[Federal Register Volume 70, Number 17 (Thursday, January 27, 2005)]
[Notices]
[Pages 3919-3922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-1500]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project Nos. 2543-063 and 2543-065]


Clark Fork and Blackfoot, LLC; Order Dismissing Application, 
Issuing Notice of Intent To Accept Surrender of License, and Providing 
Opportunity for Comments

January 19, 2005.
Before Commissioners: Pat Wood, III, Chairman; Nora Mead Brownell, 
Joseph T. Kelliher, and Suedeen G. Kelly.

    1. In this order, we dismiss the application filed by Clark Fork 
and Blackfoot, LLC (CFB), licensee for the Milltown Hydroelectric 
Project No. 2543, to amend the project license by authorizing the 
permanent drawdown of the project reservoir and certain other actions. 
Because the entire project is contained within a site designated under 
the Comprehensive Environmental Response, Compensation, and Liability 
Act of 1980 \1\ (CERCLA, or Superfund Act), and the actions proposed to 
be taken under the amendment application would be taken pursuant to a 
remedial action plan recently adopted under CERCLA by the U.S. 
Environmental Protection Agency (EPA) and the State of Montana, the 
Commission concludes that Commission authorization is not required to 
conduct the activities that would be authorized by the license 
amendment. We also conclude that the public interest is best served if 
these actions are carried out solely under EPA's authorization. In 
addition, because EPA's plan calls for dismantling of the project, we 
are issuing notice of our intent to accept surrender of the license. 
Finally, we are providing an opportunity for interested entities to 
comment on our notice of intent to accept surrender of the license. 
This order serves the public interest by making clear that 
responsibility for clean up of the Superfund site rests with EPA, 
rather than with this Commission.
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    \1\ 42 U.S.C. 9601, et seq.
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Background

    2. On June 3, 1968, the Commission issued a license for the 
continued operation and maintenance of the 3.2-megawatt Milltown 
Project, located on the Clark Fork River in Missoula County, 
Montana.\2\ The license had an

[[Page 3920]]

effective date of May 1, 1965, and a termination date of December 31, 
1993.
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    \2\ 39 FPC 908. The license was issued to Montana Power Company. 
In February 2002, the license was transferred from Montana Power 
Company to Montana Power, LLC. See 94 FERC ] 62,265. Thereafter, 
Montana Power, LLC, changed its name to Clark Fork and Blackfoot, 
LLC. See 102 FERC ] 62,124 (2003).
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    3. In 1983 EPA, pursuant to CERCLA, designated the Milltown Project 
site as the Milltown Reservoir Sediments Operable Unit of the Milltown 
Reservoir Sediments/Clark Fork River Superfund Site. The Superfund Site 
extends approximately 120 miles upstream from the project site to 
Butte, Montana. The reach of the Clark Fork River therein is 
contaminated by arsenic, copper, zinc, and other heavy metals, which 
have leached from now-closed mines in the vicinity of Butte. The 
project reservoir contains approximately 6.6 million cubic yards of 
contaminated silt.
    4. EPA, the Montana Department of Environmental Quality, and others 
have been studying the site for many years in order to select a 
permanent clean-up plan (remedy selection). Solutions under 
consideration included such measures as capping and leaving the 
sediments in place, removing the sediments by dredging, and removing 
both the dam and the sediments. The Commission has several times 
amended the license to extend its term because the remedy selection has 
not been completed.\3\ The most recent such amendment, issued April 14, 
2004, extended the term of the license through December 31, 2009.\4\
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    \3\ 50 FERC ] 61,139 (1989); 69 FERC ] 61,124 (1994); 91 FERC ] 
61,280 (2000), reh'g denied, 92 FERC ] 61,231 (2000); 92 FERC ] 
61,049 (2002); 105 FERC ] 61,048 (2003).
    \4\ 107 FERC ] 62,028.
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    5. In May 2004, EPA and Montana issued a Revised Proposed Plan 
(Proposed Plan) for the remedy selection. The Proposed Plan provided 
for the project to be dismantled, the contaminated sediments removed 
and shipped by rail to an existing repository for contaminated 
materials nearer to the mine sites, and the project site restored.\5\
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    \5\ The Revised Proposed Plan included, in addition to the 
remediation plan, a site restoration plan under development by the 
U.S. Fish and Wildlife Service; Confederated Salish and Kootenai 
Tribes; and the State of Montana through the Department of Fish, 
Wildlife, and Parks and the Natural Resource Damage Program (Natural 
Resources Trustees).
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    6. In anticipation of a license surrender application by CFB, the 
Commission held issue scoping meetings on June 9, 2004, in Bonner, 
Montana, and on June 10, 2004, in Opportunity, Montana. The notice of 
scoping meetings \6\ also solicited written comments, which were filed 
by several entities.\7\
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    \6\ 69 FR 30,291 (May 27, 2004).
    \7\ PPL Montana, LLC; Avista Utilities; Clark Fork Coalition; 
Bonner Development Group; United States Department of the Interior; 
Clark Fork River Technical Assistance Committee; American 
Whitewater; Montana Historical Society; and Montana Department of 
Fish, Wildlife, and Parks.
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    7. On October 28, 2004, CFB filed an application to amend the 
license in order to begin implementing Stage 1 of the Proposed Plan, 
described below.
    8. On December 13, 2004, PPL Montana LLC (PPLM), the licensee of 
the downstream Thompson Falls Project No. 1869, filed comments 
expressing its opposition to Commission action prior to PPLM being 
afforded an opportunity to be heard regarding its concerns with the 
amendment application, plus comments critical of the technical analysis 
included with the amendment application concerning the likelihood of 
contaminated sediments being carried downstream as a result of 
activities associated with the proposed amendment.
    9. On December 20, 2004, EPA made a final remedy selection and 
issued its Record of Decision (Final Plan), pursuant to which the 
project will be dismantled and removed.

Discussion

    10. Under the Final Plan, clean-up and site restoration is to 
proceed in three stages. In Stage 1, the licensee will partially draw 
down the reservoir. EPA will construct a temporary bypass channel for 
the river and use sheet piling to isolate the sediments from the 
flowing water, and construct a railroad spur and access roads in the 
drawn-down reservoir. Stage 1 will begin as soon as possible, and is 
expected to continue through September 2005. In Stage 2, EPA will ship 
most of the contaminated sediments by rail to an existing disposal 
site. It will then lower the reservoir further by removing the turbines 
from the powerhouse, and removing the powerhouse and most of the dam 
(i.e., the spillway, radial gate, and the north abutment). In Stage 3, 
EPA will design and construct a new flood plain and channel to benefit 
fish, wildlife, and recreational uses.
    11. EPA and the U.S. Department of Justice are negotiating with the 
current owners of the mine sites, who are responsible parties with 
respect to the costs of cleaning up the project site, and others, 
including the Natural Resource Trustees, with a view toward filing a 
consent decree in the United States District Court for the District of 
Montana. The consent decree would provide, among other things, for 
selection of the precise actions and activities related to the 
remediation and restoration of the project site. EPA indicates that the 
consent decree could be lodged with the court in late January 2005.\8\ 
CFB's amendment application does not state when it would file an 
application to surrender the project license, but contemplates that a 
surrender application would address the effects of the actions to be 
completed in the subsequent stages of the remediation plan.\9\
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    \8\ The Missoulian, Tuesday, December 21, 2004: http://www.missoulian.com/articles/2004/12/21/news/top/newsd1.txt.
    \9\ See letter filed July 29, 2004 requesting designation of CFB 
as the Commission's non-federal representative for consultation with 
the U.S. Fish and Wildlife Service under the Endangered Species Act 
at 1.
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    12. CFB's license amendment application requested Commission 
authorization to commence Stage 1 activities in advance of EPA's now 
final remedy selection. These are: (1) CFB's lowering the project 
reservoir to a level approximately ten feet below full pool through the 
radial gate in the project dam to expose the area where contaminated 
sediment has accumulated; and (2) EPA's isolating the contaminated 
sediments from flowing water with sheet piling and constructing a 
bypass channel for the Clark Fork River. CFB states that no permanent 
alterations of the project structures are needed for Stage 1 
activities. CFB would only need to shut down the generators and remove 
the boat barriers and trash booms at the dam. Stage 1 drawdown would 
begin during a low flow period of the winter months with the timing and 
drawdown rates controlled to prevent problems associated with ice. 
During the low flow winter period, the radial gate spillway would 
function as an ungated overflow structure. As flows increase in the 
spring, the panel-gate spillway gates and stanchions would be removed, 
enabling the panel-gate to serve as a second ungated overflow 
structure. Should it become necessary to refill the reservoir and/or 
resume generation for any reason, the panel-gates could be restored and 
the radial gate used to control the rate of refill.\10\ CFB stated that 
the Stage 1 activities need to take place during the December 2004 to 
September 2005 time frame to ensure timely implementation of the then-
proposed, but now final, Plan.\11\
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    \10\ Application pages A-3 to A-4.
    \11\ Initial Statement at 3.
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    13. Most of the entities who filed comments in response to the 
scoping meetings generally supported EPA's proposed plan, but alleged 
various deficiencies in EPA's analyses and in the Proposed Plan that 
they contend

[[Page 3921]]

should be addressed by the Commission in the context of a license 
surrender application. Others assert that any license surrender 
application would require compliance by the Commission with certain 
other statutes, such as the Endangered Species Act \12\ and National 
Historic Preservation Act.\13\
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    \12\ 16 U.S.C. 1531-43.
    \13\ 16 U.S.C. 470-470w-6.
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    14. The issue we confront here is whether the Commission should 
entertain a license amendment or surrender application where all of the 
activities to occur thereunder are components of a remediation and 
restoration plan developed by EPA and Montana under CERCLA. Section 
121(e)(1) of CERCLA \14\ provides that:
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    \14\ 42 U.S.C. 9621(e)(1).

    No Federal, State, or local permit shall be required for the 
portion of any removal or remedial action conducted entirely onsite, 
where such remedial action is selected and carried out in compliance 
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with this section.

    15. CERCLA does not define the word ``permit,'' but we believe its 
meaning encompasses an amendment to an existing license and any other 
Commission authorization that would otherwise be required. We have 
found nothing in the legislative history of CERCLA to indicate that 
Congress intended for this broad language to be limited to instances 
where no other federal, state, or local permits already exist or would 
otherwise be required with respect to actions conducted on a Superfund 
site,\15\ and our reading of the section comports with the only 
judicial decision of which we are aware construing section 121(e)(1). 
In McClellan Ecological Seepage Situation v. Cheney,\16\ the court 
cited section 121(e)(1) in rejecting the plaintiff's contention that a 
permit was needed under the Resource Conservation and Recovery Act 
(RCRA) \17\ to carry out certain hazardous waste remedial actions at a 
Superfund site at an Air Force base because all of the actions in 
question were to be taken in the context of remedial action under 
CERCLA.
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    \15\ The Conference Report discussion of section 121(e)(1) as 
enacted simply reiterates the language of the section. The 
Conference Report's discussion of the House and Senate bills shows 
however that the exemption from federal, state, and local permits in 
the section as enacted is more expansive than the exemptions that 
would have been provided under either the House or Senate bills. 
Under the House bill, on-site remedial actions would have required 
permits under the Clean Water Act, Clean Air Act, Safe Drinking 
Water Act, and state groundwater laws. Under the Senate bill, no 
Resource Conservation Recovery Act or Clean Water Act permit would 
be required for the portion of any response action conducted 
entirely on-site. H. Rep. No. 99-962, 1986 U.S. Code Cong. and Adm. 
News, 3276 at 3336-38 (1986).
    \16\ 763 F.Supp. 431 (E.D. Cal. 1989), vacated and remanded on 
other grounds, McClellan Ecological Seepage Situation v. Perry, 47 
F.3d 325 (9th Cir. 1995), cert. denied, 516 U.S. 807. The case 
decided at 47 F.3d 325 held that CERCLA section 113(h), which denies 
federal courts jurisdiction (with a single exception not relevant 
here) to entertain challenges to removal or remedial actions 
selected under CERCLA, barred the plaintiffs' claims concerning RCRA 
and the Clean Water Act with regard to all activities being 
undertaken pursuant to the selected clean-up plan. In contrast, the 
court held that CERCLA section 113(h) did not bar the plaintiff's 
claims concerning non-compliance with RCRA as they pertained to 
clean-up activities not covered by the plan.
    \17\ 42 U.S.C. 6901-6991i.
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    16. The Final Plan, as described above, will result in the 
cessation of generation and complete removal of the project. EPA will 
implement, or direct the implementation of, all aspects of its plan, 
and has effective regulatory control over all aspects of the project. 
It is entirely within EPA's discretion to determine when to begin 
activities under the Final Plan. Under these unique circumstances 
(i.e., a CERCLA site where the remediation plan provides for cessation 
of project generation and project removal), complete regulatory control 
transferred from the Commission to EPA when the Final Plan was adopted, 
and there is nothing left for the Commission to regulate. Thus, there 
is no longer a basis for Commission jurisdiction. That fact, in 
conjunction with the operation of CERCLA section 121(e), means that 
neither EPA nor CFB require any authorization from the Commission to 
implement the Final Plan. For this reason, it would not be appropriate 
for the Commission to entertain a license amendment application to 
commence EPA's plan. We will therefore dismiss the license amendment 
application.\18\
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    \18\ Because CFB's application is being dismissed, the 
Commission has not issued a public notice requesting interventions. 
Any request for rehearing of this order must be accompanied by a 
motion to intervene.
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    17. We also think this is an appropriate case in which to apply the 
doctrine of implied surrender, by which the Commission deems certain 
actions or events, typically removal of the generators or abandonment 
of the project facilities, to demonstrate the licensee's intent to 
surrender the license.\19\ Here Stage 1 will result in the permanent 
cessation of generation and is clearly the first step in a process that 
will result in the complete removal of the project under EPA's 
authority. CFB's stated intention to file a surrender application is 
not relevant in light of the fact that CERCLA section 121(e) as applied 
to the facts of this case obviates the need to file such an 
application. We therefore deem it to be CFB's intention to surrender 
the project license.\20\ In light of the foregoing, we are issuing in 
this order notice of our intent to accept surrender of the project 
license,\21\ effective 45 days from the date of this order.\22\
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    \19\ FPA section 6, 16 U.S.C. 796, and 18 CFR 6.4. See, e.g., 
New England Fish Co., 38 FERC ] 61,106 (1987), Pinedale Power and 
Light Co., 38 FERC ] 61,036 (1987), and Watervliet Paper Co., 35 
FERC ] 61,030 (1986). The doctrine has been expanded to encompass a 
situation where co-licensees were not able to agree on whether or 
not to continue operating a project and the co-licensee that wished 
to operate the project was not able to do so without the cooperation 
of the other co-licensee. See Fourth Branch Associates 
(Mechanicville) v. Niagara Mohawk Power Corp., 89 FERC ]61,194 
(1999), reh'g denied, 90 FERC ] 61,250 (2000), appeal dismissed, 
Fourth Branch Associates v. FERC, 253 F.3d 741 (D.C. Cir. 2001).
    \20\ Under ordinary circumstances, 18 CFR 6.4 would require 90 
days notice prior to the effective date of license termination by 
implied surrender. A 90-day notice period is appropriate where the 
Commission is to consider what conditions, if any, to attach to 
acceptance of the surrender. Here, however, project retirement and 
removal will be entirely in the hands of EPA. We will therefore 
waive this provision of section 6.4, and will provide a 45-day 
notice period. Similarly, we will waive the 90-day notice 
requirement of Standard Article 23 of the project license, 
pertaining to implied surrender. See Montana Power Co., 39 FPC 908, 
Ordering Paragraph (C) at 911, and Standard Article 23, 37 FPC at 
865.
    \21\ Subdocket P-2543-065 has been established for this 
proceeding.
    \22\ It is likewise appropriate for EPA, rather than this 
Commission, to determine the extent to which other federal statutes, 
such as NEPA and ESA, may apply to EPA's remediation and site 
restoration plan and, to the extent they do, for EPA to take any 
actions that may be required thereunder. In this regard, we note 
that CFB has been engaged in consultation as the Commission's non-
federal representative with the U.S. Fish and Wildlife Service and 
the Montana State Historic Preservation Officer, based on its belief 
that the Commission would process a license amendment application. 
In this context, FWS has issued a Biological Opinion of the effects 
of EPA's remediation plan on bull trout and bald eagles. There 
appears to be no reason why these consultations may not continue, if 
necessary, under EPA's auspices.
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    18. Finally, so that we may consider the views of any interested 
parties prior to the date surrender becomes effective, we are providing 
30 days for parties to file comments in response to our notice of 
intent to accept surrender of the project license.
    The Commission orders: (A) The licensee amendment application filed 
on October 28, 2004 by Clark Fork and Blackfoot, LLC, for the Milltown 
Hydroelectric Project No. 2543 is dismissed.
    (B) The Commission hereby issues notice of its intent to accept 
surrender of the project license, to be effective 45 days from the date 
of this order, unless otherwise ordered by the Commission in response 
to comments received pursuant to Ordering Paragraph (D).
    (C) The 90-day notice requirement of 18 CFR 6.4 and of Article 23 
of the project license are hereby waived.
    (D) Interested entities may submit, within 30 days of the date of 
this order,

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comments and/or motions to intervene in the implied surrender 
proceeding.
    (E) The Secretary is directed to promptly publish this order in the 
Federal Register.

    By the Commission.
Linda Mitry,
Deputy Secretary.
[FR Doc. 05-1500 Filed 1-26-05; 8:45 am]
BILLING CODE 6717-01-P