## Facts

- FERC issued Joseph M. Keating a 1992 license under the Federal Power Act (FPA) to build a small hydroelectric project in California’s Inyo National Forest.
- FPA § 13 required construction to commence within two years of the license, with only one possible extension up to two additional years.
- At Keating’s request, FERC stayed the construction-commencement deadline to allow time to obtain required approvals, including state water rights and land-use authorizations.
- The U.S. Forest Service required Keating to obtain a special use permit and, as a condition of construction, to secure necessary water rights; Keating obtained the permit in 1995.
- Keating sought state appropriative water rights and related permissions; the process faced protests and prerequisites, including showing access to the diversion site and a discharge permit.
- Years after the license issuance, Keating still lacked key prerequisites, including access to the diversion point, a point-of-discharge permit, needed license amendments, and final Forest Service approval of construction plans.
- More than fifteen years after licensing, FERC lifted the stay, finding no reasonable assurance Keating could commence construction in the foreseeable future; with the stay removed, the statutory deadline elapsed and the license expired by operation of law.
- Keating petitioned for review, challenging the evidentiary basis for FERC’s determination and arguing FERC should be equitably estopped from lifting the stay due to his reliance and investment.

## Issues

1. Whether FERC’s decision to lift the stay and allow the license to expire was supported by the record and was not arbitrary or capricious under the FPA.
2. Whether FERC was equitably estopped from lifting the stay based on Keating’s reliance on the agency’s long maintenance of the stay.

## Decision

- The court denied the petition for review and upheld FERC’s orders.
- The court held that FERC reasonably concluded, based on record evidence, that Keating was unlikely to commence construction in the foreseeable future.
- The court ruled the FPA’s time limits did not entitle Keating to an indefinite stay effectively suspending statutory deadlines beyond the limited extension contemplated by § 13.
- The court rejected equitable estoppel because Keating failed to show affirmative misconduct by the government or a basis for reasonable reliance on an indefinite stay.

## Legal Principles

- Under FPA § 13, construction-commencement deadlines are time-limited; agency accommodations cannot create an entitlement to an indefinite suspension inconsistent with the statutory scheme.
- Agency decisions are sustained where the agency articulates a rational connection between the facts found and the choice made and the record supports the agency’s predictive judgment within its expertise.
- Equitable estoppel against the federal government requires more than reliance or delay; it demands at least affirmative misconduct, and absent such misconduct a regulated party cannot rely on agency action to defeat enforcement of statutory limits.

## Conclusion

The D.C. Circuit held that FERC acted within its discretion in ending a long-standing stay and allowing a hydroelectric license to lapse when persistent permitting and access barriers made timely construction speculative, and it further held that reliance on the stay did not estop the government absent affirmative misconduct.


Keating v. Fed. Energy Regul. Comm'n, 569 F.3d 427 (D.C. Cir. 2009)