## Facts

- The City of Fort Smith, Arkansas planned a dam and reservoir on Lee Creek (flowing from Oklahoma into Arkansas) to meet municipal water-supply needs; the reservoir would flood land in both states.
- Because the project included a small hydroelectric generator, it required a Federal Energy Regulatory Commission (FERC) license under the Federal Power Act (FPA).
- Fort Smith described a two-phase concept: Phase I would provide roughly 10 million gallons per day; Phase II would raise the dam, increase supply, and cause additional environmental impacts, including flooding more land and eliminating miles of an Oklahoma scenic river.
- During licensing, Fort Smith withdrew its Phase II proposals; only Phase I was presented to FERC for approval.
- FERC prepared an environmental impact statement (EIS), received recommendations and objections from resource agencies (including Oklahoma entities), and imposed license conditions intended to protect and mitigate fish and wildlife impacts.
- Environmental organizations petitioned for review, alleging violations of the FPA, the Clean Water Act (CWA) § 401, and NEPA (including EIS scope and alternatives).

## Issues

1. Whether FERC had to consider Phase II environmental effects under FPA § 10(a)(1) comprehensive-planning/public-interest requirements when licensing Phase I.
2. Whether NEPA required the EIS to analyze Phase II as a reasonably foreseeable connected or cumulative action.
3. Whether FERC violated FPA § 10(j) by not adopting or adequately addressing fish and wildlife agency recommendations, particularly those aimed at Phase II.
4. Whether FERC could consider municipal water-supply benefits when deciding to issue a hydropower license under FPA § 4(e).
5. Whether CWA § 401 required Oklahoma water-quality certification because Oklahoma waters would be affected.
6. Whether the EIS adequately evaluated reasonable alternatives under NEPA.

## Decision

- The court denied the petition for review and upheld FERC’s issuance of a Phase I license with conditions.
- FERC was not required under the FPA or NEPA to evaluate Phase II impacts because Phase II was withdrawn and speculative, and no Phase II application was before the agency.
- FERC did not violate FPA § 10(j); recommendations tied to proposals not before FERC did not bind the agency, and FERC adequately explained departures and supported its findings with substantial evidence.
- The court deferred to FERC’s interpretation of FPA § 4(e) permitting consideration of water-supply benefits in addition to navigation and power.
- FERC did not err under CWA § 401 by proceeding without Oklahoma certification because certification is required only from the state where the discharge originates, which FERC found to be Arkansas.
- The EIS’s alternatives discussion satisfied NEPA given the project’s purpose and the record.

## Legal Principles

- NEPA does not require an EIS to analyze impacts of a future project phase that is withdrawn and remains speculative; agencies need not study hypothetical projects.
- Under FPA § 10(a)(1), FERC’s public-interest and comprehensive-planning review focuses on the project presented for licensing; potential future expansions may be treated as outside the licensing scope when not reasonably foreseeable.
- FPA § 10(j) requires consideration of fish and wildlife recommendations and an explanation for departures, but FERC retains discretion and is not compelled to adopt recommendations aimed at projects not before it.
- FERC may consider non-power public benefits, including municipal water supply, in hydropower licensing determinations under FPA § 4(e), subject to deferential judicial review.
- CWA § 401 requires certification from the state in which the discharge originates, not from every state whose waters may be affected.
- Courts generally uphold FERC’s technical and policy judgments where the agency addresses material comments, explains its choices, and its determinations are supported by substantial evidence.

## Conclusion

The D.C. Circuit sustained FERC’s Phase I hydropower licensing decision for Fort Smith’s Lee Creek dam, holding that neither the FPA nor NEPA required analysis of a withdrawn and speculative Phase II expansion, that FERC adequately handled fish-and-wildlife recommendations, that water-supply benefits could be considered in licensing, and that CWA § 401 certification was required only from the state where the discharge originates.


Nat'l Wildlife Fed'n v. FERC, 912 F.2d 1471 (D.C. Cir. 1990)