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.  County of Butte v. Department of Water Resources (2022) 13 Cal.5th 612, Case No. S258574.  Acknowledging the result would likely be different if a private party were the license applicant, the Court applied a narrower type of direct conflict preemption, based on a state entity being the facility owner/operator/applicant.  The majority did agree with the Third District Court of Appeal that the Counties challenging the State Department of Water Resources’ (“DWR”) EIR, prepared in connection with its application to renew a 50-year license to operate its Butte County Oroville dam and related hydroelectric facilities, could not seek to unwind a settlement agreement prepared as part of FERC’s application process and proceedings; nor could they seek to enjoin DWR from operating under the proposed (but not yet issued) license – a request for relief the Counties initially pursued, but apparently abandoned at oral argument before the Supreme Court.  The Court’s majority acknowledged such actions would contravene FERC’s “sole jurisdiction” over licensing process disputes and be preempted under longstanding federal law.  (18 C.F.R. § 4.34 (i)(6)(vii); First Iowa Coop. v. Federal Power Comm’n (1946) 328 U.S. 152, 164 (“First Iowa”).)
Continue Reading California Supreme Court Holds In 5-2 Decision, Over Chief Justice’s Strong Dissent, That Federal Power Act Does Not Fully Preempt CEQA’s Application to FERC’s Licensing Process for State-Owned and Operated Hydroelectric Projects