The PUD's hatchery program is designed to mitigate fish passage losses at the Wells Project. The physical structures include adult collection sites, a central hatchery facility and acclimation facilities. The amount of compensation is to be determined by a formula using a five-year running average of adult runs by species. In 1991, the PUD will produce spring chinook yearlings, sockeye juveniles, and steelhead smolts. The production will then be evaluated and, based on those results, the PUD will either increase sockeye production or eliminate sockeye production and add production of summer chinook juveniles.

At completion of a project juvenile mortality/survival study, adjustment will be made to production levels, except for steelhead, to reflect the differences between the mortality rate developed in the study and the mortality rate assumed in developing the original production amounts. Adjustments will also be made to compensate for any unavoidable and unmitigated adult losses.

Once the five-year rolling average estimate of the juvenile run size reaches 110 percent of the estimated juvenile production used to establish the original production, the Joint Fisheries Parties can request a compensation increase in juvenile run size, except for steelhead.

The settlement also provides for continued studies and evaluations of the program. Studies will also be conducted on the potential unutilized habitat and on establishing sockeye in new habitat. The studies will be conducted under the direction of the Wells Project Coordinating Committee, which will be composed of one technical representative of each signatory to the agreement.

The Joint Fisheries Parties agree with the PUD that the Wells Project portion of the proceeding in Docket No. E-9569 should be terminated. These parties also agree to support the PUD when it requests relicensing of the project. The Joint Fisheries Parties further are of the view that the PUD's performance of its responsibilities under the agreement satisfies the PUD's fish protection and compensation obligations under the Federal Power Act and all other applicable laws and regulations.

In their offer of settlement, the parties indicate that it represents the culmination of two years of intensive negotiation, and that it "is intended to resolve, at least until March 1, 2004, the anadromous fish issues" pending in the proceeding.

5 See 45 FERC at p. 62,259.

6 See 45 FERC at pp. 62,259-60 and 46 FERC at p. 61,197.

The trial staff, in its comments supporting the settlement, requests that the Commission "make clear that the Commission's authority to require changes in structures and operations, should the need arise, is preserved" during the period when the settlement is not subject to modification. The trial staff also suggests adding certain reporting requirements to enable the Commission to monitor compliance with the settlement. The trial staff does not propose modification of any of the substantive terms of the settlement, and no party opposes the settlement.

Discussion

As we noted in approving an earlier settlement in this proceeding,5 the issues have been thoroughly ventilated and debated, and the settlement agreement is the result of a concerted effort to resolve these important matters in a way that is acceptable to all of the participants. We commend the participants for their efforts. We believe the settlement agreement is in the public interest, and we will adopt it. The agreement balances the continued operation of the project with an effective, long-term program for protection, mitigation, and enhancement of the fishery resources affected by the project.

We will clarify the dispute resolution provisions of the settlement agreement in the same manner as we did in our above-cited 1988 and 1989 orders approving related settlements.6 Section I.D. of the settlement agreement provides that, if the Wells Project Coordinating Committee cannot resolve a dispute among the signatories and if the amount in controversy is less than $325,000, then any party may request the Commission to refer the dispute to (1) the presiding judge in the mid-Columbia Proceeding, Docket No. E-9569, (2) the Commission's Chief Administrative Law Judge, or (3) the Division of Project Compliance and Administration, Office of Hydropower Licensing, "in the order listed," for expedited review. For the reasons stated in our prior orders, the Commission will in most cases refer such disputes to the Division of Project Compliance and Administration, and will use its best efforts to resolve such disputes within the time frames set forth in the agreement. In appropriate circumstances, such as when there are material facts in dispute, we may refer a matter to an administrative law judge. In either event, the initial staff decision will be subject to de novo review by the Commission. And, as we emphasized in our 1989 order, any resolu

tion by the Coordinating Committee, or a third party, pursuant to section I.D. that contemplates a change in the license or in the operation of the project thereunder shall result in the filing of an appropriate application therefor by the licensee as soon as practicable after the dispute is resolved.

As we noted in our prior orders with respect to the settlements approved therein,' approval of the settlement agreement does not affect the Commission's authority, as reserved in the license, to require, after notice and opportunity for hearing, alterations to project facilities or operations that may be warranted by changed circumstances. We intend that any such reserved authority would be exercised only after full consideration of the benefit sought to be achieved thereby, balanced against the possibility that as a consequence the settlement could be voided, thereby eliminating the benefits obtained thereunder. If any party voids the agreement, the licensee shall, within 30 days, so inform the Commission in writing.

Finally, we will adopt the reporting provisions proposed by the trial staff in its comments.

The Commission orders:

(A) The settlement agreement filed in this proceeding on December 4, 1990, is approved and made a part of the license for Wells Project No. 2149.

(B) The Wells Project No. 2149 portion of the proceeding in Docket No. E-9569 is terminated.

(C) The Commission's approval of the settlement agreement shall not constitute approval of, or precedent regarding, any principle or issue in these or any other proceedings.

(D) (1) Whenever a violation of the settlement agreement occurs, the licensee shall, within 30 days of the occurrence, file with the Commission, and send a copy to the Regional Office, a report containing an explanation of the circumstances surrounding the violation and the licensee's plan to avoid any repetition thereof.

(2) Whenever a dispute arises under section I.D. of the settlement agreement that is resolved without referral to the Commission,

the licensee shall, within 30 days, file with the Commission, and send a copy to the Regional Office, a report containing an explanation of the dispute and the nature of the resolution.

(E) The licensee: (a) shall notify the Commission and the Commission's Portland Regional Office of all meetings of the Coordinating Committee; (b) shall file functional design drawings, including all information required by 18 C.F.R. § 380.3, at least 90 days prior to construction of any facilities under the agreement; (c) shall file for approval all changes in monitoring, evaluation, study and production plans, not specified in the agreement; and (d) shall file an annual report. The annual report shall be filed on April 30 of each year and shall include:

(1) A description of plans developed during the previous year for any studies, evaluations, monitoring programs, production programs, system operations, or fish passage efforts;

(2) The results of all studies, evaluations and monitoring of the previous year;

(3) An outline of all actions taken towards fulfillment of the terms of the agreement;

(4) An explanation of the reasons for exercising specific alternatives stipulated in the agreement;

(5) A chronology of compliance for the previous year, outlining schedule changes, the reasons for the changes, and documentation that the Joint Agencies were consulted prior to implementation of the changes;

(6) A schedule of activities for the next year; and

(7) Summaries or meeting minutes from each of the meetings of the Coordinating Committee for the previous year.

(F) This order is final unless a request for rehearing is filed within 30 days from the date of its issuance, as provided in section 313(a) of the Federal Power Act. The filing of a request for rehearing does not operate as a stay of the effective date of this order or of any other date specified in this order, except as specifically ordered by the Commission. The licensee's failure to file a request for rehearing shall constitute acceptance of the order.

Order Denying Rehearing

7 See 45 FERC at p. 62,260 and 46 FERC at p. 61,198.

construction, operation, licensing and pollution abatement. Certification does not establish any property right, resolve competing claims for a site, or authorize construction.9

On rehearing, Citizens argue that the Commission must implement procedures under NEPA because Commission QF certification is a "major federal action significantly affecting the quality of the human environment." In support, Citizens cite cases in which courts have found that agencies must comply with NEPA in connection with granting approval of facilities or operations which could not go forward without agency approval. Those cases are

953 FERC at p. 61,588 n.42, citing Virginia Turbo Power Systems-II, L.P., 51 FERC ¶ 61,079, at p. 61,178 n.30, reh'g denied, 51 FERC ¶61,356 (1990), appeal docketed sub nom. Andrews v. FERC, No. 90-3127 (4th Cir. 1990) (Virginia Turbo) (emphasis supplied).

The Commission further explained that certification "does not authorize the facility to be built" and that "in granting certification, the Commission is making only a factual finding that the facility as described in the application satisfies PURPA and the Commission regulations and therefore qualifies for the benefits conferred thereunder." 53 FERC at p. 61,588.

10 For example, Lathan v. Volpe, 455 F.2d 1111, 1120-21 (9th Cir. 1971) dealt with federal highway officials' approval of the location of an interstate highway and authorization of the acquisition of property for a right-of-way under the Federal-Aid Highways Act (23 U.S.C. § 101 et seq.). In Maryland Conservation Council, Inc. v. Gilchrist, 808 F.2d 1039, 1042 (10th Cir. 1986), the approval of the Secretary of the Interior, inter alia, was required, under the Land and Water Conservation Fund Act of 1965 (16 U.S.C. § 4601-4 et seq.) for conversion of the lands of a state park that had been established with substantial federal funding to allow a highway to pass through the park. In Sierra Club v. Hodel, 848 F.2d 1068, 1090-91 (10th Cir. 1988), the Secretary of the Interior (through the Bureau of Land Management) had a statutory duty under the Federal Land Policy and Management Act (43 U.S.C. § 1701 et seq.) to prevent unnecessary or undue degradation of lands and resources due to improvements; this duty extended to federally protected wilderness study areas when a road running through the areas was to be improved. Likewise, Davis v. Morton, 469 F.2d 593, 596-98 (10th Cir. 1972), dealt with a grant of a proposed 99-year lease of Indian lands, which required approval of the Secretary of the Interior (through the Bureau of Indian Affairs) under 25 U.S.C. § 415. Similarly, Calvert Cliffs' Coordinating Committee, Inc. v. AEC, 449 F.2d 1109, 1115-16 (D.C. Cir. 1971) dealt with rules governing the consideration of environmental issues in the granting of Atomic Energy Commission construction permits and operating licenses.

11 Citizens attempt to compare the "nationwide permit" program of the Army Corps of Engineers (whereby parties are allowed, in connection with con

FERC Reports

distinguishable from the QF certification proceeding here. Those cases involve situations where the activity in question requires agency approval because of specific statutory or regulatory mandate.10 The QF certification proceeding here, on the other hand, is optional.11 Indeed, a facility can “self-certify;" that is, a facility can lawfully obtain PURPA benefits as a QF without express Commission action. 12 In short, the QF certification here cannot be said to be a precipitating cause or action which, in Citizens' view, is the prerequisite to preparation of an EA or EIS.13

struction projects, to discharge into waterways minimal amounts of dredge and fill materials without seeking separate permits for each discharge) to Commission QF certification. In this regard, Citizens cite Riverside Irrigation District v. Andrews, 758 F.2d 508 (10th Cir. 1985) (Riverside). Citizens' attempted application of Riverside to the instant case is misplaced. The Clean Water Act (33 U.S.C. § 1344) requires a permit, either a nationwide permit or a separate case-specific permit, from the Corps of Engineers before any discharge can occur. 758 F.2d at 511. As we have stated, Commission QF certification is not an authorization to proceed with construction. Moreover, in Riverside, the court stated that the Clean Water Act does not require a "major" federal action, and the Corps must consider the environmental impact of even "minor" actions. Id. at 513.

12 See 18 C.F.R. § 292.207 (1990). In fact, an entity that wants to construct and operate a cogeneration or small power production facility but does not need and does not want PURPA benefits can still lawfully (that is, assuming compliance with any other applicable federal, state, or local laws) construct and operate such a facility without either Commission QF certification or self-certification. The same logic applies equally to NHPA procedures.

13 The Commission does prepare environmental studies pursuant to NEPA in connection with the issuance of certificates of public convenience and necessity under section 7 of the Natural Gas Act. 15 U.S.C. § 717f (1988). However, unlike the QF certification proceeding here, that public convenience and necessity certification procedure authorizes construction and operation of natural gas pipelines and related facilities. Such construction of facilities and commencement of services cannot lawfully occur unless the Commission issues a certificate of public convenience and necessity.

The natural gas "blanket certificates" to which Citizens refer, Citizens Rehearing at 10, are not comparable in this regard to Commission QF certification. These "blanket certificates" are still required certifi cates; they are still required before construction can begin. Commission QF certification is not required before construction can begin. See generally Revisions to Regulations Governing Certificates, FERC Statutes and Regulations 32,477, at pp. 32,460-62 (August 13, 1990) (proposed regulation); 18 C.F.R Part 157 (1990); 18 C.F.R. Part 292 (1990); see also supra note 12.

¶ 61,058