HYDRO LAW
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2020 Mid-Year Hydropower Update By Morgan Gerard, Elizabeth McCormick, and Chuck Sensiba
The Washington, DC, headquarters of the U.S. Environmental Protection Agency.
D
uring the first half of 2020, the hydropower industry has been subject to major regulatory changes that are likely to have far-reaching and significant consequences for licensees, regulators, and other stakeholders. These changes include two major rules altering longstanding regulations pertaining to the Clean Water Act (CWA) and the National Environmental Policy Act (NEPA); proposed changes to the Federal Energy Regulatory Commission’s (FERC) dam safety program following the catastrophic dam failures in Michigan; and several key pieces of proposed legislation working their way through Congress.
Section 401 Rulemaking
36 | HYDRO LEADER | September 2020
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PHOTO COURTESY OF THE EPA.
On June 1, 2020, the U.S. Environmental Protection Agency (EPA) issued a final rule that revised the nearly-50-year-old water quality certification (WQC) regulations established by section 401 of the CWA. Prior to the issuing of this rule, the EPA’s regulations implementing section 401 were broad, giving states extensive power to impose a wide variety of conditions on proposed projects. Those conditions are often costly to implement and maintain and inject a large degree of uncertainty into hydropower development and licensing. In its final rule, the EPA clarified that “section 401 appropriately
focuses on addressing water quality impacts from potential or actual discharges from federally licensed or permitted projects.” In other words, the EPA’s final rule requires states and tribes to focus their review on the water quality of the discharge, not on the overall activity that is the subject of the federal permitting effort. The final rule also clarified the time period for section 401 state review, providing that 1 year is the “absolute outer bound” for states to act on requests for WQC, and that the 1‑year period begins on the date the state receives a certification request, meaning a signed and dated written communication requesting certification with a description of the project, its discharges, and receiving waters. The rule would also prohibit a state and applicant from engaging in a coordinated effort of withdrawal and resubmittal requests to toll, or restart, the 1‑year period. The EPA’s final rule also provided that a state will be considered to have waived its certification authority when it “fails or refuses to act” on a section 401 certification application within the “reasonable period” designated by the federal permitting agency. In addition, the final rule is explicit that a state “fails or refuses” to act when it fails to issue a WQC or denial in writing or to follow the procedural requirements of section 401.
