SUMMARY

A power company built 2 dams, power houses, diversion pipes, and transmission lines on NE Washington's Sullivan Creek almost a century ago. The project fell into disrepair in the 1950's and in 2007, the owner asked the Federal Energy Regulatory Commission (FERC) to give up jurisdiction over the project. This could have left the management of the dams in a regulatory no-man's land and create a bad precedent allowing the abandonment of old dams. AW was the only public interest organization that intervened and protested, along with the local Tribe, the US Forest Service, and Washington State. The FERC decided to give up jurisdiction, leaving in place impacts fish passage, fish spawning, sediment transport, and recreation. American Whitewater challenged this decision and in March of 2008 we won.

This success launched 2 years of collaborative negotiations that lead to a landmark Settlement Agreement in March of 2010 calling for the removal of Mill Pond Dam, and enhanced operation of Sullivan Dam.

DETAILED HISTORY

The Sullivan Creek Project was constructed by the Inland Portland Cement Company in 1909, and was used to generate power until 1956, when the Project’s wood flume was damaged. The Project is located on Sullivan Lake, Outlet Creek and Sullivan Creek, a tributary of the Pend Oreille River.

Washington State’s water quality standards designate Sullivan Creek as a Class AA stream. Designated uses include fish migration, rearing, spawning and harvesting, wildlife habitat, water supply (domestic, industrial, agricultural), recreation (primary contact recreation, sport fishing, boating and aesthetic enjoyment), commerce and navigation. State standards require that water quality of this class shall markedly and uniformly exceed the requirements for all or substantially all uses.” WAC 173-201A-030. The antidegradation policy requires that, “Existing beneficial uses shall be maintained and protected and no further degradation which would interfere with or become injurious to existing beneficial uses shall be allowed.”

The Project occupies lands of the United States within the Colville National Forest. The Project, as originally constructed, consisted of Sullivan Lake Dam and Reservoir, Sullivan Creek diversion dam and conduit, and Mill Pond Dam and reservoir, conduit, penstock, power plant, and transmission facilities. See Public Utility District No. 1 of Pend Oreille County, Washington, 20 F.P.C. 753, 754 (1958).

The Licensee purchased the Project and its associated water rights from Inland in 1959, and has operated the project reservoirs to benefit hydroelectric generation at downstream projects and for water supply to the town of Metaline Falls. The Federal Power Commission (“FPC”) issued a 50-year license for the Project effective October 1, 1958. See id. The FPC licensed the Project as a storage project benefiting the downstream generation projects, with provisions for the Licensee to study the feasibility of enlarging or rehabilitating the Project for purposes of power generation.

Prior to accepting the license, the Licensee requested that the FPC modify the license so that it did not describe certain of the project works as abandoned, thus requiring a Forest Service permit for the occupancy of National Forest lands by these project works. See Public Utility District No. 1 of Pend Oreille County, Washington, 21 F.P.C. 284 (1959). The Licensee stated that the project works had not been abandoned and requested that the diversion dam and conduit and the flume section of the power conduit from Mill Pond be included in the license as project works. See id. The project boundary was modified to include the lands occupied by the discontinued project works, thus eliminating the need for a Forest Service permit. See id. at p. 285.

Over the course of the existing license, the Licensee twice has filed license amendments proposing changes to allow for power generation. Licensee withdrew its 1994 application for license amendment in 2002.

On September 23, 2003, the Licensee filed a notice of intent not to file an application for a new license for the Project. On October 22, 2003, the Commission published notice of the licensee’s intent, and required that any applications for a new license for the Project must be filed by September 30, 2006. No applications were filed.

On October 5, 2006, Licensee filed a Petition for Declaratory Order (“Petition”) requesting the Commission to determine that the existing license for the Sullivan Creek Project (P-2225) is void. See e-Library no. 20061005-5016 (Oct. 5, 2006). In the alternative, the Licensee requested a determination that the license will expire on October 1, 2008, with no further action required by the Commission or the Licensee.

On November 20, 2006, American Whitewater filed a timely, unopposed Motion to Intervene and Protest (“AW Protest”) in response to the Petition. See e-Library no. 20061121-5081. The U.S. Department of Agriculture, through the U.S. Forest Service (“Forest Service”), also filed a timely, unopposed Notice of Intervention and Protest (“Forest Service Protest”) in response to the Petition. See e-Library no. 20061117-5106 (Nov. 17, 2006).

On July 18, 2007, the Director of the Division of Hydropower Administration and Compliance (“Director”) issued the instant Order. The Director declined to declare the existing license void. However, he found that the Project is not required to be relicensed upon expiration of the existing license in 2008: “The current license will expire by its own terms with no further Commission action on October 1, 2008.” Order, Ordering ¶ A.

On August 17th, 2007, American Whitewater, with the superb help of the Natural Heritage Institute, filed a Request for Rehearing with the FERC. This filing asked FERC to reconsider their decision, based on significant legal grounds, and asked that the FERC require settlement talks to discuss project removal and/or transfer of jurisdiction to the Forest Service. The US Forest Service and Washington State also filed similar requests for rehearing.

On March 20th, 2008 FERC partially granted and partially rejected our rehearing request. They agreed that the project must be licensed, and therefore that the licensee must no immediately initiate a license surrender proceeding. They further ordered that the Licensee must secure a special use permit from the USFS for any project works that will remain. Paradoxically they decided that once part of the project was removed (Millpond dam, the flume, and the powerhouse), the remaining parts would no longer require FERC oversight (Sullivan Dam). This is logical and legal hole that you could drive a raft through. Regardless, the result for Sullivan Creek will be highly positive.

With the legal matters behind us, the parties began meeting monthly to reach a collaborative solution that met all legal, ecological, recreational, and economic interests.

On March 29th, 2010, a Settlement Agreement was filed by all parties calling for the removal of Mill Pond Dam and enhanced operation of Sullivan Dam.