Resource Agency Hearings and Alternatives Development Procedures in Hydropower Licenses, 84389-84396 [2016-28063]

Agencies

• DEPARTMENT OF AGRICULTURE
• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration
• DEPARTMENT OF THE INTERIOR
• Office of the Secretary

[Federal Register Volume 81, Number 226 (Wednesday, November 23, 2016)]
[Rules and Regulations]
[Pages 84389-84396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28063]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 81, No. 226 / Wednesday, November 23, 2016 / 
Rules and Regulations

[[Page 84389]]



DEPARTMENT OF AGRICULTURE

Office of the Secretary

7 CFR Part 1

DEPARTMENT OF THE INTERIOR

Office of the Secretary

43 CFR Part 45

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 221

[Docket No. 080220223-6961-03]
RINs 0596-AC42, 1090-AA91, and 0648-AU01


Resource Agency Hearings and Alternatives Development Procedures 
in Hydropower Licenses

AGENCY: Office of the Secretary, Agriculture; Office of the Secretary, 
Interior; National Oceanic and Atmospheric Administration, Commerce.

ACTION: Final rules; response to comments.

-----------------------------------------------------------------------

SUMMARY: The Departments of Agriculture, the Interior, and Commerce are 
jointly issuing final rules for procedures for expedited trial-type 
hearings and the consideration of alternative conditions and fishway 
prescriptions required by the Energy Policy Act of 2005. The hearings 
are conducted to expeditiously resolve disputed issues of material fact 
with respect to conditions or prescriptions developed for inclusion in 
a hydropower license issued by the Federal Energy Regulatory Commission 
under the Federal Power Act. The final rules make no changes to 
existing regulations that have been in place since the revised interim 
rules were published on March 31, 2015, and took effect on April 30, 
2015. At the time of publication of the revised interim rules, the 
Departments also requested public comments on additional ways the rules 
could be improved. The Departments now respond to the public comments 
received on the revised interim rules by providing analysis and 
clarifications in the preamble. The Departments have determined that no 
revisions to existing regulations are warranted at this time.

DATES: Effective November 23, 2016.

FOR FURTHER INFORMATION CONTACT: Mona Koerner, Lands and Realty 
Management, Forest Service, U.S. Department of Agriculture, 202-205-
0880; John Rudolph, Solicitor's Office, Department of the Interior, 
202-208-3553; or Melanie Harris, Office of Habitat Conservation, 
National Marine Fisheries Service, 301-427-8636. Persons who use a 
telecommunications device for the deaf (TDD) may call the Federal 
Information Relay Service (FIRS) at 800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Executive Summary

    The Departments of Agriculture, the Interior, and Commerce (the 
Departments) are issuing final rules to implement section 241 of the 
Energy Policy Act of 2005. Energy Policy Act of 2005, 109 Public Law 
58, 119 Stat. 594, 674, 109 Public Law 58, 2005. Section 241 created 
additional procedures applicable to conditions or prescriptions that a 
Department develops for inclusion in a hydropower license issued by 
Federal Energy Regulatory Commission (FERC). Specifically, section 241 
amended sections 4 and 18 of the Federal Power Act (FPA) to provide for 
trial-type hearings on disputed issues of material fact with respect to 
a Department's conditions or prescriptions; and it added a new section 
33 to the FPA, allowing parties to propose alternative conditions and 
prescriptions.
    In 2015, the Departments promulgated three substantially similar 
revised rules--one for each agency--with a common preamble. The revised 
interim rules became effective on April 30, 2015, so that interested 
parties and the agencies more immediately could avail themselves of the 
improvements made to the procedures. At the same time, the Departments 
requested public comment on additional ways the rules could be 
improved.
    The Departments have reviewed the public comments received on the 
revised interim rules, and are providing responses to the public 
comments and further analysis and clarification. The Departments have 
determined that no changes to existing regulations are warranted in the 
Final Rules.

II. Background

A. Interim Final Rules

    On November 17, 2005, at 70 FR 69804, the Departments jointly 
published interim final rules implementing section 241 of the Energy 
Policy Act of 2005 (EPAct), Public Law 109-58. Section 241 of EPAct 
amended FPA sections 4(e) and 18, 16 U.S.C. 797(e), 811, to provide 
that any party to a license proceeding before FERC is entitled to a 
determination on the record, after opportunity for an agency trial-type 
hearing of no more than 90 days, of any disputed issues of material 
fact with respect to mandatory conditions or prescriptions developed by 
one or more of the three Departments for inclusion in a hydropower 
license. EPAct section 241 also added a new FPA section 33, 16 U.S.C. 
823d, allowing any party to the license proceeding to propose an 
alternative condition or prescription, and specifying the consideration 
that the Departments must give to such alternatives.
    The interim final rules were made immediately effective, but a 60-
day comment period was provided for the public to suggest changes to 
the interim regulations. The Departments stated in the preamble that 
based on the comments received and the initial results of 
implementation, they would consider publication of revised final rules.

B. Request for Additional Comment Period

    In July 2009, the Hydropower Reform Coalition (HRC) and the 
National Hydropower Association (NHA) sent a joint letter to the three 
Departments, asking that an additional 60-day comment period be 
provided before publication of final rules. The organizations noted 
that they and their members had gained extensive experience with the 
interim final rules

[[Page 84390]]

since their initial comments were submitted in January 2006, and they 
now have additional comments to offer on ways to improve the trial-type 
hearing and alternatives processes. The Departments granted NHA and 
HRC's request. Instead of publishing final rules, the Departments 
published revised interim rules, effective on April 30, 2015, with a 
60-day comment period.

C. Revised Interim Rules

    On March 31, 2015, the Departments jointly published revised 
interim rules implementing EPAct section 241. 80 FR 17156. The rules 
and preamble addressed a few issues that remained open in the 2005 
rulemaking, such as who has the burden of proof in a trial-type hearing 
and whether a trial-type hearing is an administrative remedy that a 
party must exhaust before challenging conditions or prescriptions in 
court. Additionally, the revised interim rules clarified the 
availability of the trial-type hearing and alternatives processes in 
the situation where a Department exercises previously reserved 
authority to include conditions or prescriptions in a hydropower 
license.
    The revised interim rules went into effect on April 30, 2015, but a 
60-day comment period was provided for the public to suggest changes to 
the revised interim regulations.

D. Comments Received

    The Departments received comments on the revised interim rules from 
Exelon Generation Company, LLC (``Exelon'') and comments submitted 
jointly by the National Hydropower Association, American Public Power 
Association, Edison Electric Institute, and Public Utility District no. 
1 of Snohomish County, Washington (``Industry Commenters''). Responses 
to these comments are provided below. The Departments also received a 
comment that is not relevant to this rulemaking and therefore does not 
necessitate a response. The reader may wish to consult the section-by-
section analysis in the revised interim rules for additional 
explanation of all the regulations.
Burden of Proof
    The Industry Commenters strongly disagree with the Departments' 
decision in the revised interim final rule to assign the burden of 
proof to the party requesting a hearing. See 7 CFR 1.657(a), 43 CFR 
45.57(a), and 50 CFR 221.57(a). They assert that the burden of 
persuasion should be assigned, in accordance with Sec.  7(d) of the 
Administrative Procedure Act (APA), 5 U.S.C. 556(d), to the party that 
is ``the proponent of [the] rule or order,'' and that the burden should 
be assigned to the Departments because they are the proponents of their 
mandatory conditions or prescriptions which they seek to attach to a 
licensing order as well as the alleged facts supporting those 
conditions or prescriptions. The Departments received these comments on 
the interim final rule and explained the Departments' rationale for 
disagreeing with the comment in the revised interim rules. 80 FR 17170-
17171. For the reasons explained in the revised interim rules, the 
Departments do not agree with the comment and no changes to the 
regulations are required.
    The Industry Commenters cite Escondido Mutual Water Co. v. La Jolla 
Band of Mission Indians, 466 U.S. 765 (1984), in support of the 
assertion that the Departments are the proponents. In that case the 
Supreme Court noted that a condition or prescription must be supported 
by evidence provided by the conditioning agency (or other interested 
parties). Id. at 777 nn.17, 20. The Industry Commenters assert that 
this is consistent with the APA requirement that the proponent of an 
order ``has the burden of proof.'' However, the Escondido case dealt 
with an appeal from a U.S. court of appeals' decision that Sec.  4(e) 
of the FPA required FERC to accept without modification any license 
conditions recommended by the Secretary of the Interior. As noted by 
the Supreme Court, FERC's orders, including licenses, are reviewable by 
a U.S. court of appeals under 18 U.S.C. 825l(b), and the court of 
appeals, and not FERC, has exclusive authority to determine the 
validity of a condition or prescription in a license. 466 U.S. at 777 
and 777 nn. 19, 21. Because conditions and prescriptions, and whether 
they are supported by substantial evidence, are only reviewable under 
Sec.  825l(b), the conditions or prescriptions themselves are not the 
subject ``orders'' of the trial-type hearing. Rather, the subject of 
the hearing is the hearing requester's claim that the correct facts are 
different than the Department's factual basis for the conditions or 
prescriptions.
    In a trial-type hearing, the requester seeks a decision from the 
ALJ upholding its claim and thus is the proponent of the order and 
bears the burden of persuasion. See Schaffer v. Weast, 546 U.S. 49, 62 
(2005). The correctness of this position is strongly buttressed by the 
fact that the same conclusion was reached by all six independent ALJs 
who ruled on this issue prior to specifically assigning the burden of 
proof in the revised interim rules. No changes to the regulations are 
necessary.
Applicability of Rules on Reopener
    The Industry Commenters state that the revised interim rules 
should, but do not appear to, provide for a trial-type hearing or the 
submission of alternative conditions or fishway prescriptions 
(alternatives) when an agency imposes conditions and prescriptions 
during the licensing proceeding, reserves its right to impose 
additional or modify existing conditions or prescriptions during the 
license term, and then exercises that reserved right. The Departments 
disagree with the commenter's premise that the rules do not provide for 
a trial type-hearing or the submission of alternatives in such a 
situation.
    The revised interim rules provide that where a Department ``has 
notified or notifies FERC that it is reserving its authority to develop 
one or more conditions or prescriptions at a later time, the hearing 
and alternatives processes under this part for such conditions or 
prescription will be available if and when DOI exercises its 
authority.'' 7 CFR 1.601(c); 15 CFR 221.1(c); 43 CFR 45.1(c). 
Accordingly, if a Department exercises reserved authority during the 
license term to impose additional or modified conditions or 
prescriptions, the hearing and alternatives processes under this part 
for such conditions or prescriptions will be available.
    The Industry Commenters contend that where a Department imposes new 
or substantially modified conditions or prescriptions under reserved 
authority during the license term, the Department has an obligation 
under the license to justify these changes based on a change in facts. 
This comment pertains to the justification for a Department's exercise 
of its reserved authority, which is beyond the scope of this 
rulemaking, and therefore merits no further response.
Improvements to the Hearing Timeline
    The revised interim rules extended a few of the deadlines in the 
2005 rules, while not adopting some commenters' recommendations that 
the Departments significantly expand the hearing schedule. The Industry 
Commenters assert that these extensions do not go far enough because 
the compressed timeline set out in the rules imposes extreme hardship 
on the parties and forces parties to limit the scope of their 
challenges to agency conditions and prescriptions. They contend that 
EPAct does not require such a condensed schedule.
    Specifically, they reiterate two recommendations rejected in the 
revised interim rules: (1) Extending the deadline

[[Page 84391]]

for filing trial-type hearing requests and proposed alternative 
conditions or prescriptions from 30 to 45 days after a Department 
issues its preliminary conditions or prescriptions; see 7 CFR 
1.621(a)(2)(i), 43 CFR 45.21(a)(2)(i), and 50 CFR 221(a)(2)(i), and (2) 
allowing for consecutive rather than concurrent 90-day hearings when 
there are two unconsolidated hearing requests pending for the same 
conditions or prescriptions, thus delaying by 90 days the issuance of a 
decision by the ALJ for one of the hearings. The Departments continue 
to reject these recommendations for the reasons stated in the revised 
interim rules, 80 FR 17164-65, including that adding more time to the 
hearing process raises a significant potential for delay in license 
issuance, a result Congress expressly sought to avoid in section 241 of 
EPAct.
    The commenters also recommend a rule amendment to allow for 
supplementation of the exhibit and witness lists which must be filed 
with the hearing request. The Departments decline to make such an 
amendment because supplementation is already allowed. See 7 CFR 
1.642(b), 43 CFR 45.42(b), and 50 CFR 221.42(b).
    Another commenter recommendation is that the rules should mandate 
rather than merely allow consolidation of hearing requests with common 
issues of fact. In fact, the rules do require consolidation for all 
hearing requests with respect to any conditions from the same 
Department or any prescriptions from the same Department. See 7 CFR 
1.623(c)(1) and (2), 43 CFR 45.23(c)(1) and (2), and 50 CFR 
221.23(c)(1) and (2).
    Regarding all other situations, certainly consolidation may be 
appropriate to avoid inconsistent decisions, promote economy of 
administration, and serve the convenience of the parties. However, 
especially where the commonality is minimal, allowing the requests to 
be processed separately may be the most economical and streamlined 
approach, avoiding complicating one process with the numerous, 
intricate issues of the other process. Consequently, the Departments 
decline to accept the recommendation, opting to retain the flexibility 
to determine the best approach based on the unique circumstances of 
each situation. See 7 CFR 1.623(c)(3), 43 CFR 45.23(c)(3), and 50 CFR 
221.23(c)(3).
Definition of Disputed Issue of Material Fact
    In the preamble to the revised interim rules, the Departments 
offered guidance on the types of issues which constitute disputed 
issues of material fact and are thus appropriate for resolution in a 
trial-type hearing, stating that legal or policy issues are not issues 
of material fact. The Industry Commenters contend that the Departments 
should revisit their guidance, asserting that the Departments' notion 
of what is a legal or policy issue is overbroad.
    However, the focus of their comments is not on the relevant 
regulation or guidance, but on the positions taken by the Departments 
during previous trial-type hearings. They reference several instances 
in which ALJs disagreed with the Departments' litigation positions 
regarding what constitutes a disputed issue of material fact. The 
positions the Departments have taken in trial-type hearings are based 
on the specific facts and circumstances of the issues before the ALJ. 
The Departments' litigation positions are not the subject of this 
rulemaking; therefore, these comments do not necessitate a change to 
the regulations.
    The commenters refer the Departments to the Departments preamble 
statement in the revised interim rules that ```historical facts' such 
as whether fish were historically present above a dam `may be resolved 
based on available evidence and do not involve attempts to predict what 
may happen in the future.''' 80 FR 17178. The commenters assert that 
the ``Departments' attempt to distinguish between an `historical fact' 
and matters of `prediction' is a false dichotomy.'' The commenters 
reason:

    Whether a condition or prescription will, in practice, have the 
desired effect or achieve an agency's goals is a factual question, 
not a policy question. All conditions and prescriptions are attempts 
to achieve a future result, and thus have predictive elements. 
Parties often disagree with an agency whether its condition or 
prescription will achieve that result. An essential and fundamental 
element of the scientific method is prediction. . . . Scientific 
prediction is a tool for crafting environmental policies. Any 
disputed issues of material fact with regard to the science behind 
proposed conditions or prescriptions are appropriate for 
determination by the ALJ.

    The Departments do not agree that the distinction between 
historical facts and matters of prediction is a false dichotomy. As 
explained in the revised interim rules, only disputed issues of 
material fact are appropriate for resolution in a trial-type hearing.80 
FR 17177-17178. While the Departments agree that some predictive 
elements of a condition or prescription may represent disputed issues 
of material fact in a particular case, such as whether a prescription 
will result in the passage of fish, other predictive elements of a 
condition or prescription may represent legal, policy or non-material 
issues that are not appropriate for resolution in a trial-type hearing. 
The Departments continue to believe that only disputed issues of 
material fact are appropriate for determination by the ALJ.
    The Industry Commenters also contend that disputed issues with 
respect to alternatives considered and rejected by a Department are 
material facts that should be resolved by the ALJ. They assert that if 
a Department, in issuing a preliminary condition or prescription, 
considered and rejected other potential conditions or prescriptions, 
the scientific justification for why those options were rejected is 
material.
    This contention is responsive to the Departments' position in the 
revised interim rules that immaterial issues not appropriate for ALJ 
consideration include those that blur the distinction between the EPAct 
trial-type hearing process and the separate alternatives process 
created under new FPA section 33. The Departments' position and 
reasoning remain unchanged in this regard:

    Trial-type hearings are limited to resolving disputed issues of 
material fact relating to a Department's own preliminary condition 
or prescription. Where the hearing requester's purpose is to 
establish facts that may support an alternative proposed under the 
distinct section 33 process, but that do not otherwise affect the 
Department's ultimate decision whether to affirm, modify, or 
withdraw its preliminary prescription or condition, then the issue 
raised is not ``material'' to that condition or prescription.
    Such matters must be resolved by the relevant Department through 
the section 33 process, and the ALJ should not make findings that 
would preempt the Department's review.

80 FR 17178. Prohibition against Forum-shopping: (1) Venue selection, 
(2) ALJ selection.
    The Industry Commenters propose changes to the regulations based on 
the assumption that the Departments exert undue influence over the 
selection of a venue for the trial-type hearing and the presiding ALJ. 
The Departments disagree with this assumption and therefore the 
proposed changes are unnecessary.
    Regarding venue selection, they offer purported examples of undue 
influence in support of a suggested rule change requiring the ALJ to 
balance the convenience of the parties. The commenters point to the 
assignment of an ALJ in the Pacific Northwest for FERC Project No. 
2206, which involved a licensee based in Raleigh, North Carolina, with 
counsel in Birmingham, Alabama. However, that hearing was

[[Page 84392]]

scheduled to take place in Charlotte, North Carolina, and was settled 
before a hearing was held.
    The commenters also refer to the assignment of an ALJ in 
Sacramento, California, for FERC Project No. 2082, which involved a 
licensee based in Portland, Oregon, with counsel in Washington, DC 
However, the licensee withdrew a motion to hold the hearing in Portland 
after the overwhelming majority of the parties expressed to the ALJ a 
preference for a hearing in Sacramento during the prehearing 
conference. These examples do not demonstrate any undue influence.
    Further, the apparent inference that the venue is determined by the 
location of the ALJ's office is not correct. Nor is it determined 
solely by balancing the convenience of the parties, as implied by the 
commenters suggested amendment. As pointed out in the preamble to the 
revised interim rules:

the ALJ has discretion to manage hearing locations. As the ALJs have 
done in prior cases, the Departments expect that an ALJ will take 
into consideration factors such as convenience to the parties and to 
the ALJ, the location of witnesses, and the availability of adequate 
hearing facilities when determining the location of a hearing. 80 FR 
17170.

    The Departments conclude that no change in the rules is needed 
regarding hearing venue selection.
    Regarding the selection of an ALJ, the Industry Commenters assert 
that a Department ``should not be allowed to hand pick a Department ALJ 
or an ALJ with a track record favorable to the Department.'' They 
identify two potential remedial amendments: (1) Use a lottery system to 
select an ALJ, or (2) preferably, use FERC ALJs instead of Department 
ALJs under the assumption that FERC ALJs would be more neutral and have 
more subject matter expertise.
    The Departments disagree with the unsupported assumptions that they 
are exercising undue influence over the selection of ALJs or that a 
Department would consider ``hand picking'' an ALJ to obtain an 
advantage. In accordance with the mandate of 5 U.S.C. 3105, 
administrative law judges are assigned to cases in rotation so far as 
practicable, with due consideration given to the demands of existing 
caseloads and the case to be assigned.
    The Departments also dispute the assertion that FERC ALJs are 
``more neutral'' or have more germane expertise. In fact, the 
independence of all ALJs is protected and impartiality fostered by laws 
which, among other things, exempt them from performance ratings, 
evaluation, and bonuses (see 5 U.S.C. 4301(2)(D), 5 CFR 930.206); vest 
the Office of Personnel Management rather than the employing agency 
with authority over the ALJs' compensation and tenure (see 5 U.S.C. 
5372, 5 CFR 930.201-930.211); and provide that most disciplinary 
actions against ALJs may be taken only for good cause established and 
determined by the Merit Systems Protection Board on the record after 
opportunity for a hearing (see 5 U.S.C. 7521). As for expertise, the 
Departments' ALJs have considerable experience and expertise evaluating 
natural resource issues similar to those which typically underlie 
imposition of a condition or prescription.
    Furthermore, the use of FERC ALJs would require the agreement of 
FERC and possibly a statutory amendment. In sum, the Departments 
disagree with the premises of the comment regarding the selection of 
ALJs and conclude that no related change in the rules is necessary or 
desirable.
Stay of Case for Settlement
    The Industry Commenters also assert that the revised interim rules 
should permit settlement negotiations not only for 120 days before a 
case is referred to an Administrative Law Judge (ALJ)--as provided in 
the revised interim rules--but also during the period after the ALJ has 
issued the decision, yet before issuance of the Department's modified 
conditions. The Industry Commenters add that settlement discussions 
should not be prohibited under ex parte principles, considering that 
settlements ought to be encouraged at all points in a hearing process.
    Notwithstanding the Industry Commenters' assertion, the Industry 
Commenters also offered support for the new 120-day stay period for 
purposes of facilitating settlement. We agree that both the length of 
this period and its placement at the pre-referral stage could lead to 
more settlements and avoid the more formal stages of the hearing 
process. We also agree with the Industry Commenters that settlements 
should be permitted whenever reached by parties. Yet here we note that 
the availability of a stay period is not the only mechanism or 
incentive by which settlements can be facilitated, and that parties are 
at liberty to conduct robust and meaningful settlement discussions 
concurrently with the ongoing hearing process, at any stage in such 
process. Further, given that Congress established in EPAct a short 90-
day time limit for completion of the trial-type hearing to avoid the 
potential for substantial delay in license issuance, it would be 
unworkable to provide for any additional amount of time beyond the 
revised interim rules' 120 day-period for a stay in proceedings in 
which to pursue a settlement.

Other Minor Modifications

1. Discovery
    In the preamble to the revised interim rules, the Departments 
declined to amend the discovery provisions for the trial-type hearing 
in response to comments that the rules needlessly limit discovery by 
requiring authorization from the ALJ or agreement of the parties. The 
commenters recommended that the Departments adopt the approach of the 
FERC regulations at 18 CFR 385.402(a) and 385.403(a), which authorize 
discovery to begin without the need for ALJ involvement unless there 
are discovery disputes. Industry Commenters have reiterated these 
comments, further arguing that section 241 of EPAct guarantees the 
availability of discovery, not that such discovery must be first agreed 
to by the parties or authorized by the ALJ.
    The Departments continue to disagree that the regulations should be 
changed for the reasons detailed in the preamble to the revised interim 
rules. See 80 FR 17168-69. In summary, the Departments' rules do allow 
for rapid initiation of discovery and the criteria for allowing 
discovery are fairly similar to those utilized by FERC and federal 
courts. More importantly, discovery limits are necessary in this 
specialized trial-type hearing context to fit within the expedited time 
frame mandated by section 241 of EPAct, and wide-ranging discovery 
should not be necessary, given the typical documentation generated 
during the license proceeding, including the record supporting the 
conditions or prescriptions.
    Also, the fact that section 241 provides for ``the opportunity to 
undertake discovery'' does not guarantee unlimited discovery.

    It is fundamental that the scope of discovery is not limitless 
and is restricted by the concepts of relevancy. United States Lines 
(S.A.) Inc.--Petition for Declaratory Order Re: The Brazil 
Agreements, 24 S.R.R. 1387, 1388 (ALJ 1988). See also 4 James W. 
Moore et al., Moore's Federal Practice, P 26.56[1], at 26-96 (2d ed. 
1993).

American President Lines, LTD v Cyprus Mines Corp., 1994 FMC LEXIS 33, 
*31-32 (Jan. 31, 1994); see also Fed. R. Civ. P. 26(d)(1). Further, as 
noted by the Supreme Court, even the liberal discovery rules of the 
Federal Rules of Civil Procedures,

are subject to the injunction of Rule 1 that they ``be construed to 
secure the just, speedy, and inexpensive determination of every 
action.'' To this end, the requirements of Rule 26(d)(1) that the 
material sought in

[[Page 84393]]

discovery be ``relevant'' should firmly be applied, and the . . . 
courts should not neglect their power to restrict discovery where 
``justice requires [protection for] a party or person from 
annoyance, embarrassment, oppression, or undue burden or expense . . 
. . '' Rule 26(c). With this authority at hand, judges should not 
hesitate to exercise appropriate control over the discovery process.

Herbert v. Lands, 441 U.S. 153, 177 (1979) (emphasis in original).
    The revised interim rules reasonably incorporate similar standards 
for discovery, see 7 CFR 1.641(b), 43 CFR 45.41(b), and 50 CFR 
221.41(b), to be applied by the administrative law judges to secure the 
just, speedy, and inexpensive determination of each case. The Industry 
Commenters have not addressed how application of those standards would 
unduly limit discovery. Because the Departments conclude that the 
standards are fair and reasonable, no change in the discovery 
provisions is warranted.
2. Page Limitations
    In preamble to the revised interim rules, the Departments declined 
to extend the page limits for hearing requests in response to comments 
requesting that the limit for describing each issue of material fact be 
increased from two pages to five pages and that the limit for each 
witness identification be increased from one to three pages. The 
Departments did conclude that the required list of specific citations 
to supporting information and the list of exhibits need not be included 
in the page restrictions and amended the rules accordingly. See 7 CFR 
1.621(d), 43 CFR 45.21(d), and 50 CFR 221.21(d).
    The Industry Commenters renew the same requests without offering 
any new reasons why the requests should be granted. The Departments 
continue to believe that the page limits are generally appropriate and 
provide sufficient space for parties to identify disputed issues, 
particularly in light of the expedited nature of the proceeding. The 
Departments further note that they are bound by the same page limits in 
submitting an answer. See 7 CFR 1.622, 43 CFR 45.22, and 50 CFR 221.22. 
Therefore, for the reasons stated in the preamble to the revised 
interim rules, the Departments decline to amend the page limitations.
3. Electronic Filing
    In the preamble to the revised interim rules, the Departments 
rejected commenter suggestions to revise the regulations to allow 
parties to file documents electronically, using email or FERC's eFiling 
system. The Departments did agree that, in many circumstances, the 
electronic transmission of documents is a preferable means of providing 
documents to another party and revised the rules to allow for 
electronic service of documents on a party who consents to such 
service. However, the Departments noted that ALJ offices do not 
currently have the capacity or resources to accept electronically and 
print off the large volume of documents typically filed in connection 
with a trial-type hearing.
    The Industry Commenters again suggest that electronic filing should 
be allowed at the ALJ's discretion, citing the example of a Coast Guard 
ALJ allowing filing by email pursuant to the agreement of the parties 
at a prehearing conference addressing a trial-type hearing request. For 
the reasons discussed in the revised interim rules, the Departments 
decline to adopt regulations that permit filing by email with the ALJ 
offices. 80 FR 17161-17612. Email is not a substitute for a dedicated 
electronic filing system in which administrative, information 
technology, and policy issues such as document management, storage, 
security, and access can be systematically addressed. Because none of 
the ALJ Offices have a dedicated system, the Departments will not 
authorize filing by electronic means.
Equal Consideration Statements
    The Industry Commenters request that the Departments revisit their 
interpretation of section 33 of the Federal Power Act (FPA section 33) 
as described in the revised interim rules. 80 FR 17176-17177. In the 
revised interim rules, the Departments interpreted FPA section 33 to 
require a Department to prepare an equal consideration statement only 
when a party has submitted an alternative condition or prescription.
    The commenters state that the Departments' interpretation is 
contrary to the plain language of section 33(a)(4) and (b)(4), which 
they suggest should be read to require that a Department prepare an 
equal consideration statement whenever a Department submits any 
condition or prescription, regardless of whether a party submits an 
alternative. The commenters assert that the Departments' contextual 
analysis of FPA section 33, as described in the revised interim rules, 
is flawed because FPA section 33 unambiguously supports the commenters' 
interpretation. The Departments disagree with this comment.
    As the Departments explained in the revised interim rules, the 
requirement that the Departments prepare an equal consideration 
statement must be read in the context of the overall statutory scheme. 
80 FR 17177. Section 33 of the FPA is titled ``Alternative Conditions 
and Prescriptions,'' and it sets forth a series of sequential steps for 
considering an alternative and reaching a final determination. Section 
33(a)(l) permits any party to a hydropower license proceeding to 
propose an alternative condition. Under section 33(a)(2), the Secretary 
must accept an alternative if it ``(A) provides for the adequate 
protection and utilization of the reservation; and (B) will either, as 
compared to the condition initially [deemed necessary] by the 
Secretary[,] (i) cost significantly less to implement; or (ii) result 
in improved operation of the project works for electricity 
production.'' 16 U.S.C. 823d(a)(2). When evaluating an alternative, 
section 33(a)(3) directs the Secretary to consider evidence otherwise 
available concerning ``the implementation costs or operational impacts 
for electricity production of a proposed alternative.'' The Departments 
continue to believe that a contextual analysis of FPA section 33 
demonstrates that section 33 requires the preparation of an equal 
consideration statement only when a party submits an alternative 
condition or prescription. No changes to the regulations are needed in 
response to the comment.
    The commenters also disagree with the Departments' perspective, as 
explained in the revised interim rules, that in the absence of an 
alternative the Departments will generally lack sufficient information 
to provide a meaningful equal consideration analysis of the factors 
required by FPA section 33(a)(4) and (b)(4). The commenters state that 
ample information is available to the Departments in the licensing 
application at the time the Departments adopt a condition or 
prescription, regardless of whether any alternatives were proposed 
under FPA section 33. The commenters observe that ``[w]ithout this 
information, the Departments presumably would not have sufficient 
information to draft meaningful preliminary conditions and 
prescriptions.''
    The Departments note FPA sections 4(e) and 18, which authorize the 
Departments to issue conditions and prescriptions, do not require the 
Departments to consider certain types of information otherwise required 
by FPA section 33 when evaluating alternatives, such as ``the 
implementation costs or operational impacts for electricity production 
of a proposed alternative.'' 16 U.S.C. 823d(a)(3). Accordingly, the

[[Page 84394]]

Departments generally lack related information until such time that the 
Departments evaluate an alternative and prepare an equal consideration 
statement, which occurs after the Departments prepare preliminary 
conditions and prescriptions.
    When preparing an equal consideration statement, the Departments 
must evaluate ``such information as may be available to the Secretary, 
including information voluntarily provided in a timely manner by the 
applicant and other parties.'' 16 U.S.C. 823d(a)(4) and (b)(4). The 
revised interim rules require a proponent of an alternative to submit 
information necessary to evaluate the alternative and prepare an equal 
consideration statement pursuant to FPA section 33. While such 
information may or may not be available in licensing applications 
prepared for FERC, the Departments will generally lack sufficient 
information to provide a meaningful equal consideration pursuant to FPA 
section 33 until such time as the proponent of an alternative submits 
the information with an explanation of how the alternative meets the 
criteria set forth in FPA section 33. No changes to the regulations are 
needed in response to the comment.
Hearings on Modified Conditions and Prescriptions
    Commenters request that the Departments address perceived loopholes 
in the revised interim rules that would allow the Departments to avoid 
trial-type hearings in three scenarios. The commenters state that the 
interim final rules were silent as to whether a right to a trial-type 
hearing exists in situations where (1) the Department issues no 
preliminary conditions or prescriptions, but reserves the right to 
submit mandatory conditions or prescriptions later in the licensing 
process; (2) the Department adds conditions or prescriptions that were 
not included with its preliminary conditions or prescriptions; or (3) 
the Department's modified conditions or prescriptions include factual 
issues or justifications that were not presented with its preliminary 
conditions or prescriptions. The commenters write that the revised 
interim rules addresses the second scenario by handling it on a case-
by-case basis, but do not address the first and third scenarios. The 
Departments believe that the revised interim rules address all three of 
these scenarios and no changes to the regulations are needed. The 
Departments again note that in several instances, the commenters 
discuss specific licensing proceedings. As stated above, such 
proceedings are not the subject of the rulemaking and therefore, the 
comments about them do not necessitate a change to the regulations.
    The revised interim rules address the commenters' first scenario, 
in which a Department issues no preliminary conditions or 
prescriptions, but reserves a right to submit conditions and 
prescriptions later in the licensing process. The Departments received 
comments on the interim final rules that requested the availability of 
a trial-type hearing when a Department reserves its authority to 
include conditions or prescriptions in a license. The Department 
responded to this comment by stating that ``under EPAct, it is only 
when a Department affirmatively exercises its discretion to mandate a 
condition or prescription that the hearing and alternatives processes 
are triggered. Allowing for trial-type hearings and alternatives when 
the agencies have not exercised this authority would be both 
inconsistent with the legislation and an inefficient use of the 
Departments' resources. Consequently, these final rules continue to 
provide that the hearing and alternatives processes are available only 
when a Department submits a preliminary condition or prescription to 
FERC, either during the initial licensing proceeding or subsequently 
through the exercise of reserved authority.'' 80 FR 17159. Thus, the 
revised interim rules addressed the commenters' first scenario by 
providing a right to a trial-type hearing only when a Department 
submits a preliminary condition or prescription to FERC during the 
initial licensing proceeding, or when a Department submits a condition 
or prescription to FERC through the exercise of reserved authority 
after FERC has issued a license.
    In discussing their first scenario, the commenters' language 
suggests that they may not be concerned about a Department's 
reservation of authority to submit conditions or prescriptions, but 
instead may actually be concerned with the availability of a trial-type 
hearing when a Department issues no preliminary conditions or 
prescriptions, but submits conditions and prescriptions outside of the 
timeframe contemplated in FERC's regulations for filing preliminary 
conditions or prescriptions, which is ``no later than 60 days after the 
notice of acceptance and ready for environmental analysis.'' 18 CFR 
5.23(a). See also 18 CFR 4.34(b). The Departments note that in this 
scenario, the Departments would not be exercising reserved authority to 
submit preliminary conditions or prescriptions because, as long as a 
licensing proceeding is pending, a Department has authority to submit 
conditions and prescriptions without the need to ``reserve'' its 
authority. A reservation of authority is only necessary for submission 
of conditions or prescriptions after FERC has issued a license.
    The revised interim rules, when addressing whether a trial-type 
hearing should be held to address disputed issues of fact at the 
preliminary or modified condition/prescription stage, impliedly 
addressed the scenario where the Departments submit conditions and 
prescriptions outside of the timeframe for doing so in FERC's 
regulations. The Departments explained the circumstances under which a 
Department may submit a preliminary condition or prescription later in 
the licensing process and that the availability of the trial-type 
hearing process would be decided on a case-by-case basis: 
``[E]xceptional circumstances may arise where facts not in existence 
and not anticipated at an earlier stage necessitate a new preliminary 
condition or prescription. This circumstance would be handled on a 
case-by-case basis, in coordination with FERC as necessary.'' 80 FR 
17164. The Departments have continued to apply this rationale and 
process in the final rules.
    With respect to the third scenario, the Departments received 
similar comments on the interim final rule that requested ``the 
regulations provide for trial type hearings at the modified stage if 
the modifications are based on new facts that did not exist or were not 
anticipated at the preliminary stage, or if the agency submits an 
entirely new condition or prescription at the modified stage.'' 80 FR 
17163. The Departments responded by stating that the revised interim 
rules ``continue the approach taken in the interim regulations of 
scheduling the trial-type hearing process immediately following the 
issuance of preliminary conditions and prescription.'' 80 FR 17164. The 
Departments reasoned that this approach allows trial-type hearings to 
occur during FERC's licensing time frame as required by Congress, that 
it promotes efficiency, and that providing for trial-type hearings at 
the modified stage is not a reasonable or efficient use of resources. 
80 FR 17163-17164. The Departments maintain this rationale in the final 
rules.
    Industry commenters state that any final rules must provide a 
remedy for licensees who object to new conditions and prescriptions 
imposed at the modified stage, or when the Department's modified 
conditions or

[[Page 84395]]

prescriptions include factual issues or justifications that were not 
presented with its preliminary conditions or prescriptions. The 
commenters also state that the final rules must provide a standard for 
when a modified condition or prescription would trigger the right to a 
trial-type hearing. The Departments disagree with these comments. For 
the reasons discussed above and in the revised interim rules, the 
Departments will continue their approach of scheduling the trial-type 
hearing process immediately following the issuance of preliminary 
conditions and prescriptions. The Departments again acknowledge ``that 
exceptional circumstances may arise where facts not in existence and 
not anticipated at an earlier stage necessitate a new preliminary 
condition or prescription. This circumstance would be handled on a 
case-by-case basis, in coordination with FERC as necessary.'' 80 FR 
17164. No changes to the regulations are needed in response to these 
comments.
Submissions and Acceptance of Alternatives
    The Industry Commenters believe the Departments are not complying 
with the requirements of FPA section 33 to accept a proposed 
alternative if the alternative: ``(A) provides for the adequate 
protection and utilization of the reservation; and (B) will either, as 
compared to the condition initially proposed by the Secretary--(i) cost 
significantly less to implement; or (ii) result in improved operation 
of the project works for electricity production.'' 16 U.S.C. 823(a)(2). 
The Departments disagree with this comment. Notwithstanding this 
comment, the Industry Commenters do not provide proposed revisions, and 
the Departments do not believe any changes to the regulations are 
necessary.
    The Industry Commenters also ``commend'' the revised interim rules 
for adding a new change to allow for a revised alternative within 20 
days of an ALJ decision, but express the view that this time period is 
still ``unnecessarily short,'' given an ALJ opinion's typical length 
and underlying complexity. The commenters compare this timeframe to the 
60-day timeframe in which the Departments may revise conditions and 
prescriptions, and suggest that the deadline for a revised alternative 
be, similarly, 60 days.
    In response, the Departments note that the FPA specifically 
provides that the Departments will evaluate alternatives ``based on 
such information as may be available to the [Departments], including 
information voluntarily provided in a timely manner by the applicant 
and others.'' 16 U.S.C. 823d(a)(4), (b)(4) (emphasis added). To achieve 
a proper balance between the Congressional mandate to consider evidence 
otherwise available to DOI, including information timely submitted, and 
Congressional intent to avoid delays in the FERC licensing process, the 
Departments established a 20-day period for submittal of revised 
alternatives.
    Exelon submitted comments concerning 43 CFR 45.74(c), which 
generally provides that DOI will consider information regarding 
alternatives provided by the deadline for filing comments on FERC's 
National Environmental Policy Act (NEPA) document. This provision 
states that ``[f]or purposes of paragraphs (a) and (b) of this section, 
DOI will consider evidence and supporting material provided by any 
license party by the deadline for filing comments on FERC's NEPA 
document under 18 CFR 5.25(c).'' 43 CFR 45.74(c). Paragraph (a) in 43 
CFR 45.74 specifies the evidence and supporting material DOI must 
consider when deciding whether to accept an alternative. Paragraph (b) 
in 43 CFR 45.74 identifies the criteria DOI must use to evaluate 
whether to accept an alternative. Paragraph (c) in 18 CFR 5.25 
identifies which FERC hydropower license applications require FERC to 
issue a draft NEPA document. As discussed below in more detail, the 
provision's scope is limited to license applications under FERC's 
Integrated License Application Process, as opposed to proposed 
amendments to existing licenses.
    Exelon interpreted 43 CFR 45.74(c) as establishing a strict 
deadline for submittal of information regarding a proposed alternative. 
The commenter noted that the subsequent finalization of any conditions 
or prescriptions may occur much later than this deadline, sometimes 
because of pending applications for water quality certifications 
(required under section 401 of the Clean Water Act). Exelon expressed 
concern that a potentially substantial time gap between the NEPA 
comment deadline and finalization of a prescription or condition could 
result in the exclusion of the best and most current scientific 
research to inform DOI's evaluation of alternative prescriptions and 
conditions.
    DOI does not believe that 43 CFR 45.74(c) will result in the 
exclusion of the best and most current scientific research to inform 
the Department's evaluation of alternative conditions and fishway 
prescriptions. DOI believes that considering information regarding 
alternatives submitted by any license party by the close of the FERC 
NEPA comment period will provide the Departments with all reasonably 
available information to evaluate an alternative condition or fishway 
prescription in accordance with Section 33 of the Federal Power Act.
    Furthermore, as noted in the interim final rule, ``[g]iven the 
complexity of the issues and the volume of material to be analyzed in 
the typical case, the Departments cannot reasonably be expected to 
continue to accept and incorporate new information right up until the 
FERC filing deadline for modified conditions and prescriptions.'' 80 FR 
17156, 17176. Nevertheless, the language of 43 CFR 45.74(c) only sets 
forth the requirement that DOI must consider pre-deadline submittals, 
and thus it does not preclude DOI from considering, in exceptional 
circumstances, evidence and supporting material submitted after the 
deadline.
    It is not unusual for a license applicant to have authorization 
petitions pending at the time a Department considers an alternative. 
These types of pending petitions include, but are not limited to, 
applications for a Clean Water Act section 401 water quality 
certification.
    As a practical matter, the parties and stakeholders share an 
interest in the timely submittal of evidence and supporting materials 
in order to ensure a robust alternatives process and avoid delays 
during FERC's licensing proceedings. The timely submittal of evidence 
under 43 CFR 45.74(c) also reflects a statutory process that prescribes 
specific timeframes. The EPAct avoids delay by requiring the hearing 
process to be completed in a 90-day timeframe and ``within the time 
frame established by [FERC] for each license proceeding.'' As noted in 
the revised interim rules, the hearing process was crafted to work 
within FERC's licensing timeframes. 80 FR 17156, 17163 (Mar. 31, 2015). 
The process for submitting, evaluating, and adopting alternatives was 
similarly drafted with the timeframes in mind.
    Under FERC's rules, modified conditions and prescriptions, 
including any adopted alternatives, must be filed within 60 days after 
the close of FERC's NEPA comment period. 18 CFR 5.25(d). The timely 
submission of information under 43 CFR 45.74(c) is necessary so DOI has 
adequate time to consider the information and file modified conditions 
and prescriptions 60 days after the close of FERC's NEPA comment 
period.
    Additionally, the FPA specifically provides that the Departments 
will evaluate alternatives ``based on such

[[Page 84396]]

information as may be available to the [Departments], including 
information voluntarily provided in a timely manner by the applicant 
and others.'' 16 U.S.C. 823d(a)(4), (b)(4) (emphasis added). DOI 
believes that 43 CFR 45.74(c) achieves the proper balance between the 
Congressional mandate to consider evidence otherwise available to DOI, 
including information timely submitted, and Congressional intent to 
avoid delays in the FERC licensing process.
    Exelon also expressed concern that in instances where DOI exercises 
its reserved authority to include a condition or prescription in a 
license that FERC has previously issued, the language in 43 CFR 
45.74(c), that the DOI ``will consider'' information submitted prior to 
the NEPA comment deadline, could potentially preclude the introduction 
of additional relevant and supporting information that was not 
submitted during the license-application-related NEPA process. As 
discussed above, the language of 43 CFR 45.74(c) only sets forth the 
requirement that DOI must consider pre-deadline submittals. Thus, it 
does not preclude DOI from considering evidence and supporting material 
submitted after the deadline in cases where FERC has issued a license 
and a Department exercises reserved authority. Therefore, 
notwithstanding Exelon's concern, paragraph (c) of 43 CFR 45.74 does 
not preclude the introduction of relevant information that would 
support a proposed alternative condition or prescription after DOI 
exercises its reserved authority to include a condition or fishway 
prescription in a FERC license.

VI. Consultation With FERC

    Pursuant to EPAct's requirement that the agencies promulgate rules 
implementing EPAct section 241 ``in consultation with the Federal 
Energy Regulatory Commission,'' the agencies have consulted with FERC 
regarding the content of the revised interim rules. After considering 
post-promulgation comments, no changes were made to the revised interim 
final regulations in the final rules.

VII. Conclusion

    These final rules have been determined to be not significant for 
purposes of Executive Order 12866.
    OMB has reviewed the information collection in these rules and 
approved an extension without change of a currently approved collection 
under OMB control number 1094-0001. This approval expires November 30, 
2018.
    The Departments have reviewed the comments received in response to 
the revised interim rules and have determined that no change to the 
rules is necessary.
    Accordingly, the interim rules amending 6 CFR part 1, 43 CFR part 
45, and 50 CFR part 221, which were published at 80 FR 17155 on March 
31, 2015, are adopted as final without change.

    Dated: October 6, 2016.
Robert F. Bonnie,
Undersecretary--Natural Resources and Environment, U.S. Department of 
Agriculture.
    Dated: September 22, 2016.
Kristen J. Sarri,
Principal Deputy Assistant Secretary--Policy, Management and Budget, 
U.S. Department of the Interior.
    Dated: October 31, 2016.
Samuel D. Rauch III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service, National Oceanic and Atmospheric Administration, 
U.S. Department of Commerce.
[FR Doc. 2016-28063 Filed 11-22-16; 8:45 am]
 BILLING CODE 3411-15-P; 4310-79-P; 3510-22-P