SCOTUS Lifts Hydroelectric Industry to Victory, 4-0

SCOTUS Lifts Hydroelectric Industry to Victory, 4-0

SCOTUS Lifts Hydroelectric Industry to Victory, 4-0

What do sports, the hydroelectric industry and the US government have in common?  This blog, of course.  This week, the Supreme Court of the United States (SCOTUS) handed down a few extremely high profile decisions, including ones concerning same-sex marriage, voting rights and human gene patents.  Though these are the cases which garnered most of the attention, SCOTUSblog reports that the Court actually handed down decisions in over 75 cases.  Four of these cases concern environmental issues, and while none of these cases have the drama and excitement of a walk-off homerun, they all have direct effects on the hydroelectric industry.

According to the US Energy Information Administration, hydroelectric generation accounts for about 2/3 of renewable power in the United States.  Because hydroelectric energy accounts for such a large portion of energy generation, any law or regulation that affects the industry will also have an effect on the bottom line of our electric bills. Below is a roundup of these cases, why they matter to the industry, and their translation in the world of sports.

Tarrant Regional Water District v. Herrmann

This case involves a dispute between the states of Oklahoma and Texas over water rights in the Red River Basin.  Oklahoma, Texas, Arkansas and Louisiana all have rights to take 25% of the river overflow. The question being, where does that 25% come from?  Texas asserted that it could take its portion from any part of the river, including parts in Oklahoma territory.  Oklahoma begged to differ, as did the Supreme Court.

Ownership of rights to the water is of huge importance to energy producers.  This decision will help dictate to hydroelectric producers where to build and with whom to negotiate contracts for water use.

Decision: Cowboys and Sooners.  Watch for this one to be further played out in the annual Red River Rivalry game between the Universities of Oklahoma and Texas next October!

LA County Flood Control District v. Natural Resources Defense Council, Inc (NRDC)

The issue at play here was whether water discharged from an improved waterway (think canal constructed for irrigation) into an unimproved waterway (think a regular river) is subject to contamination rules set by the Clean Water Act.  The NRDC argued that downriver water in unimproved sections might be contaminated by improved sections, so the jurisdiction in charge of those improved sections (LA County, in this case) should be liable for any contamination.  The SCOTUS held that whether improved or unimproved, a river in one spot is still the same river further downstream.

As noted above, hydroelectric generation accounts for the vast majority of renewable energy generated in the US.  If NRDC’s argument had been upheld, hydroelectric producers may have had even bigger headaches when planning for water control, both pre and post generation.

Decision: The County of Angels.  The decision by the SCOTUS was unanimous, and this even seems to have been settled somewhat by previous case precedent.  This conclusion was as foregone as when UCLA opens its basketball season against Sisters of the Blind and Poor College.

Arkansas Game & Fish Commission v. U.S.

The Fifth Amendment of the US Constitution states, in part “…nor shall private property be taken for public use, without just compensation.”  This case questions whether property is technically “taken” by the government when frequently flooded due to regular operation of dams and other water uses.  Specifically in this case: Arkansas claims that the US Government owes the state damages for flooding land downriver from hydroelectric and land use dams.  The US argued that since the flooding is not permanent, no damages should be awarded.  The SCOTUS argued that the damages ARE permanent, and so is their decision against the Federal government

For hydroelectric producers, this decision signals that proper research and planning is expected prior to altering water flow and patterns for electric generation.  It is only natural that such diversion will result in environmental changes within the generation station’s footprint.  But producers need to give a reasonable assessment to all those affected as to what those effects might be, and may be liable if affects exceed those assessments.

Decision: Arkansas.  No one wants to watch the Razorbacks play all their games on a muddy field anyway.

Georgia-Pacific West/Decker v. Northwest Environmental Defense Center

This case was more about judicial procedure than environmental or energy policy.  The original argument was whether loggers were required to obtain permits allowing pollution in runoff waters that lead to major waterways.  It was decided that yes, logging companies should be responsible for the pollution they put into the water. Those companies appealed based on legal technicalities, namely jurisdiction and whether later EPA regulations and explanations rendered the decision irrelevant.  On both questions, the Supreme Court denied the appeal.

The main takeaway from this ruling for the energy industry is the indication that the Court expects the EPA to play fair with the states and industries by not issuing after the fact “clarifications” on regulations and expecting those clarifications to be immediately (or even retroactively) followed.  Basically: there needs to be regulatory certainty for a power generation industry that has countless regulations to follow.

Decision:  Compliance Divisions who can expect more comprehensive rules and regulations from the EPA.  This case was as stimulating as a nil-nil draw in a soccer game.

The Series Sweep

The Undisputed Champion of this year’s slate of SCOTUS cases concerning environmental issues is the hydroelectric industry.  These decisions generally offer clarification and certainty as to what is required of producers in terms of acquiring resources and following regulations.  This can help cut some of the red tape when it comes to planning and compliance.  And cutting red tape can only be a bonus to the bottom lines of both producers and consumers.

To learn more about our energy services and how we’re helping to better the environment, read more here or visit this page.

Scott Shugarts
Energy Curtailment Specialists, Inc.

Scott can be found on Twitter, Google+, and LinkedIn.

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