PHASE II
OHIO RIVER DASIN ENERGY STUDY
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November 1980
LEGAL AND IN6TITUTICNAL
ASPECTS OF INTERSTATE
POWER PIANT DEVELOPMENT IN
THE OHIO RIVER BASIN ENERGY STUDY REGION
By
James C. McLaughlin
West Virginia University
College of Law
Morgantown, West Virginia 26506
Prepared for
Ohio River Basin Energy Study (ORBES)
Subcontract Under Prime Contract EPA R805588
OFFICE OF RESEARCH AND DEVELOPMENT
U.S. ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
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PREFACE
A few words about the organizational scheme of this study are in order.
This study discusses both the present legal and institutional setting of
pcwer plant siting and development and possible legal and institutional means
to solve problems existing in the present setting. The legal setting includes
federal and state laws, judicial review and scare private planning. In addition
interstate compacts though not part of the present legal landscape, except
marginally, could play a prominent role in the solution to one of the main
problems caused by present laws, the lack of regional interstate coordination
of paver plant siting. Therefore compacts are dealt with extensively both
as to their history and legal status and their possible future use in the
power plant siting context.
This study begins by briefly canvassing the federal law background to the
interstate coordinative need, including discussion of seme federal constitutional
doctrine affecting state-federal relationships. Potential federal solutions
are then discussed. State law affecting siting is then briefly discussed,
followed by a discussion of the nature of state uniform and reciprocal laws
and of their potential for use to solve the coordination problem. That is
followed by a full discussion of interstate compacts: first as to what they
are and second as to ho? they might be used in this context. Next is a section
focusing on judicial review which discusses the problems created by courts and
the possibility of using courts as the primary solution to the coordination problem.
Finally, the possibility of private planning for interstate coordination is
discussed.
This is divided into eight main sections which are nunbered consecutively
even though grouped under five chapters. Thus Chapter II contains Sections 3
and 4 and Chapter III contains Sections 5 and 6. It might seem anomalous that
a subsection of a chapter could start with a nunber higher than one, but the
seeming ancmaly dissolves if it is remembered that the "Sections" are the
main divisions of this report and the "Chapters" are merely convenient organizing
groupings of some of the sections. There are two sections concerning federal law
and two concerning state law and two on oonpacts and one on judicial review and
one on private planning, which, can be seen to make five convenient groupings
of the eight sections. Hopefully, the Sunmary Table of Contents before the
Table of Contents will make clear the reasons for this organization.
Although this study is the product of many minds other than mine, as
the many quotations from, and citations to, scholarly works attest, I owe
a special debt of gratitude to Boyd R. Keenan, professor of political science,
University of Illinois at Chicago Circle and Vincent P. Cardi, my colleague
on the law faculty here at West Virginia University. Their comments and
encouragement were very helpful. Finally I owe a special debt of gratitude
to Miss Johnella Olexa who typed the final draft presented here.
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SUMMARY TABLE OF CONTENTS
PAGE
PREFACE iii
USTTRDDUCTICN AND SUMMARY OF CONCLUSIONS 1
GLOSSARY OF TERMS 7
CHAPTER I. FEDERAL LAW: AS PART OF THE PROBLEM AND AS POTENTIAL
SOLUTION 11
Section 1: Extant Federal Policy Creating the Need
for Efficient Interstate Coordination
of Electric Power Development 11
Section 2: Federal Law Solutions: Existing, Proposed
and Potential 19
CHAPTER II: STATE LAW 65
Section 3: State Siting Law, Background to the Need
for Interstate Coordination 65
Section 4: State Law as a Solution to the Coorri-i nation
Problem 80
CHAPTER III: INTERSTATE COMPACTS 94
Section 5: The Interstate Compact as an Institutional Device
for Interstate Cooperation and Coordination .... 97
Section 6: The Interstate Ccnpact as a Solution to the
Interstate Coordination Problem 122
CHAPTER IV. JUDICIAL REVIEW AND STANDING TO SUE 138
Section 7: Judicial Review as Crucial to the Problem and
Solution of Efficient and Just Regulation
of Pcwer Plant Siting 138
CHAPTER V: PRIVATE PLANNING AND COORDINATION 167
Section 8: The Use of Electric Utility Industry Regional
and National Organizations to Effect Interstate
Coordination of Power Plant Siting 167
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TABLE OF CONTENTS
PAGE
PREFACE iii
INTPOIXJCTICN AND SUMMARY OF CDNCLUSICNS 1
The Problem 1
Various Legal Mechanisms Potentially Available For Solution—
Sunmary Of Conclusions 2
GLOSSARY OF TEFM3 7
CHAPTER I. FEDERAL LAW: AS PART OF THE PROBLEM AND AS POTENTIAL
SOLUTION 11
Section 1: Extant Federal Policy Creating the Need for Efficient
Interstate Coordination of Electric Pcxver
Development 11
A. Catalogue of Laws H
Extant Federal Legislation Affecting Pcwer Plant
Development 11
Prescnptive Energy Legislation 12
Prescriptive Environmental Legislation 13
Non-Prescriptive Federal Legislation 16
B. Aspects of Federal Policy Creating the Coordinative Need ... 17
Section 2: Federal Law Solutions: Existing, Proposed
and Potential 19
A. Existing Federal Efforts at Interstate Coordination
in the Electric Utility Industry 19
B. Existing Federal Efforts at Interstate Coordination in
Areas Other Than Electric Utility Development 22
(1). Gcnplete federal control of interstate activity .... 22
(2). Federal prescription of policy with federal
financing but with the administrative bocty
under control of each state 23
(3). Federal primary policy with federal financing with
state "secondary" prescriptive authority and
state administration 23
(4). Federal policy mandating interstate coordination
or cooperation but with primary policy
development left to individual states 23
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TABLE OF CONTENTS (CONT'D)
PACE
(5). Federal policy mandating interstate coordination
but primary policy left to interstate regional
control through? 24
(6). Federal nanprescriptive planning agency as a
resource to facilitate interstate coordination .... 25
C. Past Proposals for Federal Law Solution of the Problem
of Electrical Energy Facility Siting and Development
not Designed to Specifically Promote Interstate
Coordination 29
(1)• General summary and discussion 29
(2). Excerpts of pertinent parts of the 1973 and 1978
proposals 34
The 1973 Proposal 34
The 1978 Proposal to amend the Atomic Energy Act. . 41
D. Legal Doctrines of Federalism Pertinent to the Solution
of the Interstate Coordination Problem 51
(1) • The supremacy clause and federal preenption 51
(2). The eleventh amendment and sovereign linnunity 57
(3). The tenth amendment and intergovernmental imnunities . . 59
E. Potential Federal Solutions to the Problem of Efficient
Interstate Coordination 61
(1). General advantages and disadvantages of a
federal solution 61
(2). Discussion of possible federal legal arrangements
to effect coordination 61
CHAPTER II: STATE LAW 65
Section 3: State Siting Law, Background to the Need for
Interstate Coordination 65
Introduction and Overview 65
A. Siting Law in the U.S. 66
B. Siting Law in the OKBES States 73
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TABLE OF CONTENTS (CONT'D)
PAffi
OHIO 73
KENTUCKY 74
WEST VIRGINIA 75
PENNSYLVANIA 76
INDIANA 76
ILLINOIS 76
C. Model State Siting Law 77
1. Outline of model state siting act proposed by
National Symposium on State Environmental
Legislation (March 1972) 77
a. Siting Authority 77
b. Siting Mechanism 77
c. Financing Alternatives 77
2. Outline summary of proposed National Association
of Regulatory Utility Canmissioners'; "Model
State Utility Environmental Protection Act". 77
a. Siting Authority 77
b. Applications 78
c. Hearings On Application 78
d. Final Decision 78
e. Other Provisions 79
Section 4: State Law as a Solution to the Coordination Problem . . 80
A. Existing State Efforts at Interstate Coordination of
Power Siting 80
B. Potential Use of Uniform or Reciprocal State Legislation ... 84
(1) . Introduction 84
(2). Sane uniform state acts viewed as potential models ... 86
Uniform Interstate Arbitration of
Death Taxes Act (U.L.A.) § 1. (Vol. 8, p. 261). . 86
Uniform Interstate Compromise of Death Taxes
Act (U.L.A.) (Vol. 8, p. 274) 86
Uniform Controlled Substances Act (U.L.A.) § 504
(Vol. 9, p. 333) . ' 87
Uniform Narcotic Drug Act (U.L.A.) § 19
(Vol. 9, p. 760) TTT 88
Uniform Reciprocal Enforcement of Support Act ... 88
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TABLE OF CONTENTS (CONT'D)
PAGE
(3). Advantages and disadvantages of state law solution ... 90
(4). An example of a model uniform interstate
coordination act for power plant siting 92
CHAPTER III. INTERSTATE COMPACTS 94
Potential for the use of an interstate oonpact as a
solution to the coordination problem 94
Section 5: The Interstate Compact as an Institutional Device for
Interstate Cooperation and Coordination 97
A. Background: The Nature, History, Seme Examples of, and the
Literature on Interstate Compacts 97
(1). What is an interstate compact? 97
(2). Brief history of interstate compacts 100
(3). Review of certain regional compacts 101
Colorado River Compact of 1921 101
Interstate Oil Compact of 1935 104
Port of New York Authority Compact 104
Ohio River Valley Water Sanitation Canpact .... 105
Two Federal-Interstate Compacts 106
(4). Review of the literature on interstate compacts .... 107
Books 107
Articles 108
B. The Legal Status of Compacts 110
(1). Jurisdiction of courts 110
(2). Nature of the legal rights and duties created by
compacts 114
(3). Enforcement 117
C. The Political Status of Interstate Compacts 120
Section 6: The Interstate Compact as a Solution to the Interstate
Coordination Problem 122
A. Discussion of Various Uses 122
Introduction 122
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TABLE OF CONTENTS (CONT'D)
PAGE
(1). The use of an existing compact 123
(2). The amendment of an existing ccmpact 124
(3). The creation of a new federal-interstate oanpact .... 124
B. Illustrative Examples of Hypothetical Interstate Compacts . . 125
Introduction 125
(1). Example: amendments to the Ohio River Valley Water
Salutation Compact 126
Article I 127
Article II 127
Article III 127
Article IV 131
Article V 132
Article VI 132
(2). Exanple: a new federal-interstate compact (pertinent
parts) 133
CHAPTER IV. JUDICIAL REVIEW AND STANDING TO SUE 138
Section 7: Judicial Review as Crucial to the Problem and Solution
of Efficient and Just Regulation of Power Plant
Siting 138
A. The Nature of Judicial Review 138
(1). What is judicial review? 138
(2). When and where is judicial review? 139
(3). Summary history of judicial review 142
B. Scope of Review (Standard of Review) 143
(1). Cold record factor 143
(2). The law-fact confluence and dichotomy 144
(3). Nature of administrative decisions 147
(4). The articulated standards of review 149
C. Standing to Sue 152
D. Potential for the Efficient Utilization of Judicial Review
in the Interstate Coordination of Power Plant Siting .... 152
(1). Channeling judicial review 154
(2). Limiting the scope of review 156
(3). Special or ad hoc courts 158
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TABLE OF CONTENTS (CONT'D)
PAGE
Selection and Tenure Options 159
(a) A Permanent Article III Court (like the Court of
Claims) with Judges Selected by the President
with the Consent of the Senate 160
(b) An "Article I" Court with Judges Appointed for
a Term of Years 165
(c) Ad Hoc Appointment of a Panel of Judges from the
Existing Life-Tenured Federal Judiciary to Hear
Individual Disputes 165
(d) A Temporary Court with Special Jurisdiction
Appointed frcm the Ranks of the Life-Tenured
Federal Judiciary 166
CHAPTER V: PRIVATE PLANNING AND COORDINATION .... 167
Section 8: The Use of Electric Utility Industry Regional and
National Organizations to Effect Interstate
Coordination of Power Plant Siting 167
A. National Electrical Reliability Council and the Regional
Councils 169
Introduction—Numerous Studies 169
History Of Private Planning—General 170
History Of Private Planning—Specific To Siting
Coordination 172
Present System Of Private Planning 173
Legislation For Siting Control Introduced In The
Early 1970s • 174
B. Antitrust Policy and Private Coordination 175
C. Legal Arrangements that Might Induce or Carpel Greater
Private Coordination of Power Plant Siting 181
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INTRODUCTION AND SUMMARY OF CONCLUSIONS
The Problem
The federal government has established a carp Lex and changing environmental
and energy policy codified in a complex code of regulations further elaborated
by federal agencies all to be implemented "voluntarily" by the individual states
with constant monitoring by several federal agencies. Provision is made for
federal-state cooperation. But the environmental and energy problems addressed
by the state implemented federal policy are interstate in nature—some aspects
of which are national, most, at least, interstate-regional. The natural markets
for energy resources is interstate, guaranteed by the federal constitution to
remain interstate. Transportation of these resources is naturally interstate.
Transportation of the end resultant useable energy is likewise interstate.
Air and water pollution is by its nature interstate. Even solid waste disposal
is an interstate problem—no state can unilaterally isolate itself fron the
natural interstate market for disposal sites. Yet, only lip service has been
paid to the interstate nature of the problem of implementing the federal energy-
environmental policy.
Two distinct but interrelated results obtain from the current implementation
scheme: (1) inefficent allocation of energy resources and their transformation
into useable energy and (2) conflict between states. Interstate conflict leads
inevitably to litigation in a court system not designed for the swift resolution
of disputes of this order of magnitude. This results in inefficiency in the
entire implementation scheme—an inefficiency that can be ill afforded in a
system already burdened by the problems of multiple federal agency monitoring
of state implementation of complex federal policy. This regulatory inefficiency
caused by interstate conflict exacerbates the allocatory or economic inefficiency
caused by the lack of interstate cooperation in implementation. Thus not only
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is, say, the location of a particular new electrical generating facility likely
to be in the wrong place in terms of achieving national energy and environmental
goals but it will take much longer to locate it anywhere. In short, the present
system seems designed to get the wrong result after exaggerated delay and cost.
Or, at least, it is not designed to get the best result in the swiftest way
possible.
The very nature of our federalistic legal and political order occasions
this inefficiency. But without compromising that essential order, there are
available means of achieving greater efficiency in electrical power development
by improving the interstate coordination of the development enterprise.
Remember "efficiency" means achievement of energy and environmental purposes
without undue delay.
Various Legal Mechanisms Potentially Available For Solution—Sutrcnary Of Conclusions
The interstate compact or agreement has long been suggested as a solution.
The two sections on compacts in this study suggest that a whole range of
interstate agreements is possible but that the legal consequences of any
particular agreement cannot be precisely determined. The range of possibilities
includes: an agreement to exchange information about siting proposals within
each member state; or an agreement to give standing to each other before each
member state's siting decision-makers; or an agreement to provide a joint task
force for region-wide planning of future site locations with or without federal
agency participation at the initial stage; or an agreement to provide a region-
wide plan for electric pcwer development with regional implementation, or,
without a plan, to set up a regional siting authority.
Although a regional siting authority is legally feasible, with Congressional
consent, it is politically impractical. In fact regional planning is probably
politically not a plausible alternative unless each member state has an
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opportunity to opt in or out after the plan is formulated. A sample of such a
schene using the Ohio River Valley Water Sanitation Compact Carmissian as the
foundation for a planning task force is included in the section on compacts.
A compact purely to gather, process and disseminate information an a
region-wide basis would probably not need congressional approval. As the
processing becomes more elaborate, moving from simple ordering of data to analysis
and projection of impacts, the need for constant federal agency input becomes
more urgent. In fact, the more complete the interstate coordinative scheme
becomes the greater the need for including federal agencies as full working
partners. There is now precedent for a federal-interstate compact and a sample
compact of this nature is included in this study. Although, a federal-interstate
compact seems an attractive alternative to complete federal control on the one
hand or fragnented state control on the other, the practical political and legal
difficulties of such a scheme may be insurmountable. A regional agency has no
polity. It is dependent on a conglomerate of jealous state polities and
continuing national approval. Disputes will arise, both in planning and in
implementation. Hie courts will be resorted to as the recent experience of the
planning and regulatory compact between California and Nevada to govern Lake Tahoe
development makes clear. Because judicial involvement is central to the success
or failure of any interstate coordinative scheme that goes beyond mere information
exchange, a section is included in this study that attempts to explain the
intricacies of judicial involvement in the administrative process and hew such
involvement might be better utilized. Judicial involvement is inevitable;
the attendant delay and confusion may not be.
Of course, if regional arrangements are not forthcoming, and the need for
regional rationalization of electrical energy development continues to press,
federal control becomes a likely option. But a federal solution need not mean
complete federal control. The few federal proposals for specific federal
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electrical generating facility siting policy have opted for state implementation
modeled on the environmental laws. These proposals, which are discussed in
Section 2 of this study, only recatmend but do not command interstate coordination.
They would make for a more uniform system of state siting, federally monitored,
but since they do not require accounting for interstate inpacts no improvement
in interstate efficiency would result—i.e., a new layer of bureaucracy with no
solution to the problem.
What might be possible at the federal level is region-wide studies (OKBES
for example) followed by advisory regional plans such as those generated for
water resources by the Ohio River Basin Canmissian. Of course such advice need
not be taken by state siting agencies but it could give guidance to such agencies
and direction to the private utilities in their planning. Such regional planning
could be coupled with a special-federal regional court that would have sole
federal jurisdiction to review state siting decisions at the instigation of
either the federal planning agency, other states, or even private parties.
The sole issue for review would be conformity to the plan. Of course, such review
would inevitably involve some review of the basic fairness of the plan and whether
it was a reasonable carrying out of the Congressional planning mandate. Some
interests would probably seek to use such court as an immediate review agency
of the siting plan, before any specific siting decisions are made thereunder.
Such premature review probably should be avoided.
Another federal solution, at least to the interstate conflict part of power
plant siting, is to set up a special federal siting court (on any of several
node Is suggested in Section 7 of this study) without any regional planning. Such
a court would have all such disputes channelled through it and have an expedited
procedure. It could either be peopled with specially chosen experts or if picked
from the general federal judiciary, it could have a staff of experts to aid it
in its deliberation.
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Another federal approach to problem of interstate coordination would be to
set up a federal agency whose sole function is to coordinate state siting
decisions. It could require that all state siting decisions be preceded by an
interstate impact statement sent to it for review before a final decision is made.
Legislation creating such an agency could make it the sole federal agency for
review of state siting decisions and could make its assessment of the interstate
impact statement purely recommendatory or the agency could be authorized to seek
to enjoin the state siting decision if made against its reccimendation or if
based on an inadequate interstate impact statement.
Hie final federal solution would be to give the Federal Energy Regulatory
Catmission site licensing authority for all non-nuclear electrical generating
development.
A state law solution could be sought through reciprocal legislation where an
adopting state authorizes the intervention before its siting authority of
representatives of any other adopting state. It could even provide for mandatory
binding arbitration for disputes, modeled on the Uniform Arbitration of Death
Taxes Act.
Finally, can interstate coordination of siting be effected by facilitating
the voluntary coordination of the private utilities? In enacting § 202(a) of
the Federal Power Act providing for "voluntary interconnection and coordination
of facilities," Congress was "confident that enlightened self-interest will lead
the utilities to cooperate ... in bringing about the economies which can alone
be secured through planned coordination." (Senate Report #621, 74th Cong.,
1st Sess. 49 (1935).) Although the electrical utility industry is organized
into nine regional reliability councils under a National Electric Reliability
Council (NERC) and into numerous power pools and agreements to the end of
economic efficiency so that a reliable and adequate supply of electricity is
maintained, it is not organized to promote the equitable distribution among the
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states of the environmental and economic impacts caused by the development of
increased generating capacity. But one of the goals of interstate coordination
is econanic efficiency and the private sector can better achieve that goal if
allowed to pool and interconnect without regard to state lines. State power
siting authorities may disrupt this. Perhaps the best and simplest solution
would be a system of one stop federal licensing of new sites following region-wide
submission by the private reliability councils of 10-20 year plans for power
development with provisional approval of such plans by a consortium of federal
officials and state officials within the region.
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GLOSSARY OF TEEMS
Note: Hie following glossary defining terms used in this study and other related
studies and papers should be read for itself as a general background to
this study. It may also be useful as a ready reference while reading this
study.
CRUCIAL TERMS:
Coordination:
activities in which officials of different states do not work together but
perform complimentary acticais with awareness of each other's actions and
of the reciprocal efforts to avoid duplication, conflict, complications and
of the reciprocal efforts to meet similar goals. No common agency or
binding agreement or compact is necessary but coordination could be facilitated
through common agency or formal agreement.
Cooperation:
activities in which the officials of different states agree and do work
together with varying degrees of institutional integration. New York Port
Authority and Ohio River Valley Water Sanitation Commission (ORSANCO) for
example.
Regional:
a governmental area covering parts of two or more states. Generally a Region
has a natural delineation (like a river drainage basin) that relates to the
governmental purpose the area is set up for. This use of "regional" is in
contrast to the use of "region" in § 107 of the Clean Air Act where it is
intrastate in most cases. Where there might be confusion the phrase
"interstate region" is used.
FUNCTIONS OF GOVERNMENT:
Intelligence Function:
(Used as the first of Professor Myers McDougal's* seven decisional functions.)—
the gathering, processing and dissemination of information relevant to social
choices in all other decision functions.
*McDougal & Vlassic, Law and Public Order in Space, 1046-85 (1963), as cited
and discussed in W. Reisitan & G. Simscn, Interstate Agreements in the American
Federal System, 27 Rutgers L. Rev. 70, 73 (iy /3). Their definition of coordination
& cooperation were also useful. Id. at 75.
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Pronation Function:
"agitation" for adoption of pertain preferred policies as "prescriptions" (law).
"Agitation" is McDougal's word and would include the various means of promoting
proposals for prescriptive legislation, which includes (1) "getting the ear" (or
"catching the eye") of the legislators and (2) trying to persuade them by shewing
(a) the intrinsic worth of the proposal and/or (b) the popular support for the
proposal.
Prescription Function:
adoption of policies as authoritative or as law. This is generally thought of as
the "legislative" function but in truth legislatures perform an intelligence and
proration function as well. (They also regularly perform the last two of
McDougal's functions "termination" and "appraisal" not defined in this glossary.)
Moreover, the 11 rule-making" authority of administrative agencies is prescriptive.
Crucial to prescription is the power to carmand obedience. But "contending
obedience" can be a subtle process as well as a physically coercive one.
Especially is this true in a federal system where the central government
mandates state cooperation or state adherence to federal rules. This process
of securing obedience is discussed below under "sanctions."
Invocation Function:
the assertion that a prescription has or is being violated and the provisional
characterization of such deviation. This is a function generally performed by
police departments (from muni cops to the FBI) or the investigative arm of
administrative agencies. Prosecuting or other public attornies also participate
in this function which is close to the "executive branch" notion of traditional
tri-partite nomenclature. An administrative agency's investigative authority
may be for "intelligence" purposes as a prelude to promotion or prescriptive
rule-making, as well as, investigation of violations of existing prescriptions
which is part of this invocation function.
Application Function:
the authoritative specification of a violation or deviation from prescriptions
and the designation and implementation of a sanction program. Under traditional
nomenclature this is the "judicial" function, performed in this country by
courts. Administrative agencies and even city council sometimes play a role in
this application function. See "Sanctions" belew.
Sanctions:
in this context means measures taken to induce conformity to prescribed behavior
or law. They are of two general varieties roughly suggested by the carrot and
stick with the donkey metaphor. 3ut as we shall see, the carrot in our federal
system some tines becomes a stick and the distinction is hard to maintain.
The stick variety are usually thought of as punishments. Fine and imprisonment
are the only two such sanctions allowed in our system (except against children).
Obviously they are not always successful in inducing the prescribed behavior.
Against large groups such as labor unions they are not very effective. In our
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American system, such coercive sanctions are almost always imposed by a court
of law. The enforcement of administrative oease and desist orders is by court
injunction which, then, is backed by fine or imprisonment.
But there are other sanctions that are not physically coercive. These
"sanctions" can be used to induce behavior, do not require court action, but
are "coercive" enough (or otherwise effective enough) that the behavior they
are designed to induce can be called "prescribed." Federal grants in aid to
states or to private entities are often conditioned on conforming to certain
behavior. When felt dependency on such federal funds is great enough, then
the actors feel "coerced" into conformity. Most employers induce obedience
from employees by the threat of discharge. Likewise when the federal government
has a program which it wants state government to implement it offers the states
money to run the program and for seme measure of control over the program or
both. Once so "employed" the state is induced to adhere to federal direction
by threat of being "fired" and replaced by a federal agency. This is the mode
of "sanction" of the Clean Air Act, with its State Implementation Plans (SIP's);
the Federal Water Pollution Control Act Amendment of 1972 with HPDES all modeled
on the Social Security Act of 1935. 42 U.S.C. §§ 301 et seq. (especially
Titles IX and III relating to Unemployment Compensation.) In Stewart Machine Co.
v. Davis, 301 U.S. 548 (1937) the Court upheld the state-federal cooperation
plan. It refused to find that the tax and credit in ocarbination are weapons of
coercion, destroying or impairing the autanony of the states. "The assailants
of the statute say that its dominant end and aim is to drive the state
legislatures under the whip of economic pressure into the enactnent of
unemployment compensation laws at the bidding of the central government. The
difficulty with the petitioner's contention is that it confuses motive with
coercion. "Every tax is in seme measure regulatory. To sane extent it
interposes an economic impediment to the activity taxed as compared to others
not taxed' .... In like manner every rebate frcm a tax when conditioned upon
conduct is in same measure a temptation. But to hold that motive or temptation
is equivalent to coercion is to plunge the law in endless difficulties."
The Court concluded: "The Social Security Act is an attempt to find a method
by which all public agencies may work together to a common end."
Qi the other hand, it is clear that state officials cannot be induced to
pass an implementation plan by threat of the traditional coercive sanctions of
fine or inprisonment. See District of Columbia v. Train, 521 F.2d 971 (D.C. Cir.
1975), dismissed as moot in E.P.A. v. Brown, 97 S.Ct. 1635 (1977) after E.P.A.
abandoned its policy. See also, National League of Cities v. Usery, 426 U.S. 833
(1965).
TYPES OF GOVERNMENTAL ENTITIES:
Interstate Governmental Organization:
a group of people each one of whan is an agent for a state or substate governmental
entity who regularly-exchange intelligence, coordinate activity or cooperate
toward some ccrtmon goal agreed cn in advance.
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Interstate Governmental Agency:
a group of people each of whom (no natter how or by wham appointed) is agent for no
state or substate government but acts an behalf of an interstate governmental
entity which may be an interstate agreed on entity or a federally imposed entity
(ARC). An interstate governmental agency could represent an interstate governmental
organization.
Forums:
(from B. Keenan and Wens ton, A Region' s Energy and Environmental Future:
Organization Options, Background paper for Assembly on Intergovernmental Energy
and Environmental Cooperation, p. 133). Forums perform intelligence and
promotional but not prescriptive functions. They can be (1) purely interstate
and either public, like the Multistats Tax Ccnmission, or private, like the
National Electric Reliability Council and its nine regional councils or
(2) purely federal like the Federal Regional Councils or (3) a combination of
federal and interstate such as the Ohio River Basin Commission (ORBC) mentioned
on pages 25-28 below.
Catalysts;
(according to Keenan and Wens ton [borrowing from M. Derthick, Between Nation and
State, Brookings Institution, 1974]) a specific type of organization "devoted to
changing the actions of the local, state and federal governments through a
specific set of programs." Multi-state regional catalysts formulate "regional
goals cooperatively with the states and the federal government." Hie catalyst
agency like the "forum" serve intelligence and promotional functions but a
catalyst differs from a forum because it has money to spend to promote specific
programs. Therefore, promotion becomes inducement and conceptually its function
stands somewhere between promotion and prescription. (See definition and
discussion of "sanction" in this Glossary.) Two examples of multi-state regional
catalyst agencies are the Appalachian Regional Ccnrnission (ARC) discussed in this
study and the Regional Economic Development Commissions (Title V, Public Works
and Economic Development Act of 1965).
Authorities:
are agencies with prescriptive, invocation or application power or seme oarbinatian
of the three. Examples of an interstate authority is the Port of New York Authority
and ORSANOO established by interstate compact. An example of purely federal
authority of a regional nature is the Tennessee Valley Authority (T.V.A.). Of
course, the federal regulatory agencies such as the S.E.C., N.R.C. or the F.C.C.
are purely federal authorities but of a national, not regional, nature. Exanples
of Joint federal-interstate authorities are the Delaware River Basin Camission
and the Susquehanna River Basin Camrission established by interstate compacts.
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CHAPTER I. FEDERAL LAW: AS PART OF THE PROBLEM AND AS POTENTIAL SOLUTION
Section 1: Extant Federal Policy Creating the Need for Efficient Interstate
Coordination of Electric Power Development.
Without being redundant to the 1977 ORBES study, Legal Analysis of
Institutional Accountability for the Ohio River Basin, this section is a brief
identification and description of the federal law relevant to this study,
judicially developed doctrine as well as legislation. The present federal ^
law affecting power development decisions is vast, complex and rapidly changing.
Whether a new federal law or legal institution is the best solution to the manifest
need for the coordination of those decisions is problenatic but there is no denying
that existing federal law is one of the greatest causes of the need for interstate
coordination. Therefore this section is included in this survey as an update
and a compendium with seme change in emphasis from the 1977 Study referred to
above.
A. Catalogue of Laws:
Extant Federal Legislation Affecting Power Plant Development.
The Special Study Report for ORBES by N. L. White and J. F. Fitzgerald of
May, 1977, entitled Legal Analysis of Institutional Accountability for the
(Mo River Basin exhaustively surveyed federal and state law (except West Virginia
and Pennsylvania) pertinent to ORBES. It will be referred to hereafter as
"1977 Study" when cited with pagination indicated as "p. 1" or "p. 45", etc.,
omitting "III-E-" of the original. This is a brief compendium of that report,
updated as of July, 1980. It is organized by the general labels "energy,"
"environmental" and "other" reflecting the two major policy areas of legislation
with the catchall "other" for that which fits neither. Seme legislation concerns
both. It is classified under the label that seems to capture the major policy
thrust of the legislation.
*In recent years with the growth of federal regulation of many subjects
"loose-leaf services" have developed to help the lawyer, bureaucrat and citizen
to keep track of this swelling and changing tide of law. These "services" are
loose-leaf books so that on a regular basis (weekly, monthly or quarterly) they
can be updated by adding and deleting laws, administrative rules, interpretations,
and decisions and judicial interpretations. The focus is on federal regulation
but state regulation is also kept track of. The Environmental and Energy areas
of regulation have generated such loose-leaf services. In Energy there is
"Energy Law Service" published by Callaghan & Oanpany, 3201 Old Glenview Road,
Wilmette, Illinois 60091 and "Energy Users Report," published by The Bureau of
National Affairs, Inc., 1231 25th Street, N.W., Washington, D.C. 20037.
In Environment there is the "Environment Reporter" also published by the
Bureau of National Affairs (BNA). Tb keep current with the continuing development
in the areas surveyed here one needs only make a judicious use of these services.
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Prescriptive Energy Legislation.
The main thrust of this rapidly proliferating body of legislation is
energy efficiency. National security, foresight, and econcry are the
underlying motives. In more mundane terms, growing foreign dependency,
scarcity and rising costs of energy sources are facts of life that have
caused the rash of new legislation. The measures being taken are conservation
of use and switching to alternative sources of energy which in the near
term means switching to more plentiful fossil fuels or nuclear paver (?)
and in the long run means finding alternatives to fossil fuel and nuclear
energy by encouraging technological and scientific development.
The National Energy Plan of December 1978 is in fact five acts,
Public Laws 95-617 through 621 (92 Stat. 3117, 3174, 3206, 3289, 3350):
Public Utility Regulatory Policies Act of 1978 (P.L. 95-617)
has six titles of which Title I, "Retail Regulatory Policies for
Electric Utilities"; Title II, "Certain F.E.R.C. and Department
of Energy Authorities"; and Title III, "Small Hydroelectric Pcwer
Projects" are of sane interest to this study. Title I establishes
Federal standards for state utility rate-making creating a new
section (2601 et seq.) of title 16 of the United States Code.
Title II amends the Federal Power Act as to "interconnection11
and "wheeling."
Energy Tax Act of 1978 (P.L. 95-618) provides individuals and
business with tax credits for the purchase and installation of
energy conservation equipment and imposes a gas guzzler tax on
auto makers based on fleet average. (42 U.S.C. § 6801 et seq.)
National Energy Conservation Policy Act (P.L. 95-619) establishes
a statutory energy conservation program for residential, school
and hospital buildings and takes certain solar energy study
initiatives. It contains (§§ 213 and 215) requirements for state
residential energy conservation plans for "regulated utilities"
(enforced by states) and for "non-regulated utilities" (enforced
by Sec. of Energy) the main thrust of which is that utilities
offer to inspect, arrange for installation and financing of
energy conservation measures in private hemes.
Power Plant and Industrial Fuel Use Act of 1978 (P.L. 95-620)
prohibits new facilities frcm using petroleum or natural gas
(§ 212 lists Permanent Exemptions from this requirement because
of fuel supply, site limitations, environmental requirements or
lack of capital) and, where feasible, requires existing
facilities that use oil or gas to convert to more abundant fuels.
Section 602 provides for loans to assist power plant acquisition
of air pollution control equipment and § 761 disallows delay or
avoidance of compliance with applicable environmental requirements
by reason of this act.
The Natural Gas Policy Act of 1978 (P.L. 95-621) which completes
the National Energy Plan, is probably already obsolete and,
in any event, need not detain us here.
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The Department of Energy Organization Act of 1977 (August) (P.L. 95-91,
91 Stat. 565), 42 U.S.C. § 7101 et seq., as the name suggests establishes
the new department, provides for transfer of functions (primarily from the
Federal Energy Administrator and ERDA) and creates the Federal Energy
Regulatory Coirm. (FERC) which replaced the FPC. No substantive policy is
created by this act.
Energy Policy and Conservation Act of 1975 (P.L. 94-163, 89 Stat. 871),
42 U.S.C. § 6201 et seq. encourages the development of underground coal mines
by guaranteeing loans (§ 6211) and creates the "Strategic Petroleum Reserve"
(S§ 6231-6246). It gives the president certain emergency power and authorizes
the Department of Energy to prescribe rules for improving energy efficiency
(§§ 6291-6309) including encouraging and prompting State Energy Conservation
Programs (§§ 6321-27).
The Emergency Petroleum Allocation Act of 1975 (P.L. 94-99, 89 Stat. 481)
15 U.S.C. i 751 et seq. This act together with the act it amends, the EPAA
of 1973, (P.L. 93-155) was intended to grant the President specific temporary
authority to deal with shortages of crude oil and its products in order to
minimize adverse impact of such shortages or dislocations on the public and
the eoonory.
Energy Supply and Environmental Coordination Act of 1974 (ESECA) (88 Stat.
246) as amended in 1975 by Title I and II of the Energy Policy and Conservation
Act (P.L. 94-163, 89 Stat. 875, 960) 15 U.S.C. Si 791-98. (See 1977 Study
p. 9.) This act has been amended by the Power Plant and Industrial Fuel Use
Act of 1978, see above and see § 762, "Effect of Orders Under 8 2 of ESECA:
Amendments to ESECA." What ESECA made discretionary as to conversion, PPIFUA
makes mandatory.
Energy Conservation and Production Act (P.L. 94-385, 90 Stat. 1125)
Titles II, III (Energy Conservation Standards for New Building Act of 1976)
and part of IV (Energy Conservation in Existing Buildings Act of 1976) are
collected under "Energy Conservation and Resource Renewal" at 42 U.S.C.
§ 6801 et seq. (See 1977 Study at pp. 11 and 12.)
Prescriptive Environmental Legislation.
Environmental legislation has had a longer history than energy
legislation but even then the modern coirmitment is barely ten years old.
Although there is earlier legislation that can be called "environmental",
The National Environmental Policy Act of 1969, 42 U.S.C. i 4321 et seq.
is the cornerstone of the modern era. In form it is merely procedural.
It establishes the Council on Environmental Quality (CEQ), to advise and
assist the president, and the Environmental Impact Statement (EIS), a
kind of "full disclosure" law, (see 1977 Study pp. 2 and 3) in order
"to promote", "to stimulate", "to enrich understanding" to the end of
"encouraging productive and enjoyable harmony between man and his
environment" (code § 4321). The CEQ is without apparent prescriptive
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or adjudicative authority. But NEPA's "Congressional declaration of national
environmental policy" (code • 4331) is a substantive mandate: "to use all
practicable means ... to create and maintain conditions under which man
and nature can exist in productive harmony, and fulfill the social, economic
and other requirements of present and future generations of Americans."
(Code § 4331(a).) (Subpart (b) of this section lists six more specific goals.)
The key concept in NEPA is that the federal government must as far as
is practicable, consistent with other policy goals, improve and coordinate
its action "to create and maintain conditions under which nan and nature
can exist in productive harmony."
A "substantive mandate" means that merely filing an EIS for any "major
federal actions significantly affecting the quality of the human environment"
is not enough, the substantive policy implicit in NEPA must be met. That
raises two difficult questions: (1) who has authority to decide whether
or not the NEPA policy is met and (2) precisely what is that policy or, put
another way, what is that policy in terms of rules or guidelines to direct
the decision-maker in the individual case. The answer to the first question
is somewhat complex: The agency proposing the action has the primary
decision-making authority and the EIS means the agency is at least aware of
environmental consequences and it is presumed it will obey the law, i.e.,
NEPA substantive policy. But the EIS also guarantees Presidential or
Congressional oversight of that decision at the behest of the CBQ (including
E.P.A.), and other agencies or the public. Finally, the judiciary has
oversight capacity under the Administrative Procedures Act, 5 U.S.C. i 551
et seq., especially §S 701-06 at the behest of persons "injured in fact."
(See discussion of "standing to sue" in Section 7.) It is this judicial
oversight that causes people to think of NEPA as creating prescriptive
substantive law. But judicial review of administrative action is generally
very weak and very time consuming. (See discussion of "judicial review" in
Section 7.) Nonetheless, to the ordinary citizen this seems to be the one
certain access to what otherwise appears to be faceless, inaccessible
governmental action. Even with their limited review, the courts have
developed the idea of the substantive nature of NEPA. The conflict has
been whether or not that NEPA standard of judgment is straight cost-benefit
balancing analysis or, as suggested by § 4332(2)(D) and (2)(C)(iii), a "least
adverse alternative" approach.* See, The Least Adverse Alternative Approach
*
These two approaches are simply two aspects of rationality which is
always a balancing process. A simple example: It may be perfectly rational
on a cost-benefit basis to pay $5,000 for a certain car, but if I have
the alternative of buying the sane car for $3,000 it's irrational to pay
$5,000. However the problem with alternative analysis is that of determining
whether the $3,000 car is the "same car." "Same car" could mean "the identical
car," "a carbon copy," "the functional equivalent," or "close enough for real
needs. When the analysis moves from the relatively simple and objective
car-money balancing to the complex and unquantifiable facts and values of
environmental vs. "other values" balancing, "alternative analysis," although
more rational than simple cost-benefit analysis seems to many decision-makers
too complex to bear. See pages 68-72 below.
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to Substantive Review Under NEPA, 88 Harv. L. Rev. 735 (1975) for an excellent
brief (23 pages) discussion of this conflict. However, most judicial oversight
is involved with the preliminary issue as to whether an EIS is required or
adequate. Hie United States Code Annotated or the United States Code Service
(U.S.C.S.) contains, following § 4332, abstracts frcni the hundreds of cases
interpreting § 4332. Currently in U.S.C.S. with supplement, the annotations
run to 57 pages.
Although NEPA is addressed to federal governmental action only, it also
reaches much state action and private action either because of federal funding
of state action (see § 4332(2)(D)) or the federal licensing of private action
(e.g., Corps of Engineers permit to an electric utility for water intake
and discharge facility). But state licensing of private development is not
covered by NEPA.
Much state and private action is affected by the following federal
environmental acts. What follows is not an exhaustive list. (See 1977
Study for such a list.) This is a very brief compendium of the major federal
legislation, grouped by air, water and land quality protection laws,
affecting power plant development.
The Clean Air Act is an agglomeration of many acts now codified
at 42 U.S.C. §§ 7401 to 7642 and covering seme 225 pages in the
1978 United States Code Service pocket supplement. (Formerly
42 U.S.C. § 1857 et seq.) (See 1977 Study, pp. 6-7, 165-66
(on State Implementation Plans, SIPs, p. 167.) See Bleicher,
Economic and Technical Feasibility in Clean Air Act Enforcement
Against Stationary Sources, 89 Harv. L. Rev. 316 (Dec. 1975),
just one of countless articles on this Act.
Federal Water Pollution Control Act Amendment of 1972, 33 U.S.C.
§§ 1151 et seq. especially § 1342 (National Pollution Discharge
Elimination System (NPDES)) and § 1288 (Areawide planning called
§ 208 Plans) (See 1977 Study pp. 6-7.) This act is quite
comprehensive and after the Clean Air Act is most crucial to
interstate coordination of the power development effort. (See
1977 Study pp. 6-7 and p. 167.) While the Environmental Protection
Agency (EPA) (established in 1970 by executive order under 5 U.S.C.
§ 906(a) authority for executive reorganization) has most of the
regulatory and permit responsibility under F.W.P.C.A. and the
Clean Air Act, the Army Corps of Engineers has certain permit
authority as to physical obstruction affecting navigability under
33 U.S.C. § 403 (Protection of Navigable Waters and Harbors and
River Improvements Generally, § 10 of an 1899 Act) and 33 U.S.C.
§ 1344 of F.W.P.C.A. Because both the Clean Air Act and F.W.P.C.A.
provide for state implementation, the Corps is often the only
direct federal involvement in pewer plant citing decisions.
The Solid Waste Disposal Act was substantially amended and reenacted
by the Resource Conservation and Recovery Act of 1976 (P.L. 94-580,
90 Stat. 2795) and new appears under its original title in 42 U.S.C.
§§ 6901 et seq. It creates the Office of Solid Waste within the
E.P.A. (§ 6911-12) (See 1977 Study pp. 8-9.) This act authorizes
E.P.A. to pranulgate regulations identifying and managing hazardous
wastes (see 40 Code of Federal Regulations Part 255) (§§ 6921-25),
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including the power to revoke even a state granted permit
(§ 6928(a)(3)) or to impose a fine of $25,000 per day.
Like the Clean Air Act and F.W.P.C.A. it authorizes (§ 6926(b))
and encourages, by financial assistance (§ 6931), state
implementation of a state hazardous waste program as a replacement
of the federal program. It provides for intrastate regional
planning (but not interstate). All state plans most meet or
exceed the federal standards. Ironically, one of the purposes
of the 1976 act was in part required by the cleanup of the air
and water. (The stuff has got to go somewhere!) (§ 6901(b)(3)).
It, like the other environmental acts, provides for citizens
suits (§ 6972) and judicial review (§ 6976).
Surface Mining Control and Reclamation Act of 1977 (P.L. 95-87,
91 Stat. 447), 30 U.S.C. § 1201 et seq. There are other
environmental acts (like the Safe-Drinking Water Act (42 U.S.C.
300(f)) but the above list is the major legislation effecting
paver plant development.
Non-Prescriptive Federal Legislation.
Although this label may seem a contradiction in terms, this is a
useful rubric for federal laws that authorize studies or that create agencies
that are advisory only (like C.E.Q.), agencies that have no prescriptive
legislation to enforce or power to make prescriptive rules. In other words
although the legislation "prescribes" the creation of an agency or study,
the agency created neither makes nor enforces rules.
Most of the prescriptive legislation Congress passes in the Energy
and Environmental Area carries with authorization for further intelligence
gathering but a few acts have been aimed exclusively at this function,
for example:
Environmental Education Act, 20 U.S.C. § 1531 et seq. (1970) which
sponsors educational programs on the importance of maintaining
the ecological balance;
Water Resources Planning Act of 1964, 42 U.S.C. § 1961-1961 c-8
(1970) which provides for the training of scientists and
supplementation of ongoing programs for research in water resource
management.
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B. Aspects of Federal Policy Creating the Coordinative Need:
The federal policy chiefly causing the need for interstate coordination is
the policy of state implementation of national environmental standards. The
state inplementation is monitored by federal agencies but the federal agencies
have only a limited authority to coordinate or cause the states to coordinate
the implementation. Clean Air Act (as amended in 1977) § 126 provides for
"Interstate Pollution Abatement" in state implementation plans (SIPs) at the
behest of other states but the SIP complained of must violate (i.e., allow a
source to violate) § 110(a)(2)(E)(i) which is designed to force state implementation
plans to "contain adequate provision prohibiting any stationary source within the
State from emitting any air pollutant in amounts which will prevent" another state
from meeting or maintaining national primary or secondary anbient air quality
standards (NAAQS) or frcm effectively using measures to prevent significant
deterioration of air quality. Section 160(4) of Part C—"Preventing Significant
Deterioration of Air Quality" also refers to one state's not interfering with
another state's abatement program. Although these sections of the Clean Air Act
might seem to give EPA, the federal monitor, authority to require that SIPs
coordinate controls with other states, the mandate is certainly not to overall,
comprehensive, or continuous coordination but for piecemeal concern only where an
SIP allowed in-state source will prevent another state frcm actually meeting a
standard—tendencies and lesser interstate impacts will not occasion EPA
intervention.
The specific environmental problem seemingly most pressing for interstate
solution is the long range transport of sulfur dioxides and sulfate particulates
reported by J. Brcnberg and T. Pox, Intergovernmental Cooperation in Up-Valley
Pollution Transport Management, in Energy and Environment: An Intergovernmental
Perspective, the final report of the Ohio River Valley Assembly. Moreover,
according to allegations of Clifford L. Jones, Secretary of the Pennsylvania
Department of Environmental Resources in a position paper presented to ORBES
on October 24, 1979:
"The economic impacts of interstate transport of air pollutants
are also a major concern. Advected air pollution requires
Pennsylvania to adopt stricter (than other states) emission
limitations for its industry. As a result, a greater economic
burden is placed on Pennsylvania industries and economic growth
and development is discouraged. In addition, acid rain resulting
from the long distance transport of SO2 and NOx may be responsible
for substantial adverse effects on cropland, forest productivity,
.... (etc.)"
Given the complexity of air pollution control, it would be very difficult
for EPA to accomplish the necessary coordination to avoid these impacts on the
piecemeal basis prescribed by the Clean Air Act. But regionalizatian within
EPA makes it even more difficult. The ORBES states are in three different EPA
regions. In order to coordinate within EPA, a Tri-Regional Task Poroe was
established by Memorandum of Understanding. This is only for air pollution.
EPA also has responsibility to monitor state implementation of water pollution
and solid waste disposal policies. EPA in order to monitor the state enforcement
of this complex legislation must itself establish elaborate functional and
geographical divisions and then as the Tri-Regional Task Force bears witness-
reorganize within itself to coordinate its own activities. Interstate coordination
seems to get lost in this maze. States, naturally, are concerned with in-state
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impacts. Moreover, Congress has allowed relaxation of local environmental
standards if "neoessary to prevent significant local or regional economic
disruption or unemployment . . ." § 125 (Clean Air Act Amendments of 1977).
The Sulfur Dioxide Control in Ohio, Issues and History, dated October 17, 1979,
by Reg. V. of U.S. E.P.A. details the difficulties inherent in the Congressional
scheme.
Power plant siting itself is not subject to any public planning and the
Federal Energy Regulatory Commission has no authority over siting, although
it can now order wheeling. FERC has encouraged private utility site planning.
Not only do the environmental aspects of pcwer plant development require
interstate coordination, but its economic aspects are also interstate: the
energy resource market, its transportation, the market for the electricity
produced. Even the "local" economy affected by a new site is often interstate.
But the present pressing need for interstate coordination is caused by the
pervasive federal environmental and energy regulations the industry must deal
with. While efficiency, reliability and adequacy of electrical energy production
calls for an integrated interstate bulk power network, private utility
coordination fostered and monitored by the F.P.C. (now F.E.R.C.) once seemed
adequate to the task, in spite of the drama of an occasional power outage.
But with the federal environmental/energy regulations of the past ten years,
this no longer is true.
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Section 2: Federal Law Solutions; Existing, Proposed and Potential.
A. Existing Federal Efforts at Interstate Coordination in the Electric
Utility Industry:
There are four acts with their amendments that are implicated here:
(1) The Federal Power Act of 1935 (49 Stat. 838) found in 16 United States
Code (hereafter U.S.C.) § 791(a) et.seq. but especially §§ 824, 824(a)
(interconnection and coordination or\(electric utility company) facilities)
and 824(b) through 825(u); (2) The Public Utility Holding Co. Act of 1935,
(49 Stat. 803) 15 U.S.C. § 79 et seq.; (3) The Antitrust Laws (prinarily~the
Sherman Act, 26 Stat. 209) 15 U.S.C. § 1 et seq.; (4) The Atonic Energy Act
of 1954 as amended, 42 U.S.C. § 2133 et seq., with the Energy Reorganization
Act of 1974 (88 Stat. 1253) 42 U.S.C. § 5801 et seq. especially the Nuclear
Regulatory Commission, §§ 5841-49.
Under these provisions essentially all hydroelectric power facilities
(16 U.S.C. §§ 797(e) §§ 817) and all nuclear power facilities (42 U.S.C.
§ 2235) are licensed and controlled by the federal government. Exceot for
TVA, fossil-fuel burning electrical facility siting is controlled, if at all
by the states, but the first three acts cited above have seme direct impact on
interstate coordination.
The Federal Power Act especially § 824(a)(1970) (§ 202(a) of the act)
gives the Federal Power Cotmission (now the Federal Energy Regulatory Commission
(FERC)) 42 U.S.C. § 7134 and §§ 7171-77 (part of Department of Energy
Organization Act of 1977, P.L. 95-91) authority to divide the country into
regional districts for the voluntary interconnection and coordination of
facilities for the generation, transmission and sale of electric energy" and
under § 824a (b) (§ 202(b) of the Pcwer Act) upon the complaint of state
ccmmission or a public utility, it can force a utility "to establish physical
connection of its transmission facilities with the facilities of another person's
(selling) electric energy (if it) finds such action necessary or appropriate in
the public interest." But the Commission must find that "no undue burden will
be placed upon the utility thereby" and the commission has "no authority to
carpel the enlargement of generating facilities" or "impair (the utility's)
ability to render adequate service to its customers".
Moreover, as the Supreme Court noted in Otter Tail Power Co. v. United States,
410 U.S. 366 (1973) , the Ccmnission lacked prxJPr lirtripr thp ac+ <-n ryrrter
"wheeling," the electrical equivalent of a common carrier—not buying or selling
power, just carrying it, "wheeling" it, on one's lines. This "defect" is
remedied by amendment to the F.P.A. in the 1978 National Energy Plan (The Public
Utility Regulatory Policies Act of 1978) adding Section 211 (16 U.S.C. 824(j))
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"wheeling." It should be noted that it empowers the ccrnmission to order "any
other utility to provide transmission services to the applicant (including any
enlargement of transmission capacity necessary to provide such servioes).
(Emphasis added.1 (§ 211(a)) (§ 211(b) says "Including any increase in transmission
capacity . . . .")
Under new section 212 (16 U.S.C. 824K) the applicant for wheeling must stand
ready to bear the cost of any enlargement of transmission facilities ordered under
§ 211(a) or (b).
But the act reiterates the old restriction: "The carmission shall have no
authority under § 210 or 211 to carpel enlargement of generating facilities."
(Emphasis added.)
These new sections taken together, especially the wheeling section, could add
significantly to FEFC's power to affect interstate coordination of paver plant
siting or development. See Breyer, Analyzing Regulatory Failure, infra, at p. 698.
Of that power to affect coordination! A fairly detailed article Breyer & MacAvoy,
The Federal Power Carmission and the Coordination Problem in the Electrical Paver
Industry, 46 S. Cal. L. Rev. 661 (1973) suggests "that the CarcrcLssion's planning
activities have been ineffective, and that the Ccnmission cannot realistically be
expected to guide the planning activities of private pcwer companies. Institutional
solutions to energy production problems will have to take other forms." (at 663)
The article states that "considerable practical difficulties, together with a nurrber
of legal problems and a tendency to respond only to the stimulus of immediate
problems" have caused the FPC to fail to accomplish the coordination called for by
its 1964 Survey. (Id. at 708.) In spite of the addition of the wheeling power,
Breyer1 s general conclusions would probably not be altered. In a recent article,
Breyer, Analyzing Regulatory Failure: Mismatches, Less Restrictive Alternatives,
and Reform, 92 Harv. L. Rev. 549 (1979) he says (at 558) under heading "A. Typical
Justifications for Regulation," "7. Rationalization":
*Certain Wheeling Authority: Section 211. (a) Any electric utility or Federal
power marketing agency may apply to the Ccrnmission for an order under this
subsection requiring any other electric utility to provide transmission services
to the applicant (including any enlargement of transmission capacity necessary to
provide such services). Upon receipt of such application, after public notice and
notice to each affected State regulatory authority, each affected electric utility,
and each affected Federal power marketing agency, and after affording an opportunity
for an evidentiary hearing, the Carmission may issue such order if it finds that
such order—
(1) is in the public interest
(2) would—
(A) conserve a significant amount of energy
(B) significantly promote the efficient use of facilities and
resources, or
(C) improve the reliability of any electric utility system to
which the order applies, and
(3) meets the requirements of section 212.
(16 U.S.C. 824 (j))
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Occasionally governmental intervention is justified an the
ground that, without it, firms in an industry would remain too small,
or would lack sufficient organization, to produce their product
efficiently. (Citing 1973 article at 680-82, 685-87, 688-94.)
One would ordinarily expect such firms to grew or cooperate, and
unit costs to decrease. But often social or political factors act
to counteract this tendency. (Citing F. Scherer, Industrial Market
Structure and Economic Performance, 306-07 (1970).) In such
circumstances, agencies have sought to engage in industry-wide
"planning." In the 1960's for example, the (F.P.C.) argued that
increased coordination in the planning and operation of electric
power generating and transmission facilities would significantly
lower unit costs. The Conmission felt that environmental, political,
regulatory, and managerial problems made it difficult for firms to
plan jointly. The result was a relatively unsuccessful federal
agency effort to encourage industry-wide rationalization.
See Pennsylvania Water and Power Co. v. F.P.C., 343 U.S. 414, 421-26 (1952)
discussing the F.P.C.'s interconnect power and see Western Lgt. and Tele. Co.,
33 F.P.C.R. 1147 (F.P.C. Opin. #462 1965) approving a merger to facilitate
interconnection between Colorado and Kansas. F.E.R.C. has power under 16 U.S.C.
§ 246 to authorize mergers, etc.
Probably more important to the interstate coordination problem is F.E.R.C.'s
power and duty under the Act (16 U.S.C. 824a(a)) to promote and encourage the
"voluntary interconnection and coordination of facilities for the generation,
transmission and sale of electric energy ..." and to that end "to divide the
country into regional districts." Pursuant to that power the Cortmission in
1965-68 called upon the industry to establish national and regional coordinating
bodies. The National Electric Reliability Council (NERC) and nine regional
reliability councils resulted. The reliability councils will be discussed
further in section 8 on private efforts at coordination.
The F.P.C. opinion mentioned above suggests the connection the siting issue
has with both the Public Utility Holding Co. Act of 1935 and the Antitrust Laws.
By the P.U.H.C.A. the Securities and Exchange Caimission was given pewer over
"Holding Companies." The SEC was directed to take action to require the breakup
and simplification of existing holding conpanies' systems to insure that any
remaining holding company system would constitute an "integrated public utility
system." In Janes, Regulated Industries (1967) the author says (at 79) "the terms
and structure of the statute are quite complex, encompassing numerous exemptions
of various dimensions and provisions designed to coordinate federal and state
regulation of the same utilities."
The Antitrust Laws are involved both in the merger of utility companies and
in refusals to deal or cooperate with other utilities, which could be an attempt
to monopolize, etc. In Otter Tail Power Co. v. United States, 410 U.S. 366 (1973),
the Supreme Court considered the applicability of section 2 of the Sherman Act
(15 U.S.C. § 2) to a vertically integrated electric utility. Otter Tail has
substantial generating facilities and an extensive subtransmission system in a
tri-state service area. Beginning in 1960, several municipalities served by
Otter Tail decided to operate their own local systems. Otter Tail refused to sell
power to these municipalities at wholesale, or to allow its lines to be used for
wheeling power to them from other suppliers. Ihe Justice Department brought a
civil action against Otter Tail under Shenran § 2, alleging monopolization and
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attempted monopolization of the retail distribution of electric power. The district
court ordered them to sell at wholesale and to wheel. The Supreme Court affirmed
(4-3). The major issue in the case is one generally discussed under the rubric of
"primary jurisdiction," i.e., if more than one agency of government has jurisdiction
over a regulated industry which one has "primary" jurisdiction which is both a
question of first in time and first in legal power assuming two or more federal
laws or regulatory schemes conflict.
The only thing worth mentioning here as to The Atomic Energy Act, is that the
United States Court of Appeals for the Ninth Circuit has ruled that a California
law that conditioned construction of nuclear power plants on existence of
demonstrated nuclear wastes disposal technology regulates subjects inpliedly
preempted by A.E.A. and thus the state law is unconstitutional under the
Supremacy Clause. "Preemption Doctrine" is discussed in Section 2 D (1) of
this report. Pacific Legal Foundations v. State Energy Resources Conservation
and Development Catinission, 472 F.Supp. 191 (S.D. Cal. 1979).
B. Existing Federal Efforts at Interstate Coordination in Areas Other Than
Electric Utility Development;
There is a paucity of federal legislation that attempts to coordinate state
regulatory activity. On the other hand there is much federal legislation that
directly and imperatively regulates interstate activity. Moreover, there is
considerable federal legislation which endeavors to coordinate federal and state
activity on a one to one basis, efforts at "cooperative federalism." For the
purpose of discovering potential models, a scheme of possible federally initiated
legal and institutional arrangements to achieve interstate coordination or
cooperation in power plant development (excluding interstate compacts) is hereafter
outlined with federal law examples of each listed where there is such law.
This scheme lists the arrangements from roughly most federally centralized to
least centralized.
(1). Complete federal control of interstate activity:
The examples frcm other areas that appear most analogous to the siting of power
generating facilities are the Canmunications Act of 1934, (48 Stat. 1064) 47 U.S.C.
§ 151 et seq. and The Federal Aviation Act of 1958 as amended by the Airline
Deregulation Act of 1978, (Pub. Law 95-504) 49 U.S.C. § 1301 et seq. Each of
these acts involves fixed local facilities of substantial ragnitude whose
activities have substantial interstate consequences. In fact electric generating
facilities have arguably more interstate consequences than either broadcasters
or airports for not only does their product go interstate, (in a giant interstate
bulk power grid system) but substantial air, water and (even) solid wastes go
interstate, while the source of their electrical product, coal, oil, etc., is
shipped interstate in huge quantities.
Other conspicuous examples of complete control are the National Labor Relations
Act, and the Patent and Trademark Acts and various federal food and drug laws and
labeling acts.
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(2). Federal prescription of policy with federal financing but with
the administrative body under control of each state;
The Unemployment Compensation system established by the Social Security Act,
42 U.S.C. § 301 et seq. (Titles IX and III dealing with Unemployment Compensation),
is the most salient example of this federal-state cooperation. See Stewart Machine
Co. v. Davis, 301 U.S. 548 (1937) discussed under "Sanctions" in Glossary of Terms.
(3). Federal primary policy with federal financing with state "secondary"
prescriptive authority and state administration:
Each of the three principal environmental laws above, and the Surface Mining Control
and Reclamation Act of 1977 and the Occupational Safety and Health Act of 1970
(29 U.S.C. § 651 et seq.) are conspicuous examples of this fairly carman practice.
"Secondary prescriptive authority" is either the right to set higher standards or
more detailed standards or both. See 29 U.S.C. § 667 of O.S.H.A. for example.
What often happens is that the federal minimums become maximums due to industry
pressure on state government and state fears of losing industry if their
regulations are stiffer vis-a-vis other states regulations. Obviously, for much
the same reason, federal-state disputes can also arise over the more detailed
regulations made pursuant to carrying out primary federal policy. Constant
federal monitoring of the state implementation plans is thus required. See
Comment, Jurisdiction to Review Informal E.P.A. Influence upon State Decision Making
Under the Federal Water Pollution Control Act: Shell Oil Co. v. Train, 92 Harv. L.
Rev. 1814 (1979).
(4). Federal policy mandating interstate coordination or cooperation but
with primary policy development left to individual states:
With some caution I suggest that the Federal-Aid Highway Act of 1956 (70 Stat.
374) 23 U.S.C. § 101 et seq. which established the interstate highway system
is a potential model. 23 U.S.C. § 103(e)(1) provides in part: "The routes
of this system, to the greatest extent possible, shall be selected by joint
action of the State highway departments of each State and the adjoining States,
subject to the approval of the Secretary (of transportation) . . . ." (Elrphaiis
added.) If "primary policy" means the designation of the exact route of each
highway, then states do make primary policy subject to fairly general federal
guidelines. But the nature of the highways actually constructed and the
implementation of the building program is subject to rather strict federal
guidelines. The federal government induces state conformity with money, up
to 95% of the construction costs. (23 U.S.C. § 120). By amendment in 1970
environmental, social, and economic factors were added to the list of federal
guidelines to be obeyed by the state. This is in keeping with the spirit of
NEPA. 23 U.S.C. § 109(h)(i) and (j) reads as follows:
(h) Not later than July 1, 1972, the Secretary, after consultation
with appropriate Federal and State officials, shall submit to
Congress, and not later than 90 days after such submission,
promulgate guidelines designed to assure that possible adverse
economic, social, and environmental effects relating to any
proposed project on any Federal-aid system have been fully
considered in developing such project, and that the final decisions
on the project are made in the best overall public interest,
taking into consideration the need for fast, safe and efficient
transportation, public services, and the costs of eliminating
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or minimizing such adverse effects and the following:
(1) air, noise, and water pollution;
(2) destruction or disruption of man-made and natural resources,
aesthetic values, cairounity cohesion and the availability
of public facilities and services;
(3) adverse employment effects, and tax and property value losses;
(4) injurious displacement of people, businesses and farms; and
(5) disruption of desirable community and regional growth.
Such guidelines shall apply to all proposed projects with
respect to which plans, specifications, and estimates are approved
by the Secretary after the issuance of such guidelines.
(i) The Secretary, after consultation with appropriate Federal, State,
and local officials, shall develop and promulgate standards for
highway noise levels compatible with different land uses and after
July 1, 1972, shall not approve plans and specifications for any
proposed project on any Federal-aid system for which location
approval has not yet been secured unless he determines that such
plans and specifications include adequate measures to implement
the appropriate noise level standards.
(j) The Secretary, after consultation with the Administrator of the
Environmental Protection Agency, shall develop and promulgate
guidelines to assure that highways constructed pursuant to this
title are consistent with any approved plan for the implementation
of any ambient air quality standard for any air quality control
region designated pursuant to the Clean Air Act, as amended (42
USCS §§ 1857 and notes-1858a).
The interstate highway program has been an undoubted success given that one agrees
with its goal of building a great interstate highway system which many in these
energy scarce and environmentally conscious times now think was a mistake—it
surely destroyed incentives to develop or even maintain urban, interurban, and
rural mass transit. In fact the very success of this 1950's conceived program
may be the failure of the 1970 's and 1980 's—but then who can plan 20 years
ahead!
But regardless of its substantive success or failure, all will likely agree
that as a venture in intergovernmental cooperation it has been a success. The
federal government employed the states not as servants but as agents with
substantial discretion to build a national interstate system. (However I
remember as a state right-of-way agent working in Ohio in 1960 being frequently
aware of the Bureau of Public Roads watching us—but at a distance.)
(5). Federal policy mandating interstate coordination but primary policy
left to interstate regional control through:
(a) federal agency, federally appointed, such as the Federal Regional Council
(see description below under (6)) but with either prescriptive clout or
the authority and duty to resolve interstate differences with finality;
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(b) federal agency but with both federal and state representatives such as the
Ohio River Basin Canmission (see below under (6)) but with powers as in (a).
There does not seem ever to have been such an agency.
(6). Federal ncnprescriptive planning agency as a resource to facilitate
interstate coordination:
Four such primarily "intelligence gathering" and "promotional" agencies will be
briefly mentioned here.
The Ohio River Basin Commission was established by Exec, order #11578 of
January 13, 1971, amended by exec, order in 1975 pursuant to power in Title II,
"River Basin Carrmissians," of the Water Resources Planning Act of 1965, 42 U.S.C.
1962(b) et seq. Section 1962b(b) (§ 201(b) as enacted) states that the
Canmission shall be (1) "principal agency for the coordination of Federal, State,
interstate, local and nongovernmental plans for the development of water and
related land resources in its area." It then more specifically provides:
(2) prepare and keep up-to-date, to the extent practicable,
a comprehensive, coordinated, joint plan for Federal, State,
interstate, local and nongovernmental development of water
and related resources: Provided, That the plan shall include
an evaluation of all reasonable alternative means of achieving
optimum development of water and related land resources of the
basin or basins, and it may be prepared in stages, including
reconrrendations with respect to individual projects;
ORBC has in fact prepared its overall plan in 14 stages, one for each main tributary
flowing into the main stem of the Ohio and then produced a comprehensive plan for
the entire Basin.
(3) recanmend long-range schedules of priorities for the collection
and analysis of basic data and for investigation, planning, and
construction of projects; and
(4) foster and undertake such studies of water and related land
resources problems in its area, river basin, or group of river
basins as are necessary in the preparation of the plan described
in clause (2) of this subsection.
Its duties are further detailed in Section 204:
DUTIES OF THE COMMISSIONS
Sec. 204. Each river basin ccmmissian shall—
(1) engage in such activities and make such studies and investigations as
are necessary and desirable in carrying out the policy set forth in
section 2 of this Act and in accomplishing the purposes set forth in
section 201(b) of this Act;
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(2) submit to the Council and the Governor of each participating
State d report on its work at least once each year. Such report
shall be transmitted through the President to the Congress.
After such transmission, copies of any such report shall be sent
to the heads of such Federal, State, interstate, and international
agencies as the President of the Governors of the participating
States my direct;
(3) submit to the Council for transmission to the President and by him
to the Congress, and the Governors and the legislatures of the
participating States a comprehensive, coordinated, joint plan, or
any major portion thereof or necessary revisions thereof, for water
and related land resources development in the area, river basin, or
group of river basins for which such ccmmissian was established.
Before the commission submits such a plan or major portion thereof
or revision thereof to the Council, it shall transmit the proposed
plan or revision to the head of each Federal department or agency,
the Governor of each State, and each interstate agency, from which
a member of the oonmission has been appointed, and to the head of
the United States section of any international ccrmission if the
plan, portion or revision deals with a boundary water or a river
crossing a boundary, or any tributary flowing into such boundary
water or river, over which the international cortmissian has
jurisdiction or for which it has responsibility. Each such
department and agency head, Governor, interstate agency, and
United States section of an international ccnmissicn shall have
ninety days from the date of the receipt of the proposed plan,
portion, or revision to report its views, comments, and
reccranendations to the commission. The commission may modify
the plan, portion, or revision after considering the reports so
submitted. The views, comments, and recommendations submitted
by each Federal department or agency head, Governor, interstate
agency, and United States section of an international ocntnission
shall be transmitted to the Council with the plan, portion, or
revision; and
(4) submit to the Council at the time of submitting such plan, any
reccjtmendaticns it may have for continuing the functions of the
ccmmissian and for impleirenting the plan, including means of
keeping the plan up-to-date.
Annually since its inception, ORBC has submitted such a report as required in
§ 204(2) and § 201(b)(3) "prioritizing" projects in the Ohio Basin.
Section 205 details a commission's "powers" and makes "administrative
provisions"—which after stating it can hold hearings, acquire offices, having
mailing privileges, hire personnel and use other state and federal personnel,
have vehicles, ends with the catchall:
(a)(8) incur such necessary expenses and exercise such other powers
as are consistent with and reasonably required to perform
its functions under this Act.
Then in § 205(b), the chairman (appointed by the President of the United States):
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is authorized to administer oaths when it is determined by a majority
of the catmission that testimony shall be taken or evidence received
under oath.
Section 205 further provides:
(c) To the extent permitted by law, all appropriate records and papers
of each river basin ccnmissicn shall be made available for public
inspection during ordinary office hours.
(d) Upon request of the chairman of any river basin commission, or
any member or employee of such ccnmissicn designated by the
chairman thereof for the purpose, the head of any Federal department
or agency is authorized (1) to furnish to such commission such
information as may be necessary for carrying out its functions
and as may be available to or procurable by such department or
agency, and (2) to detail to temporary duty with such catmission
on a reirttoursable basis such personnel within his administrative
jurisdiction as it may need or believe to be useful for carrying
out its functions, each such detail to be without loss of
seniority, pay, or other employee status.
(e) The chairman of each river basin caimissian shall, with the
concurrence of the vice-chairman, appoint the personnel employed
by such commission, and the chairman shall, in accordance with
the general policies of such commission with respect to the work
to be accomplished by it and the timing thereof, be responsible
for (1) the supervision of personnel employed by such commission,
(2) the assignment of duties and responsibilities among such
personnel, and (3) the use and expenditure of funds available
to such conmission.
Section 206 provides for compensation of catmission meirbers: federal meimbers
continue to be paid by the department from which they ccme, state and compact
meitbers as the state or compact agency provides, with a special provision for
the chairman.
Section 207 provides for financing the commission. This is done an an annual
basis and the ratio has been 2.5-1, federal to state.
Section 202 provides for membership of ccnmissians. OFBC has a chairman
appointed by the president, ten federal agency representatives, ten state
representatives (one from each state with waters draining into the Ohio) and
Ohio River compact representatives, i.e., ORSANCO.
Section 203 "Organization of Canmissions" provides for action by consensus
or unanimity:
(d) In the work of the commission every reasonable endeavor shall
be made to arrive at a consensus of all members on all issues;
but failing this, full opportunity shall be afforded each
member for the presentation and report of individual views:
Provided, That at any time the catmission fails to act by
reason of absence of consensus, the position of the chairman,
acting in behalf of the Federal meirbers, and the viae-chairman,
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acting upon instructions of the State members, shall be set
forth in the record: Provided further, That the chairman,
in consultation with the vice-chairman, shall have the final
authority, in the absence of an applicable bylaw adopted by
the carmission or in the absence of a consensus, to fix the
times and places for meetings, to set deadlines for the
submission of annual and other reports, to establish
subcommittees, and to decide such other procedural questions
as may be necessary for the carmission to perform its functions.
OKBC has only failed to reach such consensus three times in its history—each
time as to specific projects, twice failing of consensus over the Blue Ridge
Project an the New River in Virginia and once over a power plant siting.
ORBC has a citizen's advisory council with 198 members broken down into
eight groups each with an area of interest relative to river development projects
and planning: environmental, power, carcnerce and industry, agriculture,
recreation, water supply and quality, transportation, and general interest.
Each has 22 members, 2 private citizens frcm each state appointed by the chairman
on the reccrrmendation of the state representatives plus two at-large meirbers.
ORBC has a staff of 18 permanent employees, 9 professionals (frcm hydrologist
to economist) and 9 support personnel. The carmission meets four times a year.
It has taken cm two special projects for the federal government. They involved
studying all the water problems (supply, quality, energy, transportation,
recreation, natural historic and flood control) of the Allegheny Basin and the
Cumberland Basin.
ORBC plans and "prioritizing" are, of course, only recarmendations to Congress
and the States; they have no prescriptive effect.
The Water Resources Council is also established by this act (the W.R.P.A.)
particularly §§ 1962a through 1962a-4. Its purpose is to maintain a continuing
study and prepare an assessment biennially an water resources and to make a
continuing study of regional plans and programs relating them to national needs.
The Appalachian Regional Development Act of 1965, establishing the
Appalachian Regional Conmission (ARC) (P.L. 89-4, § lj 79 Stat. 5) 40 U.S.C.
Appx. §§ 1 through 405. This act was originally scheduled to expire in 1971, then
1975, then October 1, 1979, and its life has again been extended. This is a
"development" conmission. There is one federal member, and one from each of
the 13 states involved. The Appalachian Region is not coterminous with state
boundaries but includes only the Appalachian area of each state. Only in
West Virginia is that the whole state. Action by ARC takes a "yes" from the
federal member and a "yes" from a majority of the state members. Expenses are
50% federal and 50% state paid. No state can participate in ARC programs unless
it pays its share. ARC's functions include developing plans, conducting studies
and sponsoring demonstration projects, reviewing local public and private
development programs, formulating and recommending interstate compacts and
other forms of interstate cooperation (including model legislation). It also
must "encourage," "serve as a focal point" and "provide a forum." Specific
development programs are authorized by the act in highways, health projects,
land, timber, mining restoration, etc. Section 222 requires the consent of
any state engaged in any program.
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The Catmission nay also supplement federal grant-in-aid programs which
vrould be available to the various states and entities within the region.
{§ 3188a) Subject to limitation contained in § 3188a, the ccumission has
the power and authority for:
1) planning a regional transportation network
2) to authorize transportation demonstration projects and
3) energy demonstration projects
4) health and nutrition demonstration projects
5) vocational and technical education demonstration projects.
Federal Regional Councils, 31 U.S.C. § 16 (Executive Order No. 11647).
There are 10 federal regional councils each ooirposed of the principal regional
official of various agencies and departments, all federal, whose key function
is to develop the most effective method of allocating federal resources to
meet state and local needs. This is done by evaluation of agency programs and
coordination of agency action.
The above list does not quite exhaust the list (federal ownership a la TVA
is also possible but does not seem a viable option politically) and further
combinations of the suggested arrangements are of course possible.
C. Past Proposals for Federal Law Solution of the Problem of Electrical Energy
Facility Siting and Development not Designed to Specifically Promote
Interstate Coordination:
TVo administration proposed bills for power plant siting were discussed by
Berlin, Gill, and Yarrington, Pcwer Plant Siting—An Overview of Legislation
and Litigation, 4 Environmental Reporter No. 8 (Monograph #15) June 22, 1973.
On March 21, 1978, Congressman Udall introduced a bill to amend the Atomic Energy
Act of 1954 to improve the nuclear siting and licensing process. It was to be
called the "Nuclear Siting and Licensing Act of 1978." Discussion of all three
acts and excerpts from the 1978 and 1973 acts follow.
(1). General sumnary and discussion;
Hie two administration sponsored bills were the Power Plant Siting Act of
1971 (S. 1684) and Electric Facilities Siting Act of 1973 (S. 935) (HR 4874)¦
TWo other bills were introduced in 1971 and four others in 1973.
The 1973 Bill's preamble asserted: "A BILL to assure protection of
environmental values while facilitating construction of needed electrical
pcwer supply facilities, and for other purposes."
The 1973 and 1971 bills have these main features in canton:
1. Long-term planning by utilities for plant siting with the
disclosure of potential alternative sites to those proposed;
2. Establishment of state certifying agencies as an alternative
to direct federal licensing;
3. Federal monitoring for environmental effects;
4. Full public disclosure.
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They differ as to (1) federal agency in charge, (2) public hearing requirements
and (3) so-called "grandfather clause" or effects-on-existing-activity aspects
of the legislation. These raise important issues that must be dealt with but
are essentially questions of detail not substance. The substance of the 1973
bill is as follows:
I. Long-Range Planning (about 10 years)
A. Under regulations prepared by FPC.
B. Content of Report (filed annually):
1. general location, size, and type of facility planned for
construction within 10 years;
2. identify all existing facilities to be removed frcm service;
3. the location of tentative future sites and potential
alternative sites;
4. information about identified sites, transmission
lines, and facilities and their environmental impact
and planned measures to minimize these impacts;
5. describe coordination effort with:
a. other utilities;
b. federal and state environmental agencies.
6. other information requested by state certifying agency
or FPC might request.
II. Certifying Agencies
Within two years, state must designate an agency with
authority to certify sites and facilities. It can be a state
agency (new or existing) or interstate regional agency.
The designated agency must be approved by the Sec. of Interior.
If no state agency were determined to be qualified within the
date of enactment, or if its order was revoked, the Secretary
would have exclusive authority to carry out the functions of
the state agency.
In addition a Federal Electric Facilities Siting Panel,
composed of Interior (Energy), A.G., E.P.A., FPC (FERC), AEC
(NRC), and other federal agency representatives whose function
would be to:
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(a) draw up a federal application form—"the sole
application for all necessary federal applications;"
(b) help the state certifying agencies draw up a
consolidated application form which would be the
only application necessary for all governmental
applications—federal, interstate regional, state,
and local;
(c) expedite and coordinate federal agency review of
applications for construction and state agency
environmental impact assessments;
(d) transmit to Secretary a "notice of issuance of
required authorization" or denial, by each panel
agency.
III. Certification of Sites
A. Required before construction can begin:
1. state agency certification (or federal where no state);
2. federal notice of authorization.
B. Time of application for approval of a specific facility
construction:
1. 3-5 years of planned date of construction;
2. included in annual long-range report at least two years
before application;
3. alternatives in annual report at least one year before
application.
C. State and federal agencies have 18 months to approve or
disapprove.
D. Utility can petition Sec. of Interior if agencies fail
to act timely or conclusively.
E. Substantive standard for issuance:
1. site or route will not unduly impair "important
environmental values" and
2. is reasonably necessary to meet electric power needs.
Obviously the reporting of alternatives indicates this balancing
process should be of the "alternatives analysis" not "straight cost-
benefit" variety. (See Note p. 14 and pages 68-72 belcw.)
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Congressman Udall's H.R. 11704, Nuclear Siting and Licensing
Act of 1978 was introduced in the Senate by Senator Hart as S. 2775.
It would establish a revised and streamlined process for the licensing,
siting, construction and operation of nuclear power plants. The
substance of the bill is as follows:
I. Certifying Agency
A. Nuclear Regulatory Commission authorized to grant siting,
construction, manufacturing, and operating permits.
B. Upon Commission Request review of any application undertaken
by Advisory Committee on Reactor Safety (see Advisory
Committee on Reactor Safeguards).
C. Any or all NRC responsibilities may be assumed by a
State or Interstate organization with a program for
evaluation of acceptability of proposed facilities
approved by NRC.
II. Certification of Sites
A. Required before construction may begin.
B. Site permit may be issued 10 years prior to filing of an
application for a construction permit or a combined
construction permit and operating license.
C. Preparation of site for construction is permitted prior
to application for a construction permit.
D. Issuance of Permits
1, Construction permits or combined construction permit
and operative license issued after State where facility
would be located certifies to NRC the specific need
therefore.
2. Interim operating license may be issued prior to
hearing up in a showing of an urgent public need or
emergency provided that a site-specific issue has
been previously heard.
III. Opportunity for Hearing and Review
A. Full opportunity for hearing on any issue except if there
has been an opportunity for a hearing in a prior NRC or
State proceeding.
1. Hearing only upon request of an interested party
a. proceeding to amend or renew a site permit;
b. proceeding to suspend, revoke, amend, or renew an
approved standardized design.
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2. Hearing irrespective of request—proceeding to obtain
a combined construction permit and operating license,
a site permit, or the approval of a standardized
facility design.
B. No Commission Review or Federal Court Review of Matters
Reviewed Under an Approved State program.
There have been several other recent unsuccessful efforts to
introduce comprehensive energy facility siting as land use planning
legislation as follows:
1) Energy Facilities Planning and Development Act of 1975
(originally Title 8 of President Ford's Omnibus Energy
Bill, "The Energy Independence Act of 1975.") (S. 619).
2) Land Resource Planning Act (1975)(S. 984).
3) Electric Utility Rate Reform and Regulatory Improvement
Act (1976)(Title V)(H.R. 12461).
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(2). Excerpts of pertinent parts of the 1973 and 1978 proposals;
The 1973 Proposal:
Section 1. J'
This Act may be cited as the "Electric Facilities Siting Act of 1973."
FINDINGS AND PURPOSES
Section 2.
The Congress, in furtherance of the national environmental policy as set
forth in the National Environmental Policy Act of 1969 (83 Stat. 852; 42 U.S.C.
4321) and the national electric energy policy as set forth in section 202(a)
of the Federal Power Act (49 Stat. 848; 16 U.S.C. 824(a)), hereby finds and
declares the national public interest in the environment, the interest of
interstate ccnmerae, the interest of public and private investors in electric
utility facilities, and the interest of consumers of electric energy require—
(a) that electric facilities adequate to the Nation's need for a
reliable electric power supply be constructed upon a timely
basis, and in a manner consonant with the preservation of
inportant environmental values and wise comprehensive use of
the Nation's air, land, water, and other resources for all
beneficial purposes public and private;
(b) that all of the Nation's electric utilities should be required to
engage in adequate open long-range planning, and certifying bodies
should be established for the expeditious preoonstructicsi review
of electric facilities and related sites in order to avoid undue
delays in the constructicn of needed electric facilities and to
provide for full and timely consideration of environmental
consequences in advance of such construction;
(c) that appropriate electric facilities and related sites should be
subject to expeditious coordinated approval at the Federal and
State levels.
LCNG-RANGE PLANNING
Section 4.
(a) Each electric utility and Federal electric utility shall prepare
annually its long-range plans for electric facilities during the
ensuing ten years, or for such other period as the Federal Power
Carmissian shall specify. These plans shall be public and shall
be completed pursuant to rules and regulations established by
the Federal Pcwer Ccitmissicn as a part of the work of the Ccsnnissicn
and of the national and regional electric reliability councils
under section 202(a) of the Federal Power Act. These plans shall
be part of a coordinated regional plan and shall:
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(1) describe the general location, size and type of all electric
facilities to be owned or operated by each reporting utility,
the construction of which is projected to commence during the
ensuing ten years or during such other period or upon completion
of construction of the projected electric facilities;
(2) identify the location of tentative or alternate sites for the
construction of future electric facilities over such period
as the Ccanmission may specify, including an inventory of electric
power generating sites and the general location of associated
electric transmission line routes and state the relationship
of the identified sites, routes, and facilities, to environmental
values, describing how potential adverse effects on such values
will be avoided or minimized through the reporting utility's
long-range planning process;
(3) reflect and describe such utility's efforts to coordinate the
electric facility plans identified therein with those of other
utilities so as to provide a coordinated regional plan for
meeting the electric needs of the region;
(4) describe the reporting utility's actions to involve environmental
protection, air, water, and land-use planning agencies, in its
long-range planning process so as to identify and minimize
environmental problems at the earliest possible stage in the
long-range planning and reporting process; and
(5) supply such additional information as the appropriate State
certifying agency, the Secretary, or the Federal Power CcnraLssicn
may, from time-to-tine, prescribe upon the advice of interested
State and Federal agencies to carry out the purposes of this Act.
(b) Each electric utility and Federal electric utility shall give initial
public notice of the plans referred to in subsection (a), by filing
through its regional electric reliability council, or individually
Pub- if not a msirber of a reliability council, annually a copy of such
lie plans, together with its projections of demand for electricity that
No- the facilities would meet with the appropriate State certifying
tice agency, the Secretary, the Federal Power Ccnraission, the Environmental
of Protection Agency, and such other affected Federal, State, regional,
Plans and local governmental authorities and citizens' environmental
protection and resource planning groups requesting such plans.
(Emphasis added.)
* * *
(d) Any State dissatisfied with the Secretary's action with respect
to an order of qualification may appeal to the United States Court
of Appeals for the circuit in which such State is located, with
Ju- service of summons and notice of appeal at any place within the
di- United States, and the court shall have jurisdiction to affirm the
cial Secretary's action, to set it aside in whole or in part, and for
Re- good cause shown, to remand the case to the agency for further
view deliberation: Provided, That the Secretary's findings of fact
supported by substantial evidence shall be conclusive: And provided
further, That any judgment of the court shall be subject to review
by the Supreme Court of the United States upon certiorari or
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certification as provided in section 1254 of title 28, United States
Code. Upon the filing of an appeal, the Cleric of the Court of
Appeals shall forthwith transmit a copy of the notice to the
Secretary who shall file with the court the record upon which the
appealed action was entered, as provided in section 2112 of title 28,
United States Code. Upon the filing of the record, the jurisdiction
of the court shall be exclusive.
Section 5.
Designation of State Certifying Agencies (emitted)
CERTIFICATION OF SITES AND FACILITIES
Section 6.
(a) Effective three years fran the date of the enactment hereof:
(i) no electric utility shall ccrmience to construct or begin
operation of an electric facility within a State unless it
has received a certificate issued by the certifying agency
and a Federal notice with respect to such facility; and
(ii) no Federal electric utility shall caimence to construct or
begin operation of an electric facility unless it has
received fran the Secretary a certificate and a Federal
notice with respect to such facility.
Such facilities shall be constructed in accordance with the terms and
conditions of the certificate and Federal notice. No certificate or
Federal notice is required for electric facilities already In
operation on said effective date or for electric facilities already
under construction for which a sizable investment has been made as
determined by the certifying agency. No certificate or Federal
notice shall be required to begin operation of an electric facility,
if a certificate and Federal notice had been received with respect
to construction of such facility. (Emphasis added.)
(b) All applications by an electric utility and a Federal electric utility
for a certificate and a Federal notice shall be filed with the
appropriate certifying agency not more than five nor less than
three years prior to the planned date of ocatmenoement of construction
of the affected electric facility and such plans may be subject to
reasonable modification during the period of review. Exaept for good
Time cause shown, any site for which certification is sought and the
for approximate date on which the application for a certificate will be
Fil- filed, shall have been specified in the electric utility's long-range
ing plans and in the certifying agency's annual carpilatian not less than
two years prior to the date of application. Any alternative to a site
so identified, whether proposed by the certifying agency or by any
other person, shall be so proposed not later than one year before the
utility's specified date of application. Where the proposed site is
so identified in advance, only the alternative sites so specified
by the electric utility or the Federal electric utility, by the
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certifying agency or by other persons shall be considered by the
certifying agency, together with the full range of alternatives
for the electric facilities which the certifying agency nay
consider under section 7.
(c) As expeditiously as possible but in no event later than eighteen
Time months after receipt of the complete application, the certifying
for agency shall issue or deny the certificate and the Secretary shall
Ac- transmit the Federal notice or inform the applicant that it will
tion not be transmitted because of a denial of one or more required
on Federal authorizations. All Federal, State, interstate, or local
Pro- departments or agencies having authority relative to issuance of
posed the required certificate, or the Federal notice or other Federal,
Site State, interstate, or local authorizations shall act within such
eighteen months period.
(d) The provisions of section 5 and subsection (a) (1) of this section
notwithstanding, any electric utility may petition the Secretary
for a certificate based upon the utility's showing of a failure
of a State certifying agency to act upon a timely or conclusive
basis with respect to any application, and that as a result the
public interest in an adequate and reliable regional bulk power
supply imperatively and unavoidably requires a decision with
respect to such certification. The Federal Power Camussion shall
prescribe by regulation the facts necessary to constitute the basis
of such showing. Such applications shall be referred to the
Federal Power CormLssion, and if it makes a finding that failure to
act in a timely or conclusive manner will harm the public interest
in an adequate and reliable bulk power supply, the Secretary shall,
effective upon the date of such finding, have exclusive jurisdiction
to act on the application for a certificate. The Secretary shall
accord priority to all petitions for certificates filed under this
subsection and shall resolve than in accordance with the provisions
of section 7.
(e) Each certifying agency shall develop with the Panel a consolidated
application form, which shall include the application form in
subsection (f) and shall be the sole application necessary for all
governmental authorizations, Federal, State, interstate, or local.
The application shall include the applicant's environmental inpact
report to aid the certifying agency in complying with subsection (g)
of this section. Hie applicant shall file the application with the
certifying agency and with the Federal Electric Facilities Siting
Panel established pursuant to subsection (f) of this section.
(f) There is hereby established in the Department of the Interior a
Federal Electric Facilities Siting Panel. The Panel shall include
Sit- the Secretary of the Interior, who shall act as chairman, the
ing Attorney General, the Administrator of the Environmental Protection
Panel Agency, the Chairman of the Federal Power Canmission, or their
Cre- designees, and representatives of other Federal agencies the approval
ated of which is required in order to construct or operate the electric
facility for which a certificate is sought. The Panel shall include
the Chairman of the Atomic Energy Ccmmission or his designee with
respect to applications for nuclear facilities. The Panel is directed:
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(i) to develop a unified Federal application form which shall be
the sole application for all necessary Federal authorizations;
(ii) to develop with each certifying agency for use in its
jurisdiction a consolidated application ccmposed of the unified
Federal application form and the certifying agency's application
form;
(iii) to expedite and coordinate Federal reviews of applications under
subsection (a) of this section;
(iv) to provide highest priority to electric facility applications
being considered pursuant to subsection (d) of this section;
(v) to expedite and coordinate Federal participation in the
preparation and review of the enviranirental impact statement
required under subsection (g) of this section; and
(vi) to assarible and transmit to the Secretary, as chairman of the
Panel, a notice of issuance of required authorization or denial
thereof by each Federal entity represented on the Panel.
(g) Hie certifying agency shall prepare a detailed statement meeting the
requirements of section 102 of the National Environmental Policy Act
of 1969 and guidelines of the Council on Environmental Quality.
(h) For a period of forty-eight months fran the date of enactment of this
Act, the certifying agency may waive the requirements of subsections
(a), (b), (c), or (g) of this section upon a showing of good cause by
the electric utility or Federal electric utility or on its own notion
when an application pursuant to this Act is filed: Provided, however,
That if the requirements of subsection (g) are waived the requirements
of section 102 (2) (Q of the National Environmental Policy Act shall
apply to all Federal agencies. In the event of a natural disaster
at any time the requirements of subsection (b) may be waived by the
certifying agency with respect to transmission lines.
(i) Upon a showing by an electric utility or a Federal electric utility
of changed circumstances requiring sianificant modifications in
Re- the design characteristics of a facility for which a certificate
open- has been issued, the certification proceedings may be reopened
ing to consider changes necessary in the certificate to accommodate the
Certi- proposed modifications. The appropriate certifying agency shall
fying limit the scope of issues before it to those directly related to
Pro- the proposed modifications. In the event that the certifying agency
cess modifies any of the provisions of the certificate, the remaining
provisions shall continue in force.
(j) Notwithstanding the requirements of this section with regard to the
time periods for submission of application for certification under
this Act in advance of planned ccrmenceirent of construction,
construction may begin on any electric facility certified under
this Act sixty days after issuanoe of the appropriate certificate,
subject to such legal requirements as may be otherwise determined
through the exercise of judicial review pursuant to section 13.
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Section 7.
(a) The certifying agency is authorized to issue a certificate of
site and facility if such body finds, after having considered the
environmental and economic costs and benefits of the facility if
constructed on the site proposed by the utility or any alternative
sites proposed thereto within the limitations of section 6 (b) ;
the impact of the use of the site or such alternative sites an any
applicable land-use program; the availability of fuels; the need
for electric power, including adequacy and reliability of electric
power supplies; and other relevant factors, that the use of the site
or route will not unduly impair important environmental values and
will be reasonably necessary to meet electric power needs. If the
certifying agency determines not to issue a certificate for the
Stand- electric utility's or Federal electric utility's proposed site it
ards may issue such a certificate for the construction of a facility on
for one of the alternative sites considered. If the certifying agency
Certi- chooses to issue a certificate for a site other than that proposed
fying by the electric utility or Federal electric utility, it must first
A Site find that the utility's site is unacceptable under the provisions
of this subsection. The judgment of such certifying agency shall
be conclusive on all questions of siting, land use, public
convenience and necessity, aesthetics, and any other State or local
requirements. Compliance with air and water quality requirements
shall be determined by the duly authorized State, interstate, or
Federal air or water pollution control agencies. In the issuance
of such certificates the certifying agency may iirpose such
reasonable terms and conditions as it deems necessary. The certificate
shall show the applicant's action to meet the objectives of
section 202(a) of the Federal Power Act regarding reliability and
adequacy of service. Such certificates, when issued, shall be final
and subject only to judicial review pursuant to section 13.
(b) The certifying agency shall assure full public review and adequate
consideration of all environmental values, including the impact on
adjacent States, available alternatives, and other relevant factors
bearing an whether the objectives of this Act would be best served
by the issuance of the certificate, consideration of which has not
been reserved to other agencies by Federal statute or subsection (a).
(c) The certifying agency shall, within sixty days after it has published
notioe of receipt for an application under this section, nake a
finding as to whether there is significant public controversy
concerning the electric facility. If the certifying agency finds
there is significant public controversy concerning the electnc
facility, it shall conduct a public hearing as part of its
certification process. (Bnphasis added.) If the certifying agency
finds there is no significant public controversy, it shall continue
its certification process pursuant to subsection (a) but shall not
conduct a public hearing.
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EMINENT DOMAIN
Section 9 .
An electric utility holding a certificate which cannot acquire by contract,
or is unable to agree with the owner (other than the United States Government),
of property as to compensation to be paid for the necessary rights-of-way or
other property needed for certified electric facilities, may acquire the same
by the exercise of the right of eminent domain in the district court of the
United States for the district in which such property may be located, or in the
State courts. In any proceeding brought in the district court of the United States,
the petitioner may file with the petition or at any time before judgment, a
declaration of taking in the manner and with the consequences provided by
sections 1, 2, and 4 of the Act of February 26, 1931 (46 Stat. 1421-1422; 40 U.S.C.
§§ 258a, 258b and 258d), and the petitioner shall be subject to all of the
provisions of said section which are applicable to the United States when it files
a declaration of taking hereunder.
CONGRESSIONAL CONSENT TO INTERSTATE AGREEMENTS
Section 10.
The consent of the Congress is hereby given to two or more states to negotiate
and enter into agreements or compacts not in conflict with any law or treaty of
the United States for cooperative effort and mutual assistance in certificating
electric facilities and related sites, for the enforcement of their' respective
laws thereon, and for the establishment of such authorities or agencies, joint or
otherwise, as they may dean desirable for implementing such agreements or ocnpacts.
The right to alter, amend, or repeal this section is expressly reserved.
JUDICIAL REVIEW
Section 13.
Any person who is aggrieved or adversely affected by any final order of the
Secretary or any State certifying agency or any other Federal, State, interstate,
or local department or agency disposing of an application for a certificate,
Federal notice or other required authorization relative to electric facilities
for which a certificate is sought, by issuance or denial thereof, may appeal within
sixty days thereafter to the United States Court of Appeals for the circuit in
which there is located the principal place of business of the applicant electric
utility or Federal electric utility, with service of summons and notice of appeal
at any place within the United States, and the court shall have exclusive
jurisdiction to affirm the action of the Secretary or State certifying agency
or other Federal, State, interstate, or local department or agency or to set it
aside in whole or in part and for good cause shown, to remand the case for further
deliberation: Provided, Ihat scope of such review shall be limited to setting
aside action which the court finds was arbitrary, capricious, or an abuse of
discretion: And provided further, That any judgment of the court shall be subject
to review by the Supreme Court of the United States upon certiorari or certification
as provided in section 1254 of title 28, United States Code. Upon the filing of the
record, the jurisdiction of the court shall be exclusive. (Qnphasis added.)
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OTHER AFFECTED LAWS
Section 14.
(a) The provisions of this Act shall in no way alter or otherwise
affect the jurisdiction of the council on Environmental Quality
or the requirenents of the National Environmental Policy Act
of 1969 except that a single detailed statement shall be prepared
in connection with each certificate by the certifying agency and
circulated in oanpliance with the Guidelines of the Council on
Environmental Quality. Such statement shall fulfill the
responsibilities of all participating Federal agencies under
section 102(2) (C) of that Act with respect to the proposed
facilities.
(b) Except as provided in this Act any present requirements arising
from any Federal law, which may be applicable to any natural
person, artificial person, or interest of government, Federal
or State shall continue to apply.
the 1978 Proposal to amend the Atonic Energy Act;
Pertinent excerpts of the proposed legislation are as follows:
"H.R. 11704, A Bill to amend the Atonic Energy Act of 1954, as amended,
to inprove the nuclear siting and licensing process, and for other purposes.
Section 202.
The Atomic Energy Act of 1954, as amended, is amended by adding a new
section 195 to read as follows:
Section 195.
State Environmental Reviews—
"a.
" (1) Upon the filing of an application for a site permit,
construction permit, or caibined construction permit
and operating license for a thermal neutron pcv/er
generation facility, whichever is filed first, the
Cormission shall within ten days notify the State
within which the facility is proposed to be located.
A State nay elect to determine the environmental
acceptability of and/or need for proposed thermal
neutron power generation facilities or proposed
sites for such facilities with specified general
site-related design characteristics. Within sixty
days after receipt of such notice, the State shall
notify the Corcnission whether it has made or will
make any or all of the evaluations and determinations
provided for by this section, and whether it has a
program, approved by the Ccnmission under subsection e.,
for making such evaluations and determinations.
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"(2) If the Commission receives notice that the State will
make all the determinations provided for by this section
and has an approved program:
" (A) it shall not issue the site permit, or combined
construction permit and operating license for the
facility, whichever is requested first, unless it
is notified by the State that the State has determined
that in the case of a construction permit or
combined construction permit and operating license,
construction and operation of the thermal neutron
power generation facilities will be environmentally
acceptable or, in the case of a site permit, that the
State has determined that construction and operation
of the thermal neutron power generation facilities
with specified general site-related design
characteristics will be environmentally acceptable;
and
"(B) it shall not issue a construction permit or combined
construction permit and operating license for the
facility unless it is notified by the State that the
State has determined that there is a need for the
facility.
" (3) If the Ccarmissian receives notice that the State will make
seme of the evaluations and determinations provided for by
this section and has an approved program:
"(A) it shall not, in the case of a site permit, construction
permit, or combined construction permit and operating
license for the facility, whichever is requested first,
determine that in the case of a construction permit
or combined construction permit and operating license
construction and operation of the thermal neutron
power generation facilities will be environmentally
acceptable or, in the case of a site permit, determine
that construction and operation of the thermal
neutron power generation facilities with specified
general site-related design characteristics will
be environmentally acceptable, until it has received
from the State such evaluations and determinations as
the State has elected to make; and
"(B) it shall not, in the case of a construction permit or
combined construction permit and operating license,
determine that there is a need for the facility,
until it has received from the State such evaluations
and determinations regarding the need for the facility
as the State has elected to make.
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"(4) Evaluations and determinations shall be made by a State
under this section in accordance with the National
Environmental Policy Act of 1969, as amended.
"(5) Evaluations and determinations made by a State under
this section and under its approved program shall not
be subject to further review by the Commission and
shall not be subject to challenge either before the
Commission or in a Federal court review of Commission
action under the National Environmental Policy Act of 1969,
as amended.
"(1) Notice from a State to the Commission that it has made
or will make all the determinations provided for by this
section and has a program, approved by the Ccmriissian,
for making such determinations, will discharge the
Commission from its responsibilities under the National
Environmental Policy Act of 1969, as amended, with regard
to such determinations.
" (2) Notice from a State to the Commission that it has made or
will make some of the evaluations and/or determinations
provided for by this section and has a program, approved
by the Commission, for making such evaluations and
determinations, will discharge the Commission from any
of its responsibilities under the National Environmental
Policy Act of 1969, as amended, to prepare an assessment
of those discrete aspects of environmental acceptability
and/or need for power covered by such evaluations and/or
determinations. The Coxmission shall use the evaluations
and determinations prepared by a State under this section
in discharging its remaining responsibilities under the
National Environmental Policy Act of 1969, as amended.
"(3) If no notice is received within sixty days by the Ccratiission,
as provided in subsection a., then the Ccmnissicn shall have
the exclusive authority, except as provided by section 185
a. and b., as against the State, to determine whether the
thermal neutron power generation facilities will be in
compliance with the National Environmental Policy Act of
1969, as amended.
If a State has made seme or all of the evaluations and/or
determinations provided for by this section with respect to
proposed thermal neutron power generation facilities or
proposed sites for such facilities, then the provisions of
this section shall apply with respect to such evaluations
and determinations to each successive application with respect
to the same facilities or site. The ongoing responsibilities
of any State with a program approved under subsection e. of
this section for such evaluations and/or determinations under
the National Environmental Policy Act of 1969, as amended,
shall be the same as those of the Commission with respect to
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any application for a facility proposed to be located in a
State that does not have a program approved under subsection e.
of this section.
Nothing in this section shall affect in any way the Ccmmissian's
authority to protect the public health and safety and the
ocarmon defense and security pursuant to the Atonic Energy Act
of 1954, as amended, or the Energy Reorganization Act of 1974,
as amended, or be construed as vesting the States with any
such authority not contained in existing law. If notice is
received by the Camdssion that a State will make all the
determinations provided for by this section and has an approved
program, the Catmission shall, pursuant to the provisions of
the National Environmental Policy Act of 1969, as amended,
assess the environmental aspects of radiological safety impacts
of the operation of the facility and prepare and forward to
the State a statement of its analysis and conclusions of the
nature and extent of such impacts. The State shall include
the radiological safety impacts as set forth by the Catmission
in its statement of conclusions in the State's determination
regarding environmental acceptability provided for by this
section. The Catmission's statsnent of conclusions of the
nature and extent of radiological impacts shall not be subject
to review in any State administrative or judicial proceeding.
The Governor of any State electing to make any or all of the
evaluations and determinations provided for in subsection a.
of this section shall submit a program for making such
evaluations and determinations to the Catmission for review
and approval. The Catmission is authorized to approve a
State program in whole or in part and to specify for which
evaluations and determinations a State program is approved.
The Catmission is authorized, in consultation with other
Federal agencies and the States, to establish guidelines
for use in reviewing the State programs. Any State program
approved under this section shall include:
"(1) provisions to assure compliance by the State official or
officials who administer the program with the National
Environmental Policy Act of 1969, as amended, including
consent by a State official to assume the status of a
responsible federal official within the meaning of such
Act and authority for and consent by the State official
to accept the jurisdiction of the Federal courts for the
purpose of enforcement and review of responsibilities
under such Act;
"(2) provisions to assure that the State will give reasonable
consideration to economically feasible alternative sources
of power, including but not necessarily limited to
conservation, solar energy, coal-fired generating plants,
and other technologies and that, with respect to an
application for a site permit, the State will find a
generic need for power as provided in section 193 f.;
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(3) provisions to assure that the State will have adequate
resources and expertise to consider environmental impacts
of and/or the need for proposed facilities. State
determinations regarding environmental acceptability shall
include all relevant environmental considerations,
including decisions on certifications and discharge permits
under sections 401 and 402 of the Federal Water Pollution
Control Act, as amended, decisions on certification
concurrences under section 307 of the Coastal Zone
Management Act of 1972, as amended, and any other State
decisions required by Federal or State law to prevent or
mitigate environmental impacts frcm siting, construction,
or operation of the thermal neutron power generation
facilities;
(4) provisions to assure open and early public participation,
including provisions for hearings on final determinations
under this section, under procedures ccnparable to those
that would be employed for such determinations by the
Commission;
(5) provisions to assure that coordinated and timely decisions
are reached to carry out the purposes of the Act with
respect to the issuance by the Commission of site permits,
construction permits or combined construction permits and
operating licenses, including the establishment of a
schedule for completing the evaluations and/or determinations
provided for by this section;
(6) provisions to assure that where more than one State agency
is involved, an agency is designated to coordinate, direct
and ocnfoine the review of all of the involved agencies
and to cooperate with Federal authorities to insure
adherence to the schedule established under paragraph (5);
(7) provisions to assure coordination with related Federal
reviews and for mutual assistance between Federal and
State agencies to avoid duplication;
(8) provisions to assure that, if the State elects to assume
less than full responsibility for determining the
environmental acceptability of and need for the thermal
neutron power generation facility, the State, in
consultation with the Commission, shall coordinate its
evaluations and determinations with those of the Caotmission
in order that the Commission may in a timely fashion make
the determinations required by the National Environmental
Policy Act of 1969, as amended; and
(9) provisions to assure consideration of regional factors in
determining environmental acceptability and need for power
and that there is opportunity for participation of
adjacent States, when affected.
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States are encouraged to establish and participate in interstate
or regional organizations which, among other things, may discharge
the State's responsibilities for determining need for power and/or
determining whether the thermal neutron power generation
facilities will be environmentally acceptable or evaluating
such discrete, limited aspects thereof as the Ccrmission may
permit. Upon notice by a State to the Comtissian that such a
regional or interstate organization is designated to act for it,
the provisions of this section shall be applicable to that
organization.
"(1) The Ccrmission is authorized to review any program approved
under this section and the performance of each State.
" (2) The Ccrmission shall have the authority to suspend or
terminate any financial assistance extended under this
section and to suspend or terminate its approval of a
State program if:
" (A) it determines that the State is failing to adhere
to the program approved by the Ccrmission; and
"(B) the State has been given notice of the proposed
termination and withdrawal and given an opportunity
to demonstrate compliance with its program.
"(3) If a State program is terminated or suspended, the
appropriate Federal agency may take into account such
record as may have been established in any proceeding
pending at the time of termination or suspension, so as
to avoid undue delay and duplication of State actions.
States with programs approved under this section and States
providing information and assistance as provided by subsection i.
of this section may request and receive the assistance of
Federal agencies, including national laboratories. The Federal
agencies are authorized to provide such assistance, which may
include manpower training, the loan of personnel, and such
studies and data as may be required by the State to discharge
its responsibilities under the approved program or under
subsection i. of this section.
Any State that does not have a program approved by the Ccrmission
under subsection e. may provide to the Carmissian such information
and assistance with respect to the evaluations or determinations
provided for by this section as the State may deem appropriate.
Such information and assistance nay include any decisions
regarding the need for and any data, analyses, conclusions,
findings and/or decisions regarding any or all environmental
inpacts (except radiological safety impacts of the operation
of the facility) of the proposed thermal neutron power generation
facilities. The Ccrmission may rely on such data, analyses,
and conclusions in discharging its responsibilities under the
46
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National Environmental Policy Act of 1969, as amended.
Paragraph (5) of subsection a. shall not apply to such
information and assistance.
"j. The Caimissian is authorized to make annual grants to any
State or authorized interstate or regional agency for the
purpose of assisting in the development or administration
of a program specified in this section or the providing of
information and assistance as provided by subsection i. of
this section. Such grants shall be allocated among States
and authorized interstate or regional organizations based
on rules and regulations proiulgated by the Catmission.
A State or authorized interstate or regional organization
may, subject to the criteria contained in section 197 and
the rules and regulations of the Catmission issued pursuant
thereto, use that portion of the money received under this
subsection as may be permitted by the Catmission to fund
intervenors in proceedings held in furtherance of such
State or interstate or regional organization's responsibilities
under this section or under section 185 a. or b. . There
are authorized to be appropriated for this purpose such sums
as may be necessary for the fiscal year ending September 30,
1979.
"k. Except as expressly provided by this section, the responsibility
of the Commission or any other Federal agency to oatply fully
with the requirements of the National Environmental Policy Act
of 1969, as amended, shall not be changed.".
FEDERAL AND STATE COORDINATION .
Section 203.
•Hie Atonic Energy Act of 1954, as amended, is amended by adding a new section
196 to read as follows:
Section 196.
Federal and State Coordination—
"a. With respect to any application for a site permit, for
approval of a standardized facility design, for a construction
permit and/or operating license, or for a manufacturing
license, the Catmission shall establish a schedule for the
conduct and completion of all required Catmission reviews
and decisions. The Catmission is authorized to cooperate
with other Federal, State or reqional aqencies with review
and/or decisictutaking authority regarding the siting,
licensing, construction, or operation of nuclear power
reactor facilities in order to eliminate duplication of
effort, establish a common data base for similar reviews
and decisions, and assure timely decisions. The Canmission
shall establish, after consultation with the interested
Federal and State or regional agencies, target dates consistent
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i e g ? a r i > ] n » a \ +
To see title for 5 COLLECTIVE ENTRY, type iinei> DEPRESS DISPLAY R E C D ?
b li NIU
21 OCT 799 c
1 LEGAL AND INSTITUTIONAL ANALYSIS OF LOUISIANAS WAT ER LAWS WITH
RELATIONSHIP TO THE WATER LAWS OF OTHER STATES AND THE FEDERAL
liUVEftNMENI HT5
2 LEGAL AND INSTITUTIONAL APPROACHES (3)
3 LEGAL AND INSTITUTIONAL ARRANGEMENTS IN MINERALS DEVELOPMENT (3)
4 Legal 3rid institutional aspects m the development of the fishing
l f 1 duit r y T k t? p u D11 c of the i-'hi Lippinos 7 p 1 s^hedda p Juan C* Sou th
Chi^a Sea Fisheries Development and CoordiriotjnS Programmer 1975 DLC
Q LbbAL AND i Nb I 1 I U I 1 UNAL ASh't-U i ^ Uf- m
6 LEGAL AND INSTITUTIONAL ASPECTS OF THE (4)
7 l es a i aricS instutiona L analysis oT a \ r c r 31 i and airport noTse a ri d
apport 1 onnierit of authority between federal? state? and local
iioveynment s ~ 'J 111 ted-States* tnvironm0n 1 ai i-'rotcci ion Asency* T3l>V
1973
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1 Lc^ai and institutional aspects oT fisheries develop men! I
Republic of the Philippines / Christy* Lawrence C. South China S o a
TTsTTeTTes Development and Coordinating Programme* IV// DLL
2 Le-^al and institutional asrecti. of fisheries development *<
Republic or Vietnam / ria rr > John u» South China Sea fisheries
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with the Ccmuission schedule for completion of agency reviews
and decisions. All Coimission cooperative efforts, including
establishment of schedules and target dates, shall be
accomplished in a manner consistent with the statutory
obligations of all Federal and State or regional agencies,
and the Ccnmissian shall have no authority to require any
agency to reach a particular decision on the merits of any
matter pending before it. Neither the establishment of a
schedule or target date by the Commission nor the failure
of any affected Federal, State or regional agency to meet
a target date shall be subject to judicial review, whether
in a proceeding to review or set aside an individual affected
Federal, State or regional agency decision, or otherwise.
"b. The Carmissian or a State that is making all the determinations
provided for by section 195 shall be the lead agency for
purposes of the preparation of any environmental impact
statement required by section 102(2) (C) of the National
Environmental Policy Act of 1969, as amended, for any action
taken under this Act.".
TITLE III—INTERVENORS
FUNDING FOR INTERVENORS
Section 301.
The Atonic Energy Act of 1954, as amended, is amended by adding a new
section 197 to read as follows:
Section 197.
Funding for Interveners—
"a.
"(1) The Catmission is hereby authorized to establish a
pilot program for funding intervenors in initial or
renewal licensing proceedings, including site permit,
construction permit and/or operating license and
amendment proceedings, but not including any proceeding
for an export license, conducted by the Ccmmission
pursuant to the Atonic Energy Act of 1954, as amended,
or the Energy Reorganization Act of 1974, as amended.
The Catmission may, in its sole discretion, also extend
the pilot program to selected rule-making proceedings
conducted by it.
"(2) This section does not authorize the payment of funds
for merely attending, as opposed to participating as
a party in, Ccnmissian proceedings, nor for proceedings
where the cost of participation is minimal.
"(3) This section does not create any new right to participate
48
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in any Canmission proceeding which is not authorized by
other provisions of law.
"b. The Canmission shall, upon request and subject to available
appropriations, the eligibility criteria set forth below,
and any allocation determination under this subsection, pay
for all or part of the cost of intervention of a party,
including attorneys' fees, in Canmission proceedings of the
type described in subsection a. The amount paid, if any,
need not cover all the costs of intervention and shall be
determined based upon the intervener's contribution to the
proceeding, the provisions of this subsection and subsections
f. and g., and procedures and criteria established by the
Coirmissian by rule or regulation for determining the eligibility
of interveners for funding and the amount of funds to be
provided. These criteria shall include requirements to
establish the following:
"(1) the intervener's interest in the matter;
"(2) that the intervener does not have reasonable access to
alternative sources of funds;
"(3) that the intervention would not occur or its effectiveness
would be significantly limited in the absence of funding;
"(4) that the intervener's participation is likely to lead
to presentation of substantive arguments and/or views
that would not otherwise have been presented; and
"(5) that presentation of such viara can reasonably be
expected to contribute substantially to a fair determination
in the proceeding.
The Ccarmission shall by rule, regulation or order, allocate
available funds for costs of intervention to types or classes
of proceedings.
"c. Payments shall be made following the proceeding unless the
intervener establishes to the satisfaction of the Commission
that advance payments are required in order that its
participation not be substantially impaired.
"d. A person who receives payments after a final decision or order
pursuant to this section or advance payments pursuant to this
section shall be liable for repayment of part or all of such
payments actually received, or for forfeiture of part or all
of such payments for which such person is otherwise determined
to be eligible, whenever the Ccmnissian determines that:
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"(1) the person clearly has not provided the representation
for which the payments were made or authorized; or
"(2) the person has acted toward any other participant or
the Catmission in such a way as to unjustifiably delay,
mislead, or otherwise frustrate the objectives of the
proceeding.
"e. The amount of costs of intervention awarded under this section
for a particular proceeding shall be based upon the appropriations
available and the prevailing market rates for the kind and
quality of the services furnished, except that not expert,
consultant or attorney shall be ocnpensated at a rate in excess
of the highest rate of compensation for experts, attorneys and
consultants paid by the Commission.
"f. Whenever applications for payment under this section are
submitted by more than one intervenor, the Catmission may
require consolidation of duplicative presentations, select
one or more effective representatives to participate, offer
compensation only for certain categories of expenses, or
jointly compensate parties representing identical or closely
related viewpoints.
"g. Any decision of the Commission made pursuant to this section
shall be subject to review in court to the same extent as any
other Catmission decision, notwithstanding the fact that such
decision may be interlocutory in nature, except that the courts
of the United States shall have no jurisdiction to stay,
restrain or otherwise enjoin the proceedings of the Carmission
based on an alleged violation of this section, nor shall the
courts of the United States have jurisdiction to reverse, remand
or otherwise require reconsideration of any other Catmission
decision solely on the basis of a Commission decision under
this section, except where there has been a clear abuse of
Catmission discretion.
"h. The Catmission shall, within ninety days after the date of
enactment of this section, propose regulations to carry out
the provisions of this section. Such regulations shall be
adopted by the Commission and take effect no later than one
hundred eighty days after the date of enactment of this
section.
"i. Authority to fund intervenors under this section shall expire
on Deoerrber 31, 1983, except that the Coarmission ray continue
to fund intervenors in proceedings which were underway on
that date and where applications for funding in such proceedings
were already filed with the Catmission before that date.
On or before December 31, 1982, the Catmission shall prepare
and transmit to the Congress a report on the impact and
effectiveness of this section.
"j. There are hereby authorized to be appropriated such sums as
may be necessary to carry out the purposes of this section.".
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D- Iggal Doctrines of Federalism Pertinent to the Solution of the
Interstate Ctaordination Problem: -
(1). The supremacy clause and federal preemption:
So called "federal preemption" doctrine begins with the Supremacy Clause of
the constitution and ends with judicial efforts to fathom the intent of
Congress. The second clause of Article VI reads:
This Constitution, and the Laws of the United States
which shall be rade in Pursuance thereof; and an
Treaties made, or which shall be made, under Authority
of the United States, shall be the supreme Law of the
Land; and the Judges in every State shall be bound thereby,
any Thing in the Constitution or Laws of any State to the
Contrary notwithstanding.
Fran this clause it is clear that when a federal law* and a state law are
mutually exclusive—the obedience of one is the violation of the other—the
federal law prevails and the state law must be disregarded. Gibbons v. Ogden,
22 U.S. (9 Wheat.) 1 (1824) is an early example of this. Congressional
intent is unimportant in such a case although Congress conceivably could
expressly say, "Ihis law shall not supersede any contrary state law," which
would not mean that Congress had pro tanto overridden the Supremacy Clause
but rather would mean it had written an exception into the federal law.
But real preemption doctrine does not cane into play unless the conflict
between federal and state law is less than that of mutual exclusiveness.
In general there are two kinds of such lesser conflicts: (1) the fill-in-
the-gaps type, (called "occupying the field") in which there is a gap or
silence in the federal regulation filled in by state law (e.g., federal law
regulates width and weight but not height of trucks) or (2) the higher
standard type, in which the state law sets a higher standard than federal law
(e.g., for smokestack emissions). In either case it is possible to obey both
federal and state law but, nonetheless the state law may "conflict" with the
federal law because (1) Congress may have intended the gap to be an unregulate
area, an area of free private choice (e.g., truck height shall be determined
by the trucker), which is to say that Congress intended to occupy the field
and oust the state of legislative jurisdiction—the law regulating a particula
subject will either be federal law or no law;' or (2) Congress nay have
intended the standard set not as a minimum standard but as the only standard
(e.g., air cleanup to 5 parts per million of seme particulate emission is all
that must be met) thus a higher state standard (say 3 parts per million)
"Federal law" must be made pursuant to the constitution, of course, which
means it must have been made pursuant to some power specifically enumerated
(mostly in Art. I, § 8) in the constitution or that is "necessary and proper
[i.e., appropriate] for carrying into Execution" the enumerated powers.
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"conflicts" with the federal policy implicit in its standard.
On the other hand Congress may have intended that the "gaps" should be
filled at the discretion of the states, which is to say that Congress did
not intend to occupy the field of this legislative subject; or it nay have
intended the Congressional standard to be merely a national minimum to be
exceeded by the states if they choose to give even greater protection to
the health, safety or comfort of its own citizens, which is to say that the
state higher standard "supplements" or "ccmnpliments" the federal standard
and does not "conflict" with it.
It would seem that Congress could obviate the uncertainty by express
language addressing the issue of preemption saying, for instance, that
this law is not intended to supersede state laws on the same subject or
that subjects not covered such as the height of trucks can be regulated by
state law or that the emission standards set are minimums only. In practice
however Congress often does not eliminate the uncertainty with language
precise enough to do the job. Two reasons for this seeming imprecision cane
to mind. The exact lines as to how much state law should be displaced by
an act or hew much state law supplementation to permit is inherently
difficult. Moreover the impact on state legislation of most proposed
federal acts is but a secondary issue to the substantive merits of the
proposal. Since successful promotion of legislative proposal requires
the avoidance of issues on secondary matters (one can only lose votes
on such issues) and since precise drafting of lines would, as stated, be
difficult at best and raise serious issues, it follows that an act's
promoters will often gloss over the preemption issue with either a very
general statement of attitude toward state law in the area or no statement
at all.
For exairple, the Security Exchange Caunission Act of 1934 (15 U.S.C.
§ 78bb (a)) says, "Nothing in this chapter shall effect the jurisdiction
of the securities commission ... of any State over any security or any
person insofar as it does not conflict with the provisions of this chapter
• ...11 (Emphasis added.) Legislative history made clear that this
provision in the original act was intended to save state security regulating
laws (Blue Sky Laws). But when the act was amended in the 1960 's to
regulate tender offers (the Williams Act) the quoted clause was little
help in determining whether or not state tender-offer legislation would
be superseded. See Langevoort, State Tender-Offer Legislation: Interests,
Effects, and Political Canpetency, 62 Corn. L. Rev. 213, 246-54 (1977).
The word "conflict" can mean either mutual exclusiveness or merely that
the policies of the federal and state laws are incompatible. Perhaps the
federally imposed requirements for making a tender-offer reflect a careful
balance between allowing corporate takeovers by tender-offers (stock
liquidity and price is helped and sane times faltering companies are bolstered
by new management) and adequate education of stockholders so that they might
make an informed judgment as to whether or not to accept the offer tendered
for their stock. If a state setting of higher standards for disclosure so
burdens or delays tender-offers that it effectively eliminates such offers,
then the federal balancing of interest (i.e., the federal policy) will be
defeated, and it can safely be said that the state law "conflicts" with
federal law. Unfortunately the underlying policy of the Williams Act
(like most legislation) does not leap frcm the act. Whether or not Congress
intended the disclosure procedures as a careful balancing of interests or
52
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as an educational minimum (to be supplemented by further state requirements)
must be fathomed through legislative history, the overall language of the
act and the place of the act in our constitutional scheme.
This brings us to preemption doctrine as a particular specie of
legislative interpretation. Where a court is guided by express language,
say, that the federal standard is a minimum only (federal Enviranrrental
legislation is replete with such provision and others relating to federal-
state conflict) then it's a simple (?) matter of interpreting those
expressions. But where a court is guided only by general expressions such
as "does not conflict," or by no expression at all, the Court has used
factors based on notions of the federalistic scheme established by the
constitution to inform its judgment of legislative intent. The analysis
the Court makes when the issue is of the first type—Did Congress intend
to occupy the entire field of the legislative subject and thus preclude
any state regulation in the "field?"—is (a) the pervasiveness of the
federal legislation, (b) the federalistic nature of the general subject
of regulation, (c) the potential for conflict with federal law. Let us
look at each of these items briefly.
Pervasiveness Factor
Of the inference as to intent that can be drawn frcm the relative
pervasiveness of the federal legislative scheme the Court has stated that
the issue is whether the scheme of federal regulation is "so pervasive as
to make reasonable the inference that Congress left no roan for the States
to supplement it." Rice v. Sante Fe Elevator Corp., 331 U.S. 218, 230 (1947);
quoted in Pennsylvania v. Nelson, 350 U.S. 497 (1956). In the latter case
the Court in concluding that federal anti-ocmrrunist legislation had
superseded the state Sedition Act stated: "Taken as a whole, they evince
a congressional plan which makes it reasonable to determine that no room
has been left for the States to supplement it." In City of Burbank v.
Lockheed Air Terminals Inc., 411 U.S. 624 (1973) the court stated: Tt
is the pervasive nature of the scheme of federal regulation of aircraft
noise that leads us to conclude that there is preemption (of a Burbank
ordinance prohibiting 1 pure jet' takeoffs or landings at the Burbank airport
frcm 11 p.m. to 7 a.m.)."
Nature Of The Field Factor
The federalistic nature of the general subject of regulation is really
a constitutional factor and fits less comfortably into the language of
divining legislative intent. But it should be remenbered that "legislative
intent" is a legal concept partly built on guessing what the collective
legislative will actually was (would have been had they thought of this
particular issue) and partly on judicial perceptions of what the legal
system demands in terms of predictability and interlegislative relationships,
i.e., in terms of sound government. It is reasonable to put the "denands
of the legal system" under the general nforic of "legislative intent" because
this rightly implies that the legislature (here Congress) can change the
future impact of the judicial interpretation of their preemptive intent even
where such "intent" was inferred frcm the systems' demands and not frcm
53
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divining the collective mind of Congress. Congress can sirrply pass a law
saying we do or do not intend such and such preemption.
Of this factor based on the constitutional scheme the Court has said
that federal statutes touching on foreign affairs and national security
from external or internal subversion "touch a field in which the federal
interest is so dominant that the federal system (must) be assumed to
preclude enforcement of the state laws on the same subject." Pennsylvania
v. Nelson, supra. "Any concurrent state pcwer that may exist is restricted
to the narrowest of limits; the state's paver here is not bottomed on the
same broad base as is its power to tax." Hines v. Davidowitz, 312 U.S. 52
(1941).
In the Air Terminal Ordinance Case (City of Burbank v. Lockheed Air
Terminals Inc., supra) Justice Rehnquist for the four dissenters described
the Courts' usual attitude toward comerce clause preemption.
"... control of noise, sufficiently loud to be classified as a
public nuisance at cannon law, would be a type of regulation well
within the traditional scope of the police power possessed by
States and local governing bodies. Because noise regulation has
traditionally been an area of local, not national, concern, in
determining whether congressional legislation has, by inplicatian,
foreclosed remedial local enactments 'we start with the assumption
that the historic police powers of the states were not to be
superseded by the Federal Act unless that was the clear and
manifest purpose of Congress.* . . . This assumption derives
frxxn our basic constitutional division of legislative competence
between the States and Congress; frem ' due regard for the
presuppositions of our enbracing federal system, including the
principle of diffusion of power not as a matter of doctrinaire
localism but as a promoter of democracy . . . .' San Diego
Building Trades Council v. Garmon, 359 U.S. 236, 243, 79 S.Ct.
773, 779, 3 L. Ed.2d 775 (1959) Cemphasis added). Unless the
requisite preemptive intent is abundantly clear, we should
hesitate to invalidate state and local legislation for the added
reason that 'the state is powerless to remove the ill effects of
our decision, while the national government, which has the
ultimate power, remains free to remove the burden.'" (Emphasis
in the original.)
Moreover in Maurer v. Hamilton, 309 U.S. 598 (1940), the Court said, "As a
matter of statutory construction Congressional intention to displace local
laws in the exercise of its ccmnerce power (Art. I, § 8 (cl. 3)) is not,
in general, to be inferred unless clearly indicated by those considerations
which are persuasive of the statutory purpose. This is especially true when
public safety and health are concerned." But where the character of the
interstate ccmnercial activity being regulated requires uniform national
(or at least regional interstate) regulation, and the state law will
necessarily have an interstate impact (i.e., the state law will have an
extraterritorial effect) then the Court will be inclined in favor of
preemption. This was true in the Air Terminal Ordinance Case, and in
Northern States Power Co. v. Minnesota, 447 F.2d 1143 (8th Cir. 1971),
aff'd mem., 405 U.S. 1035 (1972). There the court struck down state nuclear
radiation safety standards that were stricter than those promulgated by the
54
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ABC. The court emphasized that the nuclear facility in question, although
located in and affecting the safety of the regulating states, provided
energy for a three state region and formed part of a national power grid.
Thus the state regulation had an extraterritorial impact, in effect, one
state was legislating for another, which violates notions of political
competency. Better the ABC, responsible to a national constituency,
should regulate alone. The Supreme Court in First Iowa Hydro-Electric
Cooperative v. Federal Power Cain., 328 U.S. 152 (1946) refused to allow
Icwa to require a permit for the construction of a dam on a navigable
river. The Court said, "It is the Federal Power Carmission rather than
the Iowa Executive Council that under our constitutional Government must
pass upon these issues on behalf of the people of Iowa as well as all
others." (Id. at 182.)
Actually in analyzing the nature of the field three distinct but
interrelated factors must be examined: (1) localness (in terms of
constitutional assignment) of subject, (2) need for uniformity, and
(3) extraterritorial impact of the local regulation. Any expressions
of Congress as to these factors will be very persuasive to the court.
For example in Huron Portland Cement Co. v. City of Detroit, 362 U.S.
440 (1960) the Court upholding a Detroit anti-pollution air standard
that required structural changes in the boilers of federally licensed
steamships operating interstate on the Great Lakes, relied heavily on
a Congressional statement in 1955 (69 Stat. 322) that "it is hereby
declared to be the policy of Congress to preserve and protect the priirary
responsibilities and rights of the States and local governments in
controlling air pollution . . . ." Thus despite the extraterritorial
impact of the Detroit ordinance (the rebuilt boilers go everywhere) and
the potential friction with other state anti-pollution laws (but not
actual friction as the Court emphasized) which generally shows the need
for uniform regulation, the Court upheld the ordinance.
Potential For Conflict Factor
The final consideration is potential for conflict with federal law.
There are two kinds of potential conflict, between state and federal laws:
procedural and substantive. Many laws set up administrative schemes for
their enforcement often including agencies with ongoing rule-making and
adjudicative functions. These procedures for enforcement of general
Congressional policy are usually part and parcel of the law. The agency's
expertise is relied on by Congress to flesh cut skeletal policy and to
apply it to particular cases. Such laws are dynamic not static. It is,
in a sense, difficult to know where the interstices are. Moreover the
procedures themselves are confusing to those being regulated. In
Pennsylvania v. Nelson, supra the Court said:
"Third, enforcement of state sedition acts presents a serious
danger of conflict with the administration of the federal
program. Since 1939, in order to avoid hampering of uniform
enforcement of its program by sporadic local prosecution,
55
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the Federal Government has urged local authorities not to
intervene in such matters, but to turn over to the federal
authorities immediately and unevaluated all information
concerning subversive activities . . . when we were confronted
with a like situation in the field of labors-management relations,
Mr. Justice Jackson wrote: 'A multiplicity of tribunals and
a diversity of procedures are quite as apt to produce incompatible
or conflicting adjudications as are different rules of substantive
law.1 Should the States be permitted to exercise a concurrent
jurisdiction in this area, federal enforcement would encounter
not only the difficulties mentioned by Mr. Justice Jackson, but
the added conflict engendered by different criteria of substantive
offenses . . . ."
When type one or "Occupy the field" analysis reaches the potential for
substantive conflict, it merges with analysis of the second type of
"conflict"—does state law compliment federal law or conflict with it?—
except that type one is concerned with "potential" conflict and type two
with "actual" conflict.
Of the substantive conflict the Supreme Court has said: "our primary
function is to determine whether under the circumstances of this particular
case, (the state's) law stands as an obstacle to the acccnplisluient and
execution of the full purposes and objectives of Congress." Hines v.
Davidcwitz, 312 U.S. 52 (1941). In Janes v. Roth Packing Co., 97 S.Ct.
1305 (1977) the Court applied this standard and concluded that a California
regulation that made no allowance in flour packaging for loss of weight
resulting frcm moisture loss during the course of good distribution r***
"conflicted" with federal law in this "full purposes" sense. It prevented
the achievement of the full purposes of a federal Fair Packaging and
Labeling Act which does make such allowance for wei^it loss even though
both federal and state standards could be met simply by putting in a little
more flour when it was packaged. Thus if the flour might qo to California,
the packer must overpack. Local distributors, say in Arizona, following
the federal standard would not overpack. Thus a one pound package of
flour in Arizona would contain less flour if frcm a local distributor than
fran a national or regional distributor. This would tend to defeat the
purpose of the federal act which was to facilitate comparison shopping.
In this instance national uniformity was necessary in order to achieve the
Congressional purpose of the FPLA.
Often the conflict is one in which the federal "minimum" standard is
not a mere minimum but is the optimum standard resulting fran a Congressional
oarpranising of conflicting interests as was illustrated above with the
discussion of the state tender-offer laws. Cbviously a state law setting
a higher standard would upset this balance and thus conflict with the
Congressional purpose.
TWO main things must be remembered frcm all this: (1) Congress can
control the fact and extent of preemption if it so chooses and (2) "prior
cases of preemption are not precise guidelines . . . for each case turns
on the peculiarities and special features of the federal regulatory schema
in question ..." (City of Burbank v. Lockheed Air Terminal Inc., s'T""a
st p. 1862) and all three of the above outlined factors must be considered
in any case plus the usual analysis of statutory language and legislative
history.
56
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One other cognate subject should be mentioned. Congress can expand
state power to control interstate ccnmeroe (i.e., to pass laws having
substantial effect on ccnmeroe) beyond what would otherwise be
constitutionally permissible (i.e., it would otherwise be labeled an
"undue burden" on interstate commerce or "discrimination'' against interstate
carmsrce). The Court in Prudential Insurance Co. v. Benjamin, 328 U.S. 408
(1946) said: "Whenever Congress' judgment has been uttered affirmatively
to contradict the Court's previously expressed view that specific action
taken by the states in Congress' silence was forbidden by the Ccnmeroe Clause,
this body has accomodated its previous judgment to Congress' expressed
approval . . . ." "[I]n all the variations of commerce clause theory it has
never been the law that what the states may do in the regulation of cornerce,
Congress being silent, is the full measure of (Congressional) power.
Much less has this boundary been thought to oonfine what Congress and the
states acting together may accomplish." See also In re Rahrer, 140 U.S. 545
(1891); Clark Distilling Co. v. Western Maryland Ry., 242 U.S. 311 (1917);
Parker v. Brown, 317 U.S. 341 (1943); Huron Portland Cement Co. v. City of
Detroit, supra.
For excellent discussions of preemption see Tribe, American Constitutional
Law, pp. 376-90, (1978); Hirsch, Toward a New View of Federal Preemption,
1972 U. of 111. L. Forum 515.
(2). The eleventh amendment and sovereign immunity:
Sovereign immunity is a carmen law doctrine that the state is immune from
lawsuit. The Eleventh Amendment has to an extent constitutional!zed this
doctrine by immunizing states from private citizen's lawsuits in the federal
courts. The Eleventh Amendment reads: "The Judicial power of the
United States shall not be construed to extend to any suit in law or equity,
caimenced or prosecuted against one of the United States by citizens of
another State . . . ." "While the Amendment by its terms does not bar
suits against a State by its own citizens, the Court has consistently held
that an unoansenting State is inmune frcm suits brought in federal courts
by her own citizens as well as by citizens of another state." Edelman v.
Jordan, 415 U.S. 651 (1974); Hans v. Louisiana, 134 U.S. 1 (1890TT
TWo doctrines have been developed to avoid the seeming absoluteness
of this ban on citizen vs. state suits in federal court:
(a) State officials who are enforcing a state law that a citizen
alleges is unconstitutional are for jurisdictional purposes
presumed to be doing as alleged (i.e., enforcing an
unconstitutional law) and since an unconstitutional law is
a void law (i.e., no law) the official is merely acting
under color of state law and a suit to enjoin such enforcement
is not against the state but against the official and therefore
not a violation of the Eleventh Amendment. The official's
action under color of state law is nonetheless "state action"
for purposes of a violation of the Fourteenth Amendment.
Ex parte Young, 209 U.S. 123 (1908). Furthermore, "[i]t is
well established that even though a state is not named a party
to the action, the suit nay nonetheless be barred by the
Eleventh Amendment . . . 'when the action is in essence one
for recovery of money fron the state ....1 Thus the rule
57
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has evolved that a suit by private parties seeking to impose a
liability which must be paid fran public funds in the state
treasury is barred by the Eleventh Amendment." Edelman v.
Jordan, supra. Recently in Quern v. Jordan, 440 U.S. 332, 337
(1979) the Court put this doctrine in succinct form:
"The distinction between that relief permissible under
the doctrine of Ex parte Young and that found tarred in
Edelman was the difference between prospective relief
on one hand (permitted) and retrospective relief on the
other (forbidden)." (Emphasis added.)
(b) the second doctrine avoiding the absoluteness of the Eleventh
Amendment ban is that a state can "waive" this immunity.
A state's imnunity can be waived either by deliberate action of the state
or "constructively," i.e., by the Courts declaring it so. For instance, if a
state does such and such thing that is subject to federal control (such as
operating an interstate railroad) and part of the federal control is the
authorization of private suits in federal courts (such as against railroads
for personal injuries) then the state is construed to have waived its imnunity
merely by the act of operating a railroad. Nor could the state expressly
deny its waiver. The act of operating the railroad is waiver. Parden v.
Terminal Railway, 377 U.S. 184 (1964).
In Petty v. Tennessee-Missouri Bridge Conntission, 359 U.S. 275 (1959),
the Court assumed "arguendo that this suit must be considered as one against
the states since this bi-state corporation is a joint or uuunun agency of
Tennessee and Missouri." (Id. at 279.) The Court interpreted a clause in
the Ccnpact giving the Ccnpact agency the power "to contract, to sue and be
sued in its name." The Court stated that "when the . . . basis of waiver
... is a statute, the question ... is whether the State has intended
to waive its immunity. But where the waiver is, as here, claimed to arise
fran a oonpact between several States, the Court is called on to interpret
not unilateral state action but the tents of a consensual agreement,
the meaning of which, because made by different States acting under the
Constitution and with Congressional approval, is a question of federal law."
(Id. at 279.) "Congress might of course adopt as federal law the law of either
or both of the States .... But Congress took no such step here.
It approved a sue and be sued clause in a ccnpact under oohditions that make
it clear that the States accepting it waived any immunity fran suit which
they otherwise might have." (Id. at 280.) Justice Frankfurter, with two
other Justices, dissented frcm this assertion and from the finding of
jurisdiction. (Id. at 283.)
However, the Court has retreated from the broader implications of the
Petty and Parden cases. In Edelman v. Jordan, 415 U.S. 651 (1974) the Court
concluded that the mere fact of participation by the state in a federal program
did not itself signify consent on the part of the State to be sued in the
federal court. Congress must make clear its intent to require waiver of the
state's imnunity to suit in federal court. Such constructive waiver of the
Eleventh Amendment right will not be lightly inferred. But if Congress does
clearly express a requirement of waiver in connection with a state's
undertaking a regulatory program that Congress could constitutionally
undertake itself, then the state will be held to have waived its imnunity
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by the fact of the undertaking regardless of what it really intends.
A third doctrine mitigating the strictness of the jurisdictional ban
is that local governmental units, although exercising state sovereign
authority, are not immunized frcm federal court suit by the Eleventh Amendment.
In Lake Country Estates Inc. v. Tahoe Regional Planning Agency, 440 U.S.
391, 401 (1979) the Court said:
"If an interstate canpact discloses that the compacting States
created an agency comparable to a county or municipality, which
has no Eleventh Amendment immunity, the Amendment should not be
construed to imnunize such an entity. Unless there is good
reason to believe that the States structured^ the new agency to
enable it to enjoy the special constitutional protection of the
States themselves, and that Congress concurred in that purpose,
there would appear to be no justification for reading additional
meaning into the limited language of the Amendment." (Emphasis
added.)
The Court found TRPA to be an unimnunized political subdivision, a sort of
interstate-local governing bod/, in finding TRPA to be a local governmental
body the Court sited Canpact language, California and Nevada's disclaimer of
intent to ocnfer immunity, the fact that six of the 10 menbers of TRPA are
appointed by counties and cities and that funding ccmes frcm local government.
Finally, the Court has recently ruled that nothing in "Art. Ill,
authorizing the judicial power of the United States, or in the Eleventh
Amendment limitation an that power, provide any basis, explicit or implicit,
for this Court to inpose limits on the power of California [to allow one of
its citizens to sue the State of Nevada in California state oourt for the
tort, cn a California highway, of a Nevada state employee]." Nevada v. Hall,
440 U.S. 410, 421 (1979). Nor does the Full Faith and Credit Clause or any
other federal law protect Nevada from a citizen's suit in another state's
oourts. (Id. at 421-22.)
In sum, Congress can control the suability of states by private parties
in federal court, whether in connection with a federal act or an interstate
caipact. See Tribe, Intergovernmental Immunities in Litigation, Taxation,
and Regulation: Separation of Powers Issues in Controversies About Federalism,
89 Harv. L. Rev. 682 (1976).
^ • The tenth amendment and intergovernmental immnnitieR:
Intergovernmental immunity was a cnoe broad doctrine that immunized federal
governmental agencies front state control and taxation and vice versa.
The doctrine had shrunk to insignificance until its recent revitalization
in National League of Cities v. Usery, 426 U.S. 833 (1976). An excellent
brief discussion is contained in a note entitled Municipal Bankruptcy, The
Tenth Amendment and the New Federalism, 89 Harv. L. Rev. 1871 (1976).
It should be remembered that in National League of Cities v. Usery
Justice Rehnquist was writing for only four menbers of a nine roenber court.
The fifth and narrow majority vote was supplied by Justice Blacknun, who,
although nominally joining in Rehnquist's opinion, wrote a brief concurrence
which suggests an entirely different errphasis, that of striking a halannp
between the federal interest in national legislation and the state's interest
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in autcncrry. Rehnquist's emphasis was entirely an whether or not the federal
law encroaches on "functions essential to separate and independent [state]
existence." Blackntun said he understood the najority opinion as adopting
"a balancing approach, and does not outlaw federal power in areas such as
environmental protection, where the federal interest is demonstrably greater."
(Emphasis addedJ
At this point I judge National League of Cities v. Usery not to be a
major stunbling block to federally mandated interstate coordination of
pcwer plant siting, either through direct federal control of the industry
(the doctrine is irrelevant here) or interstate compacts (equally irrelevant)
or federally controlled or facilitated state coordination with other states
of paver plant siting, planning and licensing with this caveat: Congress
cannot mandate that state officials legislate in seme fashion, where that
mandate is to be enforced by federal court injunction or other Draconian
sanction. (See "Sanctions" in the Glossary of Terms.) But Congress can
"induce" such coordination by offering the states the opportunity to
voluntarily join in regional coordination agreements either by compact or by
participation in a federal program. If by compact, a ocmpact agency would
facilitate coordination. If by a federal program, a federal agency (with
or without state appointing authority) would facilitate coordination.
The alternative to such "voluntary" participation would be federal takeover
of a state's pcwer plant siting decision-making authority which under the
commerce clause no one doubts the federal government has the power to do
(unless four more Rehnquists are appointed to the Supreme Court). See
Stewart Machine Co. v. Davis, 301 U.S. 548 (1937) discussed in the
Glossary of Terms under "Sanctions."
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E. Potential Federal Solutions to the Problem of Efficient Interstate Coordination:
(1). General advantages and disadvantages of a federal solution;
The major advantage of a federal solution to the problem of interstate coordination
of power plant development is that it combines the legal power to coordinate with
the political arrangement that makes for responsible and responsive coordination.
Congress is organized to represent both the nation as a polity (the people as U.S.
citizens) and the states as polities (the people as state citizens). Moreover,
the public is accustomed to federal control. Regular channels of ccmnunicatian
with Congress are available. Furthermore, interstate regional coordination is
only part of a need for national coordination, which Congress can provide for.
On the other hand, the coordination between (say) two or more interstate regional
ocnpacts might be difficult to effect.
Other considerations point away from federal control. The centrifugal nature
of our democratic attitudes (it is this centrifugal force that causes Congress to
have states inplement federal policy) when coupled with the basically multi-state
regional but not national nature of the decision-making needs in the area of
electric power plant siting point to purely regional (not national) arrangement
but with full federal participation. Moreover, while Congress may be accessible
it is less accessible than state or local legislatures. Furthermore, the federal
bureaucracy will be relied on for implementation of federal coordination, not
Congress, and the bureaucracy is not viewed as accessible. The federal bureaucracy
is very large and is itself in constant need of coordination. Witness: Hie Ohio
River Valley Tri-Regional Ccnpact—the "Regions" whose activities are to be
coordinated are merely administrative regions created to facilitate regulation.
There is one final factor that may militate a federal as opposed to state or
regional solution. Some states in a natural coordination region may have a much
greater interest and thus impetus to cooperate with sister states than do other
states. Hie interstate environmental irrpacts are not reciprocal. Air moves roughly
from west to east. Pennsylvania gets Ohio's bad air but not vice versa. True,
Olio gets Pennsylvania's bad water, but, it is the nature of things that potential
trade-offs are not equivalent between air and water. All Ohio has to gain in
voluntarily agreeing to coordinate air pollution control with Pennsylvania is the
warding off of the federal control which may come if they do not agree. That
may not be enough.
(2). Discussion of possible federal legal arrangements to effect coordination:
A short solution would be to amend the Clean Air Act to specifically provide that
the State Implementation Plans take into account the long range transport of
air pollution from the state sources and that the state enforcement agency will
regularly notify other states of the potential out of state impacts. A parti ail,
seemingly siiqple, solution, at least to the long range transport of air pollution
problem, would be to amend the Clean Air Act to provide that State Inplementation
Plans consider all the long range iirpacts of stationary sources. Only where a
stationary (existing or proposed) source causes or will cause another state to
be iimtediately prevented from attainment or maintenance of national primary or
secondary airbient air quality standards (or interfere with another state's
Prevention of Significant Deterioration (PSD) program) must a state consider
extrastate inpacts under existing law (Clean Air Act §§ 110(a) (2) (E) (i), 126, and
160). However, it may be quite difficult to set standards other than those implicit
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in the existing law (see Tri-Regianal Memorandum of Understanding, especially II,
(6)e) by which one state considers even snail {but potentially incremental)
effects on another. Moreover, having one state unilaterally judge the impact
on a second state where the judgment nay be crucial to its own development would
tax the ability to be objective of even the most dedicated state official and
probably not be satisfactory to the impacted second state. To be effective EPA
monitoring would be tantamount to a takeover of the implementation. Therefore,
regional planning seans necessary.
One way to effect such planning would be to establish a federal non-prescriptive
planning agency as a resource to facilitate interstate coordination, either:
(a) through development of long term power development plans based on
oorprehensive regional studies by giving additional authority to
an existing agency such as the Ohio River Basin Ccarmission (see
discussion of OKBC above) but with only promotional means available
to achieve voluntary state coordination by using the plan; or
(b) the same as (a) except the long range plan could either be accepted
or rejected by a state. Acceptance would entail reciprocal rights
and duties vis-a-vis other accepting states to be enforced either
by an action in the Supreme Court under its original jurisdiction
or by a special court created by Congress (see Section 7 an this
report) to hear and resolve such disputes with perhaps a limited
review by the Supreme Court (which nay be constitutionally
unavoidable). Rejection by a state would mean it oould not sue
or be sued by other states to enforce the plan, but, of course,
its electric utilities would still be subject to the ordinary
federal energy and environmental regulations including citizen's
suits in federal courts and suits by other states under federal
camion law in the Supreme Court; or
(c) the same as (b) except that the agency would be based on the
development (or catalyst) model of the Appalachian Regional Council
with federal funds available to defray gnrernn*arri-a1 anrl •inrhig+"Ha1 "
costs of states accepting the plan or the acceptance of the plan
oould entail the right to participate in federally funded development
programs related to implementation of the plan. Acceptance or
rejection by a state would otherwise entail the same rights and
duties as (b).
Another option would be to create federal regional planning agencies as above
including the various options but with any particular regional plan requiring the
approval of Congress, either:
(a) by special act of Congress, or
(b) by submission to Congress for a set veto or modification period
which, if Congress does nothing, it becomes the regional plan to be
accepted or rejected by states under the various options set out
above. Hie model for this is the Federal Rules Enabling Act of 1934
(48 Stat. 1064) 28 U.S.C. § 2072 by which thp ffiipnpmp Cnon-i- yjag
authorized to promulgate the federal rules of civil procedure.
The act said "[Hie rules] shall take effect six months after their
promulgation." Hie court was also authorized to unite law and equity
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rules and "[s]uch united rules shall not take effect until they shall
have been reported to Congress by the Attorney General at the beginning
of a regular session thereof and until after the close of such session.'
Hie rules have been amended by the same process. The Federal Rules of
Evidence were promulgated the same way but Congress exercised its
veto power and suspended the effective date of the rules and required
that they be modified before it allowed them to become effective.
Still another and stronger option would be to establish a regional planning
agency as above but on its plan's acceptance by Congress (either actively as in
(a) above or passively as in (b) above) then it immediately goes into effect
imposing rights and duties on the state's vis-a-vis each other to be enforced by
special court or the Supreme Court. (Again see Section 7 of this report.)
A variation on the above planning models would be to structure the federal
agency to include state representation like ORBC but, unlike ORBC, would act by
majority vote (ORBC acts by consensus).
A further variation would be to give the federal planning agency power to
invoke the plan (given its approval by each affected state or by Congress or both)
by authorizing it to bring action in a federal regular or special court to upset
or modify a particular state power siting decision. This, of course, assumes,
as do all the above options, primary state licensing authority.
A final variation would be the same as that inmediately above except, and
this is a big exception, that the planning agency would, on approval of its plan
(by one of the above mentioned methods), become the primary licensing authority
of any new power plant or significant new power development. This would make
for a stronger invocation process. Instead of invoking the plan in a negative
way as in the previous optional variation by vetoing (or challenging) state
granted licenses that do not aanfarm to the plan, the invocation by primary
federal licensing would guarantee that any new electrical power development
would conform to the plan as to size, location, emissions, etc. Of course,
an existing federal agency such as the Federal Energy Regulatory Commission could
be used for such licensing.
Any federal planning agency that might be established would look to the entire
iirpact—environmental, economic and energy resource and utilization—of any
electrical power development.
Without any such planning as suggested above, but by using existing or
strengthened federal law, a special federal court might be used as outlined in
the "special or ad hoc courts" portion of Section 7 of this report.
Another line of federal options would be to establish a federal agency whose
sole function is to coordinate state siting decisions. A new agency (with
nationwide authority) could be established or an existing agency could be expanded.
A new agency could have experts appointed solely to serve on the agency or it
could be composed of selected representatives of various existing agencies such
as EPA, the Energy Department, the Justice Department, the Corps of Engineers,
etc., with or without, but advisably with, a special administrative staff.
Legislation creating such an agency could make it the sole federal agency far
review of state siting decisions. It could require that all state siting (or
other significant power development) decisions be preceded by an interstate
inpact statement (IIS). TO expedite review, the IIS would be subject to a
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strict timetable including any input (which should be allowed) from sister states.
Careful formulation should be made of the exact contents such an IIS must have.
Federal agency help (and prior training) in completing the IIS should be provided.
Such an IIS would then be reviewed and assessed by the interstate coordinating
agency. Its assessment could be purely recommendatory or the agency could be
authorized to seek to enjoin those state siting decisions made against its
recommendations or against its reconmended modifications or that cire based on an
inadequate IIS.
Of course, the final federal solution would be to make FERC the site licensing
authority, entirely depriving the states of such authority.
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CHAPTER II: STATE LAW
Section 3: State Siting Law, Background to the Need for Interstate Coordination.
Introduction And Overview
There are three recent studies of state power siting law, two of which focus
on the OKBES region: White and Fitzgerald, Legal Analysis of Institutional
Accountability for the Ohio River Basin (1977), a report cantiissioned by ORBES:
A report entitled Regional Facility Siting in the ORSANOO States, written by a
"Facilities Siting Task of ORRANtD, Rnrprip Mrvwyf Chairman, of ORSANCO
(the acronym for the Ohio River Valley Water Sanitation Compact Cotmission) ;
and three chapters VII, VIII and IX contained in Volume II of Energy and the
Law, Problems and Challenges of the Late '70's, an American Law Institute and
American Bar Association course of study materials (1977). The three chapters
are VII, D. Fellman, Comparative Analysis of Power Siting in the United States,
p. 345; VIII, J. Haggard, State Power Siting Laws, p. 367; IX, R. Feldman,
State Paver Plant Siting, Issues, Approaches, and Current Legislation, p. 421.
In addition to these three studies there was a report in the Bureau of
National Affairs Environment Report, June, 1973, by Berlin, Gill and Yarringtan,
Paver Plant Siting—An Overview of Legislation and Litigation (Monograph No. 15)
and there are a nurrber of other studies cited in the above cited reports.
Each of the cited studies for the most part discuss the structure and process
of state siting law but not hew it works in fact. An article by Philip F. Cronin, Jr.
and Scott M. Turner, Article VIII of the Public Service Law—The Brave New World
of Power Plant Siting in New York: A Critique and Suggestion for an Alternative
Approach, 42 Albany L. Rev. 537 (1978) takes a critical look at the New York law
in practice. Cronin and Turner have acted "as counsel to a public utility in
numerous pewer plant licensing and environmental matters" and their views "generally
reflect public utility views of the licensing process discussed herein." (Id. at
537, first footnote.) This section briefly canvasses their views below. Otherwise
this section is a brief survey of siting practices in ORBES and other states, not
a critical evaluation of how they work in fact. This survey is intended merely
as a background to the interstate focus of this report.
At the outset it should be noted that the basic premise underlying state
siting is that siting of paver plants is a land use problem and land use is a
state not a federal law concern. Moreover within a state, land use has
traditionally been a local government not a central state government concern.
State governments typically transfer or delegate their sovereign authority to
regulate land within their territory to county or municipal or regional local
governmental units. State law, in general, merely authorizes local governmental
units to create and implement zoning codes, land use planning schemes and
subdivision regulations. Thus a statewide siting authority is itself a
departure of recent vintage fron traditional local control.
TVro factors have militated this change. Public utilities have traditionally
been regulated as to rates and service areas by state, not local, administrative
agencies (Public Utility Canmissions or Public Service Ccmnissians). Thus seme
central administrative authority over electric utilities was already in place.
With the advent of ccmprehensive federal environmental and energy regulations,
implemented by state government through seme state agency or agencies, both
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the need for, and means of, statewide control of utility siting became evident.
Electrical utility generating facilities have the potential, of course, for
impacting the environment, energy resources, and economy (and thus, if you will,
of "impacting" federal policy relating thereto) to a degree and over an area
far beyond the local site. This potential impacting effect has been dramatized
by the building of huge generating facilities with the use of recent technology.
The reoentness of this change from local to statewide control of power siting
is underlined for two reasons. First, the change has been tentative, incomplete,
greatly varied fron state to state, and even, at times chaotic. Most of the
scholarly studies and reports have focused on the progress of this change fron
local to state control and on how it can be furthered and improved. Second,
and of greater importance to this report, the change of legal institutions in
a political democracy must be accompanied by a concomitant change in public
attitude. It is probably safe to say that public attitudes as to what is
acceptable in political and legal institutions change more slowly than do
attitudes as to what is acceptable substantive policy. Therefore, although
it may seem rational to move now fron state to interstate regional control of
power siting, it my be unrealistic to expect acceptance of such a further
qualitative leap in a context in which the public nay just now be accustoming
itself to the change from local to state control.
A further concern is this: where institutional attitudes will not change
to accommodate changed substantive policy, the public may become frustrated
with the substantive policy and its attitude toward that policy nay change.
In concrete terms if the implementation of environmental protection policies
requires accounting for, and controlling, interstate environmental degradation
and public institutional conservatism prevents institutional adjustments to
accomodate this requirement, then the environmental policies may to that extent
lose public support. If other substantive policies seen frustrated by those
environmental policies, such as energy resource use and production growth, then
environmental policy is doubly troubled. It therefore behooves those concerned
with the viability of a strong environmental protection policy to discover and
promote palatable interstate arrangements to relieve at least this cause of
frustration with environmental policy.
A. Siting Law in the U.S.:
The extensive studies of the current state of power siting law contained in
the articles sited in the Introduction to this section show the trend to central
state power siting authorities. Over half the states now have seme sort of
specific power plant siting legislation. Olio's legislation, detailed in the
next part of this section, is typical of the comprehensive state legislation
that sets up a special power siting commission. In states that have no specific
legislation power plant siting is subject to local land use control law, state
environmental agency approval (which may be one or several agencies), and
approval of the state utility regulatory authority usually by a "certificate
of convenience and necessity."
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The earliest of the new specific power siting legislation was 1971. Many states
have proposals actively under consideration, today. The purpose of this new legislation
is twofold: first to make more efficient the site licensing process often by
creating one central licensing agency (either an existing, or new agency) or by
establishing a systematic procedure for going through the various agencies and
second, to make more rational the siting process by authorizing or nandating
statewide planning, by superseding local land use law, and/or by having one statewide,
all factors cost/benefit analysis (with or without alternatives analysis)* precede
any approval.
Each of the new state laws attempts to achieve one or both of these purposes but
by a wide variety of methods. Joel E. Haggard, in his article sited above, states
(at p. 386) :
"The emerging pattern with respect to state institutional mechanisms
for approving bulk energy facility sites generally is either (1) to
establish a one-stop agency with power either to determine the question
of the site's acceptability or to make a recommendation to another body
(1 or 2) . . .to split the authority over site certification between
environmental and economic authorities (i.e., between EPA types and PSC
types)."
Where there is a new one-stop agency the merbership of the agencies varies from state
to state both as to nurrber (e.g., Ohio has five voting merrbers; Arizona has 18
rrerrbers) and manner of choice. But the variety in detail may be deceiving for they
all seen to share a oamon aim of attempting to have people in the decision-making
process with expertise in the various areas of impact as well as representatives of
the carpeting interests involved. Moreover, many states have conflict of interest
provisions prohibiting the menbers of the siting agencies from having any ties with
the private utilities.
There is much variety in the substantive provisions of state siting law.
Local land use laws are sometimes specifically overridden, sometimes deferred to
in sane way but with ultimate state override authority, and sometimes sinply
complied with. Long-range planning goes from having public hearings on long-range
forecasts and making the forecasts an integral part of planning as with California
and New York; to requiring forecasts frcm the utility regulating agency or the
private utilities; to no long-range planning at all. The range of these forecasts
is from two to 15 years with 10 years being by far the most canmon forecast.
The Haggard article, supra, says this about California's law and long-range
planning (at 393-94):
"California is probably the most arrbitious and comprehensive of all
the state siting acts on this [planning] point. It provides the
new state Energy Resources and Development Commission with authority
to set up energy contingency plans, to investigate innovative approaches
(such as developing mandatory conservation measures to curtail wasteful
*See footnote supra at 14.
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or inefficient uses of energy) and to sponsor research and development
of new energy sources such as solar and geothermal power .... The
commission is to receive biennially the 5, 10, and 15 year reports
forecast frcm utilities operating within the states. These long-range
plans are subject to public scrutiny at open hearings and after analysis
and investigation the ccnmission is to issue a report evaluating the
long-range plans including assessment of growth trends and measures
to reduce these trends."
Maryland has a unique program of "site banking." The Secretary of Natural
Resources is authorized to acquire frcm four to eight sites, which utilities
may then acquire (by purchase or long-term lease) from the state when needed.
The process of obtaining data an which to base a decision varies from state
to state. Seme states rely exclusively an utility supplied data; others an an
open hearing where evidence can be given by various interest groups; still other
states use their own agencies for independent data gathering; others use private
consultants hired by the state, paid for by the utility. Of course, data is needed
as to the need for the new facility, the suitability of any proposed site from
the utility standpoint (adequate water, transport of fuel, etc.) and the inpacts
of the new facility, which include environmental, econcmic and social inpacts an
a local, intrastate regional, state, interstate regional and national basis.
The inpacts that flow directly frcm the specific location of the site, i.e.,
its ccnpatibility with surrounding land uses, give rise to alternatives analysis,
since arguably, rationality dertands, that, other things being equal (i.e.,
suitability), the available site that is most compatible with its surroundings
be picked. As suggested in Section 1, alternatives analysis can lead to much
broader inquiry than which of several sites in a given locale is most acnpatible
with its inmediate surroundings. It can lead to inquiry concerning conservation
versus increased production, nuclear versus coal fueled generation, large plant
versus several smaller plants, etc. But for state siting laws, alternatives
analysis general means merely which of several potential sites is most compatible
or least incompatible with its surroundings. Also as noted in a footnote in
Section 1, alternatives analysis, though arguable "more" rationale than straight
cost/benefit analysis of a particular new plant at a particular site, can be
very complex and time consuming. For just as no two sites are equally compatible,
no two sites are equally suitable.
New York's attempt to guarantee and facilitate alternatives analysis mandated
by its siting law was to institute a "two complete cases" approach whereby a utility
"Cost/benefit analysis," of course, is used in the NEPA sense of total costs
including environmental costs plus ordinary economic costs versus total benefits.
"Environmental costs" means the degrading of the environment (air, water, etc.).
Relieving these "costs" by use of pollution control technology then transforms
those environmental costs so relieved into economic costs. Pre-NEPA oost/benefit
analysis was much simpler and less subjective: economic cost versus economic
benefit.
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requesting a site approval has to "submit a complete case with respect to at
least two locations suitable for the proposed facility." (16 N.Y.C.R.R. § 70.20(c)
(1973).) This requirement is the focal point of the criticism of Cronin and
Turner, in the article sited supra, Article VIII of the Public Service Law—
The Brave New World of Power Plant Siting in New York: A Critique and Suggestion
for an Alternative Approach, 42 Albany L. Rev. 537 (1978). Cronin and Turner
claim that the tiro complete case" requirement adds "awesome complexity" to the
Article VIII process:
"Requiring conparative consideration of a second site/facility ocnbination
under the 'two complete case' approach can only complicate a bagic
approach already replete with difficult polycentric dimensions.
Important environmental, engineering, technological, economic, social
and public policy questions are essentially multiplied since at least
two sites and two facilities must be evaluated, compared and balanced
to achieve minimum adverse inpacts." (at 549)
"More important, however, is the fact that each of the multiple alternatives,
as well as the impacts and decision ramifications of each, is held in
abeyance until the final Siting Board decision is rendered because there
are no mechanisms for eliminating such alternatives as the proceeding
progresses." (Id. at 550.)
Moreover the authors add, it upsets the way public utilities have traditionally made
siting decisions. "Before Article VIII, a series of important decisions was made
by a public utility over a fairly lengthy period of time." "[Now] all these decisions
are held in suspension awaiting the outcome of" a "protracted regulatory proceeding
. . . ." (Id. at 551.) According to the authors this prolonged administrative
process "is-Inevitably being translated into unacoeptably high costs for the
applicant and ultimately consumers." (Id. at 551.)
Although these criticisms purport to be leveled at the perhaps unique New York
"two complete case" procedure, they could as well be leveled at any thorough-going
alternatives analysis used by a siting decision-maker. Another criticism also
aimed at the "two complete case" form of alternative analysis, but which hits all
such analysis is that:
"Polycentric" decision-making was defined by the authors by quoting from
Bayer, Alternatives to Administrative Trial-Type Hearings for Resolving Complex
Scientific, Economic, and Social Issues, 71 Mich. L. Rev. Ill, 117 (1972): IF"is
"characterized by a large number of possible results and by the fact that nany
interests or groups will be affected by any solution adopted; thus, each potential
solution will have complex and unique ramifications. In graphic terms, the
polycentric controversy can be visualized as a spider web, since ' (a) pull on one
strand will distribute tensions after a complicated pattern throughout the web
as a whole .... [E]ach crossing of strands is a distinct center for distributing
tension.1"
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"The citizens in alternate site areas are under a unique burden.
They must be prepared to intervene and fully participate in the
lengthy and ocnplex Article VIII proceedings or lose the opportunity
to protect their own interests, which may be adversely affected
only if the alternate site is chosen. This is perhaps the least
understood and most insidious aspect of the 'two complete case'
requirement.
"Despite the extensive public notice given to citizens in the
alternate site area, there is an understandable assumption an
the part of those citizens that the proposed facility will be
constructed at the primary site—in 1 someone else's back yard.'
The emphasis in the application, public notices and newspaper
reports on the 'primary' site and the 'prinary' facility, rightly
or wrongly, creates a very strong impression that the alternate
site will be utilized only if the primary site cannot be approved
for seme serious reason. In other words, 'why should the
Siting Board choose the alternate location if the expert utility
company has concluded that the primary site is preferable?'
However, under the 'two complete case' approach and 'minimum
adverse environmental impact' standard of section 146(2)(c),
there is active cansideration of the alternative site and the
likelihood of approval of that site is considerable. For example,
in Case 80003 and Case 80005, there have been PSC Staff
recarmendations in favor of the alternate site." (Id. at 556-57.)
Another criticism that hits the wider target of any thorough-going
alternatives analysis is that the environmental and other data that the utility
applicant must furnish is voluminous and costly to gather for one site but
overwhelming in volume and cost for two or more possible sites. Moreover
"[n]either the regulatory staffs nor participants have adequate resources and
expertise to complete significant independent analysis in the face of the
massive amount of data and information presented. As a result, in post-
application filing phases of the proceeding applicants have been required
to submit extensive 'after the fact' analyses which regulations discourage
in the first instance by their quantitative data and information bias."
(Id. at 559.)
In fact, it is just this huge amount of data required for thorough-going
alternatives analysis that probably caused the New York Siting Board to adopt
a "two complete case" scheme as a compromise between no alternatives analysis
on one hand and thorough-going alternative analysis on the other. It asks
for complete information not on all plausible alternatives but on just one
plausible alternative. Indeed, the New York Department of Environmental
Conservation (DEC) has fixed on the incompleteness and too narrow focus of
the "two complete case" scheme to criticize it. They have stated:
"In summary, DEC favors retaining provisions in the Article VIII
law which call for review of alternatives to the proposed prinary
site. We could support deleting part of 70.20(c) which specifies
that a complete case must be prepared an at least two locations.
The Department further requests that any deletion be natched by
escalation of the broader multi-site comparisons originally intended
for Article VIII. DEC favors strengthening the use of 70.20(d)
which provides that the applicant must provide studies on alternatives
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presented affirmatively by any party." Testimony of the Staff of the
Department of Environmental Conservation for a Public Hearing on the
Public Service Law and Recommendations for Improvements (Feb. 15, 1977)
(at 29).
The argument of Cronin and Turner, speaking from the utility point of view,
is that attenpts to achieve perfectly rational siting through thorough-going
alternatives analysis is likely to get no siting at all. They cite the fact
that the Article VIII scheme has produced only one power plant certificate in
the seven years since its enactment (of seven applications). Cronin and Turner,
supra, at 582. But they do not suggest complete abandonment of alternatives
analysis, rather they suggest a three phase approach, the first phase of which
would be "filing a site selection study proposing a site for approval by the
Siting Board." (Id. at 586.) The study "would consist of an investigation and
analysis of a nurrber of candidate sites according to established agency criteria."
(Id.) They elaborate at seme length an a proposal that is perhaps not unlike in
essence the current practice of the federal Nuclear Regulatory Commission.
NRC requires "one complete case" which if it passes cost/benefit muster will
not be upset unless an alternative site is "obviously superior." In the Matter
of Public Service Co. (Seabrook Station, Units 1 and 2) 5 NRC 501 (1977).
Unlike the thorough-going alternatives analysis in which all alternatives,
including the applicant's choice, start as equals, the "obviously superior"
type alternatives analysis gives the applicant's choice a presumption in its
favor.
The issues over state siting law will no doubt form around approaches to
alternative analysis. Resolution of that issue will have a decided affect on
statewide planning and ultimately interstate regional planning for pewer siting.
Cronin and Turner criticize the New York Public Service Commission Staff
proposals for a kind of statewide planning, a criticism that could also apply
to interstate regional planning:
'"Hie N.Y. Public Service Cemmissian (PSC) Staff idea has many features
that are similar to the phased approach recommended herein, but
emphasizes a unitary proceeding approach to final site selection.
While this approach includes suggestions that will provide useful
information, it suffers from serious deficiencies avoided by the
Phase I case-by-case approach. First, the unitary effort to
establish preferred sites raises many of the saipe public participation
problems raised by the "two complete case" alternative of the existing
Article VIII process. In a proceeding to choose fifteen to forty
preferred sites for Article VIII applications, merrbers of the public
with an interest in any one of the preferred sites would have to
participate actively to protect their interests even though there
would be no assurance that preferred sites approved would be used
in the irmiediate future, or indeed ever used, for a power plant.
Thus, the public would be confronted with much the same hypothetical
possibilities as alternate site residents face in 'two ocnplete case'
proceedings. Moreover, the Siting Board's ad hoc public member would
be obligated to participate in a large scale proceeding, much of which
nay not concern him since the Board also would consider sites in
locations in the state in which he has no interest.
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"Second, the PSC Staff proceeding would be a necessarily large scale,
diffuse effort to approve a large nunfoer of acceptable sites, many of
which may never be utilized. On the other hand, the case-by-case
Phase I proceeding would present the public participant with a firm
site and facility proposal for review in the context of the other
alternatives available. In contrast to the 1 contingency1 flavor of
the Staff approach, residents in the site areas would be on notice
that a power plant will be applied for. The residents must either
participate or lose the opportunity to influence site selection.
"Third, the case-by-case system appears to represent a more manageable
and efficient process. Proceedings would be held only when a power plant
is needed. They could be oriented to the particular population center
with electric generating deficiencies. Evaluation of a specific
proposal also would allcw a more detailed review of environmental,
engineering, economic and other factors bearing on preferred site
selection than would be possible in a unitary proceeding held to
approve a large nunfoer of diverse and widely separated sites.
The selection of one site raises significantly difficult problems
to justify a case-by-case concentration of applicant, agency and
public effort.
"Finally, there is scne evidence that unitary site proceedings might
be utilized by the PSC to seek a ranking or preferential rating for
a large number of preferred sites ultimately chosen. Such an approach
raises the prospect of the same 'hair splitting' efforts to optimize
decisicn-making on the basis of what would be enormously complex
comparisons in the same mold as currently fashioned in the 'two
complete case' context. Since many sites can accept power plants in
a manner consistent with applicable laws, rules and regulations, and
Article VIII goals, the extraordinary costs necessary to determine
whether, of those acceptable sites, site A should be utilized before
site B or vice versa are not warranted.
"In summary, while the site selection approach of the PSC Staff
would constitute an improvement of the current system and warrants
serious consideration, the case-by-case site selection process
incorporated into Phase I seems preferable.
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B. Siting Law in the OKBES States:
OHIO
(Mo is the only state in the OKBES region with a law specific to power plant
siting. It establishes a carmission whose only function is power siting. The full
text of this act in its present amended version and as it originally was enacted
plus pertinent parts of the Ohio Public Utilities Act were included as an Appendix
in the preliminary report to this study.
Below is a narrative outline of the Ohio Act:
Section 4906.01 et seq., Ohio Revised Code
Agency (4906.02)—Power Siting Commission members:
1) chairman of the public utilities commission;
2) director of environmental protection (chairman) ;
3) director of health;
4) director of economic and community development;
5) director of natural resources;
6) director of energy;
7) representative of the public (an engineer) appointed by the governor;
8) four legislative members—serving as nonvoting members.
Certification must be obtained before the commencement of construction of a
major utility facility. The procedures for obtaining a certificate are as
follows:
1) An applicant must file an application in such form as prescribed
by the ccnmission;
2) The application must be filed at least two years but not more than
five years prior to planned construction;
3) The applicant must serve a copy of the application upon the chief
executive officer of each municipal corporation and county and
the head of each public agency concerned with protecting the
environment or of planning land use in the area which any portion
of such facility is to be located;
4) Public notice must be given by the applicant within seven days of
filing of the application; (See 4906.06)
5) A public hearing must be held by the ccnmission not less than sixty
days nor more than ninety days after compliance with nos. 1 through 4.
See 4906.07.
The Ohio power siting law is a "one stop" provision; where one agency has the
complete authority to resolve all issues involving a sites acceptability. Thus
all other state public agencies or political subdivisions are precluded from
exercising jurisdiction over power facility siting. See § 4906.13.
In granting a certificate the commission must rrake certain findings and
determinations which are as follows:
1) The basis of the need for the facility;
2) The nature of the prcbable environmental inpact;
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3) That the facility represents the minimum adverse environmental
impact, considering the state of available technology and the
nature and economics of the various alternatives and other
pertinent considerations;
4) In the case of an electric transmission line, that such facility
is consistent with regional plans for expansion of the electric
pcwer grid of the electric systems serving this State and
interconnected utility systems and that such facilities will
serve the interests of electric systems econcny and reliability;
5) That the facility will comply with Chapters 3704., air pollution
control, 3734., solid waste disposal, and 6111., water pollution
control, of the revised code and all regulations and standards
adopted thereunder;
6) That the facility will serve the public interest, convenience,
and necessity.
Interstate coordination of power plant siting activities is contained in
the following section quoted verbatim near the beginning of Section 4 of this
report. Note that it empowers the contnission to coordinate and to make
arrangements for coordination. It does not enjoin on the ccmnission a duty
to coordinate nor are any mechanisms presently in place for such coordination.
Ohio 4906.14 "Joint proceedings with state or federal agencies."
KENTUCKY
Kentucky has a new law relating to siting but it does not set up a canmission
devoted exclusively to siting nor does the new law pertain exclusively to siting.
The pertinent portions of the new law are surmarized as follows:
Kentucky Revised Statutes § 278.010 et seq.
Effective April 1, 1979, the energy regulatory carmissian has exclusive
jurisdiction over regulation of rates and services of all energy utilities.
Energy utility means any person except a city who owns, controls, operates or
manages any facility used or to be used in connection with:
a) The generation, production, transmission or distribution
of electricity to or for the public ....
The energy regulatory commission consists of three (3) merrfoers appointed
by the governor with the advice and consent of the Senate.
To begin construction of any facility to be used for the generation of
electricity one must first obtain a certificate of environmental ccanpatibility.
The procedures for obtaining such a certificate are as follows:
1) Applicant files a statement of environmental compatibility of
the proposed site with the Department for Natural Resources
and Environmental Protection;
2) The statement must contain but is not limited to:
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a) A complete description of the proposed project;
b) Garments an effects of air pollutants on public health,
the effects of facility on the waters of the Commonwealth,
the treatment, handling and disposed of solid wastes, and
other adverse environmental effects.
3) Within sixty (60) days of receipt of the statement, the department
must give its recarmendations or objections to the proposed
facility to the energy commission;
4) The commission shall conduct a public hearing on the application
which is open to all interested persons. Interested persons are
those whose living environment would be affected by the construction
of the proposed facility.
The factors that must be considered by the commission in granting or denying an
application are as follows:
1) Community needs;
2) Industrial development;
3) Customer requirements;
4) Economics of the facility.
These factors are balanced against any adverse environmental factors.
It must be noted that the ALI-ABA Course, "Energy and the Law" lists the
Kentucky provision as a "one stop" provision, where one agency has complete
authority to resolve all issues involving a sites acceptability. I do not
believe that this provision preempts any powers of other political subdivisions.
KRS § 278.040 provides that the chapter dealing with the energy caimission is
not intended to limit or restrict the police jurisdiction, contract right or
powers of cities or political subdivisions.
WEST VIRGINIA
West Virginia has no specific power siting agency. However, power siting
in West Virginia is controlled by the Public Service Caimission, which consists
of three (3) members who are appointed by the governor with the advice and
consent of the Senate.
According to WV Code § 24-2-11 no public utility person or corporation may
begin construction of power facilities until they obtain from the PSC a
certificate of public convenience and necessity. The application for such a
certificate must contain:
1) A description of the location and type of facilities;
2) A statement justifying the need for such facilities;
*These requirements are from the West Virginia Code § 24-2-lla which deals with
the certificate of convenience for high voltage transmission lines.
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3) A statement of the environmental impact of such facilities; and
4) Any other information the applicant wishes to include or which
the oanmissian my require.
Upon filing of the application, the applicant must publish a Class II legal
advertisement. Any person may request a public hearing. Within sixty (60)
days of filing of the application or if a hearing was held, within ninety (90)
days after oral arguments are complete, the commission may approve the
application. To approve application the Camiissian must determine that the
proposed facility:
1) Will economically, adequately and reliably contribute to meeting
the present and anticipated requirements for electric power;
2) Will result in an acceptable balance between re as enable power
needs and reasonable environmental factors.
PENNSYLVANIA
Pennsylvania has no specific pewer siting agency or law. Power siting
decisions are made indirectly by the Public Utility Ccfftmission, which consists
of five (5) mettbers appointed by the Governor with the advice and consent
of the Senate.
A certificate of public convenience and necessity is required before a
public utility may begin to offer, render, furnish, or supply service within
the Conrnonwealth. No specific language requires such a certificate to begin
any construction. 66 Penna. Statutes § 1103 regirinps t-hat- pypry app]j ration
for a certificate be in writing but this section does not specify what is to
be contained in the application.
Subsection (b) of this section places the burden upon the Ccrrmission
to hold public hearings. The hearings are to aid in determining that granting
the certificate is necessary for the service, accomodation, convenience, or
safety of the public. The PUG does not have sole jurisdiction over public
service companies or utilities. The Public Utility Code does not iitpair the
pavers and duties of the Department of Health or the Department of Environmental
Resources. (66 P. S. § 1318)
INDIANA
Indiana has no specific power siting agency or law. Public Service Catmissian
of Indiana, which consists of three (3) members appointed by the governor at least
two (2) of whom shall be attorneys has a limited iirpact on power siting decisions.
Certification of public convenience and necessity is required before any person,
copartnership or corporation may cwn, operate, iranage, or control any plant or
equipment of any public utility. The statute is very similar to Pennsylvania's
statutes 66 P. S. §§ 1121-1123.
TT.T.TNOIS
Illinois has no specific siting agency but like West Virginia does have
some law specific to siting. The Illinois Commerce Catmissian (Ch. Ill 2/3
§ 1st sea.) consists of five (5) members appointed by the governor with the
advice ana consent of the Senate. No construction of any new plant, equipment,
property or facility which is not in substitution of any existing plant,
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equipment, property or facility my be initiated without a certificate of public
convenience and necessity. The statute does not define what is public convenience
and necessity but it has been determined by case law what factors are to be
considered. See S.H.A. Ch. Ill 2/3 § 56. This does not include municipally
owned power facilities. Any person wishing to construct a nuclear steam-electric
generating must obtain a permit fran the Pollution Control Board. See Pollution
Control Board power Ch. Ill 1/2 § 1025(a).
C. Model State Siting Law;
1. Outline of model state siting act proposed by National Symposium on
State Environmental Legislation (March 1972).
a. Siting Authority
1) One siting body to coordinate state agency review in a single
proceeding;
2) Public Participation included in review process by public hearings;
3) Siting authority's decision subject to judicial review according to
state administrative procedures.
b. Siting Mechanism
1) Site evaluation five years prior to proposed date of construction
and two years before transmission line construction;
2) An additional requirement might be ten (10) to twenty (20) year
pre-planning reconnaissance studies;
3) Public access to all proceedings by use of state information and
education center, public forums for suggestions and critiques,
and public hearings;
4) Review by siting authority of industry assessments of projected
generating capacity needs;
5) Review by siting authority of the formula used to determine future
generating capacity needs;
6) Siting authority vested with eminent domain powers.
c. Financing Alternatives
1) Surcharge on power generation at the generator;
2) Application filing fees;
3) General appropriations;
4) Any ccanbination of the above.
2. Outline summary of proposed National Association of Regulatory Utility
Commissioners': "Model State Utility Environmental Protection Act."
a. Siting Authority
1) The public utility commission provides regulation of plant siting
and transmission line routes;
2) The public utility carmission is the final certifying authority
for generating and transmission plants of 50 megawatts or more,
and for electric transmission lines of design capacity of
125 kilowatts or more;
3) Regulated utilities are any facility engaged in production,
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transmission, storage, sale, delivery, or furnishing of electricity
for public use.
b. Applications
1) Certificate of environmental compatibility and public need—
required before ccrrmencing construction ;
2) Contents of application for certificate:
i) describe location and design of facility;
ii) summarize available environmental impact information;
iii) justify the need for the facility;
iv) describe alternative sites—comparative merits and
detriments;
v) reasons for selection of preferred site.
3) Original and copies of application filed with ocnmissian;
4) Canmission disseminates copies to municipality to be affected
and state agencies with environmental protection and land use
and planning responsibilities;
5) Application sunmaries must be published in newspapers of affected
locality.
c. Hearings On Application
1) Within 60 to 90 days after filing;
2) Participants may include:
i) applicant;
ii) municipal and state agency representatives;
iii) citizens of affected locality;
iv) nonprofit public interest groups;
A. to conserve or protect natural beauty;
B. protect the environment, personal health, or
other biological values;
C. represent ccttmerce or industry.
3) Cormission may require consolidation of testimony of parties with
cannon interest.
d. Final Decision
1) Decision by oomdssion in form of written opinion;
2) Findings:
i) facility serves public interest, need, and convenience;
ii) facility is necessary;
iii) nature of the environmental impact is minimally adverse
considering technology available and the economies of
the various alternatives;
iv) facility will conform to all applicable state, regional,
and local law.
3) Catmission may refuse to apply a regional or local law considered
unduly restrictive;
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4) Rehearings for amendment of certificate nay be called if:
i) environmental impact were substantially affected;
ii) change in location required;
iii) aggrieved party petitions within 15 days of issuance
of decision.
5) Judicial review may be obtained by aggrieved party in an
appropriate state court.
6) Scope of judicial review:
i) whether ccsimission' s decision conformed to state and
federal law;
ii) is supported by substantial evidence an the record as
a whole;
iii) is consistent with provisions of siting law;
iv) was exercised in an arbitrary, capricious or
"undiscretionary" manner.
7) Further review by highest state appellate court. (Editorial
note: two step judicial review is a most dubious proposition.
The Ohio Power Siting Law is better in this respect.)
e. Other Provisions
1) Siting authority has preemptive pcwer over local governments
or other state or regional agencies;
2) Act authorizes joint action with other state or federal agencies ;
3) Act authorizes regional or interstate compacts;
4) Ten year forecasts of loads and resources filed annually with
oanmissicti;
5) Utility granted certification has eminent domain power.
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Section 4: State Law as a Solution to the Coordination Problem.
A. Existing State Efforts at Interstate Coordination of Pcwer Siting:
Recognition has been given by official and unofficial studies and by
federal and sane state laws of the need for interstate coordination of pcwer plant
siting on at least a regional level. Little has been done in fact. The Ohio
Power Siting Act, for instance, states:
Ohio Revised Code § 4906.14. Joint Proceedings With State
Or Federal Agencies.
The power siting ccnmission, in the discharge of its duties under
Chapter 4906 of the Revised Code, may make joint investigations,
hold joint hearings within or without the state, and issue joint
or concurrent orders in conjunction or concurrence with any official
or agency of any state or of the United States, whether in the
holding of such investigations or hearings, or in the making of
such orders, the ocnmissian is functioning under agreements or
compacts between states or under the concurrent power of states to
regulate interstate comerce, or as an agency of the United States,
or otherwise. The ccnmission, in the discharge of its duties under
Chapter 4906 of the Revised Code, may negotiate and enter into
agreements or canpacts with agencies of other states, pursuant to
any consent of congress, for cooperative efforts in certificating
the cmstruction, operation, and maintenance of major utility
facilities in accord with the purposes of such sections and for
the enforcement of the respective state laws regarding such facilities.
(Emphasis added.)
However, there are no such interstate accords for power siting. Moreover,
the Ohio Law (by far the most extensive of the ORBES states) makes no specific
provisions for notifying other states or for making them parties, which would
allow them "to call and examine witnesses." The Power Siting Commission,
however, "shall accept written or oral testimony frcm any person at the public
hearing . . (54906.08(c), Ohio Revised Code). This could include other states.
The Federal environmental acts give authorization to states to negotiate
and enter into interstate agreements. The States for the most part (all of the
ORBES states) have interstate cooperation ocnmissians which typically are
composed of members of both legislative houses (often the leaders) and the
executive branch. For example, Ohio and Pennsylvania have seven menbers frcm
each house and seven from the executive branch, as voting members. Kentucky
designates the leadership people of both houses who as members of the legislative
Research Ccmmission also serve as the Commission on Interstate Cooperation;
Indiana's catmission is similar to Kentucky's. Although the commissions vary
seme as to membership, their powers and duties are nearly identical. Kentucky's
law is typical and reads in part (§ 8.010 et seq., Kentucky Revised Code) :
"[The ccmmission] shall encourage and assist the legislative,
executive and judicial officials and employees of the
camonwealth to develop and maintain perscaial contact, with
departments, agencies, officials and employees of the other
states . . . ."
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(§ 8010(1)):
"The cotmission shall carry forward the participation of
Kentucky as a member of the Council on state governments."
(§ 8010(2)):
"The cantassion shall advance cooperation between the
ocntmonwealth and other units of government by exercising
principal responsibility and authority for:
(a) the proposing of interstate compacts;
(b) the proposing of uniform laws, model laws and
reciprocal statutes;
(c) the encouraging of uniform or reciprocal
administrative rules and regulations;
(d) the interchange and clearance of research
any information;
(e) any other intergovernmental action . . . that
affects intergovernmental cooperation. (§ 8.040(1))
Through these commissions, the Council of State Governments, and other standing
interstate organizations of state officials, the means are available to effect
coordination without federal help. But in three recent publications of the
Council, The States and Electric Utility Regulation, State Planning:
Intergovernmental Policy Coordination, and Environmental Resource Data:
Intergovernmental Management Dimensions, the enphasis is almost entirely on
vertical coordination (federal to state to local) and not to horizontal
coordination. The recently enacted Ohio Act creating the Department of Energy
(§ 1551.01, Ohio Revised Code (1977)) contains no express provisions for, or
even mention of, interstate cooperation. For instance § 1551.02 provides in
part that:
"The director of energy shall establish an office of
intergovernmental relations and appoint different employees
in the office, each to serve as a full time liaison officer
with the federal government, the general asserrbly, other
state agencies and local government, respectively."
In this context "other state agencies" seems to mean "Ohio state agencies."
However, the definition of "governmental agency" (§ 1551.01(A)) includes
"any unit of a state government" and would seem to mandate the furnishing
to other states the ten year forecast a "major utility facility" must annually
furnish the state of Ohio (§ 1551.17(B)). It states "[t]he forecast . . .
shall be furnished upon request to . . . governmental agencies charged with
the duty of protecting the environment . . . ." The Illinois Energy Resources
Cotmission Act (as amended 1977) is devoid of any reference to interstate
activity or cooperation. The ORSANCO study cited above concludes:
""The nature of most public utility carmissions, and other state
energy facility siting authorities result in the exclusion of or
minimal weight given to regional factors in energy facility siting.
There are few institutional or procedural arrangements that exist
for the systematic consideration of regional dimensions of facility
siting. There exists a need for institutional arrangements to
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provide adequate articulation of regional concerns.' (p. 52) One might
say 'essentially no institutional or procedural arrangements.* Even
the elaborate New York siting law referred to in the previous section
makes only oblique reference to interstate affects or cooperation.
Near the end of the recitation of the factors an which the board must
base its decision is (§ 146(g)): 'that the facility is in the public
interest, considering the environmental impact of the facility,
the total cost to society as a whole, the possible available sites
or alternative available sources of energy . . . both within the state
and elsewhere . . . .1" That is the total reference.
The need for regional coordination and the state mechanisms for effecting
such interstate coordination is apparent. Seven years ago in the Environment
Reporter Monograph by Berlin, Gill and Yarringtan, cited supra, a note of
premise and hope was sounded (at p. 11):
"Despite the fact that pewer production and consumption as well as
concomitant pollution effects have no respect for state boundaries,
there has been minimal regional action. The Federal Power Commission
has arrangements for regional activity related to interconnected
pewer grids. But the states largely have ignored this aspect of
siting policy.
"Perhaps spurred by the prospect of regional requirements under
federal law, there are beginnings of interstate action to deal with
siting on a regional basis.
"In June 1972, the Midwest Governor's Conference agreed to hold a
midsunmer meeting an 'Energy and the Environment.' Each of the
15 member states sent its chief advisors on energy needs, environmental
protection, and natural resources to lay the groundwork for development
of a team to analyze problems on a multistate basis and to consider the
interstate impact on the environment of electric power generation and
distribution. The overall objective of the midwestern effort was to
develop an energy policy for the area.
"A follcwup meeting was held in mid-October 1972 to work out positions
to be presented to each state government, in the hope of achieving
legislation or administrative arrangements to expedite solution of
interstate siting problems.
"New York State has proposed a tri-state plan for Connecticut, New Jersey,
and New York, to establish an 11-state electric supply region under a
single coordinating body to deal with the power needs of the New York
metropolitan area and to supervise the existing power grid network.
Siting and environmental values would be part of the organization's
considerations.
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"In the southeast, the Southern Interstate Nuclear Board, consisting
of 17 states and a federal representative, is changing its orientation
to a broader concern with solving energy problems similar to the
midwest program. The board is contemplating requesting legislative
changes through congressional action to enlarge the scope of its
authorized responsibility.
"In addition, Delaware, Maryland, and Virginia have formed a committee
on power plants and the environment, which held meetings in March and
October 1972. Participants hope that the cormittee will prove to be
the entoryo of a more formal entity capable of coordinating energy
policy and production among the three states."
The ORSANCO stuffy sounds a note of cautious optimism at its conclusion by citing:
(at 55-56)
"A Test Demonstration Project recently initiated by the Southern States
Energy Board (SSEB), for the Nuclear Regulatory Ooitmissian, in North
and South Carolina may become the model for future regional energy
siting. The SSEB will monitor and work with the two,states and
Duke Power Company to document a regional process of determining the
need for power and to evaluate a site selection methodology. The overall
objective of the demonstration process is to work with the states in an
actual project to find ways to improve the effectiveness and timeliness
of the regulatory process.
"Phase I of the demonstration project (expected completion date
August, 1979) develops site-plant alternatives through a logical,
subjective, and objective identification of potential sites. Phase II
(expected completion date March, 1980) concerns the evaluation by
State agencies, federal agencies, and the general public of the
site-plant alternatives with the inputs being used to select the two
best fossil and nuclear site-plant ccirbinations. Phase III (expected
completion date March, 1981) is an actual selection by Duke Power
Company of the site for its next thermal base load power station."
Having expanded its activities, the Southern States Energy Board referred to
above has only recently changed its name from the "Southern Interstate Nuclear
Board," which suggested a much more limited role than it now has. The S.S.E.B.
appears to be one of the most active promoters of interstate planning for energy
development. At least two states have taken scare notice of interstate aspects
of power siting: The New Hampshire siting act authorizes consultation with
other states who may be affected by the New Hampshire site decision. "More
explicitly," continues the Haggard article, supra, (at 395) "the Massachusetts
Act is the first state [act] to comprehend that projections made by other
utilities in the region are part of the necessary data base for a reasonable
evaluation of needs and resources within the state."
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B. Potential Use of Uniform or Reciprocal State Legislation:
(1). Introduction:
In 1890 the legislature of the State of New York adopted an act authorizing the
appointment of " ocnrnissioners for the promotion of uniformity of legislation in
the United States." In the same year, a special committee of the American Bar
Association, often reciting the action of New York, reported a resolution that
the Association recarmended the passage by each state and by Congress for the
District of Colurrbia and the territories, of a law providing for the appointment
of Commissioners to confer with Ccnmissianers from other states on the subject
of uniformity in legislation on certain subjects. As a result of the action
of the state of New York and the American Bar Association, the National Conference
was originated in 1892.
The National Conference is composed of Coanrdssioners frcsri each of the States,
the District of Coluntoia and Puerto Rico. In thirty-three of these jurisdictions
the caintdssioners are appointed by the Chief Executive acting under express
legislative authority. In other jurisdictions the appointments are made by
general executive authority. The Carmissioners are appointed by the governor
of each state. There are usually three representatives from each jurisdiction.
The term of appointment varies, but three years is the usual period. Hie
ocnrnissioners are all from the legal profession being lawyers, judges or
law professors.
The National Conference works through standing and special oorrmittees.
Whenever a subject for an act is proposed, it is referred to a standing Ccntnittee
on Scope and Program. The oorcmittee determines whether the subject merits
consideration by the Conference and makes its reccranendation to the Executive
Committee. If the Executive Committee determines that a proposed act merits
consideration by the Conference, the President of the Conference assigns
the subject to a standing or special ccrrmittee. It is the responsibility of
this committee to determine whether the subject is one on which an act should
be drafted and whether the act should be designated as "uniform" or "model."
A irodel act is an act covering a subject on which the carmissioners do not feel
that uniformity between the states is necessary, but where it would be helpful
to have legislation which would tend toward uniformity and serve as a model—a
sort of ideal law both in form and substance, like the Model Penal Code.
If the Special Committee reccmrends that a uniform or model act be drafted,
the President refers the subject to a special committee to draft an act.
With respect to some of the more important acts, it has been customary to
esrploy an expert draftsman. Hie President also appoints a Review Connvittee
to screen the draft before it is presented to the National Conference.
Tentative drafts of acts are submitted from year to year and are discussed
section by section. Each uniform draft is thus the result of one or more
tentative drafts subjected to the criticism and correction of the Ccnmissianers.
Acts are not approved by the Conference until they have been considered section
by section, by at least two annual Conferences.
Securing the adoption of uniform and model acts of the National Conference
is the responsibility of the Legislative Committee, a part of the National
Conference. With the endorsement of the American Bar Association, this oonmittee
urges the enactment of the acts in each jurisdiction. As of 1975, the
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National Conference had drafted and approved two hundred and fifteen acts.
Due to superseding of acts and withdrawing of acts there were a total of
one hundred thirty-five acts being recommended for adoption in 1975.
The Uniform Cotmercial Code (UOC) is the most conspicuously successful
of the uniform acts. It was the result of over than twenty years of intense
study. In 1938, a proposal was sponsored by the Merchants Association of
New York City for a federal sales act to govern all interstate sales transactions.
Eventually this proposal resulted in the National Conference of Oanmissianers
on Uniform State Laws adopting a proposal to prepare a uniform commercial code.
The code was to be a modernization and co-ordination of several Uniform Acts
in the field of cotmercial law including two very important and successful
acts, the Uniform Sales Act promulgated in 1906 and the Uniform Negotiable
Instruments Law promulgated in 1896. The American Law Institute joined in the
undertaking in 1941.
Between 1945 and 1952 a great nuntoer of drafts and redrafts of parts of
the proposed code were prepared by a reportorial staff supervised by an
Editorial Board. Hie Chief Reporter for the Code was Professor Karl N. Llewellyn
and the Associate Chief Reporter was Professor Soia Mentschekoff both of
the University of Chicago Law School. The first ccnplete draft of the Code
was released in May, 1949. It was not until 1952 that an official edition of
the Code with explanatory carments was published. In 1953, Pennsylvania became
the first state to enact the UCC.
As a result of changes suggested by the Law Revision Commission of New York
and those emanating from experience with the Code in Pennsylvania, the National
Conference and the ALI revised the Code in 1958. A further revision was
undertaken in 1962 which resulted in the current text. The Code has been adopted
in 49 states, the District of Columbia and the Virgin Islands. Louisiana is
the only state without the Code.
Most other Uniform Acts have not faired as well as the UOC. The Uniform
Interstate Arbitration of Death Taxes Act has been adopted by only sixteen
jurisdictions while the Uniform Reciprocal Enforcement of Support Act, has
been adopted by twenty-five jurisdictions.
Uniform and model acts are now an important source of state legislation.
Each of the fifty states has on the average enacted 28 of these uniform or
model acts written and promoted by the conference, with the range being 43
enactments [by Colorado and North Dakota] to 17 enactments [by Louisiana].
And this is counting the Uniform Commercial Code as only one act although
it is in reality a collection of eight acts covering every aspect of oanmercial
trade from sales through bank notes to secured transactions. The states in
the ORBES region have enacted these Conference-sponsored acts at about the
national average.
In Reisman and Simson, Interstate Agreements in the American Federal System,
27 Rutgers L. Rev. 70, 82 (1973) the authors say:
"The nunrber of jurisdictions adopting the uniform laws is a coordinate
index for trends in informal interstate promotion and prescription.
Hie Council of State Governments, an amalgam of 50 state ccrmissicns
with central and regional secretariats, is the principal promotional
arm of the National Conference. Yet, more focused agitation is
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practiced by other interstate associations, state officials acting
together cooperatively and coordinately below the associational
level, and private interest groups. Hence, the enactment statistics
for uniform laws tentatively reflect broadly on interstate promotion
in general rather than on the promotional competence of the Council."
Apropos this report, the Conference proposed a Uniform Public Utilities Act
in 1928. By 1943 no state had adopted it so it was withdrawn as obsolete.
(2). Sore uniform state acts viewed as potential rrodels;
Uniform Interstate Arbitration of Death Taxes Act (U.L.A.) § 1. (Vol. 8, p. 261)
§ 1 (Arbitration Agreement) (West Virginia has adopted. See § 11-11B-1 et seq.
W. Va. Code.)
When the [tax caimission] claims that a decedent was domiciled in this state
at the time of his death and the taxing authorities of another state or states
make a like claim on behalf of their state or states, the [tax commission] nay
[with the approval of the attorney general] make a written agreement with the
other taxing authorities and with the executor or administrator to submit the
controversy to the decision of a board consisting of one or any uneven nurrber
of arbitrators. The executor or administrator is hereby authorized to neke
the agreement. The parties to the agreement shall select the arbitrator or
arbitrators.
§ 2 (Hearings)
The board shall hold hearings at such times and places as it may determine,
upon [reasonable] notice to the parties to the agreement, all of whom shall be
entitled to be heard, to present evidence and to examine and cross-examine
witnesses.
Massachusetts passed a slight variation on § 2 which reads:
"Such board shall hold hearings at such places as are deemed necessary,
upon reasonable notice to the executors, ancillary administrators,
all other interested persons, and the taxing officials of the states
involved, all of whom shall be entitled to be heard.
"Such board shall apply, whenever practicable, the rules of evidence
which prevail in federal courts under the federal rules of civil
procedure at the time of the hearing."
Uniform Interstate Compromise of Death Taxes Act (U.L.A.) (Vol. 8, p. 274)
§ 1 (Compromise Agreement; Filing; Interest or Penalty for Non-Payment of Taxes)
When the [tax ccnmission] claims that a decedent was domiciled in this state
at the tine of his death and the taxing authorities of another state or states
make a like claim on behalf of their state or states, the [tax caimission] may
[with the approval of the attorney general] make a written agreement of oonproru.se
with the other taxing authorities and the executor or administrator that a certain
sum shall be accepted in full satisfaction of any and all death f-avpg imposed by
this state, including any interest or penalties to the date of filing the agreement.
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The agreement shall also fix the amount to be accepted by the other states in full
satisfaction of death taxes. The executor or administrator is hereby authorized
to make such agreement. Either the [tax carmission] or the executor or administrator
shall file the agreement, or a duplicate, with the authority that would be enpcwered
to assess [determine] death taxes for this state if there had been no agreement;
and thereupon the tax shall be deemed conclusively fixed as therein provided.
Unless the tax is paid within [ ] days after filing the agreement, interest
[or penalties] shall thereafter accrue upon the amount fixed in the agreement
but the time between the decedent's death and the filing shall not be included
in computing the interest [or penalties].
Substantial variations for the various states adopting this act. [omitted]
§ 2 (Definition of State)
As used in this act the word "state" means any state, territory, or
possession of the United States, and the District of Colutrbia.
§ 3 (Interpretation)
This act shall be so interpreted and construed as to effectuate its general
purpose to make uniform the law of those states which enact it.
§ 4 (Short Title)
This act nay be cited as the "Uniform Act cn Interstate Ccrnprardse of
Death Taxes."
§ 5 (Time of Taking Effect)
This act shall take effect [ ], and shall apply to estates of
decedents (tying before or after its enactment.
Uniform Controlled Substances Act (U.L.A.) § 504 (Vol. 9, p. 333)
60A-5-504 (W. Va. Code) Cooperative Arrangements and Confidentiality
a) The [appropriate person or agency] shall cooperate with Federal and
other State agencies in discharging his [its] responsibilities
concerning traffic in controlled substances and in suppressing
the abuse of controlled substances. To this end, he [it] may:
(1) arrange for the exchange of information among governmental
officials concerning the use and abuse of controlled substances;
(2) coordinate and cooperate in training programs concerning
controlled substance law enforcement at local and state levels;
(3) cooperate with the Bureau by establishing a centralized unit
to accept, catalogue, file, and collect statistics, including
periods of drug dependent persons and other controlled
substances law offenders within the state, and make the
information available for Federal, State and local law
enforcement purposes. He [it] shall not fumish the name
or identity of a patient or research subject whose identity
oould not be obtained under subsection (c); and
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(4) conduct programs of eradication aimed at destroying wild or
illicit grcwth of plant species fron which controlled substances
may be extracted.
Uniform Narcotic Drug Act (U.L.A.) § 19 (Vol. 9, p. 760)
"Enforcement and Cooperation" § 19
It is hereby made the duty of the [official-agency], its officers, agents,
inspectors, and representatives, and of all peace officers within the state,
and of all county attorneys to enforce all provisions of this act, except those
specifically delegated, and to cooperate with all agencies charged with the
enforcement of the laws of the United States, of the State, and of all other
states, relating to narcotic drugs.
Uniform Reciprocal Enforcement of Support Act
This is one of the most widely used acts calling for constant interstate
cooperation. Because of its reciprocal nature [our local children will not
get support from their out of state parents unless we make local parents support
their out of state children] the act has worked quite well. Pertinent parts are
as follows:
§ 1 (Purposes)
The purposes of this Act are to improve and extend by reciprocal legislation
the enforcement of duties of support.
§ 2 (Definitions)
(d) "Initiating state" means a state in which a proceeding pursuant to this or
a substantially similar reciprocal law is oonmenoed. "Initiating court"
means the court in which a proceeding is canmenced.
00 "Rendering state" means a state in which the court has issued a support order
for which registration is sought or granted in the court of another state.
(1) "Responding state" means a state in which any responsive proceeding pursuant
to the proceeding in the initiating state is ccnmenced. "Responding court"
means the court in which the responsive proceeding is ccnmenced.
§ 5 (Interstate Rendition)
The Governor of this State may:
(1) demand of the Governor of another state the surrender of a person found in
that state who is charged criminally in this State with failing to provide
for the support of any person; or
(2) surrender on demand by the Governor of another state a person found in this
State who is charged criminally in that state with failing to provide for
the support of any person ....
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§ 12 (Officials to Represent Obligee)
If this State is acting as an initiating state the prosecuting attorney upon the
request of the court [a state department of welfare, a county canmissioner,
an overseer of the poor, or other local welfare officer] shall represent the
cbligee in any proceeding under this Act. (If the prosecuting attorney neglects
or refuses to represent the cbligee the [Attorney General] may order him to
ccmply with the request of the court or may undertake the representation.)
(If the prosecuting attorney neglects or refuses to represent the obligee,
the [Attorney General] [State Director of Public Welfare] may undertake the
representation.)
§ 14 (Duty of Initiating Court)
If the initiating court finds that the [petition] sets forth facts from which
it may be determined that the cbligor owes a duty of support and that a court
of the responding state my obtain jurisdiction of the cbligor or his property
it shall so certify and cause 3 copies of the [petition] and its certificate
and one copy of this Act to be sent to the responding court. Certification
shall be in accordance with the requirements of the initiating state. If the
name and address of the responding court is unknown and the responding state
has an information agency comparable to that established in the initiating
state it shall cause the copies to be sent to the state information agency
or other proper official of the responding state, with a request that the agency
or official forward them to the proper court and that the court of the responding
state acknowledge their receipt to the initiating court.
§ 17 (State Information Agency)
(a) The [Attorney General's Office, State Attorney's Office, Welfare Department
or other information Agency] is designated as the state information agency
under this Act, it shall
(1) compile a list of the courts and their addresses in this State having
jurisdiction under this Act and transmit it to the state information
agency of every other state which has adopted this or a substantially
similar Act. Upon the adjournment of each session of the [legislature]
the agency shall distribute copies of any amendments to the Act and
a statement of their effective date to all other state information
agencies;
(2) maintain a register of lists of courts received from other states and
transmit copies thereof promptly to every court in this state having
jurisdiction under this Act; and
(3) forward to the court in this State which has jurisdiction over the
obligor or his property petitions, certificates and copies of the Act
it receives frcm courts or information agencies of other states ....
§ 34 (Appeals)
If the [Attorney General] [State Director of Public Welfare] is of the opinion
that a support order is erroneous and presents a question of law warranting an
appeal in the public interest, he may
(a) perfect an appeal to the proper appellate court if the support order was issued
by a court of this State, or
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(b) if the support order was issued in another state, cause the appeal to be
taken in the other state. In either case expenses of appeal nay be paid
on his order fron funds appropriated for his office ....
(3). Advantages and disadvantages of state law solution:
The advantages of state law facilitated coordination are clear—no interstate
agreement need be reached and no state sovereignty need be sacrificed either
to an interstate organization or to the federal government. A state therefore
can act unilaterally and hope others will follow its lead. If the act is
reciprocal no obligation to another state is incurred until that state passes
substantially the same act. Thus a simple information-on-siting exchange act
will not obligate a passing state to send siting information to any state whose
reciprocation is not guaranteed by the passage of a similar act. A state could
pass such an act on a nonreciprocal basis in the hope that this jester would
lead other states to voluntarily (i.e., administratively, without legislative
act) make reciprocal information available. But in this context a reciprocal
act usually seems more acceptable to legislators.
The incentive to pass reciprocal acts is age old: "if you'll scratch iry
ny back I'll scratch yours." If, say, Ohio wants to have an input into Indiana
siting, then all Ohio need do is pass a law allowing Indiana to participate,
indicating the extent of that participation and conditioning such participation
on a similar allowance by Indiana of Ohio participation in its siting decisions.
Similarly, Ohio might say if we have a dispute as to a siting decision, or you
do not like a siting decision of ours, we will submit it to interstate arbitration
if you will do the same if we dislike your decision. (See, for example, the
Uniform Interstate Arbitration of Death Taxes Act sited above.) Of course,
states oould submit disputes to arbitration on an ad hoc basis, but once a
dispute has arisen, agreeing on an arbitration panel and procedure is about as
difficult as settling the underlying dispute. With the reciprocal act model,
Ohio, for example, need not have any other state agree to so arbitrate, it simply
passes the act and the passage of a similar act by another state is agreement.
If no one else passes such an act, nothing is lost.
One of the disadvantages of a reciprocal legislative solution is that it is
somewhat difficult to pass an act that another state will like in sufficient detail,
such that the other state's passage of its act is really reciprocal. The two acts
need not be precisely the same in order to create reciprocal obligations but they
must be substantially the same. Moreover, if the proaess of the National Conference
of Ccntnissioners of Uniform State Laws is used drafting and promoting reciprocal
legislation could be very time-consuming, as the discussion of the "Conference"
(above) indicates.
A second problem is that the states interested in coordination in this matter,
may have such dissimilar siting laws (as is true in the ORBES region) that a
reciprocal allowance of participation in each other's siting decisions may be
clearly more advantageous to one than the other, i.e., the backs proposed to be
scratched are very dissimilar, one much itchier or larger than the other.
Ohio with its one stop procedure and clear criteria for decision may (to strain
the metaphor a little further) have a relatively small back compared to Indiana
with its less than clearly set process. In fact the advantages might be the other
way around but the dissimilarity would cause enough uncertainty as to give pause to
both parties. (A rabbit and a squirrel probably would not offer to scratch each
other's backs.)
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Two things might mitigate this disadvantage: a very modest and simple act,
for instance, one merely offering to exchange information; or the reciprocal
legislation could be tied to uniform siting legislation, for instance, Ohio
might condition its reciprocal behavior on another state's having both a
reciprocal exchange of data law and similar interval siting legislation (or,
at least, an interval siting process that conforms to certain minimum standards).
However, a very simple act does not effect much coordination and could still be
worrisome where, for instance, a state passing a data exchange act generates
a large quantity of, or well organized, data and the reciprocating state does not.
On the other hand, if the reciprocal act is tied to certain requirements as to
internal siting legislation, there may be few potential reciprocators.
A third problem with reciprocal legislation is that the passage of a
reciprocal act is an offer to all other states. Ohio, say, may want to
participate in Indiana's siting but not care about participating in Pennsylvania's
siting and not want Pennsylvania participating in Ohio's siting. State reciprocal
legislation is unlike the offer of a unilateral contract, which can be specifically
directed. States cannot discriminate in this fashion. Since the problem of
advected air pollution, a major cause of the need for interstate coordination in
power siting, does not create obvious mutual trade offs, (air currents go mainly
one way) this might prove a major impediment to accord, either by reciprocal law
or compact.
One of the ways sane of the problems of reciprocal legislation might be solved
in the context of the Ohio River Basin energy siting is to use a oompact arrangement,
new or existing, to create reciprocal legislation tailored to the needs of the
basin. Such a ccnpact could create an agency that could act more quickly than
the Council acts in drafting legislation for the states to adopt. Perhaps the
lack of mutual environmental trade offs in this context (the Ohio River flowing
east to west would probably not create a sufficient trade off to induce accord)
is offset by trade offs of a different kind—the mutual desire by states to avoid
federal takeover of the siting problem. Since in a federal union the central
government is likely to act when it sees its meirber states unable to resolve
their mutual conflicts or effect necessary coordination, the threat of scare
federal action through either the federal courts or Congress might create
sufficient mutuality of interest to generate accord. Reciprocal legislation,
a kind of "offer-at-large" to enter a contract by the act of passing similar
legislation is one way to reach agreement in a federal union.
One final disadvantage of reciprocal laws (beyond the obvious fact that
without an implausibly detailed reciprocal law they can achieve only limited
coordination) is that, if the coordination need among the OFBES states is truly
regional in scope, one or two states refusing to pass a proposed act may make
it unworkable. Let's say all but Ohio of the OFBES states pass reciprocal
data exchange laws, will the missing Ohio data make the other exchanges meaningless?
Probably not entirely, but I do not knew.
In surrmary, then, reciprocal legislation might be at least a partial solution
to the coordination problem. Let us then look more closely at seme possible
reciprocal acts.
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(4). An example of a model uniform interstate coordination act for
power plant siting:
The simplest model would be an act for the exchange of siting information.
For example, such an act might look something like the following:
"§ 1, The purpose of this act (call it the Interstate Power Siting
Data Exchange Act) is to provide for the exchange of information
with other states as to proposed electrical generating facilities
sites and their environmental impacts, economic effects, energy
resource use and other possible affects so that each state can
act in making its cwn decisions about site and facility
certification in the light of more complete information as to
out of state impacts and alternatives.
§ 2, Hie (Director of Energy) shall furnish to any agent of another state
charged with energy planning, power plant siting or environmental
protection and who is authorized by that state's law to request and
who does so request the following information:
(A) the ten year forecasts of energy consumption in this state
by region or in whatever form and whatever detail it is
possessed;
(B) the ten year forecasts as to new generating facility site
locations, their proposed size, fuel type, etc.;
(C) whatever information about air pollution emissions, [etc.,
as to specific environmental impacts] likely to be caused
by the sites mentioned in (B);
(D) any specific proposals for new generating facility sites
in the state, all the information in the possession of
the (department of energy) concerning any proposal and
the time or times and place or places that any hearings
may or will be had on such proposal and any other procedures
pertaining to such proposal;
(E) [etc., etc., whatever other information might be available
and useful but, to avoid quarrels as to relevancy, the
specification should be fairly detailed].
The information set out in § 2, need only be furnished anoe a year
to any requesting state and then only to a requesting state that
has a law identical with or substantially similar to this act.
Any state that furnishes this state's appropriate agent the information
as set out above without a law so mandating may be furnished such
information by the director at his sole discretion.
§ 3, The (Director of Energy) shall be the sole agent in this state
authorized to request and receive frcan another state the information
set out above. The director is responsible to disseminate the
information received to the appropriate agencies of this state for
their use."
A similar model might authorize a procedure for comments by the other enacting
states on the information exchanged. Or it might authorize any other enacting
state to be a party at its cwn request to any siting procedure. Or it might
formalize the interstate content procedure, which would be but a step from mutual
planning.
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A different model, might provide for siting dispute resolution by establishing
an arbitration procedure or a oonpranise procedure. The uniform death taxes acts,
cited above, could serve as prototypes, but the dispute here is substantially
more ccnplex than mere domicile determination or tax division as in the two
prototypes. Such arbitration might be preferable to adjudication, but arbitration
often leads to adjudication over the arbitrators jurisdiction or irandate. And
whether a federal court would specifically enforce such a provision is doubtful.
There are no precedents for mandatory arbitration of interstate disputes.
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CHAPTER III. INTERSTATE COMPACTS
Potential for the use of an interstate compact as a solution to the
coordination problem.
The use of the Congressionally sanctioned interstate compact device to effect
regional coordination in the electrical utility industry-was urged over fifty years
ago by the late Felix Frankfurter, then a well-known Harvard law professor, later a
justice of the United States Supreme Court. In an article with James Landis
called The Compact Clause of the Constitution—A Study in Interstate Adjustments,
34 Yale L.J. 658 (1925) he stated:
"Public utility regulation discloses a steady contraction of control
by individual States and a corresponding absorption of authority by
the Federal Government .... Apart from the railroads, however,
there is still left a wide and vital sphere of interstate ocmrnanications
which project beyond State lines but are nevertheless predominantly
regional rather than national in their penetration. Congress has left
a considerable part of this field unregulated just because it is
essentially local or regional in its significance and because the
burden of national oversight would be excessive and ineffective.
Here, again, there is need for regulation by the unified action of the
affected region. Again we find resort to compact .... Throughout
the country local utilities cross state lines and raise irritating
difficulties over regulation. State compact furnishes an effective
answer .... Here is a ready means for avoiding undue congestion
at Washington and the ineffectiveness of individual state control."
(Id. at 703-04, emphasis added.)
After some discussion of the use of the original jurisdiction of the
Supreme Court to settle interstate disputes, Frankfurter and Landis stated:
"But most questions of interstate concern are beyond the jurisdiction
of the Supreme Court; they are beyond all covert relief. Legislation
is the answer, and legislation must be coterminous with the region
requiring control. We are dealing with regions, like the Southwest
clustering about the Colorado River . . . which are organic units
in the light of a common human need like water-supply. The regions
are less than the nation and are greater than any one state.
The mechanism of legislation must therefore be greater than that
at the disposal of a single State. National action is the ready
alternative. But national action is either unavailable or excessive . . . .
With all our unifying processes nothing is clearer than that in the
United States there are being built up regional interests, regional
cultures and regional interdependencies. These produce regional
problems calling for regional solutions. Control by the nation would
be ill-conceived and intrusive .... As to these regional problems
Congress could not legislate effectively. Regional interests, regional
wisdom and regional pride must be looked to for solutions.
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The regional economic areas demand continuity of administrative
control insofar as control is to be exercised through law.
The central problem of law, it is becoming clearer every day,
is enforcement. Experience overwhelmingly demonstrates that the
demands of law upon economic enterprises, like the modern utilities,
cannot be realized through the occasional explosions of law-suits
but call for the continuity of study, the slow building-up of
knowledge, the stimulation of experiments, the initiative in
enforcement which can only be secured through a permanent, professional
administrative agency. The inventive powers exacted from modern
State legislatures must grapple with problems whose stage is an
interstate region. Collective legislative action through the
instrumentality of compact by States constituting a region furnishes
the answer.
Perhaps the sharpest emergence of this problem is due to the widespread
development of electric power." (Id. at 707-08.)
Frankfurter's remarkably presentment view of the electrical utility
industry continues:
"In brief, an integration is proposed of a vast network of generating
plants, transmission lines and distributing stations, heretofore
independent in their operations and therefore individually confined
to their territorial radius." (Id. at 710.)
"Time alone can tell the extent to which these plans will be realized
and the exact forms which they will take. This is not the occasion
to express either one's hopes or one's fears. But legal pre-vision
may certainly presuppose a vast interrelated network of electric power
freely playing across State lines, serving industrial centers and
affecting scattered communities which themselves constitute
individualized industrial and social units." (Id. at 711.)
"[Herbert] Hoover has thus stated the practical situation which confronts
lawyer and legislator:
'All this means the liquidity of power over whole groups of States.
At once power distribution spreads across State lines and into diverse
legal jurisdictions. We are, therefore, confronted not only with
problems of the coordination in the industries of their engineering,
financial and ownership problems, but also with new legal problems
in States rights and Federal relations to power distribution.'
The shallow answer to this plethora of problems is Federal control,
predicated on the surface fact that we are in the field of interstate
commerce. There is proposed a Federal Commission with authority over
power, analogous to that exercised by the Interstate Conmerce Carmission
over railroads." (Id. at 712.)
"Again, the problems of transmission are not capable of being drawn
completely within the area of solution by Congress, even if such a
course were advisable. To be sure, the transmission of electricity
across State borders is interstate comerce and as such subject to
the Federal power evolved for the control of such commerce with its
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imnunity against discrimination by State action. But to a considerable
extent the future will have to deal, as does the present, with
transmission and its facilities limited entirely to the confines of
a single State. Yet sane coordination of policy between these Statewide
transmission systems and interstate transmission will call for a
mechanism of control regional and not merely State-wide in its
operation, in order to secure interconnection, exchange and distribution
of pcwer." (Id. at 714.)
"Here, as elsewhere in the domain of public law, the legal mechanism
should evolve from actualities. Despite all mechanical invention and
depressing forces for standardization, the United States by virtue of
its size reveals distinct regions with differences of climate, geography,
economic specialization, and social habits. The integration of the
pcwer industry is likewise assuming regional forms.
From this analysis issues the legal answer. The regional characteristic
of electric paver, as a social and engineering fact, must find a
counterpart in the effort of law to deal with it. No single State in
isolation can wholly deal with the problem. The facts equally exclude
the capacity of the Federal government to cover the field. Co-ordinated
regulation among groups of States, in harmony with the Federal administration
over developments an navigable streams and in the public domain, must be
the objective. Regional solutions in such new and ccnplicated demands
upon law must necessarily be empiric and cautious in their unfolding.
The exact form of future legal devices will have to be modified from time
to time and fiuu region to region, adapted to varying conditions and,
it is to be hoped, built on a graving body of experience. The vehicle
for this process of legal adjustment is at hand in the fruitful
possibilities inherent in the Ccnpact Clause of the Constitution.
It is this solution which Governor Pinchot is pressing upon his own
and neighboring States. Only most painstaking study by lawyers saturated
with the practical problems, in collaboration with engineers and anHal
econanists, can bring the proposal to fruition." (Id. at 717-18.
Enphasis added.)
After further discussion of the constitutional difficulties both of direct
federal control or of compact control of the problem (difficulties that no longer
obtain) Frankfurter and Landis concluded:
"The imaginative adaption of the ccnpact idea should add considerably
to resources available to statesmen in the solution of prcfoleirs
presented by the growing interdependence, social and economic, of groups
of States forming distinct regions. It may well be that the New England
States, the Middle Atlantic States, the Pacific Coast States and
similar groupings will each evolve, through compact, cannon industrial
standards, thereby recognizing diversities not coincident with the
capricious boundaries of forty-eight States nor yet to be resolved by
a flat caiman denominator nationwide in its operation. Time and
circumstances alone must determine the existence of such diversities and
camion needs and the wisdom of regional rather than national treatment.
The overwhelming difficulties confronting modem society must not be at
the mercy of the false antithesis embodied in the shibboleths 'States-
Rights and 'National Supremacy.1 We must not deny ourselves new or
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unfamiliar nodes in realizing national ideals. Our regions are realities.
Political thinking must respond to these realities. Instead of leading
to parochialism, it will bring a fresh ferment of political thought
whereby national aims may be achieved through various forms of political
adjustments." (Id. at 729.)
Fifty plus years have passed since this exhortation to action and no regional
compacts have materialized in the electrical utility area. The Federal Pcwer
Commission (discussed in Chapter I) and regional organizations of the private
utility industry have crane into being. Moreover vast new federal environmental
and energy resource regulatory schemes affecting the electrical utility industry
have recently cone into being. This new federal law is largely left to
individual state inplementation with no inroediate provision for regional
interstate coordination of effort. Congress has invited such coordination through
general compact authorization as in the Federal Water Pollution Control Act
Amendments of 1972 (86 Stat. 816, Sec. 103(b)):
"INTERSTATE COOPERATION AND UNIFORM LAWS"
"Sec. 103. (a) The Administrator shall encourage cooperative activities
by the States for the prevention, reduction, and elimination of pollution,
encourage the enactment of improved and, so far as practicable, uniform
State laws relating to the prevention, reduction, and elimination of
pollution; and encourage compacts between States for the prevention and
control of pollution, (b) The consent of the Congress is hereby given
to two or more States to negotiate and enter into agreements or oarpacts,
not in conflict with any law or treaty of the United States, for
(1) cooperative effort and mutual assistance for the prevention and
control of pollution and the enforcement of their respective laws
relating thereto, and (2) the establishment of such agencies, joint
or otherwise, as they may deem desirable for making effective such
agreements and ocnpacts. No such agreement or compact shall be binding
or obligatory upon any State a party thereto unless and until it has
been approved by the Congress."
The following two sections of this report (5 and 6) will explore the ocnpact
device as a means of interstate regional coordination of federal-state regulation
affecting power plant siting.
Section 5: The Interstate Compact as an Institutional Device for Interstate
Cooperation and Coordination.
A. Background: The Nature, History, Seine Examples of, and the Literature on
Interstate Compacts:
(1). What is an interstate compact?
"No state shall enter into any Treaty, Alliance or Confederation ....
No state shall, without the oonsent of Congress, . . . enter into any Agreement
or Ccmpact with another state." Art. 1, § 10, cl. 3, U.S. Const. This is the
sole reference in the constitution to interstate agreements. Does this mean
that any and all agreements between states need Congressional approval? The answer
is a clear no. Only those "ocnpacts" or "agreements" (the two words have no
different legal significance in this context) require Congressional approval
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that are "combination [s] tending to the increase of political power in the states,
which may encroach upon or interfere with the just supremacy of the United States."
Virginia v. Tennessee, 148 U.S. 503, 519 (1893). This test was recently reiterated
and the Compact Clause and its history discussed at sate length by the Supreme Court
in U.S. Steel Corp. v. Multistats Tax Cantn'n, 434 U.S. 452 (1978) which ipheld the
constitutionality of the Multistats Tax Compact, a rather elaborate administrative
compact (among 19 states currently), even though it lacks congressional approval.
This compact created a Multistats Tax Commission composed of the tax administrators
of all member states. The Ccnmission had the following powers (giving only the
verb used in the compact): "to study", "to develop and recommend", "to ocrtpile
and publish"; (adding sane non-verbs) to adopt "advisory only" uniform
administrative regulations, and finally, the most controversial power, "to conduct
audits" at the requests of member states who have specifically adopted the audit
section (Art. VIII) of the compact and to enforce by compulsory judicial process
its auditing power in the states specifically approving this audit section.
In fact, Art. VIII, § 5, allows the Ccnmission to initiate certain audits that
the Commission thinks would be of interest to sans of its meirber states. (See
434 U.S. at 492 [White, J., dissenting].) Any meirber state can withdraw from
the compact at any time. (Illinois and Indiana both Recently withdrew.)
The majority held that none of these powers or the sum total of the cooperative
venture "enhances state power quoad the National Government" (id. at 473) or
"present opportunities for enhancement of state power at the expense of the
federal supremacy" (id. at 470) or has a "potential impact" on "federal suprenacy"
(id. at 472). All the phrases being various ways to put the Virginia v. Tennessee
test quoted above.
This 1978 case then suggests that if little direct compulsory power is given
its administrative organ, multi-state compacts of a fairly elaborate order can be
established legally without Congressional consent. TVelve different bills had
been introduced between 1964 and 1975 to gain Congressional approval for the
Multistate Tax Compact (id. at 456, nn.3 and 4, and at 486-87); none got out of
committee (id. at 479, n7J3).
This case then means that there are essentially three kinds of interstate
compacts that also have administrative organs separate from any state and
organic to the compact: (1) Compacts approved by Congress with Congress as
a full participant, (2) Compacts approved by Congress but with no or only nominal
Congressional participation, (3) Compacts without Congressional consent but with
legal force.
Two further points: even if a compact is so weak as not to require
congressional approval, such approval nay be desirable to encourage federal-
state cooperation. On the other hand, there nay be an upper limit on the
powers that can be given through a compact even with congressional approval.
Act I, § 10, cl. 1 places an absolute ban on states entering into "Any Treaty,
Alliance or Confederation" with or without the consent of Congress. tSee id.
at 460-64.) No "compact" has ever been declared unconstitutional because by
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its nature it was really a proscribed "Treaty, Alliance or Confederation".*
Nonetheless the possibility remains. The Supreme Court in U.S. Steel Corp. v.
Multistate Tax Conm'n., supra at 460-64, carmen ted:
"The Framers clearly perceived compacts and agreements as differing
fran treaties. [Footnote quoting fran the Articles of Confederation
and Wharton v. Wise, 153 U.S. 155, at 167 and 170-71 (1894) emitted.]
The records of the Constitutional Convention, however, are barren of
any clue as to the precise contours of the agreements and ccnpacts
governed by the Compact Clause. [Footnote omitted.] This suggests
that the Framers used the words 'treaty1, 'compact', and 'agreement'
as terms of art, for which no explanation was required [long footnote,
citing Engdahl, infra, (Section 5, A (3)), and Frankfurter and Landis,
supra and Weinfeld, What did the Framers of the Federal Constitution
Mean by "Agreements" and "Conpacts"?, 3 U. Chi. L. Rev., 453 (1936)
emitted] and with which we are unfamiliar. Further evidence that the
Framers ascribed precise meanings to these words appears in contemporary
ocranentary. [Footnote omitted. ]
Whatever distinct meanings the Framers attributed to the terms in
Art. I, § 10, those meanings were soon lost. In 1833, Mr. Justice Story
perceived no clear distinction among any of the terms. [Footnote quoting
from Story's 'Commentaries on the Constitution of the United States'
emitted.] Lacking any clue as to the categorical definitions the Framers
had ascribed to them, Mr. Justice Story developed his own theory.
Treaties, alliances and confederations, he wrote, generally connote
military and political accords and are forbidden to the States. Ccnpacts
and agreements, on the other hand, enforaoe 'mere private rights of
sovereignty; such as questions of boundary; interests in land situate
in the territory of each other; and other internal regulations for the
mutual comfort and convenience of States bordering on each other.'
(Citation to his 'Cormentaries' emitted.)"
Two general comments are warranted on the distinction between "treaties, etc.,"
on one hand, and "ccnpacts". First, if treaties are "political accords" as Story
suggested (see, also, Thursby, supra, at 50) and the word political were given
the meaning the Supreme Court has accorded it in recent years, i.e., questions of
policy that are fit only for legislative judgment are "political questions", then
any accord which gave significant legislative authority to a compact agency might
be a forbidden "treaty". However, this meaning of the word "political" has been
But, see, Thursby, Interstate Cooperation, A Study of the Interstate Ccnpact,
(1953) in a section called "Treaties and Conpacts Distinguished", pp. 23-33,
the author cites Williams v. Bruffy, 96 U.S. (60 Otto) 176 (1877), as saying acts
of the Confederate States of America were void because the Confederacy violated
the absolute ban on alliances, treaties and confederacies. However, one might have
thought that secession from the Union was the greater sin (see, Lamar v. Micow,
112 U.S. 452, 476 (1884)) such that a "confederacy" within the union would be-
readily distinguishable.
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developed in the context of exempting same constitutional questions from judicial
review as "political questions". See Baker v. Carr, 369 U.S. 186 (1962). If the
question as to what is a republican form of government within the meaning of the
Guaranty Clause (Art. 4, § 4, U.S. Const.: "The United States shall guarantee
to every state in the Union a Republican Form of Government . . .") is a
nonjusticiable, political question (Luther v. Borden, (U.S.) 7 How. 1 (1849)
reaffirmed in Baker v. Carr, supra at 218-26) then the difference between a
forbidden "treaty" and a permissible "compact" would be a "political question"
such that Congressional consent to an interstate accord as a "ccnpact", which
would inply a Congressional finding that the accord is a permitted "compact",
would be a final resolution of the constitutional issue and the Court would not
review it. Thus whether the "political nature" of an accord converts it into a
forbidden "treaty" is itself a "political question" to be conclusively resolved
by Congress in their deliberations over whether to assent to it. Moreover, the
Supreme Court has recently held that when an interstate regional ccnpact agency
is exercising legislative authority its members are absolutely immune from
federal damage liability the same as state legislators. The Court apparently
assumed that Compact agencies could be given legislative authority. Lake Tahoe
Estates Inc. v. Tahoe Regional Planning Agency, 99 S.Ct. 1171, 1178-80 (1979).
The dissenting opinions of Marshall and Blackman would have denied absolute
iimrunity on the basis that ccnpact agency meirbers are "not subject to the
responsibility and the brake of the electoral process." (Id. at 1181.)
Which brings us to a final general carmen t: One carmentator has suggested
that if an agency is given considerable legislative authority and each appointing
state has an equal voice even though the populations of the states are vastly
different, then it might violate the one person, one vote rule of Reynolds v.
Sims, 377 U.S. 533 (1964) and progeny. See T. Ernst, Legal Problems Affecting
Interstate Transportation Agencies, 11 Valparaiso L. Rev. 351, 367-70 (1977).
It is difficult to take this coioem very seriously. Any delegation of
legislative authority to a compact agency great enough to invoke one person,
one vote concerns would probably be beyond the contracting states constitutional
authority to delegate and certainly be beyond its political willingness as a
practical matter.
(2). Brief history of interstate compacts:
Although interstate agreements go as far back as 1664, when the colonies of
Connecticut and New York agreed on a boundary line in dispute, Ccnpacts of a
regional scope creating permanent interstate agencies of various powers did not
ccme into existence until the 1920s. Until then ccnpacts were usually bi-state
boundary arrangements. According to Barton, Interstate Ccnpacts and the
Political Process (1967), there were 36 ccnpacts between 1783 and 1920, 55 between
1921 and 1955, and "more than a score" between 1955 and 1967. A current
compilation of Ccnpacts (Interstate Compacts 1783-1977 (A Revised Carpilation))
published by the Council of State Governments in 1977 shows there to be 48
Regional Ccnpacts (id. at 31) extant.
TWo things conspired to cause the radical increase of interstate ccnpacts
after 1921: (1) "The growing necessity in modern times for cannon or even joint
administration to cope with problems that now transcended state lines" (Ziitmemran
and Wendell, p. 1) and (2) limiting decisions of the Supreme Court as to federal
power under the carrieroe clause or tax clause to solve the problems by direct
federal control. (Since 1937 the Supreme Court has taken a very broad view of
federal commerce clause power thus eliminating this second impetus enter into
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compacts.) Moreover, onoe the compact device was seen as a feasible means of
regional control of certain interstate problems, the more it was tried for
other problems—i.e., its success bred more use. The pioneer compacts of the
modern regional administrative breed were the Colorado River Compact of 1921,
ratified by Congress in 1928 in the Boulder Canyon Project Act, and the
New York Port Authority Compact of 1921. The Interstate Oil Compact of 1935
was the next advance in the use of compacts. This is a non-regional (nationwide)
compact that now includes all the states producing a significant amount of oil.
This compact "narked the use of the compact device as a means of establishing
formal integrating and recommendatory machinery for state regulation in a field
of economic production." (Zinmerman p. 7.) In 1939, the Ohio River Valley Water
Sanitation Compact, (ratified in 1940 by Congress but not effective until Virginia's
entry in 1948) was the first use in a wide region of a compact in the field of
pollution abatement. It established common regulatory machinery of a limited
character. In 1961, in the Delaware River Basin Compact the United States for
the first time became a full party to a compact.
It is my opinion that as legal institutions interstate compacts have evolved
to a point where they could be used to successfully effect energy and
environmental goals by interstate and interstate-federal cooperation and
coordination. Whether they are a politically workable solution is more
problematical.
(3). Review of certain regional compacts:
There is a paucity of compacts designed to coordinate interstate regional regulatory
activity of the kind that is directly pertinent to the electrical generating facility
siting problem addressed in this study. Nonetheless certain regional compacts may
be instructive as to the possibilities of the use of the compact device to solve
that problem.
Colorado River Compact of 1921
Colorado River Compact is the most ancient of the modern compacts. Numerous
federal projects accomplishing new or supplemental water uses in the Southwest
have relied on the Colorado River Coirpact. Apparently the desire of California
Edison Power Company for new sources of electrical energy coupled with a desire by
southwestern farmers for further irrigation sources led to joint pressure to dam
up Boulder Canyon. Upper basin states of the Colorado River: Colorado, New Mexico,
Utah and Wyoming objected because under western water law he that first develops
gets prior right to the water, the lower basin states where the dam would be
located would get most of the water. So scare prior allocation of water protecting
upper basin users had to be agreed to.
"Negotiations were therefore undertaken at Sante Fe, New Mexico,
looking toward a division of water among the basin states.
When the delegates from the states were unable to agree upon a
specific amount of water for each state, they decided to divide the
basin for allocation purposes into two groups of states: Colorado,
Utah, New Mexico, and Wyoming were designated as upper basin states;
Arizona, Nevada, and California were designated as Lower Basin States.
It was then possible to appropriate the 'beneficial consumptive use'
of water between the basins: 8.5 million acre-feet annually was
allotted to the Upper Basin, 7.5 acre-feet annually to the Lower Basin.
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This formula was written into an interstate ccnpact intended for
adherence by the seven states, and the compact document was signed
by the delegates of all seven states on Noveirber 24, 1922.
"Although the state of Arizona did not ratify the Colorado River
Compact until 1943, the division of water between the upper and
lower basins allowed the Boulder Dam project to be carried out.
Congress in 1928 passed the Boulder Canyon Project Act. This federal
statute provided for flood control on the lower Colorado River,
storage of water for irrigation, construction of the All-American
Canal, and a governnent-oonstructed power plant. Taking cognizance
of the fact that Arizona had not joined the Colorado River Compact
of 1922, the statute provided that six-state ratification of the
compact was sufficient to go forward with construction of the
Boulder Canyon Dam. The statute required that California be among
the six states ratifying the compact and that she enact a self-
limitation law in conformity with a formula for water allocation
among the Lower Basin States embodied in the statute. This formula
was in the form of an authorization in the Boulder Canyon Project
Act to the states of Arizona, California, and Nevada to enter into
an interstate agreement to the effect that, of the 7.5 million
acre-feet of water per annum allotted to the Lower Basin by the
Colorado River Compact of 1922, 0.3 million acre-feet would be
apportioned to Nevada and 2.8 million acre-feet to Arizona, in
both states 'for exclusive consumptive use in perpetuity'.
"This water allocation formula was intended to encourage the states
to settle water use rights to allow the Bureau of Reclamation to
carry our its plans for further development of the water resources
of the basin. However, the three states were unable to agree upon
this or any other formula .... The failure of the states to
apportion the water among themselves was an important factor in
Congress' refusal to authorize further development projects in the
basin. In 1951 the House Conmittee on Interior and Insular Affairs
adopted a resolution deferring further consideration of all central
Arizona project proposals 'until such time as use of the water in the
lower Colorado River Basin is either adjudicated or binding or
mutual agreement as to the use of the waters is reached by the states . . . .1
"The water allocation controversy was finally adjudicated by the U.S.
Supreme Court. The suit was brought by Arizona in 1953 after California
had made diversions from the Colorado in excess of the 4.4 acre-feet
per annum limitation imposed upon herself as a condition to
implementation of the Boulder Canyon Project Act of 1928. After
extensive study by a Special Master and rehearing by the Supreme Court,
the Court on June 3, 1963, announced its decision in Arizona v.
California. The allocation formula sanctioned by the Court was
essentially the same as that stipulated thirty-five years earlier
in the Boulder Canyon Project Act: Arizona was granted 2.8 million
acre-feet of water per annum, California 4.4 million, and Nevada 0.3
million.
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"In the Upper Basin of the Colorado, development for 'beneficial
consumptive use1 of the 8.5 million acre-feet of water per annum
allocated to the up-stream states by the Colorado River Compact
of 1922 was also delayed until the states divided the use of this
water among themselves. A Bureau of Reclamation document released
in 1946 inventoried potential projects for water resource development
in the Upper Basin but stated that the available water supply was
insufficient to permit construction of all of these projects.
This led to the issuance of directives by the Ccratdssioner of
Reclamation, Secretary of Interior, and Director of the Bureau
of the Budget that no new major projects on the Colorado River
would be approved for construction by the Bureau of Reclamation
until the states apportioned the water among themselves.
"Construction of dams an the mainstream of the Colorado River within
the Upper Basin was necessary to permit the Upper Basin to make
consumptive use of the water allotted to it by the Colorado River
Ccnpact of 1922. The storage reservoirs were required to regulate
the erratic stream flows and hold the water in the up-stream states
until used by irrigators and other interests. Because of this, the
four states responded to the call by federal officials for settlement
of the water allocation problem by sending delegates to Cheyenne,
Wyoming, in July, 1946, to negotiate the issue. On October 11, 1948,
after eight meetings and fifty sessions of the delegates, a Colorado
River Basin Compact incorporating a water allocation formula was
signed by the delegates of Colorado, New Mexico, Utah, Wyoming, and
Arizona." (Barton, supra, at 98.)
The legislative history of the Colorado River Basin demonstrates the difficulties
of getting interstate agreement on matters of great importance to the disputing
states and that the Compact although useful was no panacea. But the original
compact was really not a modern compact. It had no administrative body and no
ongoing dispute-settling or policy-making function. Ihe compact was the settlement
of a dispute or so it was thought. But it left too many other disagreements
unresolved and set up no internal machinery for their resolution. Moreover,
the matters in dispute were not amenable to a static solution, their dynamic
nature demanded a dynamic compact.
Therefore, the legislatures of the five upper basin states met during the
winter of 1949 and early in 1950 each state ratified the new compact.
"The [upper] Colorado River Basin Compact of 1949 goes further than
the 1922 Compact in that it establishes a permanent interstate agency,
the Upper Colorado Basin Corrmissian, consisting of one meirber from
each of the compacting states. The compact directs the Commission
to determine compliance of the states with the water allocation formula
contained in the compact to undertake actions 'necessary, proper or
convenient in the performance of its duties.'
"The Upper Colorado Basin Commission's Eleventh Annual Report sunmarizes
the agency's lobbying activities since enactment of the Colorado River
Storage Project Act:
'The Conmission has continued to cooperate with neuters of the
Congressional Delegations from the Upper Colorado Basin States
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and with officials of the Department of the Interior and the Bureau
of Reclamation in seeking appropriations of funds by the Oongress
for the construction of the storage units and participating projects
authorized for construction in [the Act], as well as funds for [the]
investigation of additional participating projects that are given
priority in planning in the Colorado River Storage Project Act.
As part of this cooperation, the Ccrrmission's Engineer-Secretary
has been stationed in Washington, D.C., at intermittent periods
acting as liaison between the Congress and States and various
departments of government, supplying information, arranging and
taking part in Congressional hearings, and providing other assistance
requested.' (Barton, supra, at 100.)
As can be seen from the above, the new ccsttmssian had no policy or true planning
function. It had machinery to enforce the agreed an allocation settlement and to
lobby Congress and federal agencies on behalf of its client states. Policy making
and planning (if any) was still left to Congress, federal agencies and the
individual states, in that order. In short even this new ocsnpact was only the
settlement of a dispute and a mechanism for encouraging and facilitating cooperation
between the states and between the states and the federal government. In itself,
it was not a coordinating mechanism.
Interstate Oil Ccnpact of 1935
The Interstate Oil Compact of 1935 was the result of the concerted efforts of
the oil industry to avoid federal regulation of the oil or gas industries. (Barton)
In fact control of the oil industry had been supported by the Roosevelt Administration
but had failed, by a close margin, to receive oil industry approval and later.
Congressional approval.
The stated purpose of this carrpact (I.O.C.) is to "conserve oil and gas by the
prevention of physical waste thereof from any cause." It was not designed, in any
way, to limit production or fix the price of oil and gas. Although the Compact was
approved by Congress initially in 1935 and has been renewed every two years,
the Ccnpact Carrmissian has never acted to any significant extent independently
of the oil industry." (Barton at 12.) it has little power and may not be a
Compact needing Congressional consent. See below. Barton points out at p. 19-21,
^ia^" industry is effected by policy decisions of many federal departments,
including the Justice and State departments and therefore the IOC is probably not
detrimental to private consumers. And perhaps the benefits to the oillndiitry,
such as continuing surveys of state and national governmental undertakings related
to gas and oil maintenance of oil depletion allowances and acquisition of oil and
gas leases en public lands at lew costs have benefited the consumer as well.
This ccnpact may not have needed Congressional approval. See U.S. Steel v.
Multistate Tax Conm.. 434 U.S. 452, 471-72, n.24 (1978).
Port of New York Authority Ccnpact
Port of New York Authority Compact of 1921 established the Port of New York
Authority with extensive powers, it is the first such agency.
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"In addition to construction and operation of physical facilities,
the Port Authority performs planning and recommendatory activities
to protect and advance the economic position of the Port of New York
vis-a-vis other United States and foreign ports. Since its inception,
the compact agency has conducted a continuing survey of the rates,
regulations, and practices of all nodes of transportation affecting
the Port of New York. On the basis of this information and often in
alliance with other public and private groups and individuals, the
Authority reoontnends action designed to benefit the port area to
legislative, administrative, and judicial officials at national, state,
and local levels of government in the United States . . . (Barton,
p. 67)
This Authority has a long and distinguished history but has not been without
its critics and has been the center of considerable controversy. See Tobin v.
United States, 306 F.2d 270 (2nd Cir. 1962). Because of its great power and
long life this Compact deserves careful consideration.
Qiio River Valley Water Sanitation Compact
Ohio River Basin Compact or the Ohio River Valley Water Sanitation Compact
of 1940 is prcbably the most important single compact to be studied. It is
regional, has administrative machinery with policy and planning function and is
located in the ORBES area. In fact its relationship to ORBES may be more than
as a model but may be directly implicated in any interstate arrangements made
to coordinate future electric power plant location decisions in the Ohio River
Basin. This Compact actually came to life in June 30, 1948 when Pennsylvania
and Virginia finally joined.
"... The compact creates the Olio River Valley Water Sanitation
Commission, composed of three menbers from each signatory state,
and directs the Commission to promote pollution abatement within
the area 'which shall errbrace all territory within the signatory
states, the waters in which flow ultimately into the Ohio River
or its tributaries1. The compact charges the Commission to plan
and advise the states of action needed to carrbat pollution, and
Article IX of the compact empowers the interstate agency to enforce
its own standards of water purity through any court of general
jurisdiction within the ocnpacting states.
"In formulating these standards, the Commission followed the customary
procedures for administrative rule-making. The agency gave notice
that a public hearing would be held for a particular stretch of the
river. At the hearing, persons designated by the Corrmissian would hear
testimony of interested parties. When standards of water quality
were finally arrived at, the Commission would approve and publish the
same. In these determinations, as well as other matters, the interstate
agency has sought the advice of several 'industry-action and advisory-
committees ' . . . .
"Concerning enforcement measures, although th'i compact empowers the
Corrmission to issue to negligent polluters orders for compliance with
its standards and to enforce such orders in the courts, the interstate
agency has always tended to leave enforcement to the regulatory
agencies of the compacting states . . . ." (Barton, pp. 36-38)
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According to Barton this Comdssion has "made a significant contribution to
[the] program of water pollution control." (at 41) "Through its administration
of federal funds and public relations activities, the Ccrmission has acquired
sore power to force action en pollution by municipalities." (Id. at 41.) However,
according to Barton (writing rementoer in 1967) the "Sanitation Camnissian power
to force pollution abatement by industry is virtually nil." (Id. at 42.)
This Ccnpact will be the focus of much further study for this project both as a
potential model and its direct implications. (Pertinent parts of it are printed
in the next section, "B. The Use of an Existing Oonpact".)
This Oonpact also led to a most significant explication by the Supreme Court
of the Conpact Clause, in West Virginia ex rel. Dyer v. Sims, 341 U.S. 22 (1951).
The state auditor refused to pay the West Virginia contribution to running the
Canmissian, which had been authorized by the legislature in 1949 (when the
Ccnmission actually got started). The West Virginia Supreme Court upheld this
refusal declaring the West Virginia approval of the Compact scms ten years
before as inconsistent with the state constitution because it authorized a
delegation of legislative power to non-West Virginia authorities. The decision
was based an the implications of the constitution, not express language.
The United States Supreme Court took the extraordinary step of reinterpreting
the W. Va. constitution and declared it did not bar West Virginia's joining
the Coirpact.
Two Federal-Interstate Compacts
The Delaware River Basin Ccnpact and the Susquehanna River Basin Compact
are the first ccnpacts in which the federal government has played an active,
ongoing role as participant.
"The Delaware River Basin Ccnpact creates a permanent agency, the
Delaware River Basin Ccmrdssion, composed of five menbers: the
governor of each compacting state and a representative of the
President of the United States. The ccnpact lodges in the Ccnmission
an inpressive array of planning and operating responsibilities.
The intergovernmental agency is directed by the oonpact to formulate
and keep current a comprehensive plan for the development of the
basin's water resources. In conformity with such a plan, the agency
is enpowered to plan, construct, operate, and maintain dams, reservoirs,
and other facilities. It is authorized to conduct programs for flood
control, water quality improvement, hydroelectric power generation,
fish and wildlife conservation, recreation, forestation, and watershed
management. The Carmdssian is also authorized to make future allocations
of the waters of the basin among the four states signatory to the
oonpact.
"The Ccnmission is authorized by the ccnpact to adept and recommend
to the signatory states and national government an annual expense
budget, including capital funds for projects of the Ccnmission which
may be authorized by statutes of the signatory parties. The ccnpact
agency is empowered to borrow through tax-exempt bond issues on the
credit of the Ccrrroission. The compact withholds from the Ccnmission
on the pewer to tax or to pledge the credit of the national government
or the states behind its financial obligations." (Barton, pp. 107-108)
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(4). Review of the literature on interstate compacts:
The literature on interstate compacts is not vast. Here is a summary of the more
important studies which for convenience is listed alphabetically by authors with
"Books" first, followed by "Articles" from legal periodicals.
Books
Barton, The Interstate Compact in the Political Process (1967) is a study
focusing on some dozen compacts for somewhat extended study (3-5 pages) and
another dozen for lessor study. The author declares that "the study errphasizes
political, rather than legal and structural aspects of the compact device."
"I have attempted to relate each compact or compact agency to the broader
framework of policy of which the compact is a part. The compacts are analyzed
in terms of the contribution to intergovernmental cooperation (including nation-
state as well as interstate relations) and their utility for promoting all
interests of the public in the problems over which they have jurisdiction." (p. 6)
Although giving credit to the studied compacts for some significant achievements,
Barton is somewhat sceptical of their use, viewing them as devices by which
private enterprise groups prevent more effective governmental regulation at the
federal level.
Great Lakes Basin Compact, Hearings before the Committee on Foreign Affairs
of the House of Representatives (1966) contains arguments for and against
Congressional approval of the already extant compact (1955).
Leach and Sugg, The Administration of Interstate Compacts (1959) takes a
very optimistic view of the potential role of interstate compacts to serve
interstate governmental needs.
Ridgway, Interstate Compacts: A Question of Federalism (1971)
Thursby, Interstate Cooperation, A Study of the Interstate Compacts (1963)
is a general discussion of the nature of compacts, their enforceability and
potential uses. It is exhaustively footnoted and although it contains no
bibliography, the footnotes serve as a reference to the rather vast literature
on compacts from the 1930s and 1940s.
Zimmerman and Wendell, The Interstate Compact since 1925 (1951) is self-
consciously a successor to the Frankfurter and Landis study and is quite excellent
but alas is nav itself dated though still useful. It is a general survey
including extended discussion of creation and enforcement of, and federal
participation in compacts.
Zinmerman and Wendell, The Law and Use of Interstate Compacts (1961) is
an update of the 1951 study.
Zinmerman and Wendell, The Law and Use of Interstate Compacts (1976).
The Council of State Governments republished the 1961 study supplemented
by a number of recent articles by the authors printed as an Appendix.
Also as an Appendix (pp. 57-88) are "materials intended as aids in the
drafting of interstate conpacts. They contain the texts of clauses gathered
from a wide variety of existing and proposed compacts together with some other
statutory provisions. These clauses have been arranged according to subject
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matter and are accompanied by interpretive comments." Wendell and Zirmermn
are political scientists.
Articles
Abel, Ohio Valley Panorama, 54 W. Va. L. Rev. 188 (1952), is a fairly
exhaustive explication of the landmark case on interstate compacts, West Virginia
ex rel. Dyer v. Sims, 341 U.S. 22 (1951).
Abel, Interstate Cooperation as a Child, 32 Iowa L. Rev. 203 (1947).
Cited in U.S. Steel Corp. v. Multistate Tax Ccnm., 434 U.S. 452, 465, n.16
(1979). It traces the development of the use of the compact device to effect
interstate cooperation and the encouragement given such device by courts.
Bloom, The Effect of Interstate Water Quality Controls on Legal and
Institutional Water Allocation Mechanisms—Can the Environmental Protection
Agency Amend an Interstate Compact? 22 Rk. Mt. M. L. Inst. 917 (1976)
a short (22 pages) article on the possible legal effect and conflict between
the Colorado River Compact and federal environmental laws especially the
Federal Water Pollution Control Amendments of 1972. The author concludes
that the Congress possesses the power to "override" provisions of a ccrpact
to which it had previously assented but that the Supreme Court will be reluctant
to find the Congressional intent to do so unless clearly expressed or clearly
necessary to give effect to the national legislation, (p. 933) Bloom found
no such intent in the case under scrutiny.
Cellar, Congress, Qompacts, and Interstate Authorities, 26 Law and Contemp.
Prob. 682 (1961) on the supervisory role of Congress in Interstate Compacts.
Content, Federal Question Jurisdiction to Interpret Interstate Compacts,
64 Georgetown L.J. 87 (1975) is a fairly lengthy discussion of League to
Save Lake Tahoe v. Tahoe Regional Planning Agency, 507 Fed. 517 (9th Cir. 1974),
oert. denied 420 U.S. 974 (1975). The article concludes "... even if the
courts do not equate an interstate compact with federal law, they should accept
federal question jurisdiction over claims arising under the oompact based an the
need to develop federal canton law either where two states are in direct conflict
or where the compact concerns an area in which extensive federal regulation
already exists." (At 111.)
Engdahl, Characterization of Interstate Arrangements; When is a Compact
Not a Cianpact, 64 Mich. L. Rev. 63 (1965). Discussion as fco whpn an i
accord becomes a "ccsrtpact or agreement" requiring Congressional consent.
Cited several times in U.S. Steel Corp. v. Multistate Tax Carrm'n., 434 U.S. 452.
462, 465, and 482 (dissenting) (1979)7
Engdahl, Construction of Interstate Compacts: A Questionable Qi^^'Han,
51 Va. L. Rev. 987 (1965) a long, closely reasoned artirrlp whi<--h ramnln^og.
"The jurisdictional base currently employed by the Supreme Court—
the law of the Union doctrine—is so manifestly indefensible that
no other court and no commentator has ever taken seriously the
suggestion that the Supreme Court actually espouses it. It has
been the purpose of this Article, first to demonstrate that the
Court does indeed espouse that doctrine and second, to collect
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enough arguments against that doctrine to make its continued use
unjustified. An equally important purpose has been to show that,
whatever doctrine is invoked to support certiorari, its affects
on other aspects of conpact law must be weighed. Once the law of
the Union doctrine is discarded, the way will be open for creative
legal analysis to characterize the interstate compact in a manner
which not only will support certiorari, if that is desired, but
also will make possible the development of other aspects of compact
law in such fashion as to maximize the potential of the ccnipact
device as an instrument of American government." (at 1048-49)
Frankfurter and Landis, The Compact Clause of the Constitution—A Study
in Interstate Adjustments, 34 Yale L.J. 685 (1925) is the roost cited article
in the area. Written by two of the most respected public law scholars of the
era, this article gave impetus to the trend of using compacts to solve
interstate problems. Exhaustively researched it contains in an appendix
"a detailed catalogue of the compacts to which Congress has given its sanction,
the action of the State legislatures in negotiating, ratifying and enforcing
agreements, the administration of agencies created by compacts, and adjudications
involving them. In addition, the appendix contains an enumeration of agreements
which became operative without Congressional consent and litigation under them,
proposals for agreements (which failed)" (p. 695). The authors discovered eight
fields of legislation that have elicited application of the Catmerce Clause
three of which are relevant to this study: "(4) uniformity of legislation,"
"(6) conservation of nature resources," "(7) utility regulation." Because the
authors' major concern is electric utilities I quoted it at sore length as a
sort of preface to the two sections on interstate compacts.
Grad, Federal State Compact: A New Experiment in Co-operative Federalism,
63 Col. L. Rev. 825 (1963) explores some of the developments leading to the
conclusion of the Delaware River Basin Compact (1961), the first interstate
compact with full federal participation and examines the needs filled by the
then unique device, the questions it raises, and its potential application
for the future.
Note, Congress and the Port of New York Authority, 70 Yale L.J. 812 (1961).
Reisman & Simson, Interstate Agreements in the American Federal System,
27 Rutgers L. Rev. 70 (1973). "In this article, an attempt is irade to provide
a more caiprehensive (than mere ccmpacts} view of the place of interstate
agreements in the American federal system. By reference to statutes, case law,
uniform laws and interstate compacts and organizational activity, the authors
survey a broad range of functional collaborations and agreements of varying
degrees of formality." Written at a high level of generalization using
Myers McDougal1s seven component functions of a decision to analyze the various
modes of interstate co-operation, the article is difficult but useful.
Tribe, Intergovernmental Imnunities in Litigation, Taxation and P^gnT^tion:
Separation of Pcwers Issues in Controversies about Federalism, 89 Harv. L. Rev.
682 (1976) is quoted by the Supreme Court in U.S. Steel v. Multistate Tax Corrn.,
434 U.S. 452, 469, n.21 (1978). Tribe is a leading constitutional scholar, often
cited by courts and other commentators. He concludes this brief essay: "The central
mission of courts in deciding issues involving the distribution of federal power
should therefore be to protect Congress1 role from both state and executive
intrusions." (at 713)
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B. The Legal Status of Compacts:
By "legal status" is meant a compact's status as creating rights and duties
in people and entities (legally organized groups of people, public and private)
enforceable through sore compulsory process. The nature and extent of these
rights and duties depend primarily an the wording of the particular compact.
Which "people and entities" have rights and duties will also vary widely.
By definition a right in one creates a correlative duty in another. The "entity"
could be a state, qua state, an agency of the central government of the state,
a local government, its agents, a compact cormission or its agents, a private
corporation, lobby groups, labor unions, partnerships and so on. The "compulsory
process" means a procedure for imposing a "sanction" as that term is defined in
the glossary of this study.
Although legal generalizations are probabilistic (one is predicting what a
sanctioning agent might do), seme generali zations can be made about the potential
legal status of compacts based on past judicial judgments in compact litigation.
(1). Jurisdiction of courts:
The first set of generalizations concerns jurisdiction: who gets to impose the
sanctions? Generally our society depends on the established courts of the
federal government or state governments to impose coercive sanctions but compacts
have a quasi-international law status so perhaps a special forum or court could
be used. There are, of course, two kinds of established courts, federal and state,
but it will not suffice to generalize about either federal jurisdiction or state
jurisdiction in the generic. The federal jurisdictions pertinent here include
exclusive original jurisdiction in the Supreme Court, original jurisdiction
in the Supreme Court concurrent with United States District Court jurisdiction,
exclusive original District Court jurisdiction, removal jurisdiction from state
court to United States District Court, administrative appeal jurisdiction in
District Courts and in the United States Circuit Courts of Appeals and appellate
and writ of certiorari jurisdiction in the Supreme Court from both state courts
and lower federal courts. State court jurisdiction is similarly complex but
perhaps less so.
This detailing of jurisdictions is necessary to make clear the potential
complexity of jurisdictional problems. Congress by specific statute defines
the various jurisdictions of the federal courts within certain constitutional
limitations. These generalizations concerning federal jurisdiction in relation
to compacts can be made:
(a) The United States Supreme Court has exclusive original jurisdiction
of disputes between two or more states whether for the enforcement of a compact
or not. 28 U.S.C. § 1251(a)(d).
(b) The United States Supreme Court has assumed certiorari j uri sdiction
from state court compact disputes in two cases: West Virginia ex rel. Dyer v.
Suns, 341 U.S. 22 (1D51) and Delaware River Joint Toll Bridge Ccarm. v. Colburn,
310 U.S. 419 (1940)(hereafter Colburn).
Pour theories have been used to explain this assunptian of jurisdiction:
First is the simple idea that a compact consented to by Congress becomes a
"law of the Union". Pennsylvania v. Wheeling and Belmont Bridge Co., 54 U.S.
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(13 Hew.) 518 (1851).
Second is the more complex notion that the interpretation of a compact,
including its validity and binding effect, is a federal question requiring
an independent federal judgment based on standards inferred from the federal
constitutional scheme, i.e., the rules of compact interpretation are a species
of "federal conmon law". West Virginia ex rel. Dyer v. Sins, supra, at 28.
See, Friendly, In Praise of Erie—And of the New Federal Cannon Law, 39 N.Y.U.L.
"Sev. 383 (1964); Monaghan, Forward: Constitutional Cannon Law, 89 Harv. L. Rev.
1 (1975); McLaughlin, Territorial Due Process: Analysis of an Emergent Doctrine,
81 W. Va. L. Rev. 355, 388 (1979).
Third is an alternative theory of "federal cannon law".* This theory holds
that many ccanpact disputes involve a subject matter that ought to be controlled
by federal law because of its interstate nature regardless of whether or' not
there is a compact. This argument was made to the Colbum court (see, Engdahl,
Construction of Interstate Compacts: A Questionable Federal Question, 51 Va. L. Rev.
987, 1009 (1965)) relying on Hinderlider v. La Plata River and Cherry Creek
Ditch Co., 304 U.S. 92 (1938) where Brandeis, J., for an unanimous court just
two years before Co lb urn, had rejected the "law of the Union" thesis and based
jurisdiction an the need to apply the "federal conmon law" inferred frcm the
judicial resolution of disputes as to rights to water in interstate streams.
The species of federal conmon law thus inferred is not different frcm that which
is inferred frcm cases concerning boundaries between states which also raise
federal questions. Cf. Wedding v. Meyler, 192 U.S. 573 (1904). In spite of
this argument made frcm the then recent Hinder lider Case, his basis was not
mentioned in Colbum. This seems surprising in view the fact that Colburn
involved the 1i ability of an agency created to build bridges over a-navigable
stream. This theory of jurisdiction was not available in Sims, however.
Although the oompact in Sims involved an interstate stream (the Ohio River)
the dispute pertained only to the validity and binding effect of the compact
and not with its meaning with regard to the stream.
Both rationales "two" and "three" above rely on federal conmon law but the
authority to create such law is inferred frcm different parts of the constitution,
the first related directly to compacts (i.e., the authority to settle disputes
between states found in Art. Ill, § 2, and the authority to enter into ccnpacts
found in the Compact Clause), the second related to other powers in the
constitution (e.g., Conmexce Clause).
A fourth basis not mentioned in either case but probably available in
West Virginia ex rel. Dyer v. Sims, is the Contract Clause, ("No State shall . . .
pass any . . . Law impairing the Obligation of Contracts." Art. I, § 10
(cl. 1), U.S. Const.). A "compact" is a "contract" within the meaning of that
*If a case raises federal camon law issues then it apparently satisfies
the language "right . . . under the constitution" in 28 U.S.C. § 1257(3)
giving writ of certiorari jurisdiction to the Supreme Court frcm a state's
highest court.
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clause. Green v. Biddle, 21 U.S. (8 Wheat.) 1 (1823); see, Thursby, Interstate
Cooperation, 38-40, 43, 51 (1953).
Other specific provisions of the constitution could likewise give jurisdiction
if the compact or the agency operating under it violates those provisions.
That was the claim in Lake Country Estates Inc. v. Tahoe Regional Planning Agency,
99 S.Ct. 1171 (1979) where an action against the compact agency (TRPA) for
conduct "under color of state law" within the Civil Right Act (42 U.S.C. § 1983)
was held to give a district court jurisdiction under 28 U.S.C. § 1343(3). In that
case, the Court declared: "The Ccnpact had its genesis in the action of the
compacting States, and it remains part of the statutory law of both states."
(Id. at 1176.) Therefore the agency was acting under color of state law. The Court
noted that although the Lake Tahoe Compact was approved by Congress federal
involvement is "limited by the Compact to the appointment of one nonvoting k
meirber". (Id.) Moreover, under the terms of the cctnpact the States could confer
additional powers and duties on TKPA without further congressional action and
each state could withdraw at will. (Id.) TRPA was also held to be an interstate
but local governmental agency not having Eleventh Amendment sovereign imnunity
from federal suit that the state central government would have:
"If an interstate compact discloses that the compacting States created
an agency comparable to a county or municipality, which has no
Eleventh Amendment inmunity, the Amendment should not be held to
immunize such an entity. Unless . . . the States structured the
new agency to enable it to enjoy the special constitutional protection
of the States themselves, and Congress concurred in that purpose,
there would appear to be no justification for reading additional
meaning into [the Eleventh] Amendment." (Id. at 1177.)
Both California and Nevada filed briefs claiming it was a "political subdivision"
not "an arm of the state". (Id.) The Court took the compacting states at their
word. "Under the terms of the Compact, six of the 10 governing menbers of TRPA
are appointed by counties and cities, and only four by the two states." (Id.)
Funding is provided by the counties. (Id. at 1178.) Finally the compact said
that obligations of TRPA shall not be binding on either State. (Id.)
This case is the most recent discussion by the Supreme Court of the legal
status of compacts. Although it must be kept in mind that the Court's discussion
is made in the context of deciding a particular dispute about a particular compact
and extrapolations to other contexts must be done with caution, scne tentative
inferences as to the Court's general attitude toward compacts can be made.
The Supreme Court suggests that a Compact is state law unless there is
considerably more federal involvement than mere assent. Hew much more is not
stated, but the quoted rationale, that it had "its genesis in the action of
the compacting states", undercuts the "law of the Union" thesis which was the
basis of jurisdiction stated by the United States Court of Appeals for the
Ninth Circuit in League to Save Lake Tahoe v. Tahoe Regional Planning Agency,
507 F.2d 517 (9th Cir. 1974) cert, denied 420 U.S. 974 (1975). Moreover, if
we accept Engdahl's interpretation of the Colbum decision (see above) that
the Court there declared that Congressional consent perforce makes the Ccnpact
the "law of the Union", then this recent case disapproves of Colburn.
At first glance, Lake Country Estates Inc. v. Tahoe Regional Planning Agency,
likewise seems to make dubious the proposition in Petty v. Tennessee-Missouri
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Bridge Conn., 359 U.S. 275-278 (1959): "The construction of a compact sanctioned
by Congress . . . presents a federal question". However, a distinction must be
made between the construction of a compact and the compact itself. Petty and
Dyer v. Sims hold only that the construction of a compact is a federal question.
In other words the policy and rules (inferred from the policy) used to determine
the meaning of a Compact are federal policy and rules. (Since it is judicially
fashioned it is called "federal cannon law".) (Actually Colburn also says
"construction of a compact" is a federal question.) Using federal law for
construction does not convert the thing being construed, the compact, into
federal law any more than a contract becomes "law" because "law" is used to
construe it. But the enforcement of rights and duties under a compact always
requires interpretation of the compact. This therefore seems to be a distinction
without a difference. But the construction of the ccnpact that creates a federal
issue and therefore requires federal cannon law to resolve it is a construction
resolving a dispute between the compacting parties as to their rights and duties
inter se. That is the basis of Frankfurter's finding of jurisdiction in
West Virginia ex rel. Dyer v. Sims, supra. See also his dissenting opinion in
Petty v. Tennessee-Missouri Bridge Co., supra, at 283-89. But Sims was not on
its face a dispute between states. But underlying West Virginia's attempt
unilaterally to withdraw from ORSANOO was a fight between the states as to
whether each was irrevocably bound to the others in the catmon enterprise.
Only in its formal judicial posture was it a dispute between West Virginia officials,
seme wanting to stay in, the others to get out. The other states in ORSANOO
appeared and made arguments to the Supreme Court as arnicas curia, so called
"friends of the court"—people who have an interest in the litigation but are not
officially parties to it. Colburn and Petty cannot be similarly explained.
In fact Petty relies on the "law of the Union" thesis to interpret a compact
directly contrary to the compacting parties intent—partys' intent being the
usual rule for contract or ccnpact construction. See Lake Country Estates Inc.
v. Tahoe Regional Planning Ooimu, supra.
Although the question is hardly free frcm doubt, Lake Country Estates Case
does seem to undermine the "law of the Union" rationale. Therefore League to
Save Lake Tahoe v. Tahoe Regional Planning Agency was wrongly decided by the
Ninth Circuit. As the Supreme Court has said many times the fact that a writ
of certiorari was denied implies nothing about the Court's attitude toward the
merits. In League to Save Lake Tahoe, the League and the Sierra Club sought
injunctive action against TKPA alleging that the Agency had failed to adopt
a "regional plan" within the meaning of the Ccnpact, to set forth ordinances
that effectuate the regional plan, and to prepare an environmental information
statement. The United States District Court dismissed for lack of jurisdiction.
The United States Court of Appeals for the Ninth Circuit reversed as noted above.
There was no dispute between the states. It was simply some private citizens
who did not like the way in which the agency was being run. It is a kind of
government by lawsuit. But the Ninth Circuit decision was an aberration.
See, Content, Federal Question Jurisdiction to Interpret Interstate Compacts,
64 Georgetown L. Rev. 87 (1975). Which brings us to the next proposition.
(c) Federal District Courts do not have federal question jurisdiction
to hear claims by people other than the party states against compact agencies
whether for tort liability or other liability of the agency or to enforce the
compact. See id. at 88 and no". 6; T. Ernst, Legal Problems Affecting Interstate
Transportation Agencies, 11 Valparaiso Law Review 351 (1977)". This is partly
because of the requirement that the federal issue be raised in the complaint and
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crucial to, or central to establishing the claim for relief. It ray not
"hover" in the background like Congressional consent to states to tax
national banks "hovered" in Gully v. First Nat11 Bank, 299 U.S. 109 (1936) ,
where such "hovering" was found not to be a predicate for federal jurisdiction.
Except for League to Save Lake Tahoe v. Tahoe Regional Planning Agency, supra,
the courts have uniformly so held and this seems consistent with the
Supreme Court's opinion in Lake Country Estates Inc. v. Tahoe Regional Planning
Agency. See for example Yanooskie v. Delaware River Port Authority, 528 F.2d
722 ( 3rd Cir. 1975) and Adams v. Cuyler, 592 F.2d 720 (3rd Cir. 1979). Of course,
if agency action violates rights, other than oonpact rights, created by federal
law, such as rights protected by the Civil Rights Act, there is jurisdiction.
(d) In 1962 Congress granted federal district courts concurrent jurisdiction
with the Supreme Courts in cases involving:
(1) construction or application of any interstate compact;
(2) relating to pollution of interstate rivers;
(3) where a party state is a plaintiff.
33 U.S.C. § 466q-l (1970).
(e) The agency and its personnel are probably subject to suit for their
torts, etc., in state court unless the Compact otherwise expressly provides.
(f) Much of the jurisdictional uncertainty can be avoided for a particular
compact by specific provisions within the oonpact.
(2). Nature of the legal rights and duties created by canpacts:
Rights and duties connote relationships between parties (people and entities)
enforceable by sane governmental sanction. Every "right" in one has a
correlative "duty" in another. The law of torts and private contracts concerns
the rights and duties between private citizens, although occasionally, within
the rapidly eroding doctrine of sovereign iirmunity, governmental entities also
have such rights and duties. Constitutional rights in their most usual
connotation are the rights of private citizens or entities, rights against
government and creating correlative constitutional duties in government.
There is a vast area of constitutional law, however, that creates rights and
duties between individual states and the federal government. There is a lesser
area of constitutional law that creates rights and duties between states. This
primarily involves the Full Faith and Credit Clause. Compact rights are of
this nature, also.
Thus to begin with, an interstate oonpact creates rights and duties between
states. Insofar as it creates rights and duties between states, oonpact rights
are federal—meaning they are not controlled by state law. This is probably true
even if the compact is not one either consented to or required to be consented
to by Congress. If a dispute should arise as to rights and duties between states
then the United States Supreme Court would have exclusive original jurisdiction
(27 U.S.C. § 1251(a)(1)) and in such disputes the Court always applies federal
cannon law, that is, federal judge made or "discovered" law. West Virginia ex rel.
Dyer v. Sims, 341 U.S. 22 (1951).
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The primary aim of such federal common law of interstate compacts is to
discover the true intent of the parties to the compact; first through the words
of the compact, then through practices built up under the carrpact-in-action
and finally by examining the history and background of the negotiations of
the compact. In other words care is taken to enforce the will of the contracting
parties inter se. See Frankfurter, J.'s, dissenting opinion in Petty v.
Tennessee-Missouri Bridge Conn., infra at 285.
This discovery of the will of the parties can become somewhat muddled
by the Congressional consent as it was in Petty v. Tennessee-Missouri Bridge
Comm., 359 U.S. 275 (1959) (discussed in the previous section) where the Court
"discovered" that the Congressional consent to "a sue and be sued" clause implied
a waiver of Eleventh Amendment sovereign immunity, in the face of a clear shewing
that the contracting states did not intend such a clause to be a waiver.
Incidentally, Petty was not a dispute between states, but a suit by a
private party (a compact commission employee killed at work) against the conpact
commission for negligence. The rights and duties that created the lawsuit in
Petty, were between a private party and the conpact agency. These are not
compact rights, but general rights and duties that obtain between citizens and
agents of government. The compact may attempt to control those rights and duties.
The purpose and powers of the conpact agency determines the governmental nature
of the compact. In Lake Country Estates Inc. v. Tahoe Reg. Planning Agency,
99 S.Ct. 1171 (1979), the agency was determined to be a "local governmental agency"
without Eleventh Amendment immunity and it was "acting under color of state law"
within the meaning of the federal Civil Rights Act, 42 U.S.C. § 1983. However,
it seems entirely possible that a compact, whatever its purpose or power, that
purported to affect a region covering a large part of several states would not
be "local government" and its personnel would not be acting "under color of
state law". (The Lake Tahoe region covers a mere 500 square miles.) In this
sense, The Ohio River Valley Sanitation Commission (OFSANOO), for exaitple,
is surely distinguishable from the Tahoe Regional Planning Agency (TRPA). It is
distinguishable in other particulars also. As Dyer v. Sims, supra, made clear
states may not unilaterally withdraw from ORSANCO. They could from TRPA.
The federal government is a voting participant in OFSANOO but has only one
non-voting meirber in TRPA. They are similar in that additional powers and duties
can be conferred on them by the party states without further consent.
However, even if an ORSANCO-like conpact commission could not be sued under
42 U.S.C. § 1983, it might be subject to suit for violation of civil rights under
28 U.S.C. § 1331 (general federal question jurisdiction). The Court would
probably ultimately hold that conpact agents are either federal officers or
state officers and enjoy no rrore immunity from lawsuit for federal civil rights
violations than any other governmental official state or federal. It is clear
from the Lake Tahoe decision, however, that insofar as the agency is performing
legislative acts it is absolutely immune from lawsuit, (at 1179) in federal court.
In Lake Tahoe Estates, Inc., the Court said: "This reasoning is equally applicable
to federal, state and regional legislators. Whatever potential damage liability
regional legislators may face as a matter of state law, we hold that petitioners'
federal claims do not encompass the recovery of damages from the members of TRPA
acting in a legislative capacity".
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A compact agency designed to do merely coordinative tasks is not likely to be
legislating in such a way as to create concern as to the violation of the
constitutional rights of individuals against government. Any legislating that
a coordinative agency might do should only effect the rights and duties of party
states inter se. Thus private party litigation is not as likely to throw a
wrench into a merely coordinative scheme as it is to so "wrench" an interstate
regulatory scheme.
However another recent case growing out of the Tahoe Region Planning Compact,
a case referred to in the previous subsection, might cause seine disquiet in this
regard. In League to Save Lake Tahoe v. Tahoe Regional Planning Agency, 507 Fed.
517 {9th Cir. 1974) cert, denied, 420 U.S. 974 (1975) the private party (an
environmental group) was allowed standing and federal court jurisdiction to bring
an injunctive and declaratory action not to vindicate constitutional rights or
other civil rights violated by the agency but to check the exercise of agency
discretion in adopting a regional plan. Plaintiff alleged that THPA's adopted
Plan would cause substantial environmental damage and therefore was not a
"regional plan" within the meaning of the oanpact. Regardless of the ultimate
outcome of such a suit, it can cause years of delay in inplementing the compact.
It is just such lawsuits that make regulatory schemes inefficient. If an
interstate canpact designed to coordinate state implementation of federal and
state policy on a regional basis in order to avoid interstate conflict and the
attendant delay and confusion, were in fact, to be another avenue of litigation,
then much of its ability to prorate efficient regulation would be lost. By
careful wording designed to channel dispute resolution, and to make clear the
compact's coordinative and nan-regulatory character, such judicial disruption
as in the League to Save Lake Tahoe Case, should be obviated. But it cannot be
guaranteed. As long as the attitude typified by the following remark of the
student editor of the article quoted briefly in the Review of the Literature
subsection above from the Georgetown Law Review prevails, then courts will
interfere: (at 88-89) "The existence of [a multi-state administrative or
regulatory] agency, in turn, often requires judicial supervision to ensure
that the agency is carrying out its mandated duties." It is a matter of
speculation as to whether the ultimate lawfulness oft imputed to courts is
the reason for their ultimate authority on what is lawful or whether it is
rather that their ultimate authority is the reason for their ultimate lawfulness.
In absolute monarchies the King could do no wrong because what he did defined the
right. In any event the former attitude reigns today.
Two last points: when the federal government is an actual party to a compact
and not merely a consenting agency, then in interpreting the meaning of a canpact
it should be treated as a party when divining the collective will of the parties.
Moreover, although unilateral acts of party states abrogating provisions of a
ccnpact or withdrawing from the canpact are not lawful unless specifically provided
for in the canpact, Congress cannot be so bound. Although this has not happened
so far as I know, if a later Congress should decide that an ongoing regional oanpact
*Coamment, Federal Question Jurisdiction to Interpret Interstate Compacts,
64 Geo. L.J. 87 (1975).
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agency's function could be better handled by a purely federal agency then it could
supersede the carpact with federal law just as it can supersede federal law by
later enactments.
(3). Enforcement:
There are two kinds of enforcement involved with interstate canpacts: enforcement
of compact rights and duties between the parties and enforcement of compact agency
decisions against third parties, private citizens and entities. In the latter
situation the carpact is regulatory in nature and generally provides for the use
of meirber state courts by the carpact agency. This is what ORSANCO provides.
So far as I know no ccnpact has ever attempted to set up its own independent
system for sanctioned enforcement. Could it? Assuming it were politically
feasible to get such agreement between states, it is doubtful that it would be
legal. Sanctioned enforcement requires more than a judge, clerk and courtroom.
It requires the other trappings of sovereignty including police and jails.
Compacts cannot create such sovereigns. Moreover, Article III of the Constitution
establishing and delineating federal judicial power would not allow it. A ccnpact
could, if Congress so authorized, allow for enforcement in federal courts.
The Congressional grant of jurisdiction should be express, however.
The enforcement of a ooordinative ccnpact is much more likely to raise
the first kind of problem mentioned above, enforcement between the mesrber states.
There are three possibilities here, beginning with the Supreme Court's exclusive
original jurisdiction to settle "all controversies between two or more states".
(28 U.S.C. § 1251(a)(1).) The exclusiveness of this original jurisdiction is a
matter for Congressional discretion, although since the beginning of the Republic
it has been exclusive. Nonetheless, Congress could make it non-exclusive as it
has made jurisdiction to settle "all controversies between the United States and
a State", and "all actions or proceedings by a State against the citizens of
another State . . . ." (28 U.S.C. § 1251(b)(2) and (3).) Ames v. Kansas, 111 U.S.
449 (1884). Thus, Congress could consent to a Conpact that specifically provides
for alternative original jurisdiction in scare lesser federal court or even a
special ad hoc federal court for settlement of disputes between meirber states.
Such congressional consent, if clearly made as to the jurisdictional provision,
would pro tanto change 28 U.S.C. § 1251(a)(1). If no such provision is made in
the Carpact or in the act giving Congressional consent then § 1251(a) (1) would
control.
As to this option two further observations must be made. First, the case of
Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493 (1971) makes clear that if the
provision for alternative jurisdiction is worded as § 1251(b) is worded ("The
Supreme Court shall have original but not exclusive jurisdiction of . . .") then
taking jurisdiction will be at the Court's election not the parties. Moreover,
the Court in Wyandotte manifested great reluctance to exercise original jurisdiction
where it can avoid it. Speaking for eight irerrbers of the Court, Justice Harlan stated-
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"This Court is, moreover, structured to perform as an appellate tribunal,
ill-equipped for the task of fact-finding and so forced, in original
cases, awkwardly to play the role of fact-finder without actually presiding
over the introduction of evidence. Nor is the problem merely our lack
of qualifications for marry of these tasks potentially within the purview
of our original jurisdiction; it is costpounded by the fact that for every
case in which we might be called upon to determine the facts and apply
unfamiliar legal norms we would unavoidably be reducing the attention
we could give to those matters of federal law and national import as to
which we are the primary overseers."
It should be noticed however that such reluctance would probably be substantially
lessened in bona fide dispute between two states. Harlan added:
"Thus, at this stage we go no further than to hold that, as a general
matter, we may decline to entertain a ccsrplaint brought by a State
against the citizens of another State or country only where we can say
with assurance that (1) declination of jurisdiction would not disserve
any of the principal policies underlying the Article III jurisdictional
grant and (2) the reasons of practical wisdom that persuade us that this
Court is an inappropriate forum are consistent with the proposition that
our discretion is legitimated by its use to keep this aspect of the
Court's functions attune with its other responsibilities." (Emphasis
added.)
Moreover, the alternative jurisdiction language could make plain that the election
of an original forum is for the disputing states (or more precisely the plaintiff
state) and not the Court. Or the Canpact (with express Congressional consent,
of course) could specify certain disputes that might arise as exclusively for the
Supreme Court and others only alternatively. Although the matter is not entirely
free fran doubt, it seems likely that the Supreme Court could not be stripped
entirely of its original jurisdiction to settle a coirpact dispute between states.
See Wright, Law of Federal Courts, 3rd ed. (1976) at 556.
In exercising such jurisdiction the Court is forced to "awkwardly to play
the role of fact-finder without actually presiding over the introduction of
evidence." (See quotation supra.) It does this by appointing a master who acts
as an equity judge, hears all the testimony, prepares a finding of fact and a
conclusion of law and along with a record of the testimony submits it to the
Court.
Hie findings and conclusions of the master will in no way bind the Court.
They are used merely as advice and guidance. Wright, supra, states:
"Pleadings and motions in original actions are governed by the Federal
Rules of Civil Procedure, and those rules are 'a guide* on other
procedural questions that nay arise, but the procedure remains not
very well defined."
If the action calls merely for an interpretation of the words of a compact, or
involves other purely legal questions, then appointment of a master is not
required. In Wyandotte, Justice Douglas in dissent suggested an additional aid
in oonplex cases: "We could also appoint—or authorize the Special Master to
retain—a panel of scientific advisers."
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The other two possibilities for enforcement end with the Supreme Court but
don't start there. In West Virginia ex rel. Dyer v. Simsf 341 U.S. 22 (1951)
a kind of backdoor was found by one state official bringing an action in
state court against another state official [the auditor] to force that official
to pay from the state treasury the state's agreed to share of the cost of
administering the compact. When the state Supreme Court upheld the auditor's
claim that it was a violation of its state constitution to have joined the
coirpact, the United States Supreme Court granted certiorari. Ihe other states
to the compact were not parties but were allowed to file an amicus curia brief
since they were the real parties in interest. As Justice Frankfurter, later
observed (in Petty v. Tennessee-Missouri Bridge Conm., supra, dissenting at 284):
"[Dyer v. Sims] was a typical controversy among states, a controversy as to the
undertaking of a compact among states, for the peaceful solution of which the
Constitution designed Art. 3, § 2." It must be remerrbered that Art. 3, § 2,
defines both the judicial power of the United States and the original jurisdiction
of the Supreme Court. The judicial power extends inter cilia, "to Controversies
between two or more states". Original jurisdiction of the Supreme Court extends,
inter alia, to "those [case] in which a state shall be a Party". In his explanation
quoted above of the granting of certiorari so that the Court could exercise
appellate jurisdiction in Dyer v. Sims, Frankfurter was referring to the judicial
power aspect of Art. 3, § 2. This means that not all the constitutionally-granted
judicial power over controversies between two or more states must be exercised in
original actions in the Supreme Court. Although Engdahl in the article cited in
previous discussion on jurisdiction suggests otherwise, certiorari jurisdiction
to review state court decision where the real controversy is between states,
regardless of the nominal parties, seems appropriate. Nonetheless, the highly
unusual circumstances that gave rise to the Dyer v. Sims "backdoor" are unlikely
to be repeated.
Finally, there is the possibility of using arbitration. Zimmerman and Wendell
suggested in 1951 that: (see supra at 48):
"Although judicial enforcement undoubtedly is a useful last resort,
it is submitted that suits in the Supreme Court, as a means of
securing performance of oompact obligations, are too much emphasized.
In the drawing of private contracts, the extent to which litigation
can be forestalled or avoided generally is thought to be a yardstick
of success. This is the reason why provisions calling for arbitration
or liquidated darages are incorporated so often into private agreements.
So far as your authors are aware, the first compact to contain language
that may be regarded as an arbitration provision is the Snake River
Compact of 1950. Article IV, C. (Of that Coirpact read:) 'In the
case of failure of the administrative officials of the two states to
agree on any matter necessary to the administration of this ocarpact,
the Director of the United States Geological Survey or whatever official
succeeds to his duties, shall be asked to appoint a Federal representative
to participate as to the matters of disagreement, and points of
disagreement shall be decided by majority vote.1
Article XEII of the old Pecos River Compact (1925) provided nachinery
for the adjustment of disputes arising under the agreement. But the
proposed commissioners could only recommend solutions and could not
make awards."
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Ultimate coerced enforcement against a recalcitrant state of an arbitrators
decision would still depend on the judiciary and ultimately the Supreme Court.
Of such coerced enforcement Professor Charles Alan Wright says:
"It is not clear how a judgment against a state would be enforced
if a state were to prove recalcitrant. In the lengthy litigation
between Virginia and West Virginia over 12 million dollars owed by
the latter to the former, the Court at one point wrote a strong
opinion saying that the judgment was enforceable but not deciding
precisely how it might be enforced. (Virginia v. West Virginia,
246 U.S. 565 (1918) was the last of a long series of cases on this
dispute.)
It did not have to decide because West Virginia ultimately paid the
judgment .... Patience by the Court, and the moral suasion of
its decree, are likely to be more satisfactory in resolving these
delicate interstate controversies than is a more coercive attitude."
C. The Political Status of Interstate Compacts:
Politically, interstate compacts are weak and their status airbiguous. A compact
ccmnissian has no independent constituency. A compact region is not a polity.
A conpact is a joint venture of a nurrfoer of polities. Therefore a compact
oonmissian or agency is ill-suited to the making of prescriptive policy. It is
analogous to an administrative agency not a legislative body. Beyond the
prescriptive policy contained in the originating conpact, it can but fill in
the details, like the quasi-legislative rule making of ordinary administrative
agencies. Ultimately, a compact ccmmission only implements policy. But,
as suggested, the originating compact or its amendments can create prescriptive
policy binding between the states and within the ooirpacting states.
The Ohio River Valley Water Sanitation Compact is a good example of an
administrative compact with rule making authority. Many credit ORSANCO with
substantial success in its task of cleaning up the Ohio River and its
tributaries. See the Barton book (pp. 33-47) cited in the review of literature.
Barton concludes with a caveat, however:
"The Ohio River Valley Water Sanitation Conmission's opposition to
the exercise of national governmental paver within its jurisdiction
parallels in a way the behavior of the Interstate Oil Compact Commission
and the Atlantic States Marine Fisheries Commission. But there is an
important difference. The latter two agencies have never attained
significant autonomy as governmental institutions; the oil and fishery
industries simply have acted through the compacts to prevent federal
controls which they perceive as detrimental to their substantive
interests. The Sanitation Ccmmission, on the other hand, wields some
political pcwer on its own; conflict between the interstate agency and
federal agencies should be viewed as a struggle for power among public
institutions, as well as a struggle among private groups acting through
the conpact over the allocation of substantive values. The distinction
is important because the additional level of conflict within the federal
system renders intergovernmental cooperation more difficult to achieve."
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A conpact designed purely to coordinate state regulatory activity so as to avoid
interstate conflict would at first blush not seen to require the transfer of political
pcwer to a oonpact caimission. But unless such coordination can be accomplished with
but one agreement, the coordination will require some ongoing decision-iraking
machinery. Most coordination is dynamic, not static. Moreover as dynamic
coordination approaches prescription, it does seem to require the significant
transfer of political paver to a oonpact agency. It ultimately would be acting
as a sort of one issue regional congress. That will not work. A regional "congress"
even where it is only resolving interstate disputes does not fit into our
constitutional scheme. Issues of one person, one vote, (mentioned earlier) would be
realistically raised. Why should Ohio and Illinois and Pennsylvania have only the
same vote as the much less populous Kentucky and West Virginia. On the other hand,
Kentucky and West Virginia would not likely be induced to join a oonpact with a
voting privilege based on population. Something like the "great ocnpromise" of the
national bicameral legislature, which Catherine Drinker Bowen called the Mi rarlp
at Philadelphia, would be necessary. Not only would a regional miracle be
politically inprobable (to say the least), it is not what the Conpact Clause
envisioned, nor would it avoid the one person, one vote prescription in any event.
Even state senates must follow that structure, the analogy to the federal Senate
having been rejected by the Supreme Court.
Since interstate coordination of power plant siting will be a dynamic process,
as it approaches prescription it will require some mechanism for renewed state
ratification. This suggests either that non-prescriptive coordination be tried
or a new kind of two step or ongoing ratification process be used. The next section
attenpts to deal with this problem by suggesting a range of possible uses of the
compact device from non-prescriptive to prescriptive, from the use of existing
compacts to the formation of new ones.
One final caveat, Felix Frankfurter's vision of regional utility ccnpacts has
not seen a single instance of fulfillment. Thursby, in his chapter an "Cooperative
Federalism: Uses of the Compact", concludes a brief discussion of "Utility
Regulation" [its only vise has been for joint government-owned projects—canal,
river tunnel, bridge, waterworks plant] with:
"Local privately owned utilities usually are no respecters of state lines
and consequently pose real problems of regulation. The Compact affords
a compromise between extreme centralization of control and ineffective
regulation through individual state action."
But no examples, no attenpts, are cited. That's because there are none so far.
See, Bcwen, Miracle at Philadelphia, The Story of the Constitutional Convention
May to September 1787, (Atlantic-Little, Brown; Boston; 1966).
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Section 6: The Interstate Compact as a Solution to the Interstate Coordination
Problem.
A. Discussion of Various Uses:
Introduction
As the previous section rerarks, the interstate compact has not been used in
regulation of the utility industry, electrical or otherwise. Neither has it been
used to coordinate the regulation by the states of any segment of the economy
where complex administrative machinery is in place or is necessary. However, it
has been used to promote interstate cooperation in energy planning. The Southern
Interstate Nuclear Compact and the Western Interstate Energy Ccnpact are two
examples. The former is a federally-sanctioned compact with 17 states (including
Kentucky and West Virginia) and Puerto Rico participating. Hie latter has
12 state participants. The Southern ccmpact has broadened its scope of inquiry
to include other sources of energy than nuclear. It performs intelligence and
promotional functions and has considerable vitality as an interstate advisor.
The Western compact has a similar history. The Midwest Nuclear Ccmpact designed
"to foster industrial progress in the midwest through employment of scientific
and technological advances in nuclear and related fields" (Interstate Compacts
1783-1977 published by the Council of State Governments, p. 18) has six menfcers
including Illinois, Indiana and Ohio but has no federal approval and seven other
invited states have not yet joined.
These advisory compacts may be useful first steps in regional coordination of
electric power development but they are not designed to coordinate the actual
development of electrical power facilities. A conpact could coordinate such
development either by exchange of specific information, by allowance of other
state participation (as interested parties) in state siting decisions, by
non-mandatory regional planning of such decisions, by some form of mandatory
regional planning of such decisions or by the ultimate step of collective
regional decision making. Even the last step is probably legally feasible
(political feasibility is another matter and beyond the scope of this study)
through a fully developed federal-interstate conpact. Any of the steps might
be useful in preventing the kind of interstate friction and attendant protracted
judicial actions reported at the October 24, 1979 OKBES meeting by the
"Position Paper on the Interstate Transport of Air Pollution" of the Pennsylvania
Department of Environmental Resources.
Wendell and Zimmerman stated in 1976:
"Even among problems which have come to be recognized as heavily
national in import, such as water and air quality, energy production
and conservation, welfare services, and the processes of
transportation and industrial production, federal legislation
increasingly looks toward implementation of national policies
by the States. However, in marry instances, the most appropriate
geographic areas for administration of sane of the programs may
be somewhere between State and Nation. In what is so far an
important but limited number of instances, compacts have provided
the necessary interstitial bridges to permit States to develop such
regional administration. This has been done in some interstate river
basins, interstate metropolitan areas, and in some culturally defined
regions such as Nev England and the South. However, much more should
be possible along these lines.
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While many compacts create new agencies to administer their
provisions, a strength of the device is that it utilizes the
existing governmental units and generally gives their governmental
structures a place in the conduct of the intergovernmental relationship.
The compact, whether or not it establishes an interstate or federal-
interstate agency, is therefore a means of getting the existing federal
and state apparatus to address itself to intergovernmental problems in
concert, with the intergovernmental agency as a specialized staff
resource for the purpose." (The Law and Use of Interstate Canpacts,
pp. 108-109.)
To accomplish seme or all of the coordinative steps suggested above, an existing
compact, an amendment to an existing compact, or a new compact could be used.
(1). The use of an existing compact:
Article VIII of the existing Ohio River Valley Water Sanitation Compact states:
"The commission shall conduct a survey of the territory
included within the district, shall study the pollution problems
within the district and shall make a comprehensive report for the
prevention or reduction of stream pollution therein. In preparing
such report, the commission shall confer with any national or
regional planning body which may be established, and any department
of the Federal Government authorized to deal with matters relating
to the pollution problems of the district."
The ongoing or periodic nature of the mandated "study" is indicated by the last
sentence of this Article VIII:
"The commission shall more than one month prior to any regular meeting
of the legislature of any state which is a party thereto, present to
the Governor of the state its recommendations relating to enactments
to be made by any legislature in furthering the intents and purposes
of this ccnpact." (Emphasis added.)
Although the purpose of the Ccnpact and of the mandated study is clearly to
prevent water pollution, a "comprehensive report" on its prevention surely cannot
ignore the other potential impacts—environmental, economic, and now even energy
resource—of any potential source of water pollution. Determining the optimum
long terms means of preventing water pollution must take into account the other
impacts. This is especially true in light of the extensive federal law controlling
all forms of pollution and energy resource consumption. It is all one interconnected
whole. Therefore ORSANCO could require all its menfoer states to supply it with
information as to long-range plans for power plant siting in their state or request
such information from the Federal Energy Regulatory Commission, information presently
supplied to it annually by the private utilities regional reliability councils.
ORSANCO could then compile and augment this information and distribute it to its
member state, with or without specific recommendations. ORSANOO could well serve
this clearing house function with a few extra personnel but no further legal mandate.
It should be pointed out that the Ohio River Basin Commission could alsn perform
this function.
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(2). The amendment of an existing oanpact:
The ORSANCO Compact could also be amended. Article III provides in part that
ORSANCO shall have "such additional powers as may be conferred upon it by
subsequent action of the respective legislatures of the signatory states, or by
act or acts of the Congress of the United States." In light of the interconnected
nature of environmental, energy and other impacts of power plant siting and of
the interstate character of these impacts, it would not be outside the general
character of the original oonpact to add to it a regional power plant planning
function so as to facilitate coordination of individual state's siting decisions
and to minimize interstate friction and the protracted litigation that inevitahly
follows such friction. An ounce of planning might prevent a pound of litigation.
I am not suggesting that such an amendment should be taken but that it would legally
be feasible to so amend.
The first example in "B" of this section sets out what such an amendment might
look like. The two steps of creation of a long-range regional plan with subsequent
submission of the plan to the member states, avoids the problem mentioned in the
last section of giving legislative power to an interstate organization. The various
options as to subsequent state action give the planners incentive to try to be
absolutely fair to each state and at the same time to know that everyone need not
be completely pleased in order for the plan to have seme efficacy. The legislatures
will only receive rights under the plan if they are willing to assume reciprocal
obligations.
(3). The creation of a new federal-interstate compact:
A new federal-interstate compact with a cotmission structured as in Delaware River
Basin Ccnpact but with powers and duties designed solely to coordinate state
siting decisions on a regional basis could be given a range of powers. It could
act merely as a central clearing house for each state's siting plans (if any)
or for the siting plans of all the utilities within the region. It oould be an
agency that assesses the information gathered, making estimates of the region-wide
impacts of any proposed sites, etc. It could be an agency that makes a
non-rrandatory region-wide power development plan. Or ultimately it oould be an
interstate agency that creates a plan with a range of options as to enforceability.
For instance, the plan could be "optionally mandatory." In that case each member
state would accept or reject the regional plan. Acceptance would mean that the
accepting state binds itself to follow the plan in making individual decisions
within its jurisdiction and has the right to force other accepting states (through
a suitable tribunal) to also adhere to the plan. The perceived suitability of the
dispute resolving tribunal would be crucial to the acceptability of this option.
Such tribunal must be neutral (and be perceived as neutral), capable of developing
the facts, expert at interpreting the plan, and capable of acting swiftly. It oould
be either:
(i) The United States Supreme Court exercising its original
jurisdiction to settle disputes between states;
(ii) A special tribunal composed of life-tenured federal judges
appointed on an ad hoc basis by the Chief Justice of the
United States with minimal review of its decision by the
United States Supreme Court;
(iii) A special arbitration tribunal appointed by the meirber states
on either an ad hoc basis or as a permanent arbitration
panel again with minimal United States Supreme Court review.
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The decision of the tribunal would be either (A) to enjoin
the state decision, (B) affirm the state decision, or
(C) remand for the state to either accept a modification
or condition on its original decision or to entirely
abandon it.
Alternatively, the plan generated by the agency could, on approval by the ccarmission,
become mandatory an all the meirfoer states with review by any member state in a
special tribunal using any of the options above in (2) (b) within a short period
(30 to 120 days) of its publication. The plan could then be enforced by any
mentoer state by disputing as inconsistent with the plan any other member states
citing decision in a special tribunal (the same or different from the one
approving the plan) or by the ccmpact agency. If only the compact agency can
enforce the plan it will itself became a forum for dispute settlement among
the member states. It will have to hold hearings or conduct formal or informal
negotiations among the states that disagree about a particular state's siting
decision. The agency's decision as to whether or not to question a mentoer state
siting decision by proceedings in a special tribunal will itself become the
subject of dispute which if not provided against will end up in court. I therefore
judge enforcement by the compact agency only, unacceptable. A third possibility
is the presentation of any proposed state siting decision to the agency for its
approval. If approved then that decision can be appealed by any rasnfoer state to
a special "suitable tribunal." But the initial approval by the agency should
carry some weight in the special tribunal. If the agency decision is not made
on a record then the reviewing tribunal will act as a de nova (or trial) court.
If made on a record then as any reviewing tribunal (based an a reasonableness
standard).
B. Illustrative Examples of Hypothetical Interstate Compacts:
Introduction
These examples of institutional arrangements are designed to show in detail
what might be done to coordinate state power plant siting decisions. They are
intended to vivify the discussion on the potential for the use of the interstate
corpact as a coordinative arrangement.
The first example is an amendment to an existing compact: It has the
advantage of using a proven oarrmission with established institutions.
The second example is a new compact roughly patterned after the Delaware
River Basin Conpact and Susquehanna River Basin Compact, at least as to structure.
The major difference is that these two existing compacts have primarily a
development purpose which calls more for interstate cooperation than of
coordination. Whereas, here the purpose is invocation of federal prescriptive
policy with ultimate state application. This purpose calls for coordination
of state action inter se and with federal action, rather than cooperation.
A new corpact has the advantage of allowing specific structural design to serve
its unique purpose.
Most compacts have a preamble in which is recited either as a set of "Whereas"
introduced clauses or as statement of "purpose" or "findings of fact" or both.
I have included such preairbles in the examples given here for the sake of
completeness. The preairbles are for the sake of form. Their substance is not
this writer's or anyone else's endorsement of the facts or purposes stated therein.
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(1). Example: amendments to the Ohio River Valley Water Sanitation Compact;
Amendments to the Ohio River Valley Water
Sanitation Compact to Facilitate Interstate
Coordination of Electric Power Facilities
Siting and Development
Whereas: There exists a substantial body of federal law, whidi in the irain prescribes
standards of environmental protection and energy resource utilization, that directly
affects the siting of new electrical generating facilities and the development of
electrical capacity and reliability; and
Whereas, this body of federal law is applied and implemented through agencies
of the individual state; and
Whereas, many of the individual state electrical facility siting decisions
affect the environment, economy and energy-resource utilization of other states
and especially certain neighboring states and affect the implementation decisions
pertaining to electrical facility siting in such other states; and
Whereas, there is at present no means by which an acting state easily can take
account of the affects of its decisions on other states or that such impacted state
can force consideration by the acting state of such affects except through the
uncertain process of protracted litigation;
Whereas, even if the extraterritorial and interstate environmental and other
impacts of the siting of electrical facilities were considered in a state's
decisions affecting or permitting such siting, there is at present no means of
anticipating or resolving interstate disputes over such extraterritorial inpact
except through the uncertain process of protracted litigation;
Whereas, the Ohio River drainage basin in a natural interstate area of
mutually felt environmental, economic and energy impacts such that the territory
within the area has an interdependent environment and economic character and is
distinct from other areas even though there is environmental and economic
interaction with such other areas.
Whereas: There presently exists a Compact among the states of said Ohio Basin
Region that established and has maintained for over 30 years a commission called
the Ohio River Valley Water Sanitation Canmissian that has been highly successful
in {promoting and] facilitating cooperation of the menfoer states [to the end
of cleaning and maintaining in an environmentally sound condition the waters of the
Ohio River and its tributaries]; or [in the control of new pollution and the
abatement of existing pollution from the river, stream and waters in the
Ohio River Basin];
Whereas: Direct implementation and application of environmental and energy
policy by the federal government is unnecessary in order to effect coordination
since regional coordination would be adequate and, also be more efficient and
more responsive to state needs; and
*Words in brackets are alternative phrases.
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Whereas: Aspects of the problem of electrical energy generation development
are interregional or national in scope and the federal government should be involved
in the planning process to protect the interests of other regions and to coordinate
where necessary interregional impacts and decisions; and
Whereas: The existing Ohio River Valley Water Sanitation Compact provides for
federal representation in planning and decision-making.
Therefore, the states of Illinois, Indiana, Kentucky, New York, Ohio, Pennsylvan?=,
Virginia and West Virginia, agree to amend their Ohio River Valley Water Sanitation
Compact as follows:
Article I
Each of the signatory states renews in full the pledge of Article I of the
original compact and further pledges to each other faithful cooperation and
coordination among themselves and with the federal government in regard to decisions
affecting the electrical utility1s facility proposals and plans for the siting of,
and other development of, new generating and transmission facilities so as to
achieve the minimum disruption, destruction and despoliation of the land, water and
air environment of the region, so as to achieve the maximum use of energy resources
locally available to the region, so as to achieve the optimum development of
electrical generating capacity for the region, and so as to guarantee an equitable
distribution of unavoidable environmental detriments such that industrial and other
economic development may proceed in each state consonant with federal minimum
environmental standards and federal energy standards.
Article II
A district congruent with the District created by the original Article II
[excluding that portion which drains into the Tennessee River] is hereby created
to be called the Ohio River Basin Electrical Power Siting District.
Article III
In order to carry out the purposes stated in Article I of these anendments
the commission created by Article III of the original compact is given the
following additional powers:
(A) To create an Ohio River Basin Electrical Power Facilities Siting and
Development Task Force (called the Siting Task Force). The sole duty
of the siting task force will be to prepare and submit for the uuiimission' s
disposal a Comprehensive [Ohio River Basin] Regional Electrical Power
Facilities Siting and Development Plan (called the Develcprent Plan).
The Development Plan will be submitted no later than eighteen months
[twenty] [twenty-four] from a date set by the uuiwu-ssion as the beginning
date of Siting Task Force work. The Development Plan will be written as
far as possible in plain, non-technical language, will be as succinct as
possible consistent with its task, will contain a glossary which will
define in non-technical language any technical terms used and will define
in plain language any word or words having a special use or which might
be aitbiguous, and will contain the following substantive sections:
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(1) A review and analysis of evidence for the projected need for
electrical energy in the District for the next ten years just
following the date set for submission of the Development Plan
and then for the next ten years following and for the next ten
years following (thirty years in all) and separately stated
conclusions as to the projected needs used for planning purposes
in the Development Plan and as to hew the contingency of such
projected needs will be dealt with in the Development Plan.
(2) A review and analysis of evidence for the projected need for
(or desire for use of) district generated electricity outside
the district and a similar review of the projected use within
the district of electricity generated outside the district, and
separately stated conclusions used for planning purposes as to
projected use out-of-district of in-district generated electricity
and vice versa and how the contingency of such projected uses will
be dealt with in the Development Plan.
(3) A review of plans submitted by each electric utility having
generating facilities in the region or that serve the region
of its own long range plans for the construction of new electrical
generating facilities or for the expansion of facilities at
existing sites. This review will, after detailing each utility's
plans as to location, size and type of expansion (including
removals), analyze the likelihood of the aggregate projected
electrical energy capacity meeting the needs for electrical energy
projected in Section one and the desire for energy projected in
Section two.
(4) A review and analysis of the total environmental impact means the
iirpact the proposed project would have on the immediate locale,
on the local region, and on the total region measurably iirpacted,
in the short run (up to five years) and in the long run (up to
thirty years) and environment includes the total physical (land,
water and air) environment, the economic environment, and the
social environment. ESnphasis should be on measurable physical
impacts and the effect such impacts in conjunction with federal
environmental and energy regulations and standards could have on
future industrial and other productive development of any area
affected.
(5) A review and analysis (in the same manner as Section 4) of
the alternative sites submitted by electric utilities and of
other prospective sites (including expansion at existing sites)
discovered by the Siting Task Force.
(6) A Plan for future electric power development in the division.
This section puts together the infonration and analysis of the
first five sections in a way that clearly indicates approval or
disapproval of each electric utility proposed site, the date
construction ought to begin and any contingencies that might
qualify approval or disapproval (including size of generating
capacity) and shows the regionwide development plan.
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(7) A comprehensive set of maps showing existing and future sites,
proposed and approved, proposed and disapproved, and shewing
proposed expansions and contractions of existing sites, approved
and disapproved, and shewing the bulk electric power grid that
presently exists and as planned including interregional connections.
This map section should be designed so as to make more vivid and
coherent the Development Plan and will be used as a point of
reference in the other sections of the Development Plan.
The Commission may authorize deviations from the above seven
sections in form or substance if in the sole opinion of the
Cormission the deviation will help improve the Development Plan
to the end of carrying out the purposes of this compact amendment.
(B) To appoint to the Siting Task Force such full-time people not to excede
twenty (excluding secretarial, clerical and other support staff) who in
the ocmnission' s judgment have the necessary training and experience to
carry out the duties established in III (A) of this compact amendment but
should include at least one person who by training and expedience has
special knowledge and judgment in the following areas of study:
(1) Air quality control
(2) Water quality control
(3) Land use control
(4) Energy economics
(5) Industrial economics
(6) Urban planning
(7) Agroncny
(8) Bulk electrical power distribution
(9) Electric power plant construction
(10) Electric power plant engineering (including site improvement)
(C) To determine the compensation and working arrangements of the Siting Task
Force it being understood that this Compact amendment anticipates that
the Siting Task Force will be in substantial part a group of highly qualified
people working together full-time at one location unless in the opinion of
the Commission existing or pending studies done for other governmental
agencies such as the Ohio River Basin Energy Study obviate to some extent
the working arrangement anticipated above.
(D) To charge the cost of the Siting Task Force and any other costs incurred
by the Catmissian pursuant to the purposes of this compact amendment to
member states according to the provisions of Article X of the Carpact
following the procedures established by the Catmission pursuant to
Article V.
(E) To require all electric utilities to prepare a report of its plans for
electric generating and transmission facilities for at least the next
ten years, the report to be in such a form and containing such information
as the Ccumission in consultation with the Siting Task Force finds necessary
to establishing the Development Plan, making it clear to each electric
utility the intended use and effect of its plans.
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(F) To empower the Siting Task Force to require (in addition to the electric
utility report required in (E)) such reports of private individuals,
groups, labor unions, corporations, or any other entity, public or private
(including municipal or other local governmental entities) located in the
member states as the Siting Task Force thinks useful to carrying out its
purpose. Any individual, group, or entity nay submit such information or
ideas to the Siting Task Force as such individual, etc., thinks appropriate.
Where it deems it appropriate it may pay the cost of production of such
report or reports.
(G) If any report required pursuant to (E) and (F) is not forthcoming and in
the opinion of the Ccnrnission the requirement of such report is reasonable
it may seek an order from a state court of record having jurisdiction over
the individual or entity refusing to produce the report by whatever local
process is appropriate and adequate, and the member states authorize their
courts to issue such orders after a hearing held as soon after the request
as it is possible to give due notice. The sole issue at the hearing will
be whether or not the required report will contain information likely to
further the goals of the Siting Task Force, whether the required report
exists or can be reasonably produced by the requested individual or entity
and the court shall forthwith issue its order for all or such part of the
required report as it finds appropriate and under such conditions (including
payment for the cost of its production) as it deems appropriate. Appeal
frcm such order shall be directly to the highest appellate court of the
state, notice of which must be filed with the clerk of such high court
within five working days of the order, the record of such proceeding must
be prepared by a certified court reporter from tape or other mechanical
device taken at the hearing and reproduced for all parties, all at the
Commission's cost regardless of who initiates the appeal and must be filed
by the Ccnmission within thirty calendar days of the notice or the requested
order will be deemed finally denied. The court appealed to will iiranediately
set a date for argument by attorneys for the parties which date shall be
no earlier than ten days nor later than thirty days after the record is
filed or as soon thereafter as a quorum of the court can be assembled.
Written briefs may be filed by either side prior to the hearing but not
after.
Fran the record, oral argument and written briefs, if any, the revia^ing
court shall decide whether the trial court order was reasonable or not and
forthwith affirm or reverse or reverse and remand with instructions.
The order of affirmance or reversal shall be issued on the same day as the
hearing. All costs of the appeal including reasonable attorney's fees
shall be apportioned by the court but in arty event the Comrdssion shall be
required to pay at least its own costs.
(H) At the request of the Siting Task Force or of any other interested individual,
group or entity to hold such public hearings as will in the Ccnmission's sole
judgment further the purposes of this compact amendment and any such hearing
ordered shall be at such time and such plaoe and under such conditions as the
Ccnmission deems appropriate.
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(I) When the Siting Task Force submits its completed Development Plan to
the Commission for disposition, the Ccnmissian shall hold public hearings
at such time and place and under such conditions as in its sole judgment
it deems appropriate. The hearings need not be before the entire Ccnmissian
but the Commission meirbers of each marker state may hold hearings in their
respective state provided however that before final action is taken an the
Development Plan at least one formal public hearing will be held before the
Ccnmissian sitting as a body and at which at least the following will have
an opportunity to speak:
(1) Spokesman for each meirber state's utility industry
(2) Spokesman for the East Central Area Reliability Coordination Council
(ECAR) [and for other regional reliability councils that include
ORSANCO states in their region] and the National Electrical
Reliability Council
(3) Environmental groups spokesmen
(4) Each neither state's municipal league
(J) To adept or to reject as submitted or to adept with such modifications as
it deems appropriate the Development Plan submitted by the Siting Task
Force and cause such Plan to be published as the Ohio River Valley Water
Sanitation Compact Amendments Electric Generating Facility Siting and
Development Plan the short title of which shall be the Electric Power
Plan of ORSANCO "EPPO" for short. The decision to adopt or reject or
to adopt with appropriate modifications shall be made as expeditiously
as is possible but in no event nnre than six calendar months [90 days]
[four months] after the submittal by the Siting Task Force.
Article IV
The Electric Power Plan of ORSANCO (EPPO hereafter) shall be submitted to each
meirber state's legislature at its first regular session after adoption. The merrber
states can either:
(A) Adopt EPPO as mandatory such that it gives positive direction to future
official state siting decisions, and any decision by any state official
with siting authority can be challenged by any other meirber state that
has made EPPO mandatory in an original action before the Supreme Court
of the United States under Title 28, § 1252(a)(1), United States Code,
and the sole issue in such action shall be "Is the challenged state
decision in substantial compliance with EPPO?"
(B) Adopt EPPO as advisory only in which case any official state siting decision
in substantial conformity to EPPO should be affirmed by whatever state court
or courts has reviewing authority and in which case the state agrees to
give notice of a pending citing decision to other states that have adopted
EPPO as mandatory or advisory and to allow those states to appear and
give testimony at any hearing prior to a citing decision and such states
shall have standing in the state's courts to appeal the citing decision by
whatever state procedures are ordinarily available, if any.
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(C) Adopt EPPO as informational only in which case the legislature neither
approves nor disapproves the EPPO and any use of EPPO by a state electric
pcwer siting decision maker is permissive only. The state does, however,
promise to inform other menber states iitmediately of official siting
decisions or of other electric power siting or development plans within
the state that cote to the state's attention whether in conformity to EPPO
or not.
(D) Reject EPPO in which no further duties or rights arise under this ccnpact
amendment except to pay whatever renains of that state's share of the
Article X cost of preparation of EPPO.
Article V
When at least two menber state legislatures have adopted EPPO then the ccnraission
shall have the pcwer to create a standing oanmittee to review EPPO biannually, and
it shall recommend to the Ccarmission such changes in EPPO as are necessitated by
change in federal law or member state law or by other changes in conditions in the
District and it may recommend such other changes that it finds, after careful study,
will make EPPO better serve the ooordinative purposes of this corcpact including
the efficiency of EPPO's use, and it may make any other recommendations that it
deems will serve the ooordinative purposes of this compact.
The Ccnraission may authorize this committee to have such studies made either
on a continuing basis by personnel ertployed by the ccntnission or on a periodic
basis by contract or otherwise as will enable the committee to make its biannual
review and update recommendations on EPPO.
Any such recommendations as to changes in EPPO nay be accepted or rejected
in whole or in part by the Commission and any change shall go into immediate
effect upon acceptance but any member state that has adopted EPPO (under Article IV(A),
(B) or (C)) may reject the change and that state's status becomes from that time
that of a rejecting state under Article IV (D). An adopting state has until the end
of the first full regular session of its legislature after the EPPO changes are
announced to reject the change and become a rejecting state. In the interim
between the announcement of the change in EPPO and any adopting state's rejection
of EPPO as changed, EPPO as changed shall have the same force and effect as EPPO
had before the announced change.
Article VI
The Comnission may establish a permanent agency with permanent offices and
errployees to interpret and study EPPO. Such agency nay be authorized to answer
any question asked by any affected electric utility or menber state agency or
any other person, group or agency designated by the Canriissian, as to the specific
meaning of EPPO with regard to any proposed or possible siting of generating or
transmission facilities. The Ccumission may make such rules and regulations as
it deems best serves the purposes of this Compact to govern the agency including,
but not limited to, the form and substance of requests for information on and
interpretations of EPPO, the form and significance of answers to such questions
and the process of oversight by the Cotmissian, if any.
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(2). Exanple: a new federal-interstate compact (pertinent parts) :*
The Ohio River Basin
Electric Power Generation
Siting and Development Conpact
(1) The short title of this compact is The Ohio River Basin Electrical
Siting Compact (ORBESC).
(2) The purpose of this Compact is to establish a means of coordinating
on an interstate regional basis, state and federal implementation
of existing federally mandated policy, which is concerned principally
with environmental protection and energy resource utilization, as
it directly affects the siting and other development of new electrical
generating and transmission capacity and reliability by the electrical
utility industry. The wisdom and feasibility of this canpact is
based on the following findings:
The Ohio River Basin, an interstate region, has a natural
character as an energy resource area, energy market area and
environmental area. The problem of the siting of electrical
generating facilities consistent with federally mandated energy
and environmental policy can best be solved by an interstate
regional invocation process but with ultimate application and
enforcement pcwer left to the individual states. Moreover,
important aspects of this essentially regional problem are
national or interregional in nature. Furthermore the federal laws
that particularly affect the pcwer siting process such as the
Clean Air Act, The Water Pollution Control Act Amendments of 1972,
the Solid Waste Disposal Act, and the Surface Mining and Reclamation
Act, provide for individual state implementation of primary federal
policy and specifically encourage interstate regional cooperation
and coordination. Furthermore the future energy needs and the
alternative means of meeting such needs in an environmentally sound
way have been thoroughly studied in a project of federal-state
cooperation called the Ohio River Basin Energy Study. Finally,
the electrical utility industry with the encouragement of the
Federal Energy Regulatory Canmissian and with specific Congressional
authorization have formed themselves into nine regional reliability
councils under a coordinating national organization (National
Electrical Reliability Council) and one of such regions, the
East Central Area Reliability Coordination Council (ECAR) corresponds
to a large extent with the Ohio River Basin.
*This example contains only the pertinent part of the total canpact which
would be much too long to fully set out here and is unnecessary to our purposes.
See Delaware River Basin Conpact which can be found at 32 § 815.101 et seq.
Penna. Statutes Annotated, which contains some 36 pages of text; and the
Susquehanna River Basin Compact of 32 § 820.1 et seq. Penna. Statutes Annotated
which contains seme 28 pages of text.
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Section 2.2 Commission Membership
The members of the canmission shall be the governor, ex officio, of each
signatory state, or, such governor's designee, acting on his behalf, and two
members to be appointed by the President of the United States each to serve at
the pleasure of the President.
Section 2.3 Alternates
An alternate for each member of the canmission shall be appointed by each
mentoer unless otherwise provided by the laws of the signatory state. The alternate,
in the absence of the meirber, shall represent the meirber and act for him or her.
Section 2.4 Oonpensation
Members of the canmission and alternates shall serve without compensation
from the ocsimission but shall be reimbursed by the commission for necessary
expenses incurred in the performance of their duties.
Section 2.5 Voting Power
Each meirber is entitled to one vote. No action of the canmission may be taken
unless a majority of the menbership [unless five meirbers] vote in favor thereof.
Section 2.6 Organization And Procedure
The ccnmission shall provide for its own organization and procedure, and
shall adopt rules and regulations to govern its meetings and transactions.
It shall organize annually by the election of a chairman and vice-chairman
from among its meirbers. It shall provide by its rules for the appointment by
each meirber in his or her discretion of an advisor (to serve without compensation
from the Ccnmission), who nay attend (if the rules so provide) all meetings of
the canmission and its ccnmittees.
Article 3. Powers and Duties of the Commission
Section 3.1 General Purpose Of The Powers And Duties Of The Ccnmission
The coirrnission is created by the signatory parties to coordinate the efforts
of the various agencies of the member parties responsible for decisions regarding
the regulation of the siting of new electric power generating and transmission
facilities, and of the expansion and contraction of existing generating and
transmission facilities. This coordination requires region-wide long-range
planning that is flexible and self-adjusting and subject to periodic revision as
circumstances may require. Efficiency, essential to any sound regulation, is
especially crucial to the regulation of electrical generation facility siting and
construction which siting and construction is extremely oarrplex and expensive.
*Bracketed words are alternative wording.
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Therefore, the states of Indiana, Illinois, Ohio, and
West Virginia and the Commonwealths of Kentucky and Pennsylvania
and the United States of America do hereby solemnly covenant and
agree with each other, upon the enactment of concurrent legislation
by the Congress of the United States and by the respective state
legislatures, to the Ohio River Basin Electrical Facilities Siting
Canpact which consists of this preairble and the following Articles:
[Alternative A: Planning Only]
Article 1. Definitions, Purposes and Limitations
Section 1.1 Definitions
For the purposes of this ccanpact and any supplemental and concurring legislation
enacted pursuant to it:
(1) "Basin" shall mean the Ohio River Basin excluding the
Tennessee River and that part which drains into the
Tennessee River and including all other areas that drain
into the Ohio River.
(2) "Canmissian" shall mean the Ohio River Basin Electric Facilities
Siting Ccmmssion, hereby created, and the word, "oanmissioner,11
shall mean any ireirber thereof.
(3) "Electrical facility" shall mean any facility for the generation
or transmission of electrical energy whatever the ultinate source
of energy or the means of transmission.
(4) "Federal government" shall mean the government of the United States
of America, and any appropriate branch, department, bureau, division,
or agent thereof.
(5) "local government" shall mean that portion of state sovereign authority
exercised by municipal corporations, county governmental entities
or multi-county regional agencies.
(6) "State government" shall mean that portion of state sovereign authority
exercised by agents having state-wide authority.
(7) "Person" shall mean an individual, corporation, partnership, or
unincorporated association.
Article 2. Organization
Section 2.1 Commission Created
The Ohio River Basin Electric Generating Facility Siting Ccnimission is hereby
created as a body politic and corporate, with succession for the duration of this
ccanpact, as an agent and instrumentality of the governments of the respective
signatory parties.
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Therefore this oonpact envisions the interstate coordination of the application
of facility siting policy with improved efficiency provided by compact oonndssion
reooinifcjndations to, and supervision of menber state application of, primary federal
prescriptive policy and state prescriptive policy that is consistent with federal
policy. Hie creation of substantive regulatory policy, as such, is not the business
of this compact or its ocnroLssion. Interstate coordination of the application of
the federal and state policy should assure that the extraterritorial or interstate
impact of any menber state's application of policy is taken into account before
any crucial decisions of application are taken and that such extraterritorial
interests affected have due influence on any crucial decision, but at the same
that the federal and state decision-making process of application be speeded up.
The presence of two federal members on this canmission is to assure that the
invocation and application of primary federal policy is true to Congressional
intent and that the interests of non-party states affected by party state
application decisions are considered and protected.
Section 3.2 Duties Of The Canmission
The Commission shall have the following duties coupled with the power to fulfill
than:
(A) In accordance with the specification contained in Article 4, to develop,
or cause to be developed, and to adopt a Comprehensive Plan for the
Ohio River Basin Compact area for the siting of new electric generating
facilities and new transmission lines for, at least, the ten years and
as far beyond that as prudent planning allows.
(B) In accordance with the specifications contained in Article 5, to create
an Ohio River Basin Electrical Siting Agency (Siting Agency) as a
perpetual entity and to establish and amend, when occasion dsnands,
such rules and regulations for the conduct and governance of the
Siting Agency as the Carmission deems appropriate and to review and
oversee the Siting Agencies activities on a regular or periodic basis.
(C) Make reoorrniendations to the menber parties of legislation and other means
by which the menber parties could improve regulatory efficiency or adjust
their regulatory policies so as to better achieve the party's regulatory
purposes and to better achieve an equitable distribution among the merrber
parties of the benefits and burdens (environmental and otherwise) of
electrical facility expansions and contractions and to make joint
recarrnendations to each party as to the means of achieving greater
coordination of regulatory activity to the ends of greater efficiency
and a more equitable distribution of siting benefits and burdens.
The canmission should make such reoorrniendations to the various legislative
bodies (including Congress) as it deems appropriate on an annual basis
and shall make such reoamrendations on the request of any agency of any
member party.
Section 3.3 Powers Of The Camnission
In order, better to carry out its duties the cartrnission shall have the following
additional powers:
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(A) Tto require the electrical utilities doing business within the menfoer states
to furnish such information as to their plans for expansion and contraction
of services within the Ohio River Basin, over the next ten to twenty years,
as the conmission or the Siting Agency deems useful to the discharge of
its duties. This infonration may include, but is not limited to, planned
new site facilities, alternatives to new site facilities, expansions or
contractions of existing or planned generating facility capacity, new
transmission line routes, alternative new routes, alternatives to new
routes, the environmental impact of planned new facilities and of
alternatively sited or alternatively constructed new facilities and of
the expansion of old facilities, of planned new transmission routes and
of alternatives; ....
(B) To require each state, each local and each federal agency that the cammissioi
identifies as having authority to issue licenses or permits which could have
any significant affect on present or future siting decisions to furnish
such information as to their cwn operations and policies and such informatio]
pertinent to present or future siting that they may possess as the oarmissioi.
or the Siting Agency deems useful to the discharge of its duties.
[There would follow more powers which might include the right to identify
and review projects currently in the works; to promulgate the "plan"
within a certain time; to seek court injunctions to enforce the above
powers as to data gathering or to enforce the plan, once promulgated,
or to initiate the submission of any dispute as to siting to a designated
court (such as the United States District Court for the District of
Columbia) or a special or ad hoc court; to hold public hearings concerning
the plan or its revision; to have such others powers as are necessary
to carry out its purposes. An Article 4 would detail what the plan
was to contain. An Article 5 would detail the composition, powers and
duties of the compact agency. An Article 6 would be general and deeil
with miscellaneous items such as power to acquire property, spend funds,
submit budgets, etc.]
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CHAPTER IV. JUDICIAL REVIEW AND STANDING TO SUE
Section 7: Judicial Review as Crucial to the Problem and Solution of Efficient
and Just Regulation of Power Plant Siting"
Because the nature and scope of judicial review is central to the efficiency
of any regulatory scheme, a discussion at scne length is essential as a background
to any of the proposals for interstate coordination of power plant siting
decisions. The question is hew can the time and cost of much judicial review
be limited while preserving the benefits of review—public access to the
regulatory scheme and public confidence in a just application of public policy.
To that end, there follows a discussion of what judicial review is, its history,
the standards of review (with comparison to standards of proof), and who has
access to review—"standing".
A. The Nature of Judicial Review:
(1). What is judicial review?
Judicial review in its broadest sense refers to the power of the "regular" courts
(state and federal) to review the acts of the other organs of governrrent, legislative
and executive. Judicial review has two main lines: The review of legislative
action for ^constitutionality and the review of administrative action for statutory
illegality. We are primarily concerned with administrative judicial review, and
the further discussion concerns such review unless otherwise indicated. Administrative
judicial review is concerned with review of administrative agency action. This action
by agencies such as the numerous independent federal agencies (and other not so
independent agencies like EPA) and state agencies like the various public utility
commissions is nominally "executive" but these executive acts are often quasi-
legislative or quasi-judicial in nature. It is mostly decisions of this nature
performing prescription and application functions, as opposed to the invocation
function (see glossary of terms), that are judicially reviewable. These prescriptive
and applicative pewers of administrative agencies are called "quasi" because an
the legislative side they do not set primary policy** but only secondary policy, i.e.,
they give detail and greater particularity to more general policy but in a form that
is legislative prospective rules of general application. Therefore they are
legislative but only "quasi" so. On the judicial side, these agencies apply the
primary and secondary policy to specific incidents. This is the "application function"
*
legislative action is reviewed for unconstitutionality almost always by
bringing the executive charged with inplementing the legislation into court, so
it has the appearance of administrative judicial review. Moreover, challenges
to the legality of administrative action are often coupled with challenges to
the constitutionality of the act being administered such that there is both kinds
of review in the same legal action.
**
State and federal constitutions forbid such "delegation of legislative
authority", see, L. Tribe, American Constitutional Law, 284-90 (1978).
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usually performed by courts. Agencies, however, almost always lack the fully
coercive sanction that courts have. Therefore, their application is judicial
but only "quasi" so. The review of agency action varies with the function
performed the action as is discussed further in B (3) below.
(2). When and where is judicial review?
Judicial review is usually provided for in the act creating the regulatory scheme
if such scheme involves the use of sane special agency for its invocation and
application aspects. For example, see § 4906.12 and §§ 4903.10 through 4903.20
Ohio Revised Code for judicial review of Ohio Power Siting Commission orders;
see 42 U.S.C. § 7604 ("Citizens suits"), § 7607 ("Administrative Proceedings and
judicial review") for judicial review of Clean Air Act administration; and
33 U.S.C. § 1369 of Water Pollution Control Act, and 42 U.S.C. § 6976 of the
Solid Waste Disposal Act for judicial revise of administration of those acts.
If no special agency is to perform this invocation and application functions
then it is assumed that regular procedures will be followed with application done
initially by the courts, as with the usual criminal statute. That is not considered
"judicial review", although within the judicial system there will be provision for
"appellant review" of the initial judicial (trial court) decision. This appellant
review is very similar in scope to the judicial review of administrative action.
If an invoking and applying agency is established, but judicial review is not
mentioned, then a general review act usually will authorize review of the action
or in the absence of such an act or even with such act one of the common law
remedies of certiorari, prohibition, mandamus, or habeas corpus may be available.
Finally, the inherent equitable power of the courts to issue injunctions or
declaratory judgments is most often appealed to either in conjunction with the
general act or without it. At the federal level the general review act is called
the Administrative Procedure Act and is found in 5 U.S.C. § 551 et seq. with
§§ 701-706 providing for judicial review. At the state level, an act based on
the Model State Administrative Procedure Act is often found. The federal review
acts do not specify the form of procedure (§ 703 of the A.P.A. (original § 10(b))
prescribes "any applicable form of legal action"), or the court that has jurisdiction.
The state model act does (§ 15(b)) but review under that act is not exclusive of
other traditional remedies (§ 15(a)).
The most interesting and troublesome of the traditional carrion law remedies is
mandamus. The writ of mandamus is used to force a public official to do his clear
duty (owed plaintiff) under the law. It is not supposed to be used to control the
exercise of discretion by public officials but only to force them to do what the
law clearly mandates they do (sometimes called "ministerial" tasks, as opposed to
"administrative" tasks). But it is used to force the exercise of discretion where
an official has a clear duty to exercise discretion but it is not used to control
the discretion exercised. But often a court is persuaded that the choice made by
an official is not within the choices permitted by the law. The court then declares
that the official did not do his clear duty to exercise discretion under the law,
rather the official "abused his discretion". By this legerdemain mandamus is
often used to review discretionary official action. Mandamus actions are very
carman in state courts.
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The federal action in the "nature of mandamus" (writ of mandamus having been
abolished by the Federal Rales of Civil Procedure) is provided by 28 U.S.C. § 1361,
allowing an action in any district court (where proper venue lies) and not just
the District of Ooluirbia courts where most agencies are headquartered.
At the federal level, the review provision of the Federal Trade Commission Act
is the prototype of statutory provisions for petitions for review. It has been
substantially copied into the Securities Act, the Securities Exchange Act, the
Public Utilities Holding Ccnpany Act, the National Labor Relations Act, the Federal
Pcwer Act, the Federal Aviation Act, the Natural Gas Act, the Food and Drug Act,
and at least a dozen or more additional statutes.* It provides that
"any person . . . required by an order of the Commission to cease and
desist . . . may obtain a review of such order in the circuit court
of appeals ... by filing ... a written petition .... A copy
of such petition shall be forthwith served upon the Ccrtmissica-i, and
thereupon the Commission forthwith shall certify and file in the court
a transcript of the entire record in the proceeding, including all
evidence taken and the report and order of the Commission ....
The Court shall have jurisdiction ... to make ... a decree affirming,
modifying, or setting aside the order of the Commission, and enforcing
the same to the extent that such order is affirmed .... The judgment
and decree of the court shall be fineil, except that the same shall be
subject to review by the Supreme Court upon certiorari ....
Hie jurisdiction of the circuit court of appeals to affirm, enforce,
modify, or set aside orders of the Corniissicn shall be exclusive.
Such proceedings in the circuit court of appeals *** giv*3"
precedence over other cases pending therein, and sh^n be in every
way expedited." (Emphasis added.)
When federal administrative action is reviewable, it is probably reviewable by
a proceeding for an injunction or for a declaratory judgment or both, unless a
statute or a custom makes seme other form of proceeding exclusive. But even when a
statutory form of proceeding is made exclusive by statute, a court may find an
injunctive or declaratory proceeding the appropriate means of review when the
statutory method is unavailable. For exairple, despite the provision of the
Labor Act that "the jurisdiction of the court (of appeals) shall be exclusive,
the Supreme Court has held that a district court had jurisdiction of a suit to
enjoin the Board's action in excess of its powers (Leedcen v. Kyne, 358 U.S. 184
(1958)) and has affirmed an injunction against an order of the Board dismissing
a proceeding (Leedont v. International Union of Mine, Mill & Shelter Workers,
352 U.S. 145 (1956)), and despite a provision of the Selective Service Act of 1967
that "No review shall be made of the classification . . . except as a defense to a
criminal prosecution ..." the Supreme Court has allowed pre-induction review of
a "blatantly lawless" classification of a theological student as I-A (Oestereich
v. Selective Service System Local Board, 393 U.S. 233 (1968)).**
*Davis, Administrative Law Text, 3rd Ed., p. 441 (1972).
**Davis, Administrative Law Text, 3rd Ed., p. 445 (1972).
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Injunction and declaratory judgment are important not only as forms of
proceedings for review of federal administrative action but also as the
custernary means of review in the federal courts of state administrative action.
Even when state statutes prescribe other methods for review in the state courts,
the method for obtaining review in the federal courts is by injunction or
declaratory judgment. Such "review" in federal court must be based on diversity
of citizenship (42 U.S.C. § 1332) or on federal right (under the Constitution,
Act of Congress or occasionally under federal camion law). The federal rights claim
must be that the administrative process or decision somehow violates such right.
It is not "review" in the ordinary sense and the rules below about scope of review
are not applicable to it. Such "review", is also limited by sovereign iimtunity
and the Eleventh Amendment (see discussion in Section 2) and by the doctrine of
exhaustion of administrative remedies. Prentis v. Atlantic Coast Line Co., 211 U.S.
210 (1908); Bacon v. Rutland R. Co., 232 U.S. 134 (1914). State judicial remedies
ordinarily need not be exhausted, however. Occasionally, though, a federal statute
will specifically require exhaustion of state judicial remedies before resort to a
federal court can be had as with state utility rate orders under the Johnson Act
of 1934 (28 U.S.C. § 1342). "Pour conditions must be met for the statute to be
applicable. (1) Jurisdiction must be based solely on diversity of citizenship or
repugnance to the federal constitution, so that the statute will not apply if the
order is claimed to be contrary to a federal statute. (2) The order must not
interfere with interstate commerce. (3) The order must have been made after
reasonable notice and hearing. (4) The order must be 1 a plain, speedy and
efficient remedy1 in the courts of the state." C. Wright, Law of Federal Courts,
3rd Ed. (1976), at 216.
The review by federal courts of state administrative action is further
ocnplicated by "absention doctrine" practices whereby a federal court will
abstain from exercising its jurisdiction in order to allow a state court to
clarify axtbiguous state law (Railroad Canm. of Texas v. Pulliran Co., 312 U.S.
496 (1941); Louisiana Power and Light Co. v. City of Thibodaux, 360 U.S. 25 (1959).
On a rare occasion this doctrine causes a federal court to completely dismiss the
federal suit rather than the usual practice of merely delaying federal court
exercise of jurisdiction until state court clarifying decision is obtained.
For example in Burford v. Sun Oil Co., 319 U.S. 315 (1943) the federal diversity
case was dismissed because the Texas oil field regulation schare had its substantive
and procedural aspects so intertwined in an interdependent ongoing process of
rulemaking and adjudication that it would have been inappropriate to introduce an
occasional and disparate decision maker (i.e., the federal court) into the process.
Any federal issue could be reviewed in any event by appeal or certiorari from the
state's highest court to the United States Supreme Court.
Finally, a specific statutory review is not necessarily a complete and exclusive
alternative to the general ocirmon law system. A litigant, to be sure, must pursue
the statutory method insofar as it provides an adequate remedy. But it may not.
The statutory review is usually restricted to the record made at the administrative
hearing. But the agency may refuse to hold a hearing or it may hold a hearing but
refuse to decide the case or it may have been bribed to decide as it did, or have
been improperly influenced by matter outside the record. In State v. Wrabetz,
231 Wis. 147, 285 N.W. 504 (1939), it was held that on a statutory review of a
compensation award evidence would be received that the board had not read the evidenct,
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it may be pertinent that the statute did not explicitly forbid new evidence
or that initial review was in a trial court. The Model State Administrative
Procedure Act provides that though review is restricted to the record, evidence
nay be taken of alleged irregularities in procedure before the agency. If,
however, on the statutory review new evidence cannot be received, the litigant
must then seek a proper remedy: it may be mandamus or injunction. These remedies
will be available unless the legislature has intended to exclude all remedies
other than those specifically provided. If so, the exclusion may or may not be
constitutional. Cf. Oklahoma Operating Go. v. Love, 252 U.S. 331 (1920).*
(3). Sumnary history of judicial review:
Briefly, the pertinent history is this: Fran Martin v. Mott, 25 U.S. (12 Wheat.)
19 (1827) where the President was held to be the sole unreviewable judge of the
need to «-^n the militia to Hadden v. Merrit, 115 U.S. 25 (1885) and Lent Moon Sing
v. United States, 158 U.S. 538 (1895) the Supreme Court was reluctant to review
administrative action without a clear mandate. But with American School of
Magnetic Healing v. McAnnultz, 187 U.S. 94 (1902) the federal courts began the
process of turning the presunption of no review to one of revisv. In American School,
the Postmaster General had labeled the health claims of magnetic or electrical
healing to be fraudulent and denied the use of the mails to American School.
The Supreme Court said the efficaciousness of such methods of healing may be
scientifically dubious but since the claims cannot be proven false they are not
fraudulent. Since the Postmaster General's determination that such claims were
"fraud" within the statute authorizing the stopping of mail was "a clear mistake
of law . . . the courts must have power in a proper case to grant relief.
Otherwise, the individual is left to the absolutely uncontrolled and arbitrary
action of a public administrative officer, whose action is unauthorized by any law
and is in violation of the rights of the individual." TWo things are apparent
here: first, the court is willing to substitute its judgment for that of an
administrator if the judgment is about the meaning of "law" and it feels strongly
about the correctness of its judgment and second, individual rights (here to use
the mails) are involved. Although the court asserted the mistake of law is "clear",
a reasonable person might have concluded that "fraudulent" meant claims for which
there is little or no scientific proof and that the credulous might rely on to
their detriment. The Court apparently rejected this interpretation. But whether
the Court was saying that it is "reasonable but wrong" or that it is just plain
unreasonable is not clear. Courts have traditionally been willing to substitute
their judgment for lower court judgments on legal questions even where the lcwer
court judgment was reasonable.
In Stark v. Wickard, 321 U.S. 288, 309-10 (1944) the court in holding that
silence does not imply no review of otherwise judicial issues:
"The Responsibility of determining the limits of statutory grants
of authority ... is a judicial function . . . Congress established
Courts to adjudicate cases and controversies as to claims of
*Jaffe & Nathanson, Administrative Law, Cases & Materials, p.741 (1976).
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infringement of individual rights whether by unlawful (private)
action . . . or by the exertion of unauthorized administration
power."
Professor Davis concludes:*
By the time the Administrative Procedure Act was enacted in 1946,
the nineteenth century coalman-law presumption of unreviewability
had quite clearly changed into a twentieth century common-law
presumption of reviewability. Administrative action was reviewable
unless (a) legislative intent to the contrary could be found or
(b) seme special reason called for unreviewability.
B. Scope of Review (Standard of Review):
The scope of review usually expressed in some vague standard such as "arbitrary",
"abuse of discretion", "substantial evidence" is the product of an intuitive process
without even a glimrer of precision and with little enlightening articulation.
Much of the practice of judicial review of administrative action is inherited from
appellant review practice, especially the review of the judgment of a judge and jury.
(1). Cold record factor:
The beginning point of each form of review is the "cold record". The record is calle<
"cold" because the witnesses' oral testimony is not heard live—their demeanor,
inflection, etc., is not observed. Since the manner in which testimony is given
is thought to play a large role in determining its credibility to the average
auditor, determining credibility is often said to be solely a function of the
initial fact-finding tribunal. But since credibility is also a function of factors
that can be determined from the cold record—things such as internal consistency,
externally caused bias (e.g., kinship, financial interest), general plausibility,
and corroboration—reviewing courts sometimes second guess agencies or even juries
on credibility issues. NLRB v. Pittsburgh S. S. Co., 337 U.S. 656 (1951) and
especially Universal Cairera Corp. v. NLRB, 34U U.S. 474 (1951) attributed substantial
weight to the addition of "upon the whole record" to the substantial evidence test
in the Administrative Procedures Act.
*Davis, Administrative Law Text, 3rd Ed., p. 510 (1972).
**Credibility of non-expert witness is a function of four testamentary attributes:
the witness's (1) quality of perception (e.g., distance, angle, eyesight, light,
noise, hearing) , (2) quality of memory, (3) sincerity and (4) quality of narration
(i.e., articulateness). On a fully developed record enly (3) and (4) are aided
significantly by actual observation of the witness. (1) not at all, (2) perhaps
slightly. The credibility of the expert witness (a witness who because of special
knowledge or skill not possessed by the fact-finder is allowed to make inferences
from raw facts that ordinarily would be left to the fact-finder) is very little
aided by anything not in the cold record.
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"The substantiality of evidence must take into account whatever in the record fairly
detracts from its weight" including "contradictory evidence". (At 488.) And the
reviewing court must reverse when the agency's decision clearly cannot be justified
"by a fair estimate of the worth of the testimony of witnesses or its informed
judgment on matters within its special competence or both" (at p. 490). (Enphasis
added.) See Victor Products Corps, v. NLRB, 208 F.2d 834 (D.C. Cir. 1953).
Judge Learned Hand in NLRB v. Universal Camera Corp., 179 F.2d 749 (2d Cir.
1950), reversed and renanded by Universal Camera v. NLRB, supra, put the natter
of the cold record succinctly:
"Obviously no printed record preserves all the evidence on which
any judicial officer bases his findings; and it is principally
on that account that upon an appeal from the judgment of a district
court, a court of appeals will hesitate to reverse. Its position
must be: 'No matter what you saw of the witnesses and what else
you heard than these written words, we are satisfied from them
alone that you were clearly wrong. Nothing which could have happened
that is not recorded, could have justified your conclusion in the
face of what is before us.' That gives such findings great imnunity,
(2). The law-fact confluence and dichotomy:
To understand what a review standard means the process of review must be understood.
In order to understand review the trial process must be understood. Trials whether
before a judge, a jury or an administrative agency are the conjoining of law with
fact. What is going on is the application of general policy to a concrete situation.
Such can junction of the wholly abstract with the concrete is by the use of words.
Policy (the abstract intent of the legislature) and events are converted into words.
The policy into words of lesser and lesser generality (or greater and greater
particularity) from statutory language to interpretative rule to particularized
interpretive rule and the events fron raw sensory data retained in memory (or
occasionally electronically or chemically) to words of immediate or primary
description (called words of "primary inference") to words of greater and greater
generality (called words of "secondary" or even "tertiary" inference) until
the vrords coming down frcm the general and up from the concrete coincide, i.e.,
are the same. The process of "coming down" we call "questions of law"; the process
of "coming up" we call "questions of fact". Somewhere approaching the confluence
it becomes airbiguous as to whether one is "coming down" from general policy or
"up" from facts and one "judge" may say a particular inference is a question of law,
another a question of fact, and still another a mixed question of law and fact.
See O'Leary v. Brcwn-Pacific-Maxon, Inc., 340 U.S. 504 (1951).
The distinction between questions of law and fact are important for reviewing
purposes. In general reviewing courts will correct the "mistakes" of a trial
tribunal that are questions of law, i.e., it might say "yes the trial court's
position is an arguable or reasonable inference as to what the law is but we think
the opposite is more reasonable and therefore the trial tribunal is wrong and we
will correct it". This is sometimes called the "tightness test". On the other hand
if it is labeled a question of fact the reviewing courts might say "the ultimate
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inference of fact is arguable or reasonable from the evidence contained in the
record and although we think the opposite inference also reasonable (in fact more
reasonable) and might make it, we will not disturb your decision". This is often
called the "reasonableness test" or the substantial evidence test. Thus the
characterization of an issue as either a question of law or of fact is crucial.
(See § 706 of the APA.) For instance, the ICC held that a railroad was not "an
interurban electric". The Supreme Court in summarizing the evidence said that
" [t]he facts are virtually undisputed". But for purposes of stating the scope
of review, the Court said without qualification: "The Carmission's determination
was one of fact". Professor Davis suggests that the Court's first statement
implies that "the dispute was about the meaning of the statutory term" and thus
a question of law. But the confluence analysis of the law-fact application process
(stated above) suggests that this characterization is in the airbiguous area.
Every time one points to seme object and says "that is a ball, a horse or an
interurban train" then one is both characterizing the object for communication or
classification purposes, i.e., stating a "fact" about the object and one is also
further defining the word "ball", "horse" or "interurban train". The Supreme Court's
attitude about these confluence points is to call them questions of fact especially
where it comes from an administrative body credited with expertise. See, for
example, Rochester Tel. Corp. v. United States, 307 U.S. 125, 146 (1939) and
Davis, supra, p. 546.
"What is now often regarded as the leading case came in 1941,
establishing what is known as 'the doctrine of Gray v. Powell'.
The Bituminous Coal Act of 1937 was inapplicable 'to coal
consumed by the producer . . . .' The railway filed with the
Bituminous Coal Division an application for an exemption under
this provision, and the Director, after hearing, denied the
exemption. The railway leased coal lands from the landowners,
arranged with the landowners simultaneously to lease the mining
equipment to a contractor, and entered into an operating contract
with a supplier to extract the coal at a flat rate or on a cost-
plus basis. The supplier was called an independent contractor
in the contract, and he managed the mining in his own way.
"In upholding the Director, the Court declared: 'In a natter
left specifically by Congress to the determination of an
administrative body . . . the function of review placed upon
the courts ... is fully performed when they determine that
there has been a fair hearing . . . and an application of the
statute in a just and reasoned manner'. The Court said that
lack of dispute about evidentiary facts 'does not permit a
court to substitute judgment for that of the Director ....
Unless we can say that a set of circumstances deemed by the
Catmission to bring them within the concept 'procedure' is so
unrelated to the tasks entrusted by Congress to the Cornnission
as in effect to deny a sensible exercise of judgment, it is the
*Davis, Administrative Law Text, 3rd Ed. (1972) at 546.
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Court's duty to leave the Carmission's judgment undisturbed."
Nonetheless, the Oourt and lesser cxiurts sometimes do substitute judgment
on these natters. Davis theorizes:
"Perhaps the reason the choice is kept discretionary instead of being
governed by rules, principles, and standards of law is that same of
the motivating considerations are intrinsically discretionary in that
they cannot be fully discussed in formal opinions; the considerations
that can be discussed interact with the considerations that cannot be,
so that often none can be openly discussed. The opinions are accordingly
devoted to formulas, precedents, analysis of law and fact, and only to
a slight extent articulation of theory about review.
"The discretionary determination of scope of review of application of
legal concepts to undisputed or established facts probably depends
upon (1) comparative qualificatians of courts and of agencies,
(2) the quality of the particular agency, (3) judicial impressions of
the thoroughness and expertness of the administrative handling of the
particular case, (4) the extent to which the agency is exercising pcwer
that has been especially delegated to it and withheld or withdrawn from
the courts, and (5) whether or not lawmaking by the court is needed
or appropriate in the particular case.
"The fact of comparative qualifications is especially important. Although
courts often emphasize—and sometimes over ertphasize—agency expertise,
they do not usually emphasize that judges, not agencies, are the experts
or comparatively the experts in irany areas, including constitutional law,
ocmmon law, ethics, overall philosophy of law and government, judge-made
law developed through statutory interpretation, most analysis of
legislative history, fair procedure, and problems transcending the
particular field of the agency.
". . .A good deal of emphasis should be given to a penetrating observation
by the Attorney General's Committee on Administrative Procedure: 'In
exercising their powers of review, the courts have been influenced, it
is uuimonly thought, by a variety of inarticulate factors: (1) The
character of the administrative agency, (2) the nature of the problems
with which it deals, (3) the nature and consequences of the administrative
action, (4) the confidence which the agency has won, (5) the degree to
which the review would interfere with the agency's functions or burden
the courts, (6) the nature of the proceedings before the administrative
agency, and similar factors.' These various factors have influenced
intensiveness of review in general, and more particularly the choice
between the reasonableness test and the rightness test in review of
application of legal concepts to established facts."
*Davis, supra, p. 552-53.
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(3). Nature of administrative decisions:
Further complicating the review process is the nature of the decision made by the
agency. There are perhaps six kinds of administrative decisions: formal adjudication
under §§ 556 and 557 of the APA or its analogues; trial record rule making under
§§ 556 and 557; informal rule making under § 553; interpretative rule announcements
as exempted fron § 553 procedures; informal adjudication, an "amorphous and
miscellaneous category constituting 'the vast bulk of administrative adjudication1"
primarily characterized by the lack of a formal record; and finally internal rule
making or "rules of agency organization, procedure or practice" (APA § 553(b)(A)
exeirpted from rule making procedure).
To expand on this slightly:
a) Formal adjudication in accordance with §§ 556 and 557 of the
APA (original §§7 and 8) or an analogous section particular
to scare act is most like a trial in a court and the review is
similar with deference paid (though the substantial evidence
test) to the agency's expertise much as it is paid to a jury's
special "expertise";
b) Formal trial record rule making in accordance with § 556 and
557 with review being similar to that of adjudication is an
unusual and generally not preferred method of rule making since
notice is limited to specific affected parties and is not given
in the federal register and formal trial hearings designed to
establish adjudicative facts (i.e., facts about discreet past
events) are ill designed to develop the broader legislative
facts (i.e., facts about general conditions on which to project
future conditions which the rules will govern) usually necessary
to rule making; such rule making obtains as an exception to the
less formal requirements of § 553 of the APA only where a statute
expressly calls for it, such as in the Food, Drug and Cosmetic
Act and in much ratemaking. Ratemaking although prospective
and early on characterized by Justice Holmes as legislative *
applies to an often large, but usually identifiable, group of
people (including entities) and involves very particularized
fact finding about the economics of an industry or transportation
enterprise. It is a fit subject for formal rule making.
c) "Informal" rule making is perhaps a misleading phrase. It is the
most appropriate and the judicially preferred method of rule making
when that rule making is truly legislative in nature. Section 553
*Currie and Goodrran, Judicial Review of Federal Administrative Action: Quest
for the Optimum Forum, 75 Col. L. Rev. 1, 54 (1975).
**Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 226 (1908).
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of the APA (§ 4 of original) sets out the so called "informal
procedures" required for most rule raking—called "notice and
content" proceedings. Review of such rule making is not
subject to the substantial evidence test but "may be invalidated
by a reviewing court under the 'arbitrary or capricious' standard
if they are not rational and based on consideration of the
relevant factors." F.C.C. v. National Citizens Cam, for
Broadcasting, 98 S.Ct. 2096, 2116 (1978). In fact the substantial
evidence test and the "arbitrary and capricious" standard are two
formulations for different contexts (as we shall see below) of
what is intuitively the same rationality test and as a practical
matter it makes next to no difference which formulation is used.
See content of Friendly, J., in Associated Industries of N.Y.S.
Inc. v. Dept. of Labor, 487 F.2d 349-50 (2d Cir. 1973).
d) Interpretive rule making is exenpted frcm notice and content
procedures. But drawing the line between "interpretative
rule raking" and "legislative rule making" is not easy.
The distinction is important. If a rule is labeled "interpretative"
the courts will use a rightness test in reviewing it; if labeled
legislative a reasonableness test will be used. In Morton v.
Ruiz, 415 U.S. 199 (1974), the court seems to say that even if
the agency is granted pcwer to make a rule, which would be
legislative rule making, if it chooses to forego the § 553 rule
making procedure, then the agency's own implicit characterization
of the rule as "interpretative" allows the reviewing court to pay
little deference to the administrative judgment, i.e., the court
will treat it as interpretative, therefore a question of law, and
therefore subject to the rightness test.
e) Informal adjudicative decisions do not furnish an adequate record
for review and even though a particular decision must be given
substantial deference, no review is possible sans a record.
Therefore, the reviewing court may require new evidence to be
taken or a record constructed. See Citizens to Preserve Overton
Park v. Volpe, 401 U.S. 402 (1971). This may call for review in
the district court which automatically adds another layer of
review to the process. See Currie and Goodman, supra, at 59-61.
f) Internal rules of procedure, etc., are generally only reviewable
in conjunction with the review of same substantive rule or order.
Generally the A.P.A. prescribed rules in § 553, § 556 and § 557
are the minimum which Congress requires of an agency although an
agency may evolve more elaborate procedures if it wishes.
The review of the adequacy of, or adherence to, such additional
procedures is quite limited. See Vermont Yankee Nuclear Power v.
Natural Res. D.C., 98 S.Ct. 1197, 1202 (1978) as to 5 U.S.C.
§ 553 "notice & comment" procedures.
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(4). The articulated standards of review:
Conceptually there are but four standards of review which all the various formulation
fall within. From highest to lowest: a) wrong, b) clearly erroneous, c) unreasonable
d) bad faith; if put slightly differently they sound like differences in degree not
kind: a) wrong, b) clearly wrong, c) extremely wrong, d) absurdly wrong.
The first is the standard used for purely legal judgments, i.e., when the trial
tribunal is plainly "on the way down" from policy and not within an area designated
by the primary policy maker for making secondary policy. It is the tightness test
discussed above under (2) "Law fact confluence and dichotomy". The reviewing court
will substitute its judgment as to the correct or "right" interpretation of the law
even in a close case, a case where the judgment of the trial tribunal was perfectly
reasonable or plausible. The A.P.A. (5 U.S.C. § 706) "Soope of Review" says "the
reviewing court shall decide all relevant questions of law . . . ." Even here
though some deference is often paid administrative interpretation, especially if
long standing. See Griggs v. Duke Power Co., 401 U.S. 424, 433-34 (1971) and
Morton v. Ruiz, supra, at 1075.
The second test, "clearly erroneous", or "against the manifest weight of the
evidence", is applied mostly to inferences on "the way up", so called factual
inferences. It is a kind of rightness test (i.e., substitution of judgment test)
for factual inferences, but the "cold record" is supposed to dictate same deference
to the initial fact finder. In other words a reviewer must think this judgment
looking at all the evidence is not just wrong (though reasonable) but plainly so.
It is seldom used in reviewing administrative action. In the federal system
it is used on review of a trial court's (sans jury) findings of fact. This was
the traditional review "on questions of law and fact" of equity courts which always
sat (still do) without a jury. In state courts the verbal formulation is "review
on questions of law and fact" (if appeal is made from an equity decree, e.g., an
injunction or declaratory judgment) or against the manifest (or clear) weight of
the evidence if from a jury verdict. If the latter, a new trial is ordered rather
than a substitution of judgment. Although these tests are seldom appropriate for,
or authorized for judicial review of administrative action, state courts sanetimes
confuse the manifest weight test with the substantial evidence test. See below in
D(2) the Illinois cases and the Ohio case of Chester Township v. Power Siting
Commission, 49 Ohio St. 2d 231 (1977).
The third test is reasonableness. The reasonableness standard of review is
used in two general contexts: revisv of the rules produced by administrative
rule making and review of the finding of facts of an adjudication by an agency
or a jury. In the former context it is often called "review for action that is
arbitrary, capricious or an abuse of discretion." In the latter context it is
usually called a "substantial evidence" or "substantial evidence on the record
as a whole" test. No matter what the name they are both essentially reasonableness
tests. They do vary slightly.
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In the context of rule making, the initial agency action under review was
"going down" from policy in a context in which the agency was authorized (expressly
or impliedly) to gather more "legislative facts" in order to particularize the
general legal standard set by the legislature into "rules". Judgment must be
used in transforming general standards into particular rules. Judgment both as
to the "meaning" of the newly gathered legislative facts and as to the "meaning"
of the general standards set by the legislature in light of those facts. A reviewing
court is not to substitute its judgment for that of the agency. It is to determine
only the "reasonableness" of the judgment. No doubt more deference is given by
courts to the interpretation of the legislative facts than to the interpretation
of the policy to which it is wed. Administrative agencies are credited with
expertise at interpreting the data (legislative facts) of their particular subject
of regulation and at interpreting the general legislative standard. But courts are
also supposed to be experts at the latter. Therefore, when the rule making judgment
can be separated into data interpretation versus standard interpretation less
deference is paid the latter judgment than the former. See Addison v. Holly Hill
Fruit Products, Inc., 322 U.S. 607 (1944).
In the context of adjudicative fact finding, the initial agency (or jury)
action under review was "coming up" frcm the concrete facts all the evidence for
which is contained in a formal record. The judgment under review was based in
large part on inferences made frcm the words in the "cold record". It seems natural
in this context to frame the reasonableness test in terms of substantiality of
evidenciary support in the record for any finding of fact. In this context,
arguments as to the reasonableness of the inference of fact can be somewhat tighter
than in the rule making context since specific parts of the record can be referred
to and thus logical progression to the inference more clearly demonstrated.
Perhaps it is this ability to demonstrate with greater clarity from the relatively
simple and clearly finite record of an adjudicative proceeding the reasonableness
vel nan of the inference of an adjudicative fact that induces courts to talk as
if the substantial evidence test is a more stringent test of review than the
"arbitrary and capricious test" which is used where the record is more complex and
open-ended such as with § 553 "notice and camnent" proceedings for rule iraking.
State courts sometimes formulate the test in the adjudicative fact context as
"reasonable minds could reach but one conclusion from the evidence and that
conclusion is contrary to the jury verdict". Or "there is insufficient evidence
to support the jury finding of (say) negligence and therefore there is no negligence
as a matter of law". State courts make this kind of factual review when the appeal
is on questions of law only. Hence the phrase "the facts are such and such as a
natter of law".
The bad faith standard is seldom used; but, it, or something like it, might
be used to review an administrative decision where all review is statutorily
foreclosed. A court might say "no evidence supports the decision" or "the
judgment is not only unreasonable but so clearly unreasonable that it could not
have been made honestly".
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Contemporaneously with one of the four reviews adurrbrated above, the courts
generally review one other aspect of agency action: the process used by the
agency to reach its decision. This non-substantive review seeks answers to
three questions: was the correct statutorily prescribed procedure used; does
that procedure satisfy constitutional requirements; and did the agency follow
its own self-prescribed procedures. In Vermont Yankee Nuclear Power v. Nat.
Resources D.C., supra, the Court said procedures beyond those statutorily
prescribed are not required (absent sane constitutional defect in the procedure,
which is rare). Of course, once the agency prescribes for itself procedures
beyond those statutorily dictated, it must follow them or run the risk of a
reviewing court raising its judicial eyebrow and remanding. This is especially
true in cases where the court has substantial doubts about the substance of the
agency action under review. See Citizens to Preserve Overton Park v. Volpe, supra.
In NLKB v. Wyman-Gordon Co., 394 U.S. 759 (1969) the court held that rules made
in an adjudicative hearing and not according to the procedures set out in 5 U.S.C.
§ 553 for rule making were invalid. In that case the NLKB had promulgated a rule
that a oonpany has a duty to furnish a list of names and addresses of employees
eligible to vote in a prospective election as to which union or none would be the
employees exclusive bargaining representative. But the Board did not follow the
rule making procedure prescribed by Congress but used an adjudication plus amicus
briefs of "certain interested parties" (employer groups and trade unions) to gather
facts and formulate and announce a rule which it then refused to apply to the
matter being "adjudicated" but applied it prospectively (30 days hence) only.
Wyman-Gordon refused to obey the new rule and was ordered to do so by the Board.
The Court declared the rule invalid because A.P.A. procedure was not followed
(especially notice through the Federal Register, 5 U.S.C. § 553) but since the
Board's order to Wyman-Gordon was itself the product of an adjudicative process
(where the disclosure issue was not seriously considered because already decided
by the "rule") the order was valid. Apparently the Court felt that the "rule"
could have been promulgated in an adjudicative hearing if they would have applied
it to the case being adjudicated. Thus remand would be futile because the Board
will just pretend it never made the rule and make it anew in Wyman-Gordon and
apply it to Wyman-Gordon. Douglas and Harlan dissented thinking that if the
Board thought the change was so great that it refused retroactive application
then the Board should be bound by its cwn implicit conclusion that this was a
subject fit only for rule making. See Justice Harlan's opinion. Moreover,
Douglas and Harlan reasoned, if the agency gets more input as to the rule's
wisdom by giving the broader notice required by APA, maybe it will reject or
at least modify the rule. Apparently the plurality (of four) did not think
such change likely enough to be worth the delay, or that there was actual unfair
surprise to Wyman-Gordon.
In NLEB v. Bell, 416 U.S. 267 (1974) the Court made clear that "the Board
is not precluded tram announcing new principles in an adjudicative proceeding
and that the choice between rule making and adjudication lies in the first instance
within the Board's discretion and would only be reversed for abuse. The Board's
judgment on this is "entitled to great weight".
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C. Standing to Sue;
Standing is no longer much of a problem for the would-be litigant, i.e., it
is no longer much of a barrier to judicial review. The legislative act may seek
to limit review but the persistent will find some court, somewhere, to listen.
The best bet is to limit the process to one court in one proceeding. All that
the APA (5 U.S.C. § 702) requires for standing is (1) (a) injury in fact, i.e.,
immediate, not remote; concrete, not abstract; particular to plaintiff even if
plaintiff is one of a large class with such injury as long as plaintiff's
interest is not undifferentiated from that of all other citizens and (b) there
is a "substantial likelihood" that such injury will be redressed by the relief
sought; (2) the interest plaintiff seeks to protect is "arguably" within the
"zone of interests" protected by the statute administrative implerrentatian of
which is being challenged. Duke Power Co. v. Carolina Environmental Study Group,
438 U.S. 59 (1978) found injury in fact to 40 individuals within "close proximity"
to the planned nuclear power plant who suffered "environmental and aesthetic
consequences of the thermal pollution of two lakes" near the proposed plant,
lakes vised for recreation. Moreover, "the emission of non-natural radiation
into appellees' (the 40 people) environment would also seem a direct and present
injury given our generalized concern about exposure to radiation and the
apprehension flowing from the uncertainty about the health and genetic
consequences of even small emissions like those concededly emitted by nuclear
power plants", (at 2631) The Court found there was "substantial likelihood"
that the relief requested (holding unconstitutional the $560 million limitation
on liability for nuclear accidents) would redress the above injury because
corporate officials of the electrical industry had in testimony before the
Joint Coirmittee on Atomic Energy in 1956-57 "expressed a categorical unwillingness
to participate in the development of nuclear power absent the limitations an
liability" and "the smaller producers of component parts and architects and
engineers" considered the liability limitation a "critical variable" in going
ahead with nuclear power. Therefore, if the limitation is declared to be
unconstitutional there is a substantial likelihood the plant would not be
built and the threatened thermal and radiant injuries are thus avoided.
See also Sirron v. Eastern Ky. Welfare Rights Org., 426 U.S. 26 (1976)
(relationship found) and Warth v. Seldin, 422 U.S. 490 (1975) (no relationship
found). (Note: on the merits the Court declared the limitation on liability
from a nuclear accident not to be unconstitutional.)
In Association of Data Processing Service Organization v. Camp, 397 U.S.
150 (1970), Data Processing was found "arguably within the zone of interests"
protested by a banking statute limiting bank service corporations to performance
of bank services for banks, a requirement obviously designed to protect
customers of the bank. Data Processing's interest was that of a competitor.
Obviously "arguably" means "barely arguably" and this is a very low hurdle for
the would-be plaintiff to leap.
D. Potential for the Efficient Utilization of Judicial Review in the Interstate
Coordination of Power Plant Siting: '
It is probably obvious even from the brief summary above, that judicial review
is a complex, multifaceted and most uncertain decision raking process. What is not
so obvious from the above is the time consuming nature of the process. The entire
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process is full of pleadings, then notions, then hearings, then briefs and perhaps
more hearings, interlocatory appeals (an appeal to a hitter court in the middle of
the trial process), then finally decision making by the court with the court
accountable essentially to no one if its deliberation is inordinately slow.
"Inordinately slow" means more than one year (after all the hearings, briefs, etc.),
while ordinary deliberation will take anywhere from two months to a year,* either
one or two layers of appeal on top of that plus petitions for rehearing or hearing
on banc (by all the judges of the circuit), then remands, etc. All very time
consuming. Vermont Yankee Nuclear Pcwer v. Natural Resources Defense Council, Inc.,
435 U.S. 519 (1978) was the culmination of some eleven years of administrative hearing
and judicial reyjew and still was not over. The Supreme Court is acutely aware of
the law's delay being inordinately great and especially critical in the area of
energy development/environmental impact regulation. It delivered a stingy rebuke
of the Court of Appeals' review methods and attitude in Vermont Yankee:
"To say that the Court of Appeals' final reason for remand is
insubstantial is at best a gross understatement. Consumer Power
[companion case to Vermont Yankee] first applied in 1969 [Verrtont
Yankee] in 1967 for a construction permit. The proposed plant
underwent an incredibly extensive review. The reports filed and
reviewed literally fill books. The proceedings took years.
The actual hearings themselves over two weeks. To then nullify
that effort seven years later because one report refers to other
problems, which problems admittedly have been discussed at length
in other reports available to the public, borders on the
Kafkaesque. Nuclear energy may some day be a cheap, safe source
of pcwer or it may not. But Congress has made a choice to at
least try nuclear energy, establishing a reasonable review process
in which courts are to play only a limited role. The fundamental
policy questions appropriately resolved in Congress and in the
state legislatures are not subject to reexamination in the federal
courts under the guise of judicial review of agency action.
Time may prove wrong the decision to develop nuclear energy, but it
is Congress or the states within their appropriate agencies which
must eventually make that judgment. In the meantime courts should
perform their appointed function. NEPA does set forth significant
substantive goals for the Nation, but its mandate to the agencies
is essentially procedural .... It is to insure a fully informed
and well-considered decision, not necessarily a decision the judges
of the Court of Appeals or of this court would have reached had they
been nenbers of the decision making unit of the agency. Administrative
decisions should be set aside in this context as in every other, only
for substantial procedural and substantive reasons as mandated by
statute . . . ."
*
I have done no systematic study of this and know of none. But a glance throu^i
several volumes of Federal 2d, the reports of United States Courts of Appeals, seems
to confirm this figure, since it gives argued dates and decision dates. See, for
exanple, Central Iowa Power v. Fed. Energy Reg. Catm., 606 F.2d 1156 (D.C. Cir. 1979),
argued November 30, 1978, decided July 9, 1979.
**
The "law's delay" is of ancient lineage being, you will recall, one of the
litany of things Shakespeare's Hamlet would not bear but that after death
"dreams may come". Act III, sc. 1.
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(1). Channeling judicial review:
Efforts to channel judicial review have been more successful than efforts to limit
the scope of review. (See Vermont Yankee quotation above and discussion below.)
"Channeling" means to mandate legislatively a certain court (or courts) as the
exclusive review point of agency action. The Ohio Power Siting Law (§ 4906.01
et seq. Ohio Revised Code) specifically channels the review of power siting
conrnission decisions to the Ohio Supreme Court. In fact the Ohio Public Utility
Act has channelled review of utility rate making decisions to the Ohio Suprene
Court for over forty years. The Ohio Act (§ 4903.12) reads:
"No court other than the supreme court shall have power to review,
suspend, or delay any order made by the public utilities commission
(nav also the Pcwer Siting Comriission) or enjoin, restrain or
Interfere with the uuimri_ssion or any pnhl jc utilities commissioner
in the performance of official duties. A writ of mandamus shall
not be issued against the cprnnissian or any oartmissioner by any
court other than the supreme court."
The Ohio Supreme Court has consistently adhered to this mandate. See, for example,
State ex rel. Colurrbia Gas of Ohio v. Kiroff, 46 O.S.2d 397, 348 N.E.2d 705 (1976).
Because in Ohio there are two courts below the Supreme Court (courts of comran
pleas (trial) and district courts of appeals) that might presurre to review under
common law notions of jurisdiction to review, this channeling is a significant
savings in time and energy.
The federal judicial system is likewise three tiered. Again Congress has
attempted to channel reviov of most agency action through the Courts of Appeals
(thus skipping the first tier) and especially through the United States Court
of Appeals for the District of Colurrbia. See United States Code § 42 U.S.C.
7607(b) (1) of the Clean Air Act, where rule making is channelled through the
D.C. circuit, while adjudicative type rulings or other decisions that are "locally
or regionally applicable may be filed only in the United States Oourt of Appeals
for the appropriate circuit". But the act in § 7604 provides for "citizens suits"
whereby "a person may camrenoe a civil action in United States District Court
(first tier) where the pollution occurs on his own behalf—(1) against violators
(including federal and state governmental units) of emission standards, (2) against
the administrator of EPA for failure to perform non-discretionary acts and
(3) "against any person who proposes to construct or constructs any new or modified
major emitting facility without a permit required . . . (relating to significant
deterioration of air quality) or (relating to non-attainment) or who is alleged
to be in violation of any condition of such permit. This private enforcement
provision is not an authorization of judicial review but it can result in
significant entanglement of the courts in the administrative process (the public
enforcement of such standards). Congress apparently felt such private actions
essential to strict Clean Air Act enforcement even though such private enforcement
is a rare exception to the usual rule of public agency (prosecutors, attorneys general,
administrative agencies) enforcement of public laws.
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An Illinois act is example of the lack of total success of confining judicial
review to a single statutorily prescribed procedure. The Illinois Administrative
Review Act provides: "This Act shall apply to and govern every action to review
-judicially a final decision of any administrative agency where the Act creating or
conferring power on such agency, by express reference, adopts the provisions of
this Act. In all such cases, any other statutory, equitable or ooirtron law mode of
review of ^^cisions of administrative agencies heretofore available shall not be ^
employed after the effective date hereof." 111. Rev. Stat., c. 110, § 265(1973).
(Errphasis added.) Apparently, however, "any other . . . mode of review shall not be
employed" is not clear enough in the hands of judicial interpreters bent on
"justice". At first, in People ex rel. Chicago & Northwestern Ry. v. Hulman,
31 111. 2d 166, 201 N.E.2d 103 (1964), the Court said: "It has became firmly
established that where an act creating or conferring pcwer on an administrative
agency expressly designates that judicial review will be accomplished under the
Administrative Review Act the employment of preexisting methods of securing
judicial review is prohibited". 31 111. 2d at 169, 201 N.E.2d at 105. But in
People ex rel. Dickey v. White, 204 N.E.2d 170 (111. App. 1965), the Court
concluded that this sweeping dictum did not preclude a petition for mandamus to
carpel the Director of the Department of Registration and Education to issue a
plunber's license which he had, according to the allegations of the petition,
refused to issue arbitrarily and without warrant of law, even though the Plumbing
License Law provided: "All final administrative decisions of the Director
hereunder shall be subject to judicial review pursuant to the provisions of the
Administrative Review Act". The petition further alleged that petitioner had
filed an application which was approved by the Department, and had paid the
required fee. Under the circumstances, said the Court: "Nothing remains for
the Director but to perform the perfunctory and ministerial function in issuing
and delivering the license .... Under the facts in this record, the refusal
to issue the license was not a 'final administrative decision' . . ." 204 N.E.2d
at 172. For later decisions to the same effect, see Chestnut v. Lodge, 34 111.
2d 567, 216 N.E.2d 799 (1966); People ex rel. Peterson v. Valencik, 266 N.E.2d
752 (111. App. 1970).**
Moreover, the United States Supreme Court has also found ways to circumvent
efforts to channel judicial review. In the remarkable case of Adams Wrecking Co.
v. United States, 98 S.Ct. 566 (1978) where the Court frustrated Congressional
efforts to channel and expedite judicial review of administrative rule making
by labeling a regulation designed to cut dcwn asbestos dust caused by building
razing as far as possible as not an "emission standard" but a "work practice
standard" thus outside review imnunity. ("Emission standards" promulgated by EPA
cannot be reviewed except through an expedited review by the D.C. Circuit Court
of Appeals.) On review, outside the Cangressionally prescribed channel, the Court
found the asbestos dust standard void.
*To the Administrative Review Act, Illinois has since added the Administrative
Procedure Act, Pub. Act 79-1083, Sept. 22, 1975, establishing procedures for both
rule making and the decision of contested cases.
**Jaffe and Nathanson, Administrative Law, Cases and Materials, pp. 748-49
(1976).
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(2). Limiting the scope of review:
While channeling review through certain courts is essential, limiting its scope
is equally important to administrative efficiency. But such limitations have
met with mixed success. The frustration the Supreme Court sometimes feels in
limiting the lower courts to the legislatively mandated standards is evidenced
by the unusually strong admonition quoted above fran the Vermont Yankee case.
Efforts to eliminate judicial review completely have likewise met with
mixed success, although the Supreme Court usually pays lip service to the notion
that Congress can grant as much or as little review as Congress deems proper.
See Estep v. United States, 327 U.S. 114, 120 (1946). There the Court said:
"And except when the Constitution requires it, judicial review of administrative
action may be granted or withheld as Congress chooses."
The classic example of a statute which explicitly precludes review is the
provision of the Veterans' Benefits Act that, with certain exceptions, "the
decisions of the Administrator on any question of lav/ or fact concerning a claim
for benefits or payments under any law administered by the Veterans' Administration
shall be final and conclusive and no other official or any court of the United States
shall have power or jurisdiction to review any such decisionT" 38 U.S.C. § 211(a).
Barefield v. Byrd, 320 F.2d 455 (5th Cir. 1963), reviewed and followed the many
cases holding that this provision effectively precludes judicial review of even
the most arbitrary action. Barefield v. Byrd also rejects the contention that the
APA at least permits judicial review to enforce its own procedural guarantees of
fair administrative hearing on the ground that those guarantees are themselves
inapplicable to administrative proceedings under the Veterans' Benefits Act, which
are also left entirely to the discretion of the Administrator. The constitutional
theory upon which the decisions are based is that these are gratuities which
Congress may grant or withhold upon such conditions as it sees fit. For a full-dress
attack upon the validity of this theory see Davis, Veterans' Benefits, Judicial
Review, and the Constitutional Problems of "Positive" Government, 39 Ind. L.J. 183
(1964). The closest that the Supreme Court has come to ruling explicitly on the
no-review clause of the Veterans' Benefits Act was to hold in Johnson v. Robison,
415 U.S. 361 (1974), that it did not apply to challenges to the constitutionality
of the legislation itself, such as the provision exclyding from educational
benefits conscientious objectors who performed the required alternative civilian
service.
In Jaffe and Nathanson, Administrative Law, Case and Materials, 4th ed.
pp. 949-51 (1976), using Illinois as an example, the editors show with specificity
the difficulty courts have with standards of review and the uncertainty and
confusion, i.e., regulatory inefficiency, caused thereby.
The confusion between "standards of proof" and "standards of review" that is
manifested in Jaffe and Nathanson's example was compounded by the wording of the
review standard—"questions of fact shall be held to be prima facie true and
correct". "Prima facie" is a term often used in standards of proof to denote the
point at which the burden of going forward with the evidence shifts to the
defendant or, put another way, the point at which plaintiff has produced enough
evidence to prove the material elements of his claim that, in lawyer's jargon,
"will get his case to a jury", i.e., that a jury verdict for plaintiff would be
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upheld. A jury's verdict will be biased on the preponderance of the evidence but
it will be upheld if the conclusion that the preponderance of the evidence lies
on a certain side, is found by the reviewing court to be reasonable, i.e.,
there is substantial evidence to support it. The legislature in Illinois
probably intended "prima facie" to mean the substantial evidenoe (reasonableness)
test. But there is enough confusion with the substantial evidenoe test without
using terms from a different but cognate field.
The non-lawyer reading this must remenber that in most trials to a jury or
before an administrative agency there will be substantial evidenoe on both sides.
The trial forum must decide which of two sets of opposite, but substantial,
evidence preponderates. If it decides that neither side preponderates, i.e.,
that it is a standoff, then the side with the burden of proof (read: the side
that bears the risk of non-persuasion) loses. Usually the side with the burden
of proof in the risk of non-persuasion sense is the plaintiff. If the remedy
sought is particularly harsh then a higher standard of proof than a mere
preponderance is required. For instance in suits for an injunction or a quasi-
criminal administrative remedy (e.g., revocation of a business license because
of wrongful conduct) the side seeking the remedy will often be said to be
required to have "clear and convincing" evidenoe. Again both sides might have
substantial evidenoe but the one with the burden of proof must have evidenoe
that is "clear and convincing" and not just "preponderating". Since "clear and
convincing" is not a term of comparison, while preponderance is, confusion on
review is inevitable.
For reasons that apparently run deep in the American tradition, Congress,
state legislatures and the general public seem to trust dispute settlement
decisions made by judges more than by quasi-judicial agencies when they involve
the application of existing policy and law. Therefore, absolute prohibition of
judicial review is not feasible. Moreover, since courts in our constitutional
schemes (state and federal) have the last word as to application decisions anyway
and since there are legal devices for circumventing such absolute limitations
(such as ruling the decision is outside the scope of limitation or is
unconstitutional) they likely would be ignored. The best route is to clearly
set forth the scope of review and channel it through some expeditious court
procedure.
The difference between "wrong", "clearly wrong" and "unreasonable" is
slippery even when dryly abstract.* When lubricated by controversial public
issues only loosely and tentatively resolved in the political policy making
forum, then the difference between "wrong" and "unreasonable" requires a judgment
of unusual detachment and restraint. Pcwer siting decision making moves in such
an area of tentative, shifting policy, torn between production and environmental
protection. Add to this the interstate nature of the environmental and production
issues involved and the judicial review of decisions aimed at the interstate
coordination of power siting becomes doubly difficult to confine. Only by carefully
marked out channels of review with painstaking articulation of standards of review
can a judicially created morass undoing the best layed plans of coordination be
avoided.
*
See Chester Township v. Power Siting Comm., 49 Ohio St. 2d 231 (1977) for an
example of confusing "clearly wrong" with "unreasonable".
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(3). Special or ad hoc courts:
One way of channeling and expediting review is to set up special or ad hoc
courts. They handle only one kind of case, thus becoming expert at accurately
applying the law to the facts in resolving certain kinds of disputes. Moreover,
its menbership can be picked in the first place with a view to possession of
the kind of knowledge and detachment necessary to its special task. Furthermore,
in some contexts a special court has other advantages including uniformity of
decisional or of precedential law. A few federal courts of this character have
been created. See Wright, Law of Federal Courts, 3rd Ed. (1976), § 5, pp. 11-14;
§ 11, pp. 29-38.
It must be remenrbered that there are two related but distinct purposes of
interstate coordination of paver plant development: (1) to optimize the achievement
of national goals of production and environmental protection and (2) to avoid
or to resolve conflict between states. The first goal can be achieved by
techniques ranging from region-wide communication, to joint planning, and
ultimately to sane dispute resolving forum. The second goal is achieved by the
same techniques except that once a dispute has arisen same forum for discussion
and negotiation and ultimately authoritative (imposed, if necessary) settlement
is required. Courts have been relied on to do this. In interstate dispute
settlement either the Supreme Court's original jurisdiction or some federal
district court will be used, in the latter case probably relying on the judicial
review provisions of the Clean Air Act. If the Supreme Court's original
jurisdiction is used, it will nominally be a suit between states. If the
district court is used it will nominally be a suit against EPA with state
regulatory agencies, private utilities and other private groups joining.
The Supreme Court will be reluctant to take an environmental suit of this
nature in its original jurisdiction and would likely find that the dispute is
really with EPA because EPA technically has authority to resolve it. These disputes
will thus be forced into federal district court or a circuit court of appeals.
These courts are not expert at environmental or other scientific fact analysis.
Moreover the district courts are all identified with the state in which they sit.
The judges of the district courts practiced law and often held political office
in that state. The circuit courts are similarly identified with the several
states their circuits cover. The ORBES states are in four different circuits.
Pennsylvania is in the third; West Virginia in the Fourth; Ohio and Kentucky in
the Sixth; and Illinois and Indiana in the Seventh. For resolution of ORBES
region interstate disputes there is no neutral forum save the United States
Supreme Court, whose review will likely be both limited and reluctant.
It can be seen from this that the regular federal court system below the
Supreme Court would be far from satisfactory as a neutral forum for resolving
interstate pcwer plant siting disputes. Either a special or an ad hoc court
could be constituted so as to be above reproach for lack of interstate neutrality.
Ideally then in this context a special or ad hoc court might achieve both
expertise and neutrality.
Such a special or ad hoc court (the difference between "special" and "ad hoc
courts" will be explained belcw) could be used to review the decisions of any
of the several schemes for decision making outlined in the previous sections of
this report. They could be used to review a federal siting agency's decisions
if such an agency were established. The Temporary Ertergency Court of Appeals
(TECA) established in 1971, heard all appeals from the federal district courts
in cases arising under the Economic Stabilization Act of 1970 and for a tine was
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the appeals court for all federal energy natters as well. (15 U.S.C. § 754(a)(1).)
A special court could be used to review an interstate compact agency's decision
as to planning or as to actual site permits or any other compact decision Congress
might think appropriate for judicial review. Finally such a special federal
court could be used to review state power siting decisions at the behest of a
sister state, in other words, be a trial court for a special kind of interstate
dispute—a role new played exclusively, albeit uncomfortably, by the United States
Supreme Court. Review of the decision of any special court could be, and as
practical matter, probably should be, available in the Suprene Court. A special
canpact agency review court or interstate dispute court has never been tried or,
as far as this writer knews, even suggested, before. Nonetheless they are
legally feasible. How such courts might be constituted therefore is worth
further discussion.
Special courts serving any of the three functions just rtentioned—review of
federal, canpact, or state pewer plant siting—could be constituted in several
ways. The theoretical advantages of special courts—expertise with resultant
just and efficient dispute resolution—will vary with the manner in which they
are constituted. The constitution of a court requires a determination of the
manner of selection and the tenure of the judges to sit thereon, and a
specification of its jurisdiction, i.e., the disputes it can authoritatively
resolve. Incidental to a court, but of same importance are the place it is to
sit, administrative support, and the rules for proceeding before it.
Selection and Tenure Options
Here are four ways that judges could be selected and tenured: (1) a permanent
Article III court with life tenured judges appointed by the President with the
consent of the Senate; (exanples: Court of Claims, Court of Customs and Patent
Appeals); (2) a permanent Article I court appointed by the President with Senate
approval for a term of years (5 or 10, etc.) (exairple: Tax Court); (3) ad hoc
appointments for each case from the existing life tenured federal judiciary
by the Chief Justice of the United States (example: Three judge district courts—
appointed by Chief Judge of Circuit) or appointed by the judicial panel on
multi-district litigation (28 U.S.C. § 1407) (exairple: Regional Rail
Reorganization Panel, 45 U.S.C. § 718(b)); (4) a temporary court hearing cases
of a certain kind appointed by the Chief Justice from the life tenured federal
judiciary (exanples: The Tenporary Emergency Court of Appeals (1972 to present),
which was modeled on the Brergency Court of Appeals (1942-1953)). Quite a few
other arrangements are possible but they would be permutations of the elements in
the above four suggestions. The advantages and disadvantages of any special court
in the context of interstate coordination of power plant siting can be adequately
canvassed by looking more closely at the four suggested selection and tenure options,
for each of which there exists an actual working model.
*Options (a), (b) and (d) are "special" (i.e., not part of the regular system of)
courts but are not "ad hoc" (i.e., picked to hear one case or set of cases).
They could have offices, clerks and their own calendar and docket of case,
(c) is special and ad hoc but not "very" special since oenposed of regular federal
judges. The only thing special about them is that the judges are picked to hear
the particular case in a special way not otherwise provided for in the rules.
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(a) A Permanent Article III Court (like the Court of Claims) with Judges Selected
by the President with the Consent of the Senate.
The Court of Claims was originally established in 1855. It has a Chief Justice
and six associate justices appointed by the President for life. It has nationwide
jurisdiction over most claims for money against the federal government. 28 U.S.C.
§ 1491 et seq. It sits in three judge panels and has 15 trial oonmLssioners who
are sent throughout the United States and into foreign countries to hold trial
hearings. The Court of Customs and Patent Appeals established in 1909 and the
ill-fated Coitmerce Court established in 1910 are (were) presidentially appointed
but unlike the Court of Claims are pure review courts—reviewing (in the case of
the CCPA) Customs Court (est. 1926, itself, a special court, 28 U.S.C. 251-255)
and the decisions of several patent, trademark and tariff agencies. The Commerce
Court was set up to review decisions of the Interstate Ccsmnerce Commission, the
first big federal regulatory agency. It was always mired in controversy—fran fear
that it would too much favor the railroads being regulated—and after several
Supreme Court reversals seemed to confirm its incompetency, it was abolished by
the Wilson administration in 1913. Wright, supra, at 14, concludes:
"Since 1913 Congress has resisted the many pressures, which continue
to this day, for creation of new courts with specialized subject-
natter jurisdiction. The history of the Commerce Court may have given
rise to a feeling, whether or not justified, that it is more desirable
to use judges who hear all types of cases than to create a special
tribunal with judges who hear only that kind of case."
This strongly suggests that in courts of law specialization is not viewed as an
unmixed blessing. Fear of bias and tunnel vision countervail against the benefits
of expertise. Bias is thought to be caused by the nature of acquiring expertise—
one becomes an expert at railroad law by representing the railroads; one becomes
an expert at utility law by working for the utilities; an expert at environmental
law by representing environmental action groups, etc. In addition to this feeling
of inherent bias, on one side or the other, of any particular expert, there is the
fear that the appointing authority will respond to the pressure of the potential
antagonist interest groups whose disputes the Court will resolve to appoint
"reasonable" people (read: "friendly") to the court. This latter fear seems
unrealistic in a context where there are countervailing interest groups. Such
countervailing pressure should keep out those viewed as zealots by one side or
the other and tend to moderate the merrbership. Moreover, in resolving interstate
environmental and production issues, a chief concern would be bias for or against
one of the antagonist states, a concern easily allayed by appointing people with
no connection with any of the antagonist states.
The fear of the inherent bias of expert courts is more difficult to allay.
Picking people from the groves of academia might be a way of avoiding "biased"
experts—after all ideally the scholar has acquired his expertise in the
disinterested pursuit of truth. But some will no doubt claim that the university
breeds an ivory-tower bias—the claim that "he nay know theory but he doesn't
knew hew things work in the real world". Moreover, a scholar will have published.
No natter hew neutral or detached this scholarship may appear to the disinterested
observer, to the ccsimitted with a "your either for me or against me" mentality,
neutral is "against". This may suggest that any court picked to resolve disputes
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between groups identifiable in advance of the picking, will be charged by both
sides with bias. If the interstate coordination of power siting were purely
a matter of getting states to agree or of resolving conflicts between the states'
officials then finding judges whose neutrality was assured would be a simple matter.
But other interests than those asserted by the states will play a part in any
dispute over pcwer plant siting. Perhaps the fact that such interests are roughly
countervailing will, as with the problem of biased selection, cause the screening
process to be so thorough that those experts with the least bias would be picked.
The other fear engendered by special court proposals is that the "expert"
judges will have tunnel vision or, switching metaphors, the inability to see the
forest for the trees about which the court is expert. See, Rifkind, A Special
Court for Patent Litigation? The Danger of a Specialized Judiciary, 37 A.B.A.J.
425 (1951); Note, The Environmental Court Proposal: Requiem, Analysis, and
Counterproposal, 123 U. Pa. L. Rev. 676 (1975); Lenenthal, Environmental
Decisionmaking and the Role of the Courts, 122 U. Pa. L. Rev. 509 (1974); Cakes,
Developments in Environmental Law, 3 En v. L. Rep. 50001 (1973); Report of the
President, Acting Through the Attorney General, on the Feasibility of Establishing
An Environmental Court System (1973). Judge Harold Leventhal, of the United States
Court of Appeals for the District of Colurrbia Circuit says in the article cited
above that he is skeptical of the proposal for a special environmental court:
(at 517-18)
"Review to ensure balance, coupled with restraint on the part of
the reviewer, requires a generalist who can penetrate the scientific
explanation underlying a decision just enough to test its soundness.
A specialist whose attention was directed exclusively to environmental
issues, would tend to intrude his own judgment on the issues, thereby
coopting the discretion of the agency."
Moreover, says Judge James Oakes, United States Court of Appeals for the
Second Circuit, in his article just cited, specialists are not needed for
expertise for the "current system of review by generalist judges already allows
for the consideration of the best technical expertise on the various areas of
environmental concern". (At 50012.) The Air Quality Subcommittee of the American
Bar Association testified that:
"In the long run we will get better decisions from judges with
experience in all areas of law. Environmental judges would not
have the inpartial viewpoints of district court and circuit judges
whose broad experience can be brought to bear on their cases."
Report of the President, etc., supra at II B-10.
Even if the special court were picked from existing "generalist" federal judges
as is the Temporary Brier gency Court of Appeals, the Note in the U. of Penn.
Law Review is still skeptical:
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"While there probably exists a sufficient pool of qualified lawyers
to staff a specialized court with generalists initially, the evolution
of both the law and the judges is a major concern. If a large
majority of the judges time is spent on technical issues, they will
almost inevitably lose touch with other areas of the law. Even a
court that was full of generalists could become myopic if its judges
were exposed to only one corner of the law.11
On the other hand there is considerable opinion that special courts need not be
feared for tunnel vision: Whitney, The Case for Creating a Special Environmental
Court System, 14 Wm. and Mary L. Rev. 473 (1973); Whitney, The Case for Creating
A Special Environmental Court System—A Further Caiment, 15 Wta. and Mary L. Rev. 33
(1973); H. Friendly, Federal Jurisdiction: A General View, Part VIII, "Patents and
Taxes" p. 153 (1972); Ditlow, Judicial Review of Patent Office: A More Rational
Review System, 53 J. Pat. Off. Socy. 205 (1971). Judge Henry J. Friendly* of the
United States Court of Appeals for the Second Circuit in pleading for a special
Patent Court stated:
"I am unable to perceive why we should not insist on the same level of
scientific understanding on the patent bench that clients demand of the
patent bar, or why lack of such understanding by the judge should be
deemed a precious asset. As Judge Learned Hand well said, 'To judge
on our own that this or that new assemblage of old factors was, or was
not, 'obvious' is to substitute our ignorance for the acquaintance with
the subject of those who were familiar with it.1 Such superior oampetenoe
over the experts of the Patent Office as a judge may possess comes 'not
because of his non-expert personality, nor yet because he hears tax cases,
bankruptcy cases, and other private litigation, but because he has the
advantage of hindsight and of the research of industrious counsel who
usually spend far more time on searching the art relating to a particular
invention than the Patent Office can afford to devote to any one
application.1 It is true that, as a distinguished cbjector to a specialized
patent court has said, 'It is hardly to be supposed that the meirbers of
a patent court will be so omniscient as to possess specialized skill in
chemistry, in electronics, mechanics and in vast fields of discovery
yet uncharted.' But a Patent Court, following the model of the Court
of Claims, would have a nurttoer of canmissianers to conduct the trials;
they could represent a broad spectrum of scientific knowledge and would
Colunbia University Press states: "Chief Judge Friendly's interest in federal
jurisdiction began as a pupil of Professor Felix Frankfurter. It has continued
through the various stages of his career—law clerk to Mr. Justice Brandeis,
practitioner before many federal agencies, and judge . . . since 1959. His publications
include two books; the 1962 Holmes lectures at the Harvard Law School, The Federal
Administrative Agencies: The Need for Better Definition of Standards and
Benchmarks (1967).11 The book here quoted from was based on the 1972 James S. Carpentier
Lectures at Colurrbia University Law School. Most legal scholars would probably
agree that Judge Friendly is one of America's most distinguished sitting judges.
This writer's personal feeling is that he is America's greatest living judge.
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be assigned cases in accordance with their individual capabilities.
The case would thus came before the Patent Court with detailed findings
of fact by a disinterested "judge" expert in the subject-matter.
Even though no meirfoer of the reviewing court could be expert in all
the technologies that would be involved, I do not agree that 1 [t]he
expert in organic chemistry brings no special light to guide him in
the decision of a problem relating to radioactivity.* He is still
likely to knew a good deal more about radioactivity than saneone like
the writer, whose college specialty was European history and who avoided
science courses because of lack of real conprehension. At the very least,
such a judge would contribute a scientific approach and an acquaintance
with the lingo not possessed by the cannon run. Furthermore, such a court
could have a staff of experts who would be available both to the
commissioners and to the judges as law clerks are now." (pp. 157-59)
In discussing a proposed Court of Administrative Appeals, for which he concludes
the arguments pro and con are about even, he states (at 185-86):
"A second advantage asserted for a Court of Administrative Appeals is
that it will assure greater expertise both on procedural and on
substantive questions. The argument as to the former is unimpressive.
"The possibility of acquiring greater expertise on substantive matters
is considerably better. It is often urged that the variety of natters
coming before such a court (atomic energy, electricity and gas, air,
rail, motor and water transportation, communication by telephone,
telegraph, radio and television, securities regulation, unfair labor
practices, and rrany others) would prevent the acquisition of real
expertise in any particular area, such as the Court of Appeals for the
District of Columbia Circuit has undoubtedly acquired over the years
by virtue of its exclusive jurisdiction over appeals from the FCC's
licensing decisions. Granting force to this argument, I still think
that same gain in substantive expertise would be both possible and
highly beneficial. A judge who has gone through even one minimum rate
case is better equipped for a second than when he was as a virgin ;
the third time he will be better still. A proper use of the panel
system would allow for further development of expertise; and the court
oould have a modest size staff of technical experts in the principal
areas subject to its jurisdiction. There would thus be a significant
gain in expertise on the substantive side."
As to a special environmental court Judge Friendly had this to say (pp. 189-90):
"Seme recent developments have raised the question whether there is need
for a specialized administrative review court of much no re limited scope.
A good deal of the malaise about administrative decisions affecting the
environment arises from the fact that the agency is not considered to
be truly disinterested. The Federal Power Ccrrmission is more concerned
with averting another blackout than with the Hudson River fishery; the
Federal Highway Administration wants to build highways; the Atomic Energy
Commission is interested in the development of atomic power. Hence,
even though such an agency has complied with the procedural requirements
of the National Environmental Policy Act and has produced a reasoned
impact statement, its decision to go ahead is naturally suspect, and there
is clamor for judicial review on the merits even in cases where there is
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no administrative record and no explicit statutory provision for review.
"Better solutions should be found. The best would be for Congress to
give clearer directions with respect to the ordering of priorities;
if it did, judicial review on the issue of compliance with these directions
would be appropriate.
"Short of that, one might envision a Board of Review, with rreirfoers of
the highest competence and standing, which, on the basis of the agency's
factual findings, vrould make the ultimate value judgment, at least in
cases of truly great importance. Such a Board should assure reasonable
uniformity of policy, and, if it were placed in the White House, the
line of responsibility would be clear. Some of the problems are obvious—
further delay, in sons instances a second-guessing of a 'quasi-judicial'
agency, the difficulty in disentangling environmental from other
considerations, the dangers of pressure and of poor appointments—but
these are not beyond reasonable cure if the will exists and we can hardly
expect perfection in so controversial a field. Certainly it is better
that value judgments of the sort here at issue should be made by
appointees of the President, having the aid of an expert staff, than
by random panels of federal judges, each with his own biases on such
matters and none having access to disinterested sources of information.
"However, if the enthusiasm for the federal judiciary's taking over the
running of the country should thrust this task also an the courts, it
might be better to have a Court of Environmental Appeals than to leave
such decisions to the general courts. This would avoid the evils of
randcm choice of judges, with consequent lack of decisional uniformity,
and would give the court the assistance of an expert staff. In short,
if instead of a Board of Review such as I have outlined, we mast have
substantive judicial review, perhaps it should be by a specialized
court."
Fran the above it is obvious that the "wisdom" of special courts is a matter
of much controversy. In the "pure" special court of the first alternative
(Article III, life-tenured judges, no other jurisdiction) both the advantages and
disadvantages referred to above are present in greatest measure. The advantages:
the judges nay be picked initially for their expertise and by concentrating on
one subject natter of dispute, the expertise deepens. They can be picked initially
for their neutrality and their life-tenure guarantees their independence from
biasing influences. The disadvantages: the judges may develop "tunnel-vision",
focusing on the too narrow issues with which their expertise qualifies them
especially to deal and neglecting the larger social and legal milieu in which the
disputes arise. Moreover, life-tenured judges who prove not to have the capacity
of detached and neutral expertness for which chosen, nay not be removed. The three
alternative ways for constituting special or ad hoc courts have these advantages
and disadvantages in lesser proportion which we will briefly discuss.
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(b) An "Article I" Court with Judges Appointed for a Term of Years.
Congress is constitutionally empowered to create judicial tribunals "as
necessary and proper to carrying into execution" the "Powers vested by this
Constitution in the Government of the United States." (U.S. Const, art. I,
§ 8.) A court created as necessary and proper to Article I powers (e.g., the
commerce power, compact clause paver) and not pursuant to Article III power
(i.e., the "judicial power . . . shall be vested in one supreme Court, and in
such inferior Courts as the Congress may from time to time ordain and establish")
need not be corrposed of life-tenured judges as mandated by Article III.
The United States Tax Court (26 U.S.C. § 7441, as amended in 1969 by Pub. L.
91-172, § 951, 83 Statutes 487) is an Article I court. Administrative Law Judges
(formerly called hearing examiners) although not members of a specific court are
Article I judges. (5 U.S.C. §§ 1305, 5372, 3344, 7521 as amended by Pub. L.
95-251, 92 Statutes 183.)
Article I courts are scnetimes called "legislative" as opposed to the name
"constitutional" given Article III courts. Same controversy has obtained over
the years as to the status of, and relationship between "constitutional courts"
and "legislative courts." (See Palmore v. United States, 411 U.S. 389 (1973);
National Mut. Ins. Co. of District of Colunbia v. Tidewater Transfer Co., 337 U.S.
582 (1949); Wright, Federal Courts, 3rd Ed., § 11, pp. 29-38 (1976).) It is
fairly clear, however, that an Article I court oould be established to review
disputes growing out of a federal administration of power plant siting, or of
compact administration of power plant siting. Whether such a court oould be
established to settle disputes between states over power plant siting where no
federal or compact agency is involved is more problematic. In any event, most of
the advantages and disadvantages of an Article III court obtain for an Article I
court except that an Article I court may be less independent of political influence,
but oould be created on a limited term basis.
(c) Ad Hoc Appointment of a Panel of Judges from the Existing Life-Tenured
Federal Judiciary to Hear Individual Disputes.
In the limited context of settling conflicts between states over environmental
and energy issues in the allowance of the siting of new power facilities to be
built by private utilities the judges should be (1) disinterested as to
environmental-energy policy issues, (2) neutral with regard to the states involved
and (3) capable of understanding the complex scientific data involved. Picking
special court judges from the sitting federal life-tenured judges oould possibly
get the most competent court based on those three requirements. Using the three
judge court model,* whereby a panel of three judges is picked by the chief judge
of the circuit from the active and senior district court and circuit court judge
of the circuit to hear a single case, a new special kind of three judge panel oould
*28 U.S.C. § 2284 was amended to eliminate three judges courts except in
legislative reapportionment cases and with certain cases under the Civil Rights Act
of 1964, the Voting Rights Act of 1965, and the Presidential Election Campaign
Fund Act, 26 U.S.C. § 9011(b)(2).
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be constituted. The Chief Justice of the United States, not the chief judge of
circuit, would pick judges from the existing life-tenured federal jlodges but none
could be fron the district or circuit wherein the case is brought or from a
district or circuit which is in one of the contending states in the lawsuit.
It would be assumed that the Chief Justice would also pick judges that are coupe tent
to deal with the factual and legal issues involved. Such a court should be
disinterested as to the environmental-energy policy issues since the judges are
life-tenured, should be above reproach as to neutrality toward the states involved,
and should be somewhat more expert at dealing with the scientific and technical
data than a purely randomly picked regular federal court. Such a court is still
a "generalist" court free of the tunnel-vision taint. On the other hand, since any
particular court will only hear one case, the court would lack the advantage a
special court might have of acquiring expertise from hearing the same kind of case
over and over, which brings us to the fourth kind of special or ad hoc court.
(d) A Tenporary Court with Special Jurisdiction Appointed fron the Ranks of
the Life-Tenured Federal Judiciary.
An alternative that might achieve that expertise from repetition that ad hoc
appointment lacks would be a court modeled after the Tenporary Emergency Court of
Appeals (TECA). TECA was originally made-up of nine judges—six circuit and three
district court judges—who were appointed in January, 1972, by the Chief Justice
pursuant to the Economic Stabilization Act Amendments of 1971 (Public Law No.
92-210, § 2). The court usually sits and decides in three judge panels.
The principal location of TECA is the District of Colurrbia, but the courts hear
cases in other places as the Chief Judge of TECA designates. The Court operates
under its own rules. It is strictly an appellate court hearing appeals fron the
federal district courts. Such a perpetual (if not permanent) court has offices
and staff unlike the ad hoc three judge courts just mentioned. Such staff could
supply sane of the expertise to allow more competent and swifter disposition of
cases. On the other hand it is subject to attack for tunnel-vision and other bias.
"Just as agencies may be 'captured' by the industries which they are charged with
regulating, a specialized court such as the TECA nay become a passive partner
with the agencies it reviews." Elkins, The Temporary Emergency Court of Appeals;
A Study in the Abdication of Judicial Responsibility, 1978 Duke L. Rev. 113, 151.
My own reading of TECA cases leaves me unconvinced that this charge is true.
Rather the court has taken seriously and understands that the reasonableness
standard does not allow it to substitute judgment for the reviewing agency.
They are doing what the Supreme Court in the Vermont Yankee Case quoted earlier
admonished review courts to do.
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PRIVATE PLANNING AND COORDINATION
The Use of Electric Utility Industry Regional and National Organizations
to Effect Interstate Coordination of Power Plant Siting.
There has been substantial interstate coordination of the electrical utility
industry by the industry itself under the general oversi^it of the Federal Power
Odnmission (FPC) and its successor, the Federal Energy Regulator Ccnniissicn.
In fact, the only coordination in the industry has been by the private sector
under federal supervision. This coordinative effort, however, has not extended
to plant siting or development. As indicated in previous sections, plant siting
is regulated by the individual states implementing local, state and federal policies
with no interstate coordination. Likewise, the retail sale of electricity is
controlled by the individual states.
In the vast area between plant siting and retail delivery lies the nationwide
system of wholesale transmission called by the industry the "North American bulk
power systems". It is under the regulatory authority of the Federal Energy
Regulatory Commission (FERC). FERC in turn, has, consistent with its original
Congressional mandate, relied on the voluntary coordination of private utilities.
(See Section 2, above.) This voluntary or private coordination of the nonsiting
aspects of the interstate electrical industry has been quite extensive. The
National Electrical Reliability Council (NERC), the organization with the overall
responsibility for this private coordination declared (in the 8th Annual Review
of overall reliability and adequacy of the North American Bulk Power Systems,
August, 1978, p. 3):
"The existing bulk paver transmission system in North America
consists of several highly-developed networks, interconnecting
essentially all utilities in the United States and Canada.
The inherent strength and capability of these networks have
been demonstrated repeatedly. It is essential that these
networks be strengthened and expanded continually as electric
production and use grew, and as technology advances. However,
siting, regulatory, and financial constraints make it much
more difficult to provide the transmission capacity to meet
the anticipated pewer requirements. This will result in
degradation of power supply reliability."
NERC's stated purpose is "further to augment the RELIABILITY and ADEQUACY of bulk
pewer supply in the electric utility systems of North America" (from inside cover
of 8th Annual Review).
The question then is can this demonstrated capacity for coordination by the
private sector be utilized for new tasks with expanded purposes. The new task
would be interstate coordination of pewer plant siting. The expanded purposes
are not foreign to present coordinative effort by the industry but would have
to receive a new emphasis so as to be equal with reliability and adequacy.
Efficiency" (or minimizing cost) is a production goal well within the private
sector's ken. But three nan-production oriented purposes are not so naturally
with the private sector's ken: environmental protection, energy resource utilization,
CHAPTER V:
Section 8:
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and a fair (and perceived as fair) allocation of the benefits and burdens of siting
among the states. The industry is quite familiar with the first two of these non-
production purposes of coordination. The last is a purely political purpose
probably not a present concern of the industry. These non-production purposes
might seem at odds from a producer's perspective with the goals of efficient
production of a reliable and adequate supply of electricity. Suitability of a
site for efficient production and its compatibility with the broad range of
environmental/energy resource goals are often at odds and one would expect the
private utility to opt for production suitability.
However, if the final balancing of suitability and compatibility interests
is left to public decision-makers, private utilities superior technical knowledge
and incentives might be utilized to fashion long-range comprehensive interstate
regional plans for power generating facility and transmission development.
There would need to be public-established criteria for the private industrial
planning. The plans could then be the basis for expeditious and final public
choices. This publicly guided and mandated private planning might also be
publicly funded.
In order to examine this option for interstate coordination of power siting
this report will take a brief look at the existing organizations within the
private sector, their present structure and operation and their potential for
ocmprehensive industry-wide regional planning. A brief review of the antitrust
law iirplications of such private planning will then be rade. Finally seme public
control options will be suggested. The ultimate picture would be roughly
(1) the public establishment of planning criteria, (2) comprehensive private
planning, (3) expeditious final public approval of the planning including naking
choices among planning options and (4) regulation-free private action in accordance
with the plan.
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A. National Electrical Reliability Council and the Regional Councils:
Introduction—Numerous Studies
Since the Federal Power Cartmission's 1964 National Pcwer Survey, there have
been a raft of studies both public and private concerning the future of the
electrical utility industry, rrany with a special concern for facility siting in
all its complexity. Pour articles based in large part on the various studies
are here drawn on to give an overview of the private sectors activity:
(1) Nassikas, Centralizing Decisional Authority, 24 Adm. L. Rev. 15 (1972).
John N. Nassikas, when he wrote this article, was chairmn of the F.P.C., by
appointment of President Nixon. Nassikas was an outspoken opponent of same of
the proposals for a federal siting act, (although he said "Absent state or
regional implementation (of a national standard for certification), I reoanmend
federal certification." (Id. at 26.)) and a proponent of private utility planning.
(2) Journey, Pcwer Plant Siting—A Road Map of the Problem, 48 Notre Dame L.
273 (Dec. 1972]"! Drexel D. Journey was Deputy General Counsel of the Federal
Power Ccarmission when he wrote this article which is a functional analysis of
plant siting legislation introduced into Congress in 1971 and 1972. (3) Doub,
Federal Energy Regulation--Toward a Better Way, 60 A.B.A.J. 920 (1974).
William 0. Doub, wrote this short article as a precis of the report of the
Federal Energy Regulation Study Team of which he was chairman. He was a
commissioner of the Atomic Energy Commission (new NEC). The "Team's" report
was entitled Federal Energy Regulation: An Organizational Study. (1974).
The Report concluded! (Id. at 922.)
"Direct federal pre-emption of siting and licensing was not deemed
advisable at this time—in part because philosophical resentment
against that step would likely be strong, but primarily because
it could diminish important state powers and initiative in the
planning field and because state and local groups are ordinarily
much better equipped to evaluate such items as local ecology,
aesthetic standards, and compatibility with surrounding land uses.
Nevertheless, the report admitted the harsh reality that federal
pre-emption may become necessary at some future date if the as yet
untried co-ordinating efforts fail to satisfy regional and national
needs for certain critical energy facilities because of narrcwer
geographical interests."
(4) Breyer and MacAvoy, The Federal Pcwer Ctonmission and the Co-ordination Problem
in the Electrical Utility Industry, 46 S. Cal. L. Rev. 661 (1973) was cited
previously in Section 2. StephenBreyer is a law professor and Paul MacAvoy is
an economist. They maintain there are three major problems confronting the
electricity industry—reliability, environmental protection, and efficiency.
Their article discusses the third of these:
"the need for an efficient system of production—a system that produces
and transmits the electricity demanded at the lowest cost. This
discussion will suggest that increased coordination among electricity
producers can lower production costs while simultaneously allowing a
given expenditure for electricity to purchase more reliability or more
environmental protection .... While this Article will discuss the
coordination problem, its major purpose is to evaluate the ability of a
regulatory agency to plan in a technologically complex industry." (Id.)
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They T>nninrte> that the Federal Power Commission (new FERC) cannot plan and has been
a failure at coordinating the industry for efficiency.
"It has been suggested that the causes of this failure include not
only a possible lack of sane statutory authority, but also the practical
difficulties involved in having regulators make complex managerial
decisions and the inpossibility of giving private managers incentives
that would lead them to make decisions more to the regulators' liking.
The causes include the tendency of the agency to try to respond to
problems incrementally as they arise, rather than to devote significant
efforts to long-range planning. Thus, the need to rationalize the
industry remains." (Id.) (Emphasis added.)
Breyer and MacAvoy suggest that public debate must new focus on "the major alternatives
to regulation." Unfortunately they suggest only two alternatives—consolidation
of the industry by mergers into 10 to 15 large, privately-cwned companies and
creation of an industry consisting of 15 to 25 large production companies owned
and controlled at least in part by the government—and reject them both. They then
conclude simply "that, if the nation is to obtain the benefits of rationalized
planning, it must seek alternatives". (Id.) More recently Breyer wrote Analyzing
Regulatory Failure; Mismatches, Less Restrictive Alternatives and Reform, 92 Harv.
L. Rev. 549 (1979) also cited above. The above articles will be cited by name of
author and page in the following review of NERC.
History Of Private Planning—General
Since the inception of federal regulation Congress has had confidence in the
coordinative capacity of the private utilities. Section 202(a) of the Federal
Power Act of 1935 stated that the FPC, acting through persuasion and voluntary
industry responses, is to secure such construction, interconnection and
coordination of electric utility facilities throughout the nation as will assure
". . .an abundant supply of electric energy . . . with the greatest possible
economy and with regard to the proper utilization and conservation of natural
resources . . . ." Notice that "adequacy," "efficiency," and resource "conservation"
are specifically aimed for, while reliability and environmental impact are not
nentioned specifically although the words "proper conservation of natural resources"
does hint at environmental concern. The Senate Report accompanying the Act explained
further:
"Under this subsection the Commission would have authority to work out
the ideal utility map of the country and supervise the development of
the industry toward that ideal. The Committee is confident that
en listened self-interest will lead the utilities to cooperate with
the Commission and with each other in bringing about the economies
which can alone be secured through the planned coordination which,
has long been advocated by the most able and progressive thinkers
on this subject." S. Rep. No. 621, 74th Ceng., 1st Sess. 49 (1935).
(Enphasis added.)
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Notice that in 1935 the emphasis was on private planning under public supervision
primarily aiming for economic efficiency. The Breyer and MacAvoy article
sunmarizes the private planning experience (p. 662):
"Before 1960, FPC regulation of the electric power industry had limited
impact. The Commission issued licenses to build certain hydroelectric
facilities, and it carried out orthodox "rate of return" reviews of
"wholesale" prices in that small unintegrated portion of the industry
where one company produces electricity and another distributes it.
It collected informtion from companies within its jurisdiction, but
it made no effort to plan for the industry as a whole. In fact, even
these limited activities were difficult to perform, because the
Commission followed a legal theory that made it virtually impossible
to knew, at any single point in time, the companies over which it had
jurisdiction.
"In the early 1960's, perhaps as a response to criticisms in the
Landis Report, the Commission, under the direction of a new chairman
and a rejuvenated staff, made a notable effort to plan a more efficient
power industry. In 1964 it published an extensive study of the
industry, the National Power Survey (1964 Survey), which concluded
that the nation's electric companies, by closer coordination of their
plant construction and operations, could produce power far more
cheaply. This survey was followed in 1967 by an extensive report
suggesting ways to increase the reliability of the nation's
transmission system. More recently, (circa 1970) the Commission
has brought environmental considerations into the scope of its planning.
The "coordination problem" thus early established the Commission's
role as an "industrial planner". For one thing, the Commission
recognized the problem in the early 1960's as an important one and
undertook to resolve it. For another, this problem was virtually
the only important planning activity on the Commission's agenda for
several years.
The problem initially did not seem intractable. In fact, it seemed
a typical, though complicated, example of the sort of planning that
commissions might be though capable of performing. Thus, the
Corrmission1 s failure to solve the coordination problem should interest
those who—like the early New Dealers—believe that regulatory agencies
can be used to overcome the various planning problems created by
technological advance, and it will help to evaluate the currently
popular thesis that, given the poor results of price control,
commissions should shift their emphasis from price control to planning.
(Footnotes omitted and emphasis added.)
Notice here that coordination before 1960 had nothing to do with plant siting
or construction and whatever coordination was accomplished was purely voluntary
through pooling joint ventures and mergers. See Meeks, Concentration in the
Electric Power Industry; The Impact of Anti-Trust Policy, 72 Col. L. Rev. 64,
1U0-117 and especially note 192, p. 115, containing a statement of FPC
policy as to merger.
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History Of Private Planning—Specific To Siting Coordination
Journey, supra, at 274, gives us the background specific to siting coordination:
"Chronologically, siting first appeared in the early 1960's as a
transmission line construction, right-of-way, econcroic coordination
matter. The nub of the question was how to facilitate economic
coordination and power pooling of the Nation's 3,600 electric
utility systems as contemplated in the Federal Power Catinission's
1964 National Power Survey^ At least three general factors were
involved: (1) limitations of state eminent domain laws in respect
to the construction of backbone transmission lines spanning severeil
states and serving a general geographic region; (2) public policies
affecting the use of Government lands for right-of-way purposes, . . .
and (3) differing institutional policy views of the three ownership
sectors of the utility industry (investor cwned, publicly owned,
and cooperatively owned), relative to tax status, capital cost
relationships, and the matter of ownership autonomy." (Emphasis added.)
Journey goes on to state that the Report of the Legal Advisory Canmittee to
the 1964 National Pcwer Survey merely stated that better coordination could be
achieved but made no specific suggestions for change because such suggestions
would imply political controversial policies on which there was no consensus on
the canriittee.
Journey goes on to surmarize the emergence of public concern about reliability
and adequacy of bulk power service following the 1965 Northeast paver failure.
Journey:
"The matter of building and operating bulk power supply facilities—
the larger electric generating stations and the interconnecting
high-voltage transmission lines—became an adjunct of the public1 s
principal concern, which, understandably, was continuity and
reliability of electric pewer services. The Federal Power Comnission's
46th Annual Report to Congress has summarized this metamorphosis:
"The Ocnroission recommends examination of existing institutions
for regional coordination . . . for interconnection of systems
. . . for developing and applying reliability standards . . .
for employing extra-high-voltage transmission . . . for securing
needed rights-of-way . . . for assuring that small systems
reasonably share in the economic and reliability benefits . . .
and for maintaining continuity of bulk power supply.'
* * *
"Currently, [early 1970's] environmental or locational factors
occupy a high degree of prominence in legislative considerations
of pewer plant siting. This emphasis arose canmencing in the
mid and late 1960's. By that time, general public concern over
environmental protection had found rather extensive legislative
expression in each of the three basic environments—air, land,
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and water. Power plant construction and operation use each of
these. Three Nationwide power plant siting studies added
considerable impetus to the locatianal and environmental emphasis.
One of those studies was conducted by the Working Conmittee on
Utilities* while the other two were administered under the
auspices of the Office of Science and Technology." (Other
footnotes emitted.)
"The cumulative effect of delays in the construction and operation
of electric generating stations and interconnecting backbone
transmission facilities began to surface at approximately the
same time as these developments. As this occurred, the adequacy
aspect of electric reliability became all too apparent. Paver plant
siting is both an environmental problem and a problem because of
environmental concerns. Summarizing these various interrelations
and concepts, the 1970 National Pcwer Survey tidies up the
package rather neatly: 'Deterioration of the quality of electrical
service would of itself and through its economic repercussions
degrade our national life. That is the crux of the power issue
facing the nation today . . . ." (Emphasis added.)
Present System Of Private Planning
Journey (at 282-83) describes the present system of private planning as
follcws:
"Acting through its general rule-making authority, the [Federal Pcwer]
Commission has implemented ... a procedure which provides for
systematic public reporting of the utility operations and a mechanism
for participation by the Federal Pcwer Garrmission and state public
service ccnmission staff personnel in the activities of the utilities
through an observer role status. In this manner, institutionalized
public representation is projected into utility planning procedures
at initiating levels. It is not an after-the-fact review of the
type occurring in licensing cases which are subject to formal legal
procedures of the Administrative Procedure Act.
This program is carried on through nine regional electric reliability
councils and a national organization (National Electric Reliability
Council). Through these councils, the Nation's major electric utility
systems coordinate the planning and operation of their respective
major electric generating stations and inter-connecting transmission
*Wbrking Ccimdttee on Utilities, Report to the Vice President and to the
President's Council on Recreation and National Beauty (1968).
**Office of Science and Technology, Consideration Affecting Steam
Power Plant Site Selection (1968); Office of Science and Technology,
Electric Power and the Environment (1970).
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lines in the interests of adequacy and reliability of electric supply.
This is accomplished on a regional basis and with due regard for
operational and environmental considerations.
The public reporting system covering the utilities which participate
in electric reliability council work covers such fundamental matters
as load projections, generating resources, higher voltage interconnected-
network facilities, electric stability analyses, ccmnunication and
facility monitoring procedures, regional load shedding and maintenance
programs, service restoration plans, pollution control and environmental
information associated with proposed larger generating units, 300,000
kilowatts and higher, and transmission facilities, 230 kilovolts and
higher. The work product, an organized body of information, is available
to all governmental authorities and the general public.
Approximately 290 electric utility systems owning about 95 percent
of the electric utility generating capacity within the United States
participate in the Federal Power Carrmissian's voluntary cooperative
procedures ^program. They serve in excess of 60 million ultimate electric
consumers.
Legislation Par Siting Control Introduced In The Early 19705
Journey goes on to analyze sore legislative proposals for controlling and
coordinating the siting of new electrical generating facilities, specifically four
bills introduced in the 92nd Congress 1st session (H.R. 605 (S. 294), H.R. 5277
(S. 1684), H.R. 6971, H.R. 11066) and one bill introduced in the 91st Congress,
2nd Session (S. 4421.). Of H.R. 605 Journey stated:
"H.R. 605 is a federal facility certification bill, supplemented
with legislative objectives aimed at securing, pursuant to Federal
Pcwer Commission review: (1) regional planning and operation of
bulk power facilities according to Ccnndssion-prescribed criteria;
(2) economic operational coordination of certified facilities,
including all other bulk power facilities of the utility, whether
investor-owned, publicly cwned, or cooperatively owned; (3) and the
protection and enhancement of environmental values. The facilities
to be certified by the Federal Pcwer Carmission include transmission
facilities of 200 kilovolts and higher which are constructed two
years subsequent to the enactment of the bill and generating units
Statement of Policy, Reliability and Adequacy of Electric Service—Reporting
Data—Participation of Regulatory Personnel in Regional Councils, 43 F.P.C. 515,
Order No. 383-2 (Apr. 10, 1970). The respective federal-state staff work is
coordinated through a series of staff level working groups established by the
Federal Pcwer Ccarmission and the various state public service commissions under
the cooperative procedures of the Federal Power Act, 16 U.S.C. § 824(h) (1970);
see FPC News Release, No. 17, 198 (Dec. 18, 1970); Nat. Ass. of Regulatory
Utility Ccnmissioners Bulletin, No. 3 (Jan. 18, 1971). (Other footnotes omitted.)
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or plants constructed four years after enactment. Investor-owned,
publicly cwned, and cooperatively cwned systems are subject to the
certification requirement. Certification is compulsory in any of
three circumstances: (1) in the event that the utility seeks to
use eminent domain procedures; (2) if the Federal Pcwer Cartnission
deems certification proceedings necessary for regional coordination
or other purposes; (3) or if a new governmental agency, the National
Council on the Environment, deems such proceedings necessary for the
preservation and enhancement of (a) environmental values, (b) conservation
of natural resources, or (c) strengthening long-range land-use planning.
Those elements, together with regional coordination, constitute the
legislative standard for certification. Where "... some other
technically and economically feasible and reliable kind of design of
facilities, location therefore or manner of operation thereof is clearly
preferable ..." facilities cannot be certificated. The authority
which the Canmission or the Council would exercise is a negative form
of action—a suspension order holding up the cons urination of a planned
utility proposal. Certification does not obviate the need for independent
compliance with all laws affecting the environment.
The Canmission would be authorized to permit one utility, at that
utility's expense, to enlarge and use the certificated facilities
of another utility. The Canmission, in directing the general
coordination of physical facilities, operation, exchanges, and sales
of power among utilities and in controlling the abandonment of bulk
power operations, would be authorized to act to carry out regional
coordination, subject to the prohibition that the Cormission may not
unduly burden a utility. The Caimission would be authorized to
"... secure the establishment of appropriate and effective regional
organizations and procedures to carry out regional and inter-regional
coordination ..." and to ooirpel utilities to participate in and
support such regional organization. (Emphasis added.)
Ttoo of the other four bills envisioned a prominent role for the reliability
councils. Journey discussed the differences in the legislative proposals under
nine headings which identify the major questions any proposal should address.
The nine questions he identifies do not include one specifically related to
interstate coordination or the avoidance of interstate disputes.
B. Antitrust Policy and Private Coordination:
The Meeks article cited above and Shenefield, Antitrust Policy Within the
Electric Utility Industry, 16 Antitrust Bull. 681 (1971) are the most
comprehensive recent surveys of this subject.
Meeks (presently the Dean of the College of Law at Ohio State), supra,
at 65-66 states:
"Congress has never exempted the electric power industry
from the application of the antitrust laws. In fact,
the major regulatory statutes require that the regulating
agencies take account of antitrust considerations in any action
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they nay take under these statutes. The Justice Department also
has same responsibility in this area. Nevertheless, antitrust policy
was, until recently, rarely viewed as important in this industry.
Regulatory practices almost uniformly reflected the traditional
view that the industry was a natural monopoly, ill-adapted to the
application of antitrust principles. Recently, however, under
pressures from several sources, both the Justice Department and
the relevant regulatory agencies have begun to re-examine this
assumption. The time seems ripe to implement a carefully conceived
antitrust policy to aid regulatory control in promoting and protecting
the public interest." (Footnotes omitted.)
Meeks proceeds with "Description of the Industry", concluding (at 69):
"Thus, with sane exceptions, the industry is composed of relatively
large, vertically integrated, and geographically separated companies;
the federal government, which generates a large block of pcwer for
its cwn use and for sale at wholesale but does not engage in retail
operations; and a large nurrber of relatively small municipals,
cooperatives, and private companies, which are engaged primarily,
and in many cases exclusively, in the distribution process."
(Footnotes omitted.)
Then follows with a "Survey of the Technology of Power Generation and Delivery"
(p. 69) and under "B. Generation", he concludes:
"The choice of type and size of new generators will therefore depend
upon the type of demand, the predicted demand curve, capital cost,
fuel costs (including transportation), other operating costs, and
availability of potential sites."*
Meeks then proposes "III. An Antitrust Policy": (at 76-77 and at 80-81).
His conclusions are quoted:
"It is the author's view that a careful application of antitrust
concepts can supplement regulation without sacrificing available
economies of scale. First, the industry is capable of sustaining
some competition without sacrificing these economies. With the
current potential for bulk generation and transmission, a moderate
degree of coupetition is possible in the wholesale market. Second,
the necessity of monopoly at one level of the industry does not
*Siting is itself the result of several variables including distance from and
transmission costs to load centers, maintaining reliability of the system as a
whole, fuel transportation costs, aesthetic considerations including air and water
pollution, and availability of sufficient water for cooling purposes. The supply
of choice generating sites is declining rapidly, but economical, long distance
transmission has eased the problem somewhat. See Pcwer Survey, at 71-74, 93-95.
See generally Hearings on Siting and Environmental Protection.
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require the vertical extension of monopoly to other levels.
Such vertical integration by ownership of generation, transmission,
and distribution is neither technologically nor economically necessary.
Third, the existence of a company with monopoly paver in one
geographic area does not in itself justify expansion by that company
into another area. Fourth, some oarrpetition is possible on the
margins of a company's territory if new grcwth of demand is occurring
in an area not previously served with electricity. Fifth, very active
competition exists between the electric pcwer industry and other pcwer
sources. The extension of monopoly paver beyond what is economically
necessary may provide the electric company with artificial advantages
in this oarrpetition. Sixth, there is active competition between
firms to entice new customers to locate in their areas. Protection
of each of these forms of competition seeins well justified, at least
by analogy, in currently prevailing antitrust theory. Each provides
some justification for limited application of antitrust concepts to
the electric power industry.
Thus far, competition has been discussed from the perspective of the
conpany-consurrer relationship. There are, however, two other
interrelated competitive relationships in the industry that are
of at least equal significance. These two species are oarrpetition
between companies seeking to secure and retain a franchise to serve
an area on a monopoly basis and what is kncwn as yardstick competition.
Yardstick competition exists by virtu® of the comparison, as part of
the regulatory process, of one utility's performance with that of
another. This practice serves as a kind of check on the necessarily
less-than-perfect regulatory control exercised by the responsible
agencies."
* * *
at 80-81:
"Finally, the key question to be considered in formulating an antitrust
policy for the industry is whether the benefits to be achieved by its
application outweigh the costs, including foregone benefits. Although
it is impossible to reach any firm conclusions in each situation to be
discussed, some rather general hypotheses can be stated with fair
assurance of their viability. First, the benefits of large-scale
planning, construction, and operation of generation and transmission
facilities are assumed to outweigh the benefits that might accrue from
isolated, separate systems, each building only for its own generation
needs. Second, it is assumed that a scheme that protects the structural
and competitive interests outlined above without sacrificing the economies
of scale in generation and transmission will produce the optimum benefits
at the least cost. Third, the free play of market forces, when feasible,
will probably achieve the goals of regulation to a greater degree and at
a lesser cost than will direct government regulation.
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As noted earlier, the electric power industry is undergoing a
continuing process of restructuring to take advantage of newly
available economies of scale. Hois restructuring will occur
in one or more of three ways: the development of a pervasive
wholesale market for power from large generating plants; the
creation of power pools, in which the participants combine their
needs and construct large generating facilities on a joint basis;
or massive mergers resulting in a few very large, integrated
companies. The remainder of this article will be devoted to an
analysis of the application of the suggested antitrust policy to
these three developments. Certain antitrust problems ocniroi to
all three will be treated separately."
Meeks in the next section "IV. Coupetition in the Market Place" finds a significant
detriment to competition to be what he calls the "transmission bottleneck".
He states: (at 86-88)
"Refusal to wheel pcwer over transmission lines forces wholesale
customers within an integrated system's territory to look to that
system for their power. The irrmediate result is to preclude any
competition at the generation level, thus permitting the supplier
to place the customer in a cost-price squeeze. By charging the
wholesale customer a price equal to or just under the wholesaler's
retail price, the supplier can force the buyer to charge a retail
price higher than the wholesaler's retail price. Sane price
discrimination among wholesale customers is also prevalent.
The Federal Power Act provides the FPC with the somewhat vague
power to require interconnection of systems, but does not seem
to enpower it to exercise the kind of overall control suggested
here. Several bills introduced in Congress over the past few
years would have enhanced this power somewhat, but none would have
required a company to construct additional transmission facilities
if its existing lines were being vised at capacity. ¦ Moreover, it is
not clear to what extent the Commission might be willing to use
the authority granted it under future legislation to promote
competition at the generation level and, in fact, its record, in
furthering such competition, has not been very impressive under
the present statute. The Canmission has not required wheeling—
the transportation or exchange of electricity between two utilities
over the lines of a third one—except occasionally under its powers
to condition hydroelectric plant licenses and to authorize use of
federal land for private transmission. It has also recently
disclaimed power to require wheeling under section 824a (b).
Nevertheless, the statute could be read to authorize the Gonrnission
to require establishment of adequate access to transmission facilities,
a necessary condition for the development of competition at the
generation level."
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As stated in Section 2 of this report Congress has, as of 1978, given the
Federal Energy Regulatory Camrdssion paver to require wheeling and even to compel
the enlargement of transmission capacity (but not generating capacity). The new
provision and the report of the conference conmittee indicate a Congressional
intent to strengthen not inhibit the application of antitrust policy to the
utility industry. (See Appendix B of Preliminary Report to this study on
"Federal law Aspects, etc.".) (See also discussion in Section 2 of Otter Tail
Paver Co. v. United States, 410 U.S. 380, a case decided after Meeks' article.)
Meeks goes on to discuss "V. Joint Ventures and Pooling Arrangements" and
at 107 states:
"In general, the larger the pool, the greater the savings possible
from incremental loading because there are more generating units
and, therefore, irore cost variables to choose from. Pools enplcyed
for incremental loading must be of the most sophisticated variety
since responsibility for operating the entire pooled facilities
must be delegated to one operator or operating team. If systems are
willing to do this, substantially more efficient operation can be
achieved.
Tt> sum up, pooling results in significant economies and increased
reliability. Moreover, usually, the larger the pool and the
greater the cooperation and integration, the more substantial
the gains will be. The result is better service and, assuming
the economic benefits are passed on, lower prices for the consumer.
For these two reasons, the FPC has very vigorously encouraged
pooling."
"D. Disincentives to Pooling":
"Several disincentives to pooling have already been discussed.
These include state regulatory policies relating to ownership,
placement, and retirement of equipment for rate-making purposes,
rate policies that provide little or no incentive to efficient
operations, and reluctance of management to delegate or negotiate
planning and operational decisions affecting their own system.
In addition there are two very important and closely related
disincentives that may govern the decision of a system to join
a specific pool."
Then at 111 he summarizes what the antitrust attitude toward pooling ought to be:
"In short, the sacrifice in actual or potential competition by
pooling seems miniiral and the benefits substantial. Finally,
it is highly unlikely that the same degree of econcny and
reliability could be achieved independently, except as a result
of much more drastic forms of consolidation, merger or acquisition
of all systems in the area. Pooling should therefore meet a rule
of reason test under the Sherman Act.
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Congress in the 1978 National Energy Plan legislation added:
SBC. 205. Pooling
(a) STATE LAWS.—The Commission may, on its cwn notion, and shall, on
application of any person or governmental entity, after public notice
and notice to the Governor of the affected State and after affording
an opportunity for public hearing, exempt electric utilities, in
whole or in part, frcm any provision of State law, or from any State
rule or regulation, which prohibits or prevents the voluntary coordination
of electric utilities, including any agreement for central dispatch, if
the Ccmnission determines that such voluntary coordination is designed
to obtain economical utilization of facilities and resources in any area.
No such exemption may be granted if the Ccnmission finds that such
provision of State law, or rule or regulation—
(1) is required by any authority of Federal law, or
(2) is designed to protect public health, safety, or welfare, or the
environment or conserve energy or is designed to mitigate the
effects of emergencies resulting from fuel shortages.
(b) POOLING STUDY.—
(1) The Commission, in consultation with the reliability councils
established under section 202(a) of the Federal Pcwer Act,
the Secretary, and the electric utility industry shall study
the opportunities for—
(A) conservation of energy,
(B) optimization in the efficiency of use of facilities and
resources, and
(C) increased reliability,
through pooling arrangements. Not later than 18 months after the
date of the enactment of this Act, the Ccmnission shall submit a
report containing the results of such study to the President and
the Congress.
(2) The Commission nay recommend to electric utilities that such utilities
should voluntarily enter into negotiations where the opportunities
referred to in paragraph (1) exist. The Ccnmission shall report annually
to the President and the Congress regarding any such recommendations
and subsequent actions taken by electric utilities, by the Ccmnission,
and by the Secretary under this Act, the Federal Pcwer Act, and any
other provision of law. Such annual reports shall be included in the
Commission's annual report required under the Department of Energy
Organization Act.
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The conference committee explained:
Section 205. Pooling
This section authorizes the Carrmission on its own notion, and requires
the Catinission on application, to exempt electric utilities, where the
circumstances specified in this section exist, from State laws, rules
or regulations that prohibit or prevent voluntary pooling. No exemption
is authorized where FEKC finds that the law, regulation, or rule is
required by Federal law or is designed to protect public health, safety
or welfare or the environment or conserve energy or mitigate emergencies
resulting from fuel shortages. This prohibition would include State
siting laws, regulations under the Clean Air Act, and zoning laws, among
others. Second, this section requires an 18-month Commission study on
pooling. Third, it authorizes the Carmission to recommend to electric
utilities that they voluntarily negotiate to establish pooling
arrangements where there is an opportunity through such an arrangement
to conserve energy, to optimize the efficiency of use of facilities
and resources, or to increase reliability.
The conferees do not intend that the authority contained in subsection (a)
of this section override any exclusive retail irarketing area. It is
directed at State laws and rules or regulations thereunder which prohibit
or prevent voluntary coordination of electric utilities if the Commission
determines, upon its cwn motion or upon complaint, that such voluntary
coordination is designed to obtain economical utilization of facilities
and resources in any area.
C. Legal Arrangements that Might Induce or Compel Greater Private Coordination
of Power Plant Siting:
A short statement of the electric utility planning problem is necessary to
an understanding of how the private sector might provide the planning and
coordination of power plant siting necessary to future needs and consistent with
public policy. Comprehensive electric utility planning calls for the accomodation
of six separately identifiable but interrelated general considerations:
efficiency, reliability, adequacy, environmental protection, energy resource
utilization, and distributive equity. "Efficiency" means using the least amount
of resources (capital and labor) per unit of production, i.e., getting the most
bang for the buck. "Reliability involves the security of the interconnected
transmission network and the avoidance of uncontrolled cascading tripouts which
may result in widespread power outages",* i.e., getting the bang eveiytime.
"Adequacy refers to having sufficient generating capacity to be able at all times
*Eighth Annual Review, inside front. A Report by Interregional Review
Subcommittee of the Technical Advisory Committee of the National Electric
Reliability Council (1978).
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to meet the aggregate electric peak loads" of all users, i.e., getting enou^i bang.
Environmental protection covers the short and long range impacts to the total
environment—air, water, land and people—including the health, safety, aesthetic,
social, and economic aspect of each, i.e., seeing that the bang causes the least
damage practically obtainable. Energy resource utilization refers to the selection
and conservation of non-renewable energy sources and their transportation.
"Distributive equity" refers here to the territorial allocation of burdens and
benefits of the location of sites so as not unduly to burden one to benefit
others even where consideration of the other five factors alone would make such
allocation rational. It is this consideration that makes coordination among state
and local representatives inevitable even if ultimate siting decision-making is
entirely preempted by Congress. 15ns territorial allocation is especially important
with the Clean Air Act written as it is in terms of area ambient air quality rather
than national stack emission limitations.
None of these considerations can be viewed in isolation but it is extremely
difficult to find an appropriate authority to carbine them in a manner that is
efficient and with results likely to be satisfactory to both the utility industry
and the general public. Since the federal government presently relies on NEFC
and the regional councils for reliability and adequacy planning and coordination,**
and since Congress has since 1935 mandated private coordination for efficiency,
and since several of the bills for federal siting certification contemplated the
extensive use of regional councils to create regional plans to (in the words of
H. R. 11066, 92d Cong., 1st Sess. (1971) § 402(a)) "balance reasonable power needs
and reasonable environmental factors", ** it seems appropriate to suggest ways
that the utility industry might plan responsibly and confidently for future siting.
First, criteria for planning must be established either by the Department of
Energy (under the existing Federal Pcwer Act's mandate to FERC or, preferably,
a new act) or by Congress, itself, setting forth with specificity what the regional
plans must contain, including "need" standards. The criteria would probably
specify that plans be on a contingency basis, i.e., contingent on various projections
of future need. The nature and extent of alternatives analysis must be specified.
Along with the criteria, various support systems could be authorized including
the support of existing federal and state agencies. Public funding of all or part
of the planning cost could be authorized. Time limits would be prescribed, both
as to the time period planned for and the time period in which the planning must
be completed.
Second, submission of the plan for public review and Garment must be provided
for. Specific notice to affected governmental entities and interested private
*Id.
**F.P.C. Order #383-2 found in 43 F.P.C. Rep. 515 (1970) or 35 Fed. Reg. 6121.
***HR6971, 92d Cong., 1st Sess. (1971) also provided for NERC and Regional
Council planning.
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groups would be required. A forum with federal agency representation and affected-
state representation vrould be established and would hold hearings, either at one
location central to the region or in every locale where a new generating facility
of a certain size is planned. This forum would make recommendations for alterations
in the plan which if accepted by the regional reliability council responsible for
creating the plan, would make the plan with all its contingencies final. Appeal
might be provided for on an expedited basis either to the United States Court of
Appeals for the District of Columbia (because it is neutral) or to a special court.
(See Section 7.) Review should be limited to whether or not the plan is reasonable
in light of the mandating criteria.
Once the plan becomes final following whatever judicial review is provided,
implementation of the plan could follow one of two courses. One course would be
to require specific site approval under the plan either by FERC or by a specific
state siting agency with the only issue being whether or not the specific
generating facility and site proposed conforms to the approved plan. Public hearings
could be held with standing defined so as to allcw representation of various
territorial and social interests. Although it might greatly complicate the
decision, another issue might be whether circumstances have so changed as to rake
the planning choice no longer valid. A more likely issue (in fact an inevitable
issue if the plan is a contingent plan providing for several alternative sites
or no site depending on events future to the time of planning) is the question
of what events have in fact transpired and therefore which of several alternative
courses has the plan "chosen".
A second course of implementation would be (taking a lead fran Maryland)
for the federal government or the appropriate state government to buy the planned
future sites and "bank" them. They could then lease or sell the site to the
private utility when the tine cartes for actual building. In the meantime the
government could use the site in a manner canpatible with its future use as a
generating site—for example using it as a temporary park or any other use
including leasing it for agriculture use not requiring costly development. Site
banking prevents the upsetting of well-laid plans for future sites which at the
time of planning may be optimally suitable and canpatible but which in the
passage of the planned period (say 10 years) become incompatible or unsuitable.
There are so many contingencies that can upset the best laid plans that removing
one large contingency might prove a big help. Site banking could also be
accomplished by authorizing the utilities, themselves, to acquire the future
sites. In addition to the usual eminent domain grant, public monies or loan
guarantees might be made available to underwrite the rather large outlay of
capital this might entail—an outlay with no immediate generation of income.
The above arrangement for private planning under public supervision would
utilize the technical know-hew, organizing capacity, and profit motive to create
the optimally efficient and reliable regional system adequate to various
possible future needs as established by the public criteria makers, and at the
same time because the private planner knews he must ultimately obtain public
approval, he will provide for the publicly mandated environmental protection,
energy resources utilization and the equitable distribution of burdens and
benefits among the states of the region. Knowing the planning criteria and
the public body whose approval must ultimately be sought should allow for
efficient, responsible, and confident planning. In short, it should provide
the opportunity for the utility industry to prove again that the genius of the
American system is the ability of the private sector to plan for the public good.
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