it appears that FERC has the authority to order    dam
removal.13/




13/ Further, it is likely that the operators of the Elwha
Dam could be required to pay for its removal. In cases
where the government has removed an obstruction on a
navigable waterway, the courts have held private parties'
liable to the government for the cost of removing the
obstruction. For example, in U.S. v. Perma Paving, 332 F.2d
754 (2d Cir. 1964), the court of appeals ruled that the
defendants were liable for the costs incurred by the United
States in removing an obstruction on the Bronx River.
Although section 12 of the Rivers and Harbors Act of 1899
does not specifically provide for reimbursement of
government removal expenses, the court of appeals held that
Congress contemplated reimbursement because the court could
have ordered defendants to remove the obstruction.

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B-2 36481

February 16,         1990

DIGEST


     1.  It is doubtful that the Federal Energy
     Regulatory Commission (FERC) has jurisdiction to
     issue a new license for a dam located in a
     national park, even though that dam is located on
     a navigable waterway.

     2. Because FERC does not have jurisdiction to issue a
     new license for a dam in a national park, it does not
     have authority to issue annual licenses, much less
     condition their issuance.
     3. FERC has authority to order the removal of dams it
     has licensed, as well as unlicensed dams within its
     licensing jurisdiction.




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