Conservation group appeals FERC ruling

MILLINOCKET — An environmental group is asking a Circuit Court of Appeals to overturn some of the decisions a federal agency made in approving Great Northern Paper Co.’s 30-year hydroelectric licenses in 1996.

In the petition filed with the U.S. Court of Appeals for the District of Columbia earlier this month, the Conservation Law Foundation said some of the Federal Energy Regulatory Commission’s decisions in granting GNP new licenses to operate its massive hydroelectric system on the West Branch of the Penobscot River were arbitrary, capricious and may have violated the Federal Power Act.

Brian Stetson, Great Northern’s manager of environmental affairs, said the appeal would not affect the company’s operations. Stetson, who described the appeal as a legal action between the foundation and FERC, said Great Northern had filed to intervene in the case as an interested party.

The court appeal filed by the Rockland-based Conservation Law Foundation came after FERC denied requests by several environmental groups, the Penobscot Nation and two government agencies to reconsider GNP’s hydro licenses.

In their latest request filed on Dec. 29, 1998, to FERC, representatives of the groups said the licenses should be reconsidered because of changing circumstances, such as the many future low-cost power options that will be available to GNP from electric deregulation, the Maritimes & Northeast Pipeline gas project, and a 500-megawatt, gas-fired power plant expected to go on line in Veazie in early 2000.

The groups also questioned whether the company’s power needs will drop in the future, if the Millinocket mill is sold or closed.

FERC denied the groups’ request. “Much of this information is hardly new, and all of it is too remote and speculative to cause us to revise our economic benefits analysis in these proceedings,” stated FERC officials in a seven-page ruling issued Feb. 25.

For example, FERC said that the company authorized to build and operate the natural gas pipeline in January asked to defer indefinitely construction of nearly all of the authorized lateral pipelines, including one that could serve Great Northern’s mills.

Assuming the cost of other potential sources of new energy would be as cost-effective as the electricity produced from the company’s hydroelectric system is speculative at this time, according to FERC.

In October 1996, the five-member FERC board unanimously approved orders for new 30-year licenses for the Maine paper company’s dams on the West Branch of the Penobscot River, which produce 98.2 megawatts of electricity.

One of the hotly debated issues throughout Great Northern’s 10-year dam relicensing process and in the recent court appeal filed by the Conversation Law Foundation involves restoration of water flows to a 5-mile section of the Penobscot River below Stone Dam in Millinocket, also known as the “back channel.”

When GNP built the dams for its hydroelectric system to power its pulp and paper mills a century ago, the river was rerouted, leaving minimal amounts of water in the original riverbed. The back channel is located between Shad Pond and Quakish Lake.

In its court appeal, the Conservation Law Foundation said FERC failed to balance environmental values that restoring water in that segment of the river could have on fish and wildlife against the value of the hydropower in issuing Great Northern’s licenses.

“We are saying their [FERC’s] balancing was skewed,” Carol Blasi of CLF said during a recent interview. Blasi said FERC failed to consider evidence from experts that showed the energy GNP could save through conservation efforts was more than enough to replace the generation lost as the result of increased flows in the back channel.

Earlier, FERC commissioners concluded that increased flows to the back channel would reduce energy benefits substantially, with the possibility of causing Great Northern to further curtail operations or close its paper mills.

Also, FERC officials said the increased flows would have little likelihood of establishing a self-sustaining landlocked salmon population and could interfere with Maine’s fishery objectives in other waters related to the hydro projects.

“They [FERC] minimized the benefits that the [increased] flows would provide to the public by failing to take into account the economic benefits recreational fishing, white-water boating and other intangibles would have on the local economy,” said Blasi.

“FERC says it can easily measure the economic loss, but it can’t easily measure the economic and other kinds of social gains of environmentally protective measures, so we [FERC] are going to ignore them,” said Blasi.

In its appeal, the Conservation Law Foundation is asking the circuit court to determine whether FERC violated the Federal Power Act because the agency used the current operation of the dams as the “baseline” in determining environmental impacts and mitigation requirements in the licensing process rather than the pre-dam or natural conditions. “If you do that, in every case the environment is going to lose,” said Blasi.

The CLF official said she understood some of the other groups are considering a similar appeal. Blasi said it could be six to eight months before the appeals court hears the case.