State Water Board Water Quality Certification

NID is in the process of renewing its license to operate its Yuba-Bear Hydroelectric Project, one of most complex hydropower systems in the state. The Project is the cornerstone of the District's operations, providing vital benefits to customers, the community, and the environment.

Where we stand

May contain: water, outdoors, fir, tree, and plant — Chicago Park Powerhouse

NID has filed a petition asking the U.S. Supreme Court to intervene and provide clarity about the state’s ability to issue a water quality certification. The petition involves the Yuba-Bear Hydroelectric Project.

NID has joined with other public agencies that provide water service and generate hydroelectric power in this filing.

The case is complex, and whether the petition is granted, or not, could have significant implications for customers of NID.

The Process

The Federal Energy Regulatory Commission (FERC) has exclusive authority to issue licenses for hydroelectric projects, including NID’s Yuba-Bear Hydroelectric Project. In this case, NID, interested stakeholders, environmental groups, and state and federal agencies spent the last 10 years extensively analyzing the terms under which NID’s Project can be relicensed for an additional up to 50-year period.

This evaluation balanced multiple, different needs from water supply, recreation, hydroelectric generation, upland habitat, instream flows, and many other considerations through an extensive public process.

The Federal Clean Water Act gives states opportunity within one year to issue what is known as a water quality certification to add terms and conditions to the new FERC license. NID first sought California’s water quality certification in 2012 and annually thereafter for six years in total.

The California State Water Resources Control Board (State Water Board) continually asked NID to withdraw and refile its application to try to avoid the United States’ one year limit. At issue in the petition is whether, as FERC concluded, California waived its ability to issue a water quality certification.

Background

May contain: rotor, spiral, machine, coil, and person — Dutch Flat Powerhouse 1965

In 1963, the federal government permitted NID to start generating hydroelectric energy through powerhouses on its reservoirs. That 50-year license to operate the Yuba-Bear Hydroelectric Power Project was, and is, vital to the District.

The combined gross water storage capacity of the Project is about 207,865 acre-feet of water, and the electric generation capacity is 79.32 megawatts, enough to power more than 60,000 homes. Also, as part of that license, recreation facilities were built to provide camping and outdoor experiences.

The Project sources the upper Yuba River and Bear River drainage basins, and runs through 287,000 acres in Nevada and Placer counties. In total, it consists of nine on-stream reservoirs, three off-stream impoundments, five diversion dams, four powerhouses, a 60-kilovolt transmission line, various water conduits, recreation facilities and related facilities and structures.

The Project is also a critical money-maker which contributes about $23 million annually to offset NID’s cost of providing water, and allows NID to keep customers' raw and treated water rates as low as possible.

The Issue

The fundamental question before the U.S. Supreme Court is whether the State Water Board was required to act on NID’s Water Quality Certification Application within one year of its submittal, plain and simple. Now, NID and two other similarly situated FERC licensees are asking the Supreme Court to interpret the federal requirements of the Clean Water Act.

In 2020, a federal court determined that states only had one year, and one year alone, to issue water quality certifications. Recognizing this decision placed California’s certification of NID’s Project in jeopardy, the State Water Board unilaterally and without a pending request purported to issue a certification for NID’s Project on August 14, 2020.

The State Water Board’s Executive Director prepared and released this certification with no notice, no opportunity for public review or comment, and no collaboration with NID. Further, the certification provides for no regulatory certainty in the ongoing operation of NID’s Project because it includes broad “reopener provisions” that allow the state to make changes to the certification at any time and for any reason at the whim of the SWRCB’s Executive Director. FERC, NID, and other similarly situated public agencies contend that these actions are in violation of the Clean Water Act and other state and federal laws.

The relicensing proceedings for NID’s Project have undertaken an exhaustive and careful evaluation and balancing of multiple different needs from water supply, recreation, hydroelectric generation, upland habitat, instream flows, and many other considerations through an extensive, multi-year, public process. This collaborative effort developed extensive new FERC license terms that are protective of all beneficial uses of water and have since been (and are being) analyzed under the National Environmental Policy Act, Endangered Species Act, and other state and federal laws.

On June 7, 2021 NID issued a formal letter to FERC which identified financial implications to NID, as well as significant adverse water supply, recreational and biological impacts should the California’s purported certification be implemented. Analysis done by experts shows that the certification’s new requirements, in addition to FERC’s new license parameters for the Project, have far-reaching consequences for NID and its customers.

Impacts

This issue is important because the certification that was issued by the State Water Board was done outside of the normal public process, and the public nor NID were able to participate in in the development of the conditions included in the certification.

Further, the state certification included a condition that would allow the State Water Board to modify the operating requirements of the hydropower project administratively and at any time during the license period through the issuance of new conditions. This is problematic for NID rate payers because of the uncertainty it creates related to future water supply and the long-term cost to operate the hydropower project. Without having a clear understanding of the conditions that will be required to operate the hydropower project, NID will not be able to adequately plan for future water supply and the District’s financial needs.

Consequences could mean water supply shortages to NID’s customers more than half the time and the reduced ability to carryover water in storage for use in the next year. The conditions would also have devastating effects on recreation and on hydroelectric power production by decreasing revenue that is then used to subsidize water rates for the benefit of NID’s customers. Specifically, the State Water Board's purported certification could result in:

A 49 percent reduction in average annual hydroelectric power generation (a 131 gigawatt-hours per year reduction);
A 56 percent reduction, totaling 76,000 acre-feet, in NID’s water delivery target in the driest years and water supply shortages in more than 50 percent of years;
57-68 percent reduction in carryover storage, making NID more susceptible to critical drought years;
46 percent reduction in average annual power sales, totaling more than $6.2 million per year;
Environmental impacts to other fish and wildlife species, including the endangered yellow-legged frog.

The petition to the U.S. Supreme Court seeks to avoid these potential impacts by having the court agree with FERC that California waived its water quality certification authority by failing to act within one year. This outcome would still mean that NID’s Yuba-Bear Project would be operated consistent with all the new license’s requirements to ensure balanced protection of all interests, including water supply for NID’s customers, hydroelectric generation, recreation, instream flow, and protection of the environment.

Timeline of Key Actions

March 2012: NID submits its application to FERC for a new license for the Yuba-Bear Project, and separately applied to the State Water Board for Water Quality Certification. For the next six years, the State Water Board directs NID to withdraw and resubmit its 401 Application to prevent the running of the one-year Clean Water Act limitations period.

January 25, 2019: the U.S. Court of Appeals for the Ninth Circuit issues its Hoopa Valley decision, concluding the Clean Water Act’s requirement that state regulators act on Certification requests within one year means exactly what it says – one year.

January 25, 2019: the State Water Board issues a Denial Without Prejudice of NID’s pending application for water quality certification.

February 2019: NID requested that FERC clarify whether the DC Circuit’s Hoopa Valley Decision applied to NID, such that the State Water Board had waived its 401 authority, or alternatively, whether NID should submit another application for Certification in March.

March 18, 2019: the State Water Board files a response to NID’s request, asking that FERC find the State Water Board did not waive its water quality certification authority

April 16, 2020: FERC issues an “Order on Waiver of Water Quality Certification,” finding that by failing to act on NID’s initial application for Certification within one year, the State Water Board had waived its 401 Certification authority. Shortly thereafter, the State Water Board and local non-government organizations sought rehearing of the FERC Order.

July 21, 2020: FERC issues its “Order Addressing Arguments Raised on Rehearing,” and upheld its original Order Granting Waiver.

August 14, 2020:, with no notice, no public hearing, or opportunity to be heard, the State Water Board’s Executive Director issues the purported Yuba-Bear 401 Water Quality Certification to NID.

August 17, 2020: Foothill Water Network et al. petitions the Ninth Circuit Court of Appeals for review of FERC’s Orders Granting waiver of Water Quality Certification requirements.

May 2021: the Ninth Circuit Court of Appeals grants the parties’ joint motion to consolidate the similar 401 certification considerations of NID, the Yuba Water Agency, and Merced Irrigation District cases.

August 4, 2022: the Ninth Circuit Court of Appeals rejects FERC’s waiver orders, holding that NID’s 401 Certification holds.

February 6, 2023: legal petition pending before the U.S. Supreme Court.

Key Documents

Op-ed from Pres. Karen Hull, Feb. 6, 2023