Text

Official Exhibit - NYS000101-00-BD01- Wilderness Society, Et Al. V. U.S. Dept. of Energy (9th Cir. No. 08-71074) (Feb. 1, 2011) (Wilderness Society)
	ML12334A565
Person / Time
Site:	Indian Point
Issue date:	12/14/2011
From:	; Westlaw
To:	; Atomic Safety and Licensing Board Panel
	SECY RAS
References
	RAS 21538, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01
	Download: ML12334A565 (45)
	v • d • e

United States Nuclear Regulatory Commission Official Hearing Exhibit Entergy Nuclear Operations, Inc.

In the Matter of:

(Indian Point Nuclear Generating Units 2 and 3)

ASLBP #: 07-858-03-LR-BD01 Docket #: 05000247 l 05000286 Exhibit #: NYS000101-00-BD01 Identified: 10/15/2012 Admitted: 10/15/2012 Withdrawn: NYS000101 Rejected: Stricken:

Other: Submitted: December 14, 2011 Page 1 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072)

Monongahela Power Company, DBA Allegheny Power; Path Allegheny Transmission Company, United States Court of Appeals, LLC; Path West Virginia Transmission Company, Ninth Circuit. LLC; Potomac Edison Power Company, DBA Al-CALIFORNIA WILDERNESS COALITION; Nat- legheny Power; Trans-Allegheny Interstate Line ural Resources Defense Council; The Wilderness Company; West Penn Power Company, dba Al-Society, Inc., Petitioners, legheny Power, Edison Electric Institute; American and Public Power Association; National Rural Electric Desert Protection Society; Center for Community Cooperative Association; San Diego Gas & Electric Action and Environmental Justice; Backcountry Company; Southern California Edison Company, Against Dumps; Desert Protective Council; Mor- Respondents-Intervenors.

ongo Basin Conservation Association; Alliance for Pennsylvania Public Utility Commission Responsible Energy Policy; Donna Charpied; (PAPUC), Petitioner, Laurence Charpied; San Bernardino Valley Audu- and bon Society, Intervenors, Desert Protection Society; Center for Community

v. Action and Environmental Justice; Backcountry U.S. DEPARTMENT OF ENERGY, Respondent, Against Dumps; Desert Protective Council; Mor-Allegheny Energy, Inc.; American Public Power ongo Basin Conservation Association; Alliance for Association; Edison Electric Institute; Mononga- Responsible Energy Policy; Donna Charpied; hela Power Company; National Rural Electric Co- Laurence Charpied; San Bernardino Valley Audu-operative Association; PJM Interconnection; Path bon Society, Intervenors, Allegheny Transmission Company, LLC; Path West v.

Virginia Transmission Company, LLC; San Diego U.S. Department of Energy and Samuel W. Bod-Gas & Electric Company; Southern California Edis- man, Respondents.

on Company; The Potomac Edison Company; State of New York, Petitioner, Trans-Allegheny Interstate Line Company; West and Penn Power Company, Interven- Desert Protection Society; Center for Community ors-Respondents-Intervenors. Action and Environmental Justice; Backcountry Commonwealth of Virginia; Robert F. McDonnell, Against Dumps; Desert Protective Council; Mor-Governor; Kenneth T. Cuccinelli, Attorney Gener- ongo Basin Conservation Association; Alliance for al, Petitioners, Responsible Energy Policy; Donna Charpied; and Laurence Charpied; San Bernardino Valley Audu-Desert Protection Society; Center for Community bon Society, Intervenors, Action and Environmental Justice; Backcountry v.

Against Dumps; Desert Protective Council; Mor- U.S. Department of Energy and Samuel W. Bod-ongo Basin Conservation Association; Alliance for man, Respondents.

Responsible Energy Policy; Donna Charpied; Piedmont Environmental Council; National Trust Laurence Charpied; San Bernardino Valley Audu- for Historic Preservation; National Parks Conserva-bon Society, Intervenors, tion Association; Civil War Preservation Trust;

v. Pennsylvania Land Trust Association; The County U.S. Department of Energy and Samuel Bodman, of Fauquier, Virginia, Petitioners, Secretary of Energy, Respondents, and Allegheny Energy, Inc., DBA Allegheny Power; Desert Protection Society; Center for Community

Page 2 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072)

Action and Environmental Justice; Backcountry Laurence Charpied; San Bernardino Valley Audu-Against Dumps; Desert Protective Council; Mor- bon Society, Intervenors, ongo Basin Conservation Association; Alliance for v.

Responsible Energy Policy; Donna Charpied; U.S. Department of Energy and Samuel W. Bod-Laurence Charpied; San Bernardino Valley Audu- man, Respondents, bon Society, Intervenors, and

v. Southern California Edison Company.

U.S. Department of Energy and Samuel W. Bod- Arizona Corporation Commission, Petitioner, man, Respondents. and Commonwealth of Pennsylvania and Department of Public Service Commission of the State of New Environmental Protection, Petitioners, York, Desert Protection Society; Center for Com-and munity Action and Environmental Justice; Back-Desert Protection Society; Center for Community country Against Dumps; Desert Protective Council; Action and Environmental Justice; Backcountry Morongo Basin Conservation Association; Alliance Against Dumps; Desert Protective Council; Mor- for Responsible Energy Policy; Donna Charpied; ongo Basin Conservation Association; Alliance for Laurence Charpied; San Bernardino Valley Audu-Responsible Energy Policy; Donna Charpied; bon Society, Intervenors, Laurence Charpied; San Bernardino Valley Audu- v.

bon Society, Intervenors, U.S. Department of Energy and Samuel W. Bod-

v. man, Respondents, U.S. Department of Energy, Respondent. and Public Utilities Commission of the State of Califor- Southern California Edison Company.

nia, Petitioner, Communities Against Regional Interconnect, Peti-Public Service Commission of the State of New tioner, York, Petitioner-Intervenor, v.

and U.S. Department of Energy, Respondent.

Desert Protection Society; Center for Community People of the State of New York and Public Service Action and Environmental Justice; Backcountry Commission of the State of New York, Petitioners, Against Dumps; Desert Protective Council; Mor- v.

ongo Basin Conservation Association; Alliance for U.S. Department of Energy and Samuel Bodman, Responsible Energy Policy; Donna Charpied; Secretary of Energy, Respondents.

Laurence Charpied; San Bernardino Valley Audu- New Jersey Board of Public Utilities, Petitioner, bon Society, Intervenors, v.

v. U.S. Department of Energy, Respondent, U.S. Department of Energy and Samuel W. Bod- Southern California Edison Company; Edison Elec-man, Respondents, tric Institute; American Public Power Association; Southern California Edison Company, Respond- National Rural Electric Cooperative Association; ent-Intervenor. Monongahela Power Company; The Potomac Edis-Imperial Irrigation District, Petitioner, on Company; West Penn Power Company; and Trans-Allegheny Interstate Line Company; Al-Desert Protection Society; Center for Community legheny Energy, Inc.; Path Allegheny Transmission Action and Environmental Justice; Backcountry Company, LLC; Path West Virginia Transmission Against Dumps; Desert Protective Council; Mor- Company, LLC; San Diego Gas & Electric Com-ongo Basin Conservation Association; Alliance for pany, Respondents-Intervenors.

Responsible Energy Policy; Donna Charpied; Toll Brothers, Inc., Petitioner,

Page 3 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072)

v. 15AV Judicial Review of Administrative De-U.S. Department of Energy, Respondent. cisions 15AV(D) Scope of Review in General Nos. 08-71074, 08-71823, 08-71829, 08-71831, 15Ak763 k. Arbitrary, unreasonable or ca-08-71845, 08-71870, 08-71872, 08-71884, pricious action; illegality. Most Cited Cases 08-71908, 08-72423, 08-72644, 08-72717, 08-72835. Administrative Law and Procedure 15A 790 Argued and Submitted June 8, 2010.

Filed Feb. 1, 2011. 15A Administrative Law and Procedure 15AV Judicial Review of Administrative De-

Background:

Department of Energy (DOE) issued cisions order formally designating two national interest 15AV(E) Particular Questions, Review of electric transmission corridors (NIETCs). Interested 15Ak784 Fact Questions entities petitioned for judicial review. 15Ak790 k. Rational basis for conclu-sions. Most Cited Cases Holdings: The Court of Appeals, Callahan, Circuit Under the highly deferential standard of review Judge, held that: for agency action under the Administrative Proced-(1) requirement under Energy Policy Act for DOE ure Act (APA), a Court of Appeals will affirm the to undertake study of electric transmission conges- agency action if a reasonable basis exists for its de-tion in consultation with affected States meant cision; the task of the Court simply is to ensure that that DOE had to confer with affected States before the agency considered the relevant factors and ar-it completed study; ticulated a rational connection between the facts (2) consultation requirement had not been met; found and the choices made. 5 U.S.C.A. § 706.

(3) failure of DOE to consult with affected States regarding study of electric transmission congestion [2] Statutes 361 190 was not harmless error; (4) entire study had to be vacated; 361 Statutes (5) designation of NIETCs were final agency ac- 361VI Construction and Operation tions that constituted major federal action under 361VI(A) General Rules of Construction National Environmental Policy Act; 361k187 Meaning of Language (6) formal environmental assessment (EA) was re- 361k190 k. Existence of ambiguity.

quired; and Most Cited Cases (7) failure to undertake study of environmental im- The first step in interpreting a statute is to de-pacts of designating NIETCs was not harmless er- termine whether the language at issue has a plain ror. and unambiguous meaning; this is determined by reference to the language itself, the specific context Vacated and remanded. in which that language is used, and the broader con-text of the statute as a whole.

Ikuta, Circuit Judge, filed dissenting opinion. [3] Electricity 145 9(2)

West Headnotes 145 Electricity 145k9 Transmission Facilities

[1] Administrative Law and Procedure 15A 145k9(2) k. Permit or consent by public au-763 thorities. Most Cited Cases 15A Administrative Law and Procedure Direction to the Department of Energy (DOE)

Page 4 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) under the Energy Policy Act to undertake a study [6] Administrative Law and Procedure 15A in consultation with affected States meant that 394 the DOE should have greater interaction with the States in preparing a study of electric transmission 15A Administrative Law and Procedure congestion than it need have when preparing a na- 15AIV Powers and Proceedings of Administrat-tional interest electric transmission corridor ive Agencies, Officers and Agents (NIETC) report, when it need only provide an op- 15AIV(C) Rules and Regulations portunity for comment from affected States. En- 15Ak392 Proceedings for Adoption ergy Policy Act of 2005, § 1221(a), 16 U.S.C.A. § 15Ak394 k. Notice and comment, ne-824p. cessity. Most Cited Cases Under a notice-and-comment requirement, an

[4] Electricity 145 9(2) agency has a duty under the Administrative Proced-ure Act (APA) to identify and make available tech-145 Electricity nical studies and data that it has employed in reach-145k9 Transmission Facilities ing the decisions to propose particular rules. 5 145k9(2) k. Permit or consent by public au- U.S.C.A. § 706.

thorities. Most Cited Cases Requirement under Energy Policy Act for De- [7] Electricity 145 9(2) partment of Energy (DOE) to undertake study of electric transmission congestion in consultation 145 Electricity with affected States meant that DOE had to confer 145k9 Transmission Facilities with affected States before it completed study, 145k9(2) k. Permit or consent by public au-rather than simply allowing notice-and-comment, thorities. Most Cited Cases since action might have curtailed traditional State Failure of Department of Energy (DOE) to con-powers. Energy Policy Act of 2005, § 1221(a), 16 sult with affected States regarding study of electric U.S.C.A. § 824p. transmission congestion, as required by Energy Policy Act, was not harmless error on judicial re-

[5] Electricity 145 9(2) view under Administrative Procedure Act (APA),

despite notice and comment, since congressional 145 Electricity notice requirement reflected desirability of interact-145k9 Transmission Facilities ive process itself and exclusion had altered way in 145k9(2) k. Permit or consent by public au- which DOE had made its discretionary decisions thorities. Most Cited Cases and consultation probably would have resulted in Consultation requirement under Energy Policy different study. 5 U.S.C.A. § 706; Energy Policy Act, for Department of Energy (DOE) to undertake Act of 2005, § 1221(a), 16 U.S.C.A. § 824p.

study of electric transmission congestion in con-sultation with affected States, had not been met [8] Administrative Law and Procedure 15A with regard to designation of national interest elec- 764.1 tric transmission corridor (NIETC), since draft of study had not been circulated to States, committee 15A Administrative Law and Procedure had not been created to include representatives 15AV Judicial Review of Administrative De-from States, affected States had not been given ac- cisions cess to supporting data, and there had not been 15AV(D) Scope of Review in General meaningful exchange of information. Energy Policy 15Ak764 Harmless or Prejudicial Error Act of 2005, § 1221(a), 16 U.S.C.A. § 824p. 15Ak764.1 k. In general. Most Cited Cases

Page 5 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072)

In order to constitute harmless error in the 15AV(F) Determination administrative rulemaking context under the Ad- 15Ak816 k. Annulment, vacation or set-ministrative Procedure Act (APA), the error clearly ting aside of administrative decision. Most Cited must not have had any bearing on the procedure Cases used or the substance of decision reached. 5 When a court determines that an agency's ac-U.S.C.A. § 706. tion failed to follow a clear mandate from Con-gress, the appropriate remedy is to vacate that ac-

[9] Administrative Law and Procedure 15A tion. 5 U.S.C.A. § 706.

764.1

[12] Administrative Law and Procedure 15A 15A Administrative Law and Procedure 390.1 15AV Judicial Review of Administrative De-cisions 15A Administrative Law and Procedure 15AV(D) Scope of Review in General 15AIV Powers and Proceedings of Administrat-15Ak764 Harmless or Prejudicial Error ive Agencies, Officers and Agents 15Ak764.1 k. In general. Most Cited 15AIV(C) Rules and Regulations Cases 15Ak390 Validity The petitioner has the burden of showing an 15Ak390.1 k. In general. Most Cited agency's deviation from the Administrative Proced- Cases ure Act (APA) was not harmless. 5 U.S.C.A. § 706. Where a regulation is promulgated in violation of the Administrative Procedure Act (APA) and the

[10] Administrative Law and Procedure 15A violation is not harmless, the remedy is to invalid-764.1 ate the regulation. 5 U.S.C.A. § 706.

15A Administrative Law and Procedure [13] Electricity 145 9(2) 15AV Judicial Review of Administrative De-cisions 145 Electricity 15AV(D) Scope of Review in General 145k9 Transmission Facilities 15Ak764 Harmless or Prejudicial Error 145k9(2) k. Permit or consent by public au-15Ak764.1 k. In general. Most Cited thorities. Most Cited Cases Cases Entire study of electric transmission conges-A court cannot conclude that an agency's refus- tion, as required by Energy Policy Act, had to be al to consult had no bearing on the substance of the vacated, rather than portions of it, due to failure of decision reached, as required for the failure to con- Department of Energy (DOE) to engage in interact-sult to be considered harmless error under the Ad- ive process, on petition for judicial review under ministrative Procedure Act (APA), where the Administrative Procedure Act (APA), since it was agency is tasked with adopting a novel approach almost impossible to determine precise impact of that will then affect all stakeholders. 5 U.S.C.A. § failure to consult prior to making discretionary de-706. cision for which there were few, if any, objective criteria. 5 U.S.C.A. § 706; Energy Policy Act of

[11] Administrative Law and Procedure 15A 2005, § 1221(a), 16 U.S.C.A. § 824p.

816

[14] Environmental Law 149E 595(4) 15A Administrative Law and Procedure 15AV Judicial Review of Administrative De- 149E Environmental Law cisions 149EXII Assessments and Impact Statements

Page 6 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) 149Ek584 Necessity for Preparation of State- 149Ek587 k. Major government action.

ment, Consideration of Factors, or Other Compli- Most Cited Cases ance with Requirements Under NEPA, a broad agency program may 149Ek595 Particular Projects constitute a major Federal action even though the 149Ek595(4) k. Electricity, generation program does not direct any immediate ground-and transmission; nuclear. Most Cited Cases breaking activity. National Environmental Policy Designation of national interest electric trans- Act of 1969, § 102(C), 42 U.S.C.A. § 4332(C).

mission corridors (NIETCs) were final agency ac-tions that constituted major federal action under [17] Environmental Law 149E 588 NEPA, and thus environmental study was required; 149E Environmental Law although NIETCs did not determine precise loca-149EXII Assessments and Impact Statements tions of facilities, they influenced areas in which 149Ek584 Necessity for Preparation of State-electric transmission facilities would be located, ment, Consideration of Factors, or Other Compli-which could have had great historic and regional ance with Requirements consequences that significantly affected environ-149Ek588 k. Impacting human environ-ment, those areas covered over 100 million acres in ment. Most Cited Cases ten States, and they created new federal rights, in-Under NEPA, if a program has a significant en-cluding power of eminent domain, that were inten-vironmental impact, it is a major federal action.

ded to, and did, curtail rights traditionally held by National Environmental Policy Act of 1969, § states and local governments. Energy Policy Act of 102(C), 42 U.S.C.A. § 4332(C).

2005, § 1221(a), 16 U.S.C.A. § 824p(b, e); National Environmental Policy Act of 1969, § 102(C), 42 [18] Environmental Law 149E 667 U.S.C.A. § 4332(C).

149E Environmental Law

[15] Environmental Law 149E 594 149EXIII Judicial Review or Intervention 149Ek667 k. Record of administrative pro-149E Environmental Law ceeding. Most Cited Cases 149EXII Assessments and Impact Statements Under NEPA, the record must be sufficient to 149Ek584 Necessity for Preparation of State-allow a court to determine that the agency's conclu-ment, Consideration of Factors, or Other Compli-sion of no significant environmental impact was ance with Requirements reasonable. National Environmental Policy Act of 149Ek594 k. Negative declaration; state-1969, § 102(C), 42 U.S.C.A. § 4332(C).

ment of reasons. Most Cited Cases Under NEPA, an agency cannot merely assert [19] Environmental Law 149E 582 that its decision will have an insignificant effect on the environment, but must adequately explain its 149E Environmental Law decision. National Environmental Policy Act of 149EXII Assessments and Impact Statements 1969, § 102(C), 42 U.S.C.A. § 4332(C). 149Ek580 Preliminary Assessment or Report 149Ek582 k. Necessity. Most Cited Cases

[16] Environmental Law 149E 587 Formal environmental assessment (EA) was re-quired to document determination made by Depart-149E Environmental Law ment of Energy (DOE) that designation of national 149EXII Assessments and Impact Statements interest electric transmission corridors (NIETCs) 149Ek584 Necessity for Preparation of State-would not have any affect on quality of human en-ment, Consideration of Factors, or Other Compli-vironment, since decision to encourage siting of ance with Requirements

Page 7 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) transmission facilities in one municipality rather Elizabeth S. Merritt, Deputy General Counsel, Na-than another, through number of incentives, had po- tional Trust for Historic Preservation, Andrea C.

tential effects in both municipalities in terms of val- Ferster, Washington, D.C., for Petitioners The Wil-ues of land and proposed and potential uses of land derness Society, Natural Resources Defense Coun-and NIETCs diminished legal protections at least as cil, California Wilderness Coalition, Piedmont En-to whether any particular geographic area should be vironmental Council, National Trust for Historic included in corridor. Energy Policy Act of 2005, § Preservation, National Parks Conservation Associ-1221(a), 16 U.S.C.A. § 824p(b, e); National Envir- ation, Civil War Preservation Trust, Pennsylvania onmental Policy Act of 1969, § 102(C), 42 Land Trust Association, Fauquier County, Virginia, U.S.C.A. § 4332(C). and Toll Brothers Inc., and Intervenors Desert Pro-tection Society, et al.

[20] Environmental Law 149E 582 James P. Melia and Steven K. Bainbridge, 149E Environmental Law Pennsylvania Public Utility Commission, Scott R.

149EXII Assessments and Impact Statements Perry, Commonwealth of Pennsylvania, Depart-149Ek580 Preliminary Assessment or Report ment of Environmental Protection, Harrisburg, PA, 149Ek582 k. Necessity. Most Cited Cases Maureen Riley Matsen, C. Meade Browder and D.

Mathias Roussy, Office of the Attorney General of Environmental Law 149E 690 Virginia, Richmond, VA, Andrew M. Cuomo, At-149E Environmental Law torney General of the State of New York and Maur-149EXIII Judicial Review or Intervention een F. Leary (argued), Office of the Attorney Gen-149Ek690 k. Harmless error. Most Cited eral Environmental Protection Bureau, Jonathan Cases Feinberg, Solicitor, Public Services Commission of Failure of Department of Energy (DOE) to un- the State of New York, Albany, NY, Anne Mil-dertake study of environmental impacts of designat- gram, Attorney General of New Jersey and Kenneth ing national interest electric transmission corridors Sheehan, Deputy Attorney General, New Jersey (NIETCs) and prepare formal environmental as- Department of Law and Public Safety, Newark, NJ, sessment (EA) as required by NEPA was not harm- for Petitioners Pennsylvania Public Utility Com-less error under Administrative Procedure Act mission, Governor Edward G. Rendell and the (APA), where one corridor included more than Pennsylvania Department of Environmental Protec-three million acres of national wildlife refuge as tion, New Jersey Board of Public Utilities, State of well as national parks and 57 state beaches, re- New York, Public Service Commission of the State serves and recreational areas and other corridor en- of New York, and Commonwealth of Virginia.

compassed four national forests, over one million Jonathan D. Feinberg, State of New York Depart-acres of national reserves, historic properties, and ment of Public Service, Office of General Counsel, environmentally sensitive lands. National Environ-Andrew M. Cuomo, New York State Attorney Gen-mental Policy Act of 1969, § 102(c), 42 U.S.C.A. § eral, Maureen F. Leary (argued), Assistant Attorney 4332(c); 40 C.F.R. § 1500.3.

General and Denise A. Hartman, Assistant Solicitor

1078 Anjali I. Jaiswal and Johanna H. Wald, Nat- General, Albany, NY, James P. Melia, John Levine ural Resources Defense Council, San Francisco, and Steven Bainbridge, Pennsylvania Public Utility CA, Stephan C. Volker and Joshua Harris, Oakland, Commission, Scott Perry, Pennsylvania Department CA, Caleb A. Jaffe, Southern Environmental Law of Environmental Protection, Harrisburg, PA, Janet Center, Charlottesville, VA, William A. Anderson Wagner and Nancy Scott, Arizona Corporation II, Williams Mullen, James B. Dougherty (argued), Commission, Legal Division, Phoenix, AZ, Anne

Page 8 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072)

Milgram, New Jersey State Attorney General and Atkins and David E. Hawkins, Vinson and Elkins, Kenneth J. Sheehan, Deputy Attorney General, De- LLP, Washington, D.C., Anna Jennifer Valdberg partment of Law & Public Safety, Newark, NJ, and Robert Kang, Southern California Edison Com-Maureen Riley Matsen, D. Mathias Roussy, and C. pany Legal Division, Rosemead, CA, for Respond-Meade Browder, Office of the Attorney General, ents-Intervenors Allegheny Energy, Inc., American Richmond, VA, Laurence G. Chaset (argued), Cali- Public Power Association, Edison Electric Institute, fornia Public Utilities Commission Legal Division, Monongahela Power Company, National Rural San Francisco, CA, for Petitioners Pennsylvania Electronic Cooperative Association, PJM Intercon-Public Utility Commission, Governor Edward G. nection, LLC, Path Allegheny Transmission Com-Rendell and the Pennsylvania Department of Envir- pany, LLC, Path West Virginia Transmission Com-onmental Protection, New Jersey Board of Public pany, LLC, San Diego Gas & Electric Company, Utilities, State of New York, Public Service Com- Southern California Edison Company, The Potomac mission of the State of New York, Commonwealth Edison Company, Trans-Allegheny Interstate Line of Virginia, Public Utilities Commission of the Company, and West Penn Power Company.

State of California, Arizona Corporation Commis-sion.

On Petition for Review of an Order of the United Harvey Y. Morris and Laurence G. Chaset (argued), States Department of Energy. DOE Nos.

Legal Division, California Public Utilities, San 2007-OE-01, 2007-OE-02, 73FR12959.

Francisco, CA, Deborah A. Swanstrom and Erika Before: WILLIAM C. CANBY, JR., CONSUELO D. Benson, Patton Boggs, LLP, Washington, D.C.,

M. CALLAHAN and SANDRA S. IKUTA, Circuit Stephen J. Keene, Imperial Irrigation District, Im-Judges.

perial, CA, Janet Wagner and *1079 Nancy Scott, Arizona Corporation Commission, Phoenix, AZ, for Opinion by Judge CALLAHAN; Dissent by Judge Petitioners Public Utilities Commission of the State IKUTA.

of California, Imperial Irrigation District, Arizona Corporation Commission.

John C. Truden, Acting Assistant Attorney General, OPINION Environmental & Natural Resources Division, Mi- CALLAHAN, Circuit Judge:

chael F. Hertz, Acting Assistant Attorney General, These thirteen petitions for review challenge Civil Division, Stacey W. Person, John L. Smeltzer the Department of Energy's (DOE) implementa-(argued), Mark B. Stern and Dana J. Martin tion of the Energy Policy Act of 2005 (EPAct),

(argued), Department of Justice, Bettina Mumme which added a new section 216 to the Federal and Lot Cooke, Department of Energy, Office of Power Act (FPA), codified as 16 U.S.C. § 824p General Counsel, Washington, D.C. for Respond- (sometimes referred to as § 216). Petitioners offer ents United States Department of Energy, et al. three distinct challenges to DOE's actions: (1) DOE failed to consult with the affected States in under-Brian R. Gish (argued), Davis Wright Tremaine taking the Congestion Study as required by § LLP, Washington, D.C., Randall B. Palmer, Al- 824p(a)(1); (2) DOE failed to properly consider the legheny Energy, Inc., Greensburg, PA, Sharon Lisa potential environmental consequences of its desig-Cohen, E. Gregory Barnes and Jonathan J. New- nation of national interest electric transmission cor-lander, Sempra Energy Law Department, San ridors (NIETCs); and (3) DOE's actual designa-Diego, CA, Alice Elizabeth Loughran, Steptoe & tions of the Mid-Atlantic Area National Corridor Johnson, LLP, Barry S. Spector and Michael J. and the Southwest Area National Corridor are arbit-Thompson, Wright & Talisman, P.C., Alden L. rary, capricious, and not supported by the evidence.

Page 9 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072)

We determine that DOE failed to properly consult terest electric transmission corridor (variously re-with the affected States in conducting the Conges- ferred to as a National Corridor, NIET Corridor tion Study and failed to undertake any environ- or NIETC) makes available a fast-track approval mental study for its NIETC Designation as required process to utilities seeking permits for transmission by the National Environmental Policy Act lines within the corridor. See 16 U.S.C. §§ 824p(b)-

(NEPA), 42 U.S.C. § 4332(C). We also determ- (h). In particular, the Federal Energy Regulatory ine that these failings were not harmless errors. Ac- Commission (FERC) is empowered to grant a cordingly, we vacate the Congestion Study and NI- permit for a transmission line within the corridor if, ETC designation and remand the cases to the DOE among other conditions, a state agency fails to ap-for further proceedings. Because we vacate the NI- prove the permit application within a year. 16 FN1 ETC designation, we do not consider the merits of U.S.C. § 824p(b). In addition, the EPAct, in petitioners' challenges to the specific national*1080 providing for the issuance of a permit, gives the ap-corridors other than as necessary to determine that plicant the right to acquire rights-of-way through DOE's failures to consult and to undertake an envir- eminent domain. 16 U.S.C. § 824p(e).

onmental study were not harmless errors.

FN1. Section 824p(b) reads in part:

I. BACKGROUND A. The Critical Statute, 16 U.S.C. § 824 (b) Construction permit In response to a number of electrical brown-Except as provided in subsection (I) of outs and black-outs, Congress passed the EPAct, this section, the Commission may, after Pub.L. No. 109-85, 119 Stat. 594 (2005). The notice and an opportunity for hearing, is-EPAct added a new section 216 to the FPA. The sue one or more permits for the con-first provisions of the section read:

struction or modification of electric (a) Designation of national interest electric trans- transmission facilities in a national in-mission corridors terest electric transmission corridor des-ignated by the Secretary under subsec-(1) Not later than 1 year after August 8, 2005 and tion (a) of this section if the Commission every 3 years thereafter, the Secretary of Energy finds that (referred to in this section as the Secretary), in consultation with affected States, shall conduct ...

a study of electric transmission congestion.

(1)(C) a State commission or other entity (2) After considering alternatives and recom- that has authority to approve the siting of mendations from interested parties (including an the facilities has opportunity for comment from affected States (I) withheld approval for more than 1

), the Secretary shall issue a report, based on the year after the filing of an application study, which may designate any geographic seeking approval pursuant to applicable area experiencing electric energy transmission law or 1 year after the designation of the capacity constraints or congestion that adversely relevant national interest electric trans-affects consumers as a national interest electric mission corridor, whichever is later; or transmission corridor.

(ii) conditioned its approval in such a 16 U.S.C. § 824p (emphasis added).

manner that the proposed construction or The designation of an area as a national in- modification will not significantly re-duce transmission congestion in inter-

Page 10 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) state commerce or is not economically asters or malicious acts; (7) the area's feasible ... projected need (or needs) is not unduly contingent on uncertainties associated with Moreover, 16 U.S.C. § 824p(j)(1) states, analytic assumptions, e.g. assumptions

[E]xcept as specifically provided, nothing in this about future prices for generation fuels, de-section affects any requirement of an environmental mand growth in load centers, the location law of the United States, including the National En- of new generation facilities, or the cost of vironmental Policy Act of 1969 (42 U.S.C. §§ 4321 new generational technologies; and (8) et seq.). the alternative means of mitigating the need in question have been addressed suf-B. The Congestion Study ficiently. 71 Fed.Reg. at 5662.

Following the enactment of § 216, DOE gave presentations at a number of conferences regarding The technical conference was held in March the new law. Its first request for comments or as- 2006, and a number of State entities attended and sistance from others was a February 2, 2006 some participated in various panels. A separate in-Notice of *1081 inquiry requesting comment and vitation-only meeting was held in May 2006 to providing notice of a technical conference (the review and evaluate the congestion analyses per-February 2 Notice). 71 Fed.Reg. 5660-64 (Feb. formed by DOE's contractors, but no states were 2, 2006). The notice sought comment and informa- FN3 invited.

tion from the public concerning its plans for an electricity transmission congestion study and pos- FN3. According to DOE, the invitation-FN2 sible designation of [NIET Corridors]. Id. at only meeting had three purposes:

5660. The February 2 Notice stated that work on the Congestion Study was well underway and (1) to learn whether the results of the that DOE intended to publish the study by August congestion modeling track actual and ex-8, 2006. Id. at 5661. The Notice also stated that a pected grid conditions with some fidel-technical conference would be held in Chicago, ity; (2) to learn whether the congestion Illinois, on March 29, 2006. Id. at 5660. analysis findings and other grid know-ledge suggest that there are any obvious FN2. The February 2 Notice set forth eight project or corridor priorities for new grid draft criteria for identifying NIET Cor- expansion; (3) to learn whether DOE's ridors: (1) action is needed to maintain draft NIETC criteria (other than conges-high reliability; (2) action is needed to tion) suggest additional expansion needs.

achieve economic benefits for consumers; (3) actions are needed to ease electricity DOE asserts that it reached out to affected supply limitations in end markets served States through meetings with the National Associ-by a corridor, and diversify sources; (4) ation of Regulatory Utility Commissioners targeted actions in the area would en- (NARUC) and through other meetings and cor-hance the energy independence of the respondence with individual State entities.

United States; (5) targeted actions in the DOE issued its Congestion Study in August area would further national energy policy; 2006. The notice in the Federal Register requested (6) targeted actions in the area are needed comments on the study and on the possible desig-to enhance the reliability of electricity sup-nation of national interest electric transmission cor-plies to critical loads and facilities and re-ridors. 71 Fed.Reg. 45,047 (Aug. 8, 2006). DOE duce vulnerability of such critical loads or received over 400 comments on the Congestion the electricity infrastructure to natural dis-

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Study. On May 7, 2007, DOE responded to the fects consumers' and defended the definition ad-comments and sought additional comments on opted in the Congestion Study. Id. at 25,843-45.

draft National Corridor designations for the two Critical Congestion Areas identified in the Conges- A second group of comments concerned the re-tion Study: the draft Mid-Atlantic Area National lationship between regional planning processes and Corridor; and the draft Southwest Area National the designation of national corridors. Id. at 25,846.

Corridor. 72 Fed.Reg. 25,840 (May 7, 2007) (the For example, NARUC argued that DOE should May 7 Notice). grant deference to the results of adequate regional planning processes, and the Public Utilities Com-A major objection set forth in the comments mission of the State of California (CPUC) argued was the assertion that DOE had failed to consult that designation is unwarranted unless there is with affected States. Id. at 25,850. DOE responded evidence that State and regional processes are not that it was committed to fulfilling its obligation to addressing the problem in a timely manner. Id.

consult with States but asserted that there are DOE indicated that it supports and encourages re-practical difficulties in conducting the level of con- gional planning efforts but nonetheless had de-sultation that some may prefer in the context of a cided not to defer to regional planning processes.

study of this magnitude, and that it is difficult to Id. at 25,846-47.

know which States are affected until the conclu-sions of the congestion study are *1082 known. Id. A third group raised comments concerning the DOE claimed to have met its obligation because it: drawing of boundaries. Some comments advocated (1) had provided States with numerous opportunit- the use of specific transmission projects to define ies for input and [ ] held meetings with officials national corridor boundaries, others suggested that representing individual States and groups of boundaries should be tailored to aid in the construc-States; (2) had made the Congestion Study avail- tion of specific viable transmission projects, and able on August 8, 2006; and (3) had, in addition to numerous commenters argued that DOE should

[having made] the draft National Corridor designa- draw National Corridor boundaries to exclude parks tions described in this notice available for com- and other environmentally protected areas. Id. at ment, ... simultaneously contact[ed] the Governors 25,847. In response, DOE first noted that the of each State in which the draft National Corridors statute provided little direction on how the Depart-would be located to arrange consultation meetings. ment should draw the boundaries of a National Cor-Id. ridor. Id. at 25,848. DOE observed that the selec-tion of source areas will necessarily involve dis-The May 7 Notice also described a number of cretion and is not suited to a formulaic approach.

other comments that DOE received that may be di- Id. In declining to make any changes in response to vided into four groups. A first group of comments the comments, DOE noted:

are objections to DOE's interpretation of the scope of its authority to designate National Corridors, its The Department acknowledges that determining definitions of congestion and constraint, and the exact perimeters for a National Corridor un-the need for the Congestion Study to accommodate der a source-and-sink approach is more an art state laws and policies on renewable portfolio than a science, and there will rarely be a disposit-standards. Id. at 25,842. In responding to, and re- ive reason to draw a boundary in one place as op-jecting these objections, DOE stressed its discretion posed to some number of miles to the right or the under § 216. Id. at 25,843. It noted that there is no left. The drawing of the boundary is ultimately a generally accepted understanding of what consti- judgment the Secretary must make based on all tutes constraints or congestion that adversely af- relevant considerations, including the considera-tions identified in FPA section 216(a)(4), as ap-

Page 12 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) propriate, and available, relevant data. There is formally designating two NIETCs, the no single boundary line that can be determined Mid-Atlantic Area National Interest Electric Trans-based solely upon analysis of the data. mission Corridor (the Mid-Atlantic Corridor) and the Southwest Area National Interest Electric Id. at 25,849. Transmission Corridor (the Southwest Corridor).

72 Fed.Reg. 56,992 (Oct. 5, 2007). DOE explained The fourth group of comments asserted that its perspective and its rejection of all comments re-DOE was required to prepare a Programmatic En- FN5 commending different approaches. DOE reiter-vironmental Impact Statement pursuant to NEPA ated that no environmental study was necessary, ex-before designating any National Corridor. Id. at plaining:

25,850. *1083 DOE responded that although NEPA requires environmental impact statements for major FN5. The parties note a single change in Federal actions, [t]he designation of a National coverage; Clark County, Nevada, was re-Corridor ... does not significantly affect the quality moved from the Southwest Corridor. See of the human environment, and accordingly a 72 Fed.Reg. at 25,923; 72 Fed.Reg.

National Corridor designation is not a proposal 57,017-18.

for a major Federal action significantly affecting the quality of the human environment that falls NEPA review is designed to examine the foresee-FN4 within the purview of NEPA. Id. at 25,851. able, measurable, and predictable consequences of a proposed Federal action; it is not intended to FN4. DOE reasoned as follows: forecast hypothetical or unknowable proposals or results. National Corridor designations have no A National Corridor designation is not a environmental impact. They are only designa-determination that transmission must, or tions of geographic areas in which DOE has iden-even should, be built; it is not a proposal tified electric congestion or constraint problems.

to build a transmission facility and it 72 Fed.Reg. at 57,022.

does not direct anyone to make a propos-al. Nor does the Department's designa- Finally, in March 2008, DOE issued an order tion of a National Corridor result in or denying rehearing of its Designation Order. 73 plan for any ground-breaking environ- Fed.Reg. 12,959 (Mar. 11, 2008). DOE reiterated mental impacts. Nor does National Cor- its determination that no environmental study was ridor designation irrevocably commit needed and further noted that it would be highly any resources to any activity having speculative for the Department to make assump-foreseeable environmental impacts. Des- tions about whether, when, or where FERC might ignation of a National Corridor does not permit transmission facilities. Id. at 12,969.

control FERC's substantive decision on the merits as to whether to grant or deny D. The Judicial Proceedings a permit application, specifically where The first petition to review DOE's actions was any facilities covered by a permit should filed by The Wilderness Society, et al. in this court be located, or what conditions should be on March 14, 2008. Twelve other petitions for re-placed on a permit. view were timely filed in other Circuits. Pursuant to stipulations, all thirteen petitions were consolidated 72 Fed.Reg. 25,851. in the Ninth Circuit and are before this panel for consideration.

C. The Designation Order On October 5, 2007, DOE issued its order II. THE REQUIREMENT FOR CONSULTA-

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TION tion under the Administrative Procedure Act ap-FN6 A. Standards of Review plies. See 5 U.S.C. § 706.

In reviewing DOE's actions, we are guided by the standard of review established by Chevron USA, FN6. Section 706 reads:

Inc. v. Natural Resources Defense Council, Inc.,

To the extent necessary to decision and 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 when presented, the reviewing court (1984), and its progeny. The Court's seminal state-shall decide all relevant questions of ment is:

law, interpret constitutional and statutory

1084 When a court reviews an agency's con- provisions, and determine the meaning struction of the statute which it administers, it is or applicability of the terms of an agency confronted with two questions. First, always, is action. The reviewing court shall the question whether Congress has directly (1) compel agency action unlawfully spoken to the precise question at issue. If the in-withheld or unreasonably delayed; and tent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must (2) hold unlawful and set aside agency give effect to the unambiguously expressed intent action, findings, and conclusions found of Congress. If, however, the court determines to be Congress has not directly addressed the precise question at issue, the court does not simply im- (A) arbitrary, capricious, an abuse of pose its own construction on the statute, as would discretion, or otherwise not in accord-be necessary in the absence of an administrative ance with law; interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the (B) contrary to constitutional right, question for the court is whether the agency's an- power, privilege, or immunity; swer is based on a permissible construction of the (C) in excess of statutory jurisdiction, statute.

authority, or limitations, or short of stat-Id. at 842-43, 104 S.Ct. 2778 (footnotes omit- utory right; ted). The Court, however, also noted that [t]he ju-(D) without observance of procedure re-diciary is the final authority on issues of statutory quired by law; construction and must reject administrative con-structions which are contrary to clear congressional (E) unsupported by substantial evidence intent, and that [i]f a court, employing traditional in a case subject to sections 556 and 557 tools of statutory construction, ascertains that Con- of this title or otherwise reviewed on the gress had an intention on the precise question at is- record of an agency hearing provided by sue, that intention is the law and must be given ef- statute; or fect. Id. at 843 n. 9, 104 S.Ct. 2778.

(F) unwarranted by the facts to the ex-Both prongs of the Chevron standard are in tent that the facts are subject to trial de play in this case. On the one hand, Congress clearly novo by the reviewing court.

directed DOE to engage in consultation with af-fected States. On the other hand, it did not expli- In making the foregoing determinations, citly define consultation. DOE urges that accord- the court shall review the whole record ingly, Congress's intent is not clear and that the or those parts of it cited by a party, and highly deferential standard of review for agency ac- due account shall be taken of the rule of

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[1] We have recognized that this standard is was required to consult with affected States.

highly deferential, presuming the agency action to See 72 Fed.Reg. at 25,838 (stating that FPA sec-be valid and that we may not substitute our judg- tion 216(a)(1) requires the Secretary to consult with ment for that of the agency. Nw. Ecosystem Alli- affected States' ); 72 Fed.Reg. at 56,993 (stating ance v. U.S. Fish and Wildlife Serv., 475 F.3d 1136, that FPA section 216(a)(1) states that the Depart-1140 (9th Cir.2007). We therefore will affirm[ ] ment shall conduct the congestion study in con-the agency action if a reasonable basis exists for its sultation with affected States).

decision. Id. Our task is simply to ensure that the agency considered the relevant factors and articu- Accordingly, the issue is whether DOE, while lated a rational connection between the facts found undertaking the Congestion Study, consulted with and the choices made. Id. (internal quotation the affected States as mandated by Congress. This marks and citation omitted). inquiry requires that we review DOE's efforts to in-volve the affected States in the preparation of the

1085 B. Congressional Intent Congestion Study and then evaluate whether those Congress could hardly have been more explicit efforts amount, as DOE contends, to consultation.

in directing DOE to consult with affected States. Finally, if we determine that DOE's actions did not Section 824p(a)(1) specifically directs DOE to con- amount to consultation, we must determine whether duct a study of electric transmission congestion in any such shortcoming constitutes harmless error.

consultation with affected States. Furthermore, § 824p(a)(2) directs DOE to issue a report which may III. DOE FAILED TO CONSULT designate National Interest corridors, [a]fter con- A. DOE's interaction with the affected States sidering alternatives and recommendations from in- [4] The record shows that DOE sought the af-terested parties (including an opportunity for com- fected States' input in three ways but also excluded ment from affected States). them from participating in several significant re-spects. First, on February 2, 2006, DOE invited the

[2] Our first step in interpreting a statute is to public, including the affected States, to provide determine whether the language at issue has a plain comments for its ongoing Congestion Study.

and unambiguous meaning.... Robinson v. Shell Second, DOE informed the affected States of a Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 technical conference that would be held in Chicago L.Ed.2d 808 (1997). This is determined by refer- in March 2006. Third, when it issued the Conges-ence to the language itself, the specific context in tion Study in August 2006, it invited comments on which that language is used, and the broader con- the designation of NIETCs. 71 Fed.Reg. at 45,047.

text of the statute as a whole. Id. at 341, 117 S.Ct.

843. See also United States v. Morton, 467 U.S. On the other hand, the record shows that DOE 822, 828, 104 S.Ct. 2769, 81 L.Ed.2d 680 (1984) did not extend an invitation to potentially affected (We do not, however, construe statutory phrases in States to attend an invitation-only workshop on isolation; we read statutes as a whole.). the Congestion Study that was held in May 2006.

Also, DOE did not disclose to the affected States

[3] Here, § 824's direction to the DOE to un- the congestion modeling data it used to conduct the dertake the Consultation Study in consultation Congestion Study. Furthermore, DOE never exten-with affected States in context clearly means that ded any invitation to the affected States or their DOE should have greater interaction with the States *1086 Governors to consult on the preparation of in preparing the Congestion Study than it need have FN7 the Congestion Study.

when preparing a NIETC report, when it need only

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FN7. After it had completed the Conges- of meetings with New York Public Service tion Study, DOE did invite the governors Commission and the Florida Public Service to consult. 72 Fed.Reg. at 56,996 n. 18. Commission simply notes that meetings (The Department sent a letter to the Gov- took place. There is no identification of ernor of each of the States within the draft which individuals attended the meetings or National Corridors and the Mayor of the the subject of the meetings. At the cited District of Columbia on April 26, 2007, re- meetings with the Connecticut Department questing an opportunity to consult with of Public Utility Control, the New Jersey them on the draft designations.). Board of Public Utilities, and the Pennsylvania Public Utility Commission, DOE also cites its meetings with NARUC and DOE was represented by Ellen Lutz. In the meetings and conferences with other State entities e-mail, she explains that she is DOE's as evidence that it met its obligation to consult. Representative to the Eastern Intercon-There is little, however, to suggest that these events nect, that this is a new position that I provided meaningful opportunities for dialogues began in late January, and that she is in between the States and DOE. NARUC, of course, is the process of coming up to speed on the not a state or even a state entity. Rather, it is a issues. Since at the time of this e-mail, quasi-governmental organization that includes rep- March 8, 2006, the Congestion Study was resentatives of all fifty states.... NARUC v. FCC, nearly complete, it seems unlikely that the 746 F.2d 1492, 1497 n. 2 (D.C.Cir.1984). meetings provided any real opportunity for Moreover, NARUC itself advised DOE that meet- consultation. Also, the document cited by ing with it was not the same as consulting with the DOE to support its contention that it met FN8 affected States. The record also fails to sup- with the CPUC indicates only that CPUC port DOE's assertion that those meetings that were submitted further comments, and does not held with certain State entities allowed for a mean- state that any meeting was held.

FN9 ingful exchange of information.

In sum, DOE's claim that it met its obligation FN8. NARUC wrote: to consult with the affected States is based on the argument that it had the discretion to determine Because the statute directs the DOE to what consultation required, that it met its obliga-develop the congestion study in con-tion by inviting comments from the public sultation with affected States, the (including the affected States) while it was prepar-agency had an affirmative obligation to ing the Congestion Study, that it subsequently con-seek the input of States potentially af-sidered all objections to the Congestion Study fected by the Congestion Study. The pur-raised by the affected States, and that any failures pose of this consultation is clearStates in this process of consultation were harmless.

should be able to critique the DOE's pre-liminary findings and analyses as they B. DOE's interactions do not amount to con-are evolving. Although DOE certainly sultation conducted outreach to NARUC during [5] DOE claims that § 216 does not require the development of the congestion study, more than notice-and-comment proceedings. DOE it failed to comply with this mandate asserts that because Congress did not define what it with respect to States in certain regions meant by consultation, we must defer to DOE's (for example, New England). interpretation of the term. However, we do not read the statute as encompassing DOE's proffered defini-FN9. The e-mail cited by DOE in support

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render Congress's choice of language meaningless. 157, 166, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004)).

Moreover, we find no support for DOE's position in the relevant case law. Moreover, requiring DOE to actually confer with the affected States is consistent with the pur-

1087 1. The definition of consultation pose of the EPAct. In reaction to black-outs and An ordinary meaning of the word consult is to brown-outs, Congress sought to give the federal seek information or advice from (someone with government a greater role in the development of expertise in a particular area) or to have discus- transmission lines and to circumscribe somewhat sions or confer with (someone), typically before un- the States' traditional authority over the placement dertaking a course of action. The New Oxford Dic- and construction of power lines. In recognition of tionary 369 (2001) (emphasis added). We conclude this impact on the States' traditional authority, Con-that this is the definition that Congress intended gress intended that affected States would participate when it directed DOE to prepare the Congestion in a study that might ultimately result in some lim-Study in consultation with the affected States. itation of their traditional powers. Indeed, the Su-Thus, DOE was to confer with the affected States preme Court has been sensitive to these concerns.

before it completed the study. See Solid Waste Agency of Northern Cook County

v. U.S. Army Corps of Eng'rs, 531 U.S. 159, 173, This conclusion is supported by all the applic- 121 S.Ct. 675, 148 L.Ed.2d 576 (2001). A recogni-able rules of statutory construction. It is required by tion of the sensitivity of these issues supports our the statutory context as the juxtaposition of the two determination that where, as here, Congress has dir-sections indicates that Congress intended consulta- ected an agency to consult with States before taking tion to be more than responding to comments. See action that may curtail traditional State powers, we Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 must require that the agency heed Congress's direc-S.Ct. 843, 136 L.Ed.2d 808 (1997) (noting that the tion.

plain meaning of statutory language is determined by reference to the specific context in which the 2. Case law defining consultation language is used and the broader context of the stat- In addition, our conclusion that the ordinary ute as a whole). The definition gives meaning to meaning of consult involves conferring with an en-every word in the statute. See Duncan v. Walker, tity before taking action is amply supported, if not 533 U.S. 167, 174, 121 S.Ct. 2120, 150 L.Ed.2d compelled, by our relevant precedent. In Environ-251 (2001) (noting that it is a court's duty to give mental Defense Center v. EPA, 344 F.3d 832 (9th effect, if possible, to every clause and word of a Cir.2003), we considered a provision that required statute.). Moreover, DOE's interpretation of the EPA to conduct certain studies in consultation consult to mean no more than notice- with the States, and to issue regulations based on and-comment would render part of the statute su- these studies in consultation with State and local perfluous. If consultation means no more than officials. Id. at 863. EPA asserted that it had met an opportunity for comment, there was no reason its obligation by consulting extensively with States for Congress to use distinct language in § 824(a)(1) and localities before issuing*1088 its regulations.

and § 824(a)(2). We have been directed to avoid Id. at 864. We agreed, noting:

such an interpretation. See Knight v. Comm'r, 552 U.S. 181, 190, 128 S.Ct. 782, 169 L.Ed.2d 652 [T]he overall record indicates EPA met its stat-(2008) (commenting that accepting [a particular] utory duty of consultation. A draft of the first re-approach would render part of the statute entirely port was circulated to States, EPA regional of-fices, the Association of State and Interstate Wa-

Page 17 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) ter Pollution Control Administrators opinion of the United States Court of International (ASIWPCA), and other stakeholders in Trade in U.S. Steel Corp. v. United States, 29 C.I.T.

November, 1993, and was revised based on com- 33, 362 F.Supp.2d 1336 (Ct. Int'l Trade 2005). Ad-ments received. EPA established the Urban Wet dressing notice, comment, and consultation require-Weather Flows Federal Advisory Committee ments, the court held that it is not enough to prove (FACA Committee), balancing membership that the agency solicited and received comments between EPA's various outside stakeholder in- from the Domestic Producers before executing the terests, including representatives from States, Suspension Agreement.... The agency must also municipalities, Tribes, commercial and industrial give those comments meaningful consideration sectors, agriculture, and environmental and pub- and must engage the Domestic Producers in good lic interest groups. 64 Fed.Reg. 68,724. The 32 faith consultations, in a timely fashion. Id. at 40.

members of the Phase II FACA Subcommittee, The court found that:

reflecting the same balance of interests, met four-teen times over three years and state and muni- Throughout this action, the Government has per-cipal representatives provided substantial input sisted in conflating Commerce's notice-regarding the draft reports, the ultimate Phase II and-comment obligations with its consultation Rule, and the supporting data. obligations. And, to some extent, the Government has also conflated its consultation obligations un-Id. None of the efforts noted in Environmental der one part of the statute with its consultation Defense Center are present here. No draft was cir- obligations under another part. However, the stat-culated to the States, no committee was created that ute is clear: Commerce's consultation obligations included representatives from the States, and the af- are separate and distinct from (albeit related to) fected States were not given access to the support- its notice-and-comment obligations.

ing data. Thus, DOE's efforts here fall far short of the efforts that were determined to meet the re- Id. at 40 n. 14. We think that DOE pursued a quirement for consultation in Environmental De- similarly erroneous course here, attempting to con-fense Center. flate its obligation to consult with the affected States while preparing the Congestion Study with In Confederated Tribes & Bands of Yakima In- its obligation*1089 to provide the States an oppor-dian Nation v. FERC, 746 F.2d 466 (9th Cir.1984), tunity to comment on its NIETC report.

we held that the FERC violated its duty of consulta-tion. We noted that it was not enough to give notice 3. DOE's failure to provide the affected States with to the agencies and Indian tribes, as the modeling data interfered with their ability to con-consultation obligation is an affirmative duty. Id. sult with DOE at 475. We noted that the respective fishery agen- [6] We note that, by failing to provide the af-cies believed the consultation process would take fected States with the modeling data on which it place in the preparation of [a fish and wildlife re- based the Congestion Study, DOE prevented the af-port], but that the agency issued the [report] be- fected States from providing informed criticism and fore the exhibit was submitted. Id. Here too, the comments. There can be no doubt that the modeling FN10 agency had an affirmative duty to consult and the data was critical to DOE's study. Moreover, affected States reasonably believed the consultation DOE recognizes that even under a notice-process would take place, but DOE issued the Con- and-comment requirement, an agency has a duty to gestion Study without engaging in any meaningful identify and make available technical studies and consultation with the States. data that it has employed in reaching the decisions to propose particular rules. Kern County Farm Our perspective is also consistent with the Bureau v. Allen, 450 F.3d 1072, 1076 (9th

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Cir.2006). DOE, however, defends its failure to dis- F.3d 227 (D.C.Cir.2008), specifically states that un-close any of the modeling data to the affected der the Administrative Procedure Act (APA) an States prior to the issuance of the Congestion Study agency must disclose the technical studies and data FN12 by arguing that it disclosed the technical studies upon which it bases a ruling. Third, *1090 and data after it issued the Congestion Study and there is no doubt that the modeling information was that the information did not need to be disclosed critical to DOE's preparation of the Congestion FN11 FN13 because it was proprietary. We have already Study. The ability to consult on a matter is held that DOE's duty to consult in preparing the severely compromised when an entity is denied ac-Congestion Study is separate from, and requires cess to the basis of the decision.

greater interaction with the affected States, than DOE's obligation to the States when preparing the FN12. The court explained:

NIETC report. Accordingly, its post-study release Under APA notice and comment require-of the information does not excuse its failure to ments, [a]mong the information that consult with the affected States in preparing the must be revealed for public evaluation Congestion Study.

are the technical studies and data upon FN10. The Congestion Study's Executive which the agency relies [in its rulemak-Summary states that it is DOE's first con- ing]. ... Construing section 553 of the gestion study in response to the EPAct, APA, the court explained long ago that and that it is based on examination of his- [i]n order to allow for useful criticism, torical studies of transmission conditions, it is especially important for the agency existing studies of transmission expansion to identify and make available technical needs, and unprecedented region-wide studies and data that it has employed in modeling of both the Eastern and Western reaching the decisions to propose partic-Interconnections. (Emphasis added). ular rules. ...

FN11. DOE's intimation that it disclosed 524 F.3d at 236 (citations omitted). The the technical studies and data on which it court further noted that:

reliedin the February 2006 Notice of In-Enforcing the APA's notice and com-quiry is misleading. A review of the No-ment requirements ensures that an tice of Inquiry discloses that it lists, by agency does not fail[ ] to reveal por-name or title only, over 50 documents. 71 tions of the technical basis for a pro-Fed.Reg. at 5663-64. It is not possible to posed rule in time to allow for meaning-glean the substance, let alone the particu-ful commentary so that a genuine in-lars, of the modeling studies from the lis-terchange occurs rather than ted titles.

allow[ing] an agency to play hunt the Moreover, DOE's argument that the proprietary peanut with technical information, hid-interests in the modeling data justified their reten- ing or disguising the information that it tion is not well taken. First, as noted by the States, employs. ...

there is no factual or legal basis for DOE's unstated Id. at 236-37 (citation omitted). The assumption that the States would not, or could not, court further observed that it was a respect any legitimate proprietary interests in the fairly obvious proposition that studies modeling data. Second, and more importantly, the upon which an agency relies in promul-case cited by DOE, American Radio Relay League, gating a rule must be made available Inc. v. Federal Communications Commission, 524

Page 19 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) during the rulemaking in order to afford unnecessary. Thus, if the harmless error rule were interested persons meaningful notice and to look solely to result, an agency could always an opportunity for comment. Id. at 237. claim that it would have adopted the same rule even if it had complied with APA procedures. To FN13. DOE states that it evaluated elec- avoid gutting the APA's procedural requirements, tric transmission congestion by: (1) re- harmless error analysis in administrative rule-viewing historical data related to conges- making must therefore focus on the process as tion from dozens of sources, (2) develop- well as the result. We have held that the failure to ing projections of future congestion, and provide notice and comment is harmless only (3) comparing the two. Moreover, DOE where the agency's mistake clearly had no bear-consistently reiterates that impacts from ing on the procedure used or the substance of de-persistent congestion are not readily sub- cision reached. Sagebrush Rebellion, Inc. v.

ject to empirical measurement and that Hodel, 790 F.2d 760, 764-65 (9th Cir.1986).

the task of drawing boundaries around geographic areas' experiencing constraints Id. at 1487.

or congestion is not one that lends itself to technical precision. [8] We have applied this definition of harmless errorclearly had no bearing on the procedure C. The Failure to Consult Was Not Harmless Er- used or the substance of decision reachedin a ror number of cases over the last eighteen years. For

[7] More importantly, we cannot conclude that example, see Paulsen, 413 F.3d at 1006-08 DOE's failure to consult was harmless error. Cer- (adopting the no bearing standard, noting that the tainly, American Radio Relay League notes that any agency's mistake clearly had a bearing on the pro-failure to disclose information for public comment cedure used, and commenting that the fact that is subject to the rule of prejudicial error. Id. at 237. petitioners had an opportunity to protest an We also have held that when reviewing agency ac- already-effective rule prior to the time it was ap-tion under the APA, we must take due account of plied to each of them does not render the APA viol-the harmless error rule. Paulsen v. Daniels, 413 ation harmless); City of Sausalito v. O'Neill, 386 F.3d 999, 1006 (9th Cir.2005). We have stressed, F.3d 1186, 1220 (9th Cir.2004) (holding that in the however, that a court must exercise great caution rulemaking context, we exercise great caution in in applying the harmless error rule in the adminis- applying*1091 the harmless error rule, holding that trative rulemaking context. Id. In Riverbend failure to provide notice and comment is harmless Farms, Inc. v. Madigan, 958 F.2d 1479 (9th only where the agency's mistake clearly had no Cir.1992), which involved a failure of an agency to bearing on the procedure used or the substance of fulfill the notice-and-comment procedures of the decision reached) (internal quotation marks and APA, we stated: citations omitted); Gifford Pinchot Task Force v.

U.S. Fish and Wildlife Service, 378 F.3d 1059, It's true, as plaintiffs argue, that we must exercise 1071 (9th Cir.2004) (noting that in the context of great caution in applying the harmless error rule agency review, the role of harmless error is con-in the administrative rulemaking context. The strained and may be employed only when a mis-reason is apparent: Harmless error is more readily take of the administrative body is one that clearly abused there than in the civil or criminal context. had no bearing on the procedure used or the sub-An agency is not required to adopt a rule that stance of decision reached); and Buschmann v.

conforms in any way to the comments presented Schweiker, 676 F.2d 352, 358 (9th Cir.1982) to it. So long as it explains its reasons, it may ad- (holding that an agency can rely on harmless error opt a rule that all commentators think is stupid or

Page 20 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) only when a mistake of the administrative body is The Court, however, did not redefine harmless one that clearly had no bearing on the procedure error, but rather embraced a commonsense ap-used or the substance of decision reached) (internal proach to the concept.

FN14 quotations marks and citations omitted).

To say that the claimant has the burden of FN14. Furthermore, we are not alone in us- showing that an error was harmful is not to im-ing this standard. It was set forth by the pose a complex system of burden shifting rules D.C. Circuit in Braniff Airways, Inc. v. or a particularly onerous requirement. In ordinary C.A.B., 379 F.2d 453, 462 (D.C.Cir.1967), civil appeals, for example, the appellant will when it stated that an error does not point to rulings by the trial judge that the appel-mechanically compel reversal when a mis- lant claims are erroneous, say, a ruling excluding take of the administrative body is one that favorable evidence. Often the circumstances of clearly had no bearing on the procedure the case will make clear to the appellate judge used or the substance of decision reached. that the ruling, if erroneous, was harmful and Massachusetts Trustees of Eastern Gas nothing further need be said. But, if not, then the and Fuel Associates v. United States, 377 party seeking reversal normally must explain why U.S. 235, 248, 84 S.Ct. 1236, 12 L.Ed.2d the erroneous ruling caused harm. If, for ex-268 (1964). See also Silverton Snow- ample, the party seeking an affirmance makes a mobile Club v. U.S. Forest Service, 433 strong argument that the evidence on the point F.3d 772 (10th Cir.2006) (noting that was overwhelming regardless, it normally makes harmless error may be employed only sense to ask the party seeking reversal to provide when a mistake of the administrative body an explanation, say, by marshaling the facts and is one that clearly had no bearing on the evidence showing the contrary. The party seeking procedure used or the substance of the de- to reverse the result of a civil proceeding will cision reached) (internal quotation marks likely be in a position at least as good as, and of-and citations omitted); and Conservation ten better than, the opposing party to explain how Law Foundation v. Evans, 360 F.3d 21, 29 he has been hurt by an error.

(1st Cir.2004) (noting that the omission of a formal public comment before it clearly 129 S.Ct. at 1706.

had no bearing on the procedure used or

[9] We do not think that this approach to harm-the substance of [the] decision reached).

less error allows us to depart from *1092 our con-The dissent, however, posits that the Supreme sistent case law holding that harmless error re-Court's recent decision in Shinseki v. Sanders, --- quires a determination that the error had no bear-U.S. ----, 129 S.Ct. 1696, 173 L.Ed.2d 532 (2009) ing on the procedure used or the substance of[the]

, requires a different definition of harmless error. decision reached. Paulsen, 413 F.3d at 1006 We do not agree. In Sanders, the Supreme Court (quoting Sagebrush, 790 F.2d at 764-65). In Miller clarified that in agency cases, as in appellate review v. Gammie, 335 F.3d 889 (9th Cir.2003) (en banc),

of civil cases, the burden of showing an error is we held that where the reasoning or theory of our harmful normally falls upon the party attacking the prior circuit authority is clearly irreconcilable with agency's determination. Id. at 1706. The Supreme the reasoning or theory of intervening higher au-Court struck down the Federal Circuit's harmless thority, a three-judge panel should consider itself error framework, in part because it require[d] the bound by the later and controlling authority, and VA, not the claimant to explain why the error [was] should reject the prior circuit opinion as having harmless. Id. at 1705. been effectively overruled. Id. at 893. Certainly, Sanders clarifies that the burden of showing an

Page 21 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) agency's deviation from the APA was not harmless law holding that a finding of harmless error re-rests with the petitioner, but we see nothing in quires a determination that the error had no bear-Sanders that is clearly irreconcilable with the reas- ing on the procedure used or the substance of [the]

oning or theory underlying our definition of harm- decision reached. Paulsen, 413 F.3d at 1006 FN15 less error. (quoting Sagebrush, 790 F.2d at 764-65) (emphasis added).

FN15. We note that the law review article cited by the dissent, Craig Smith, Taking FN16. We noted in Riverbend Farms:

Due Account of the APA's Prejudi-cial-Error Rule, 96 Va. L.Rev. 1727 Procedure, not substance, is what most (2010), is in accord. It opines that Sanders distinguishes our government from oth-declared something already widely under- ers. In the not-so-distant past, a govern-stood: the burden of demonstrating harm is ment agency in the Soviet Union could borne by the parties challenging agencies' impose controls on the production of decisions, but left unexplored the inter- commodities without bothering to in-esting and important question of how volve the public in the decisionmaking parties can persuade a court that an error process. By contrast, a government was prejudicial. Id. at 1728. agency in the United States must usually give notice to, and accept comments Moreover, here our concern with process is from, the public before undertaking to very different from the issue in Sanders. There, the place manacles on the invisible hand.

Supreme Court's exclusive focus on the harmless-ness of the error in affecting the final outcomethe Riverbend Farms, 958 F.2d at 1482.

determination of disabilitywas a logical applica-The dissent, however, prefers the D.C. Circuit's tion of the statutory and regulatory requirements of approach in Gerber v. Norton, 294 F.3d 173, 182 notice by the agency to the veteran as to how to (D.C.Cir.2002), that to show that error was preju-pursue his claim. The notice requirement was not dicial a plaintiff must indicate with reasonable spe-an end in itself; it was a means to permit the veter-cificity what portions of the documents it objects to an to develop his claim for disability. If a failure of and how it might have responded if given the *1093 notice had no effect on the determination of the dis-opportunity. (internal quotation marks and cita-ability claim, there could be no harm; the failure of tions omitted). The dissent asserts that other cir-notice by itself was of no consequence.

cuits have adopted a similar approach for showing FN17 In contrast, here, as in Riverbend Farms, the prejudice from procedural errors.

congressional notice requirement reflects the de-FN16 FN17. The dissent cites Conservation Law sirability of the interactive process itself. 958 Found. v. Evans, 360 F.3d 21, 29-30 (1st F.2d 1479. The consultative process dictated by Cir.2004); Texas v. Lyng, 868 F.2d 795, Congress serves the purpose of permitting the 800 (5th Cir.1989); Miami-Dade Cnty. v.

States to participate in the formulation of federal EPA, 529 F.3d 1049, 1061 (11th Cir.2008);

policy in an area of major interest to the States. As and Owner-Operator Indep. Drivers Ass'n, in Riverbend Farms, Congress did not require the Inc. v. Fed. Motor Carrier Safety Admin.,

agency to accept the views of the States; its require-494 F.3d 188, 202-03 (D.C.Cir.2007).

ment was directed at process and not merely a final result (although early consultation often will lead to Although we are compelled to follow our prior a better result). Id. at 1487. Under such a scheme, case law, we would reach the same conclusion ap-we are not free to depart from our consistent case

Page 22 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) plying the standard proffered by the dissent. We Another drawback of the dissent's approach is find that the petitioners have demonstrated that they its failure to appreciate that DOE's failure to con-were excluded from the decisionmaking process, sult has a substantive, as well as procedural com-have indicated what evidence and information they ponent. The exclusion of the affected States from would have provided if given the opportunity, and the decisionmaking process not only limited the in-have shown how their interests were harmed by formation available to DOE, it altered the way in their exclusion. which DOE made its discretionary decisions. In Kurzon v. United States Postal Service, 539 F.2d Placing the burden of showing that DOE's fail- 788 (1st Cir.1976), the First Circuit indicated that ure to consult was not harmless on the petitioners, where there was an alleged substantive error, it we determine that the affected States have shown would remand only if the court is in substantial that DOE's failure to comply with Congress's man- doubt whether the administrative agency would date in § 216 was harmful. First, we note that al- have made the same ultimate finding with the erro-though the nature of consultation makes it difficult neous finding removed from the picture. Id. at 796 to determine the precise consequences of its ab- (internal quotation marks and citations omitted).

sence, the prejudice to the party excluded is obvi- Here, we are left with substantial doubt as to ous. Consultation requires an exchange of informa- whether DOE would have made the same findings tion and opinions before the agency makes a de- had it consulted with the affected States.

cision. This requirement is distinct from the oppor-tunity to offer comments on the agency's decision. [10] Second, the impact of the lack of consulta-The essential verity of this distinction is illustrated tion before a decision is made as contrasted to com-by posing the question: would any attorney forgo menting after the agency has made a decision is the opportunity to argue his client's case before a particularly severe here because, as DOE admits, its judge renders a decision in favor of seeking recon- decisions were for the most part discretionary. In its sideration after the judge has made a decision? Of May 7, 2007, Notice, DOE stated that there is no course not; such a decision might well amount to generally accepted understanding*1094 of what malpractice. Similarly, here, the opportunity to constitutes constraints or congestion that adversely comment on DOE's completed Congestion Study affects consumers, 72 Fed.Reg. at 25,843, and does not compensate for the lost opportunity of noted that [t]he statute provides little direction on consulting with DOE in the formation of that study. how the Department should draw the boundaries of FN18 a National Corridor, id. at 25,848. Thus, DOE ad-mits that its determinations and conclusions in the FN18. In Sanders, the Court noted that it Congestion Study were not decisions compelled by had previously made clear that courts may some mathematical formulae, but important discre-sometimes make empirically based gener- tionary decisions for which there was little guid-alizations about what kinds of error are FN19 ance. The value of consulting with an agency likely, as a factual matter, to prove harm- before it makes a decision is greatest when the ful. 129 S.Ct. at 1707. A reasonable argu- agency is tasked with adopting a novel approach ment can be made that a failure to consult that will then affect all stakeholders. In such a situ-prior to making a discretionary decision, ation, as here, a court can hardly conclude that the when such consultation is mandated by agency's refusal to consult with the affected States law, is the type of error that is likely to had no bearing on the substance of the decision prove harmful. However, in light of the af- reached. See Paulsen, 413 F.3d at 1006.

fected States' showing of prejudice we need not consider such an argument. FN19. The May 7, 2007 Notice commen-

Page 23 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) ted that DOE recognizes that FPA section State laws and policies on renewable portfolio 216(a) adopted a novel approach to ad- standards; (2) DOE had adopted too broad a defin-dressing the need for new transmission in- ition of adverse effects; (3) designations should frastructure, an approach that poses chal- only be made for areas actually experiencing con-lenges to all stakeholders as we collect- gestion adversely affecting consumers and not areas ively work to address this problem. 72 that *1095 may experience congestion in the future; Fed.Reg. at 25,845. and (4) DOE should clarify the criteria it would use in deciding whether to designate a National Cor-The dissent's recitation of the States' ridor. 72 Fed.Reg. at 25,842-43.

opportunity to comment reflects its failure to ap-preciate how consulting is different from comment- FN21. The dissent's failure to appreciate ing. Of course, the States were aware that Congress the practical impact of DOE's failure to had directed DOE to conduct a Congestion Study. consult with the affected States renders the They had to protect themselves, and perhaps try to Congressional directive to consult with the reduce the potential harm from a lack of consulta- affected States unenforceable. Under the tion, by responding to DOE's request for comments. dissent's approach, an agency could refuse But, contrary to the dissent's suggestion, there is no to consult in its decisionmaking process, evidence that DOE ever consulted with any State. but no State could show harm because FN20 the agency would argue that it allowed for comments after it rendered its decision and FN20. The dissent claims that DOE parti- it declined to adjust its decision on the cipated in conference calls from state entit- basis of those comments. Because no State ies and met and corresponded with com- could show that the agency would have missions from five states. It bases this as- made a different decision if it engaged in sertion on DOE's lists of its contacts with consultation, no State could shoulder the states. However, there is no indication that burden of showing prejudice. Indeed, this these provided any real opportunity for is precisely the argument that the dissent consultation. Less than half of the contacts makes in rejecting the Eastern States claim listed at 72 Fed.Reg. 25,850 n. 35 were ac- that DOE had incorrect and flawed docu-tually with state officials rather than vari- mentation. The dissent accepts as dispos-ous organizations that may have included itive DOE's post-Congestion Study explan-state officials. More telling, a review of the ation that the discrepancies and reporting list compiled by DOE of outreach meet- errors did not affect the analysis and find-ings held regarding the Congestion Study, ings of the Congestion Study. Dissent at reveals that only two of the sixty-two 1114.

meetings were with officials of a state.

DOE does not claim that its decisions in the Finally, a review of the objections filed by the Congestion Study were compelled or that consulta-affected States and others reveals that DOE's failure tion could not have produced variations. Rather, to consult with the affected States in developing the DOE's responses to the comments stress its Congestion Study was not harmless error and that discretion, implicitly recognizing that consulta-consultation would probably have resulted in a dif- tion might well have resulted in different decisions.

FN21 ferent study. Among the over 400 comments For example, the first line of DOE's response that DOE received when it published the Conges- stresses that § 216 gives it discretion. Id. at tion Study were assertions that: (1) the focus of 25,843. It admits that the term constraints or con-the Congestion study is too narrow to accommodate

Page 24 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) gestion that adversely affects consumers ... is am- ted by DOE, and that DOE's failure to consult with biguous and the statute attaches no modifiers to the the affected States was not harmless error, preced-term to specify the particular type of magnitude of ent and reason require that we vacate the Conges-adverse effect intended. Id. DOE's admission that tion Study and remand for the DOE to prepare a a term is ambiguous and that the statute provides Congestion Study in consultation with the affected little guidance in its interpretation indicates that its States.

decisions might well have been altered through consultation with the affected States. DOE's suggestion that we might vacate only those portions of the Congestion Study for which The likelihood that consultation would produce the States have shown prejudice, misconstrues the different results may be seen, for example, in the nature of the right to consultation as well as the de-petitioners' objections to DOE's designation of the ference we owe to DOE's decisions. As noted, it is entire Mid-Atlantic region as a NIETC Corridor almost impossible to determine the precise impact and to their assertions that DOE failed to consider of a decisionmaker's failure to consult prior to mak-regional efforts to address energy constraints and ing a discretionary decision. Because the Conges-congestions. This is not to suggest that DOE's de- tion Study invokes DOE's sound discretion for terminations were unreasonable. Rather, it appears which there are few, if any, objective criteria, we that petitioners' objections are not frivolous, may simply cannot know what DOE would have decided well have some merit, and thus, we cannot conclude had it considered the affected State's perspectives that DOE, were it to exercise its discretion when in- before it completed the study, or foretell what it formed by consultation with the affected States, will decide after consulting with the affected States.

would not modify its decisions. *1096 Accordingly, DOE must prepare a Conges-tion Study in consultation with the affected States The failure to consult was not some technical which thereafter may be judicially reviewed. We error, but resulted in a decisionmaking process that express no opinion as to the form or results of the was contrary to that mandated by Congress and one collaboration. Indeed, presumably DOE could, in that deprived DOE of timely substantive informa- the exercise of its sound discretion, come to the tion. We conclude that DOE's failure to consult same or similar conclusions that it did in the initial with the affected States, as directed by Congress, study. Of course, it might reach very different con-was not harmless error. clusions. What is critical is that it follow the stat-ute's mandate and consult with affected States, par-IV. THE REMEDY ticularly as § 216 requires DOE to prepare a con-

[11][12][13] When a court determines that an gestion study every three years.

agency's action failed to follow Congress's clear mandate the appropriate remedy is to vacate that V. THE FAILURE TO UNDERTAKE AN EN-action. See, e.g., Nw. Envtl. Advocates v. EPA, 537 VIRONMENTAL STUDY F.3d 1006, 1026-27 (9th Cir.2008) (explaining that [14] We next address DOE's failure to prepare the district court's decision to vacate the EPA's ac- an Environmental Impact Statement (EIS) or an tion was the proper remedy when EPA acted out- Environmental Assessment (EA) for either of the side of its authority and in defiance of Congress's NIETCs. We do so for two reasons. First, even if clear intent). Similarly, where a regulation is pro- we had not determined that the Congestion Study mulgated in violation of the APA and the violation must be vacated, we would nonetheless hold that is not harmless, the remedy is to invalidate the reg- the NIETCs must be vacated because DOE violated ulation. See Paulsen, 413 F.3d at 1008. Accord- the law in failing to consider the environmental ingly, as we have determined that § 216 required consequences of the NIETCs. Second, because more than the notice-and-comment procedure adop-

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DOE will now have to prepare new NIETCs based Prior to making any detailed statement, on a new Congestion Study, our guidance on this the responsible Federal official shall issue should be useful for all concerned. consult with and obtain the comments of any Federal agency which has jurisdic-A. The Applicable Law tion by law or special expertise with re-All parties agree that pursuant to the National spect to any environmental impact in-Environmental Policy Act, 42 U.S.C. § 4332(2)(C), volved.

DOE, like any other federal agency, must include in every recommendation or report on proposals In Marsh v. Oregon Natural Resources Coun-for legislation and other major Federal actions sig- cil, 490 U.S. 360, 109 S.Ct. 1851, 104 L.Ed.2d 377 nificantly affecting the quality of the human envir- (1989), the Supreme Court noted that NEPA pro-onment, a detailed statement by the responsible of- motes its sweeping commitment to prevent or elim-ficial on the potential environmental consequences inate damage to the environment and biosphere by FN22 of the action. Id. focusing Government and public attention on the environmental effects of proposed agency action FN22. Section 4332(2)(C) provides that: so that the agency will not act on incomplete in-formation, only to regret its decision after it is too all agencies of the Federal Government late to correct. Id. at 371, 109 S.Ct. 1851 (internal shall:

quotation marks and citations omitted). In Winter v.

... Natural Resources Defense Council, Inc., 555 U.S.

7, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008), the Su-(C) include in every recommendation or preme Court reiterated that [p]art of the harm report on proposals for legislation and NEPA attempts to prevent in requiring an EIS is other major Federal actions significantly that, without one, there may be little if any informa-affecting the quality of the human envir- tion about prospective environmental harms and po-onment, a detailed statement by the re- tential mitigating*1097 measures. 129 S.Ct. at sponsible official on 376; see also Monsanto v. Geertson Seed Farms,

--- U.S. ----, 130 S.Ct. 2743, 2768, 177 L.Ed.2d (I) the environmental impact of the pro- 461 (2010) (Stevens, J., dissenting) (noting that an posed action, EIS is especially important where the environment-al threat is novel). Ultimately, our role is to insure (ii) any adverse environmental effects that the agency has taken a hard look at environ-which cannot be avoided should the pro-mental consequences.... Kleppe v. Sierra Club, posal be implemented, 427 U.S. 390, 410 n. 21, 96 S.Ct. 2718, 49 L.Ed.2d (iii) alternatives to the proposed action, 576 (1976).

(iv) the relationship between local short- In accord with this approach, we have reiter-term uses of man's environment and the ated that the agency bears the primary responsibil-maintenance and enhancement of long- ity to ensure that it complies with NEPA.

term productivity, and Ilioulaokalani Coal. v. Rumsfeld, 464 F.3d 1083, 1092 (9th Cir.2006) (quoting Dep't of Transp. v.

(v) any irreversible and irretrievable Pub. Citizen, 541 U.S. 752, 765, 124 S.Ct. 2204, commitments of resources which would 159 L.Ed.2d 60 (2004) ). We reiterated in Alaska be involved in the proposed action Ctr. for Environment v. U.S. Forest Service, 189 should it be implemented. F.3d 851, 859 (9th Cir.1999) , that [w]hen an

Page 26 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) agency decides to proceed with an action in the ab- [15] Thus, our precedents hold that an agency sence of an EA or EIS, the agency must adequately cannot merely assert that its decision will have an explain its decision. Id. (internal citation omitted). insignificant effect on the environment, but must We commented that [a]n agency cannot avoid its adequately explain its decision. Alaska Ctr., 189 statutory responsibilities under NEPA merely by F.3d at 859. In The Steamboaters, we reversed and asserting that an activity it wishes to pursue will vacated the agency's order because the agency have an insignificant effect on the environment. failed to prepare even an EA and did not discuss Id. (quoting The Steamboaters v. FERC, 759 F.2d the evidence presented by the various agencies or 1382, 1393 (9th Cir.1985) ). how the particular conditions placed on the project would prevent environmental damage. 759 F.2d at In Klamath Siskiyou Wildlands Center v. 1393. We explained that the agency must supply a Boody, 468 F.3d 549 (9th Cir.2006), we noted that convincing statement of reasons why potential ef-an EIS must be prepared if substantial questions fects are insignificant. Id. (internal citation omit-are raised as to whether a project may cause signi- ted). The appellate court must be able to determine ficant degradation of some human environmental whether the agency took a hard look at the poten-factor. Id. at 562 (internal citation omitted). We tial environment impacts of the project *1098 and explained that [t]he plaintiff need not show that [t]he statement of reasons is crucial to such a de-significant effects will in fact occur, but if the termination. Id.

plaintiff raises substantial questions whether a project may have a significant effect, an EIS must B. Evaluating DOE's assertion of no environ-be prepared, and noted that [t]his is a low stand- mental impact ard. Id. (internal citation omitted). In addition, we We apply these standards to DOE's assertion stated: that, although NEPA applies, it was not required to undertake any review of potential environmental Furthermore, not only did BLM fail to conduct an consequences because the NIETCs do not have any EIS prior to implementing either of the ASR De- FN23 environmental effects. We are compelled to cisions, it did not even conduct an EA. NEPA's reject DOE's assertion because (1) its conclusory implementing regulations state that EAs should statement does not allow us to determine whether be conducted to provide sufficient evidence and DOE took a hard look at the potential environ-analysis for determining whether to prepare an mental consequences; and (2) although the effects environmental impact statement or a finding of of the NIETCs may be uncertain and difficult to no significant impact. 40 C.F.R. § 1508.9(a)(1). quantify, the potential consequences of such effects Indeed, as we explained in Metcalf v. Daley, 214 are significant enough to undermine DOE's con-F.3d 1135, 1143 (9th Cir.2000), [b]ecause the clusory determination that no EA need be prepared.

very important decision whether to prepare an FN24 EIS is based solely on the EA, the EA is funda-mental to the decision-making process. In this FN23. See 72 Fed.Reg. 57,022; 73 vein, we have held that [i]f the proposed action Fed.Reg. 12,968.

does not categorically require the preparation of an EIS, the agency must prepare an EA to de- FN24. For these reasons, as elaborated in termine whether the action will have a significant the following sections, although recogniz-effect on the environment. Kern v. Bureau of ing that this is a close case, we disagree Land Mgmt., 284 F.3d 1062, 1066 (9th Cir.2002). with the dissent's perspective that the Des-ignation Order constitutes an adequate EA Klamath, 468 F.3d at 562. (dissent at 1117).

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1. The NIETCs do not determine the siting of any regional consequences that significantly affect the particular facility environment. Thus, the fact that the NIETCs do not

[16] DOE argues that the NIETCs do not have approve the actual sitings of specific transmission any environmental effect because they do not ap- facilities does not excuse DOE from considering prove of the siting of any transmission facility, and the NIETCs' environmental impacts.

furthermore, any particular siting will be subject to NEPA review. Our precedent, however, provides Furthermore, Forelaws does not stand alone in that agency action may constitute a major Federal holding that broad agency programs may constitute action even though the program does not direct major Federal actions, even though the programs any immediate ground-breaking activity. do not direct any immediate ground-disturbing activity. See Oregon Natural Desert Ass'n v. BLM, In Forelaws on Board v. Johnson, 743 F.2d 531 F.3d 1114, 1116 (9th Cir.2008) *1099 (finding 677 (9th Cir.1984), the petitioners challenged the EIS inadequate for land use plan covering a large Bonneville Power Administration's (BPA) offers portion of Oregon); N. Alaska Envtl. Ctr v.

of long-term contracts for power. Id. at 679. Al- Kempthorne, 457 F.3d 969, 973 (9th Cir.2006) though BPA argued that its actions that merely al- (noting that an EIS was prepared for agency action locate federal power to different customers do not making entire Northwest Petroleum Reserve avail-significantly affect the environment, we held that able for oil and gas leasing despite the lack of site the contracts raised considerations of far greater specific analysis for particular locations where historic and regional import and significantly affect drilling might occur); Friends of Yosemite Valley FN25 the environment. Id. at 682. Accordingly, v. Norton, 348 F.3d 789, 800-01 (9th Cir.2003) we concluded that BPA's action was not sufficient (evaluating programmatic EIS for land use plan for FN26 and required the preparation of an EIS. Id. at 686. national park); Blue Mountains Biodiversity Project v. Blackwood, 161 F.3d 1208, 1213 (9th FN25. Among the other potential effects Cir.1998) (finding EA inadequate and requiring EIS warranting review under the NEPA were FN27 for log-salvaging plan for national forest).

the fact that by defining the federal base system and new large single loads' the FN26. In Friends of Yosemite, we recog-contracts help determine the magnitude of nized that:

BPA power obligations in the future and thus will have an impact upon long-range [A]n agency's planning and management regional energy plans and that the con- decisions may occur at two distinct ad-tracts significantly affect the environment ministrative levels: (1) the because they involve important policy programmatic level at which the choices affecting energy conservation. [agency] develops alternative manage-743 F.2d at 682. ment scenarios responsive to public con-cerns, analyzes the costs, benefits and DOE recognizes the relevancy of Forelaws, but consequences of each alternative in an seeks to distinguish the case on the ground that [EIS], and adopts an amendable DOE has no authority to site electric transmission [management] plan to guide manage-facilities. This distinction is not persuasive because ment of multiple use resources; and (2) the NIETCs, in essence, influence the areas in the implementation stage during which which electric transmission facilities will be loc- individual site specific projects, consist-ated, even though they do not determine the precise ent with the [management] plan, are pro-locations of the facilities. As in Forelaws, the loca- posed and assessed.

tions of those areas could have great historic and

Page 28 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) 348 F.3d at 800. We also recognized that sought under the general review provision of the an agency must prepare an EIS at each APA, the agency's decision must be a final agency level. An EIS for a programmatic plan action and the plaintiffs must establish they have (such as the CMP) must provide suffi- suffered a legal wrong, or will be adversely af-cient detail to foster informed decision- fected or aggrieved within the meaning of the relev-making, but site-specific impacts need ant statute. Id. We proceeded to comment that the not be fully evaluated until a critical de- agency action must (1) be federal, (2) major, and FN28 cision has been made to act on site de- (3) have a significant environmental impact.

velopment. Id. (internal quotation Id. The opinion focused on the third requirement.

marks and citations omitted). We concluded that the *1100 district court properly recognized that none of the activities FN27. We noted that a project may have had an actual or immediately threatened effect on significant environmental impacts where the environment and correctly decided that the FS its effects are highly uncertain or involve reasonably found that its actions did not unique or unknown risks and warned significantly affect the quality of human environ-that general statements about possible ef- FN29 ment. Id. at 669-70. Although sympathetic fects and some risk do not constitute a to plaintiffs' concern that agencies should conduct a hard look absent a justification regarding full NEPA analysis when management plans are why more definitive information could not implemented or proposed, we concluded that the be provided. Blue Mountain, 161 F.3d at current forest management programs did not call 1213 (quotation marks and citations omit- for specific enough action to trigger NEPA's pro-ted). cedural requirements, and noted that plaintiffs could challenge the sufficiency of an agency EIS

2. The NIETCs are major federal actions when discrete agency action is called for. Id. at

a. Northcoast Environmental Center v. Glickman 670.

DOE asserts that the NIETCs are not major federal actions because it would be pure speculation FN28. We further noted that an EIS is not to predict their environmental impacts. Citing necessary where a proposed federal action Northcoast Environmental Center v. Glickman, 136 would not change the status quo. 136 F.3d F.3d 660 (9th Cir.1998), DOE asserts that an at 668. Here there is no question that the agency action that has only speculative environ- NIETCs change the status quo.

mental impacts is not a major federal action.

FN29. We noted:

Our holding in Northcoast is more nuanced than suggested by DOE. At issue in that case was a The FS Action Plan's Action Items/

proposal by the Forest Service (FS) to establish Objectives section does not create guidelines for research, management strategies, and activities which impact the physical en-information sharing concerning a root rot fungus on vironment. Rather, the Action Items/

federal land in Oregon. Id. at 670. The district court Objectives set forth guidelines and goals found that the programs did not constitute final for POC research, management agency action subject to judicial review and that strategies and information sharing. They even if they did, they were not major federal ac- do not provide for specific activities tions significantly affecting the environment. Id. at with a direct impact on POC. Similarly, 668. BLM's POC Management Guidelines provide management strategies and goals On appeal, we first noted that where review is for dealing with POC preservation and

Page 29 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) timber sales on BLM managed land. The agency's conclusion was reasonable. See 136 F.3d Guidelines neither propose any site- at 670.

specific activity nor do they call for spe-cific actions directly impacting the phys- Here, the NIETCs are undoubtedly final agency ical environment. Therefore, we find the actions. The NIETCs conclude DOE's responsibilit-Secretaries reasonably decided that an ies under § 216. They establish the boundaries for EIS was not required for their POC man- two national electric transmission corridors. Once agement programs. the NIETCs become final, any question as to the actual siting of a facility within the corridors will 136 F.3d at 670. be addressed to FERC. See 73 Fed.Reg. at 12,969 (DOE agrees that the effect of a National Corridor

[17] Northcoast offers several points of guid- is to delineate geographic areas within which, under ance. First, in determining whether the program had certain circumstances, FERC may ultimately au-a significant environmental impact, we implicitly thorize the construction or modification of electric held that the program was a final agency action transmission facilities.).

subject to review under the APA, even though we recognized that plaintiffs could challenge the suf- *1101 Both the intent and impact of the NI-ficiency of an agency EIS when discrete agency ac- ETCs support the conclusion that they constitute FN30 tion is called for. Id. Second, we determined major Federal action. They create National In-that the program was, at least potentially, a major terest corridors to address national concerns. The Federal action. It is not clear whether the require- NIETCs cover over a 100 million acres in ten ment that agency action be major was considered States. Moreover, they create new federal rights, in-separately from the requirement that the action have cluding the power of eminent domain, that are in-significant environmental impact, or whether the tended to, and do, curtail rights traditionally held latter was treated as an element of the former. In by the states and local governments. See 16 U.S.C.

any event, the opinion certainly implies that if the § 824p(b), (e). In sum, we hold that the NIETCs are program did have a significant environmental im- final agency actions that constitute major Federal pact, it would have been a major federal action. actions.

FN30. The district court had held that the b. The NIETCs raise significant environmental im-program was not a final agency action pacts and, thus, not subject to review. 136 F.3d [19] The remaining question is whether the NI-at 668. However, in determining whether ETCs could have significant environmental impacts the program had a significant environment- or, more accurately, whether DOE has created a re-al impact, we implicitly rejected this de- cord sufficient to allow us to evaluate whether its termination. If the program had not been no effects determination is reasonable.

final, then it would not have been subject to judicial review under the APA and DOE proffers four arguments against being re-plaintiffs' complaint would have been dis- quired to undertake an environmental study. First, missed. DOE contends that no potential project-specific im-pacts are reasonably foreseeable or caused by the

[18] Third, although Northcoast states that an NIETCs. DOE contends that the NIETCs are not agency need not prepare an environmental study decisions to add transmission capacity to solve the when its action does not have a significant environ- problems of congestion or to site transmission facil-mental impact, it also holds that the record must be ities along preselected routes. DOE claims that sufficient to allow the court to determine that the these decisions remain to be made by multiple inde-

Page 30 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) pendent actors, and given the vast range of options FN31. DOE cites 40 C.F.R. § 1508.18(b),

available ... it would be pure speculation to predict which reads:

environmental impacts or assign them (as a matter of causation) to the Designation Order. DOE fur- (b) Federal actions tend to fall within ther asserts that under § 216 its limited task was to one of the following categories:

determine the conditional availability of a federal (1) Adoption of official policy, such as forum for siting transmission projects, and it rules, regulations, and interpretations ad-would have been premature for DOE to evaluate opted pursuant to the Administrative the potential environmental impacts of new trans-Procedure Act, 5 U.S.C. 551 et seq.;

mission facilities when deciding merely whether a treaties and international conventions or federal forum should be made available. DOE also agreements; formal documents establish-contends that even if the NIETCs were certain to ing an agency's policies which will result result in specific projects being submitted to FERC, in or substantially alter agency pro-DOE was not required to prejudge the potential grams.

impacts of those projects because a project-spe-cific NEPA review is required before a permit is- (2) Adoption of formal plans, such as of-sues. ficial documents prepared or approved by federal agencies which guide or pre-Second, DOE claims that the NIETCs have no scribe alternative uses of Federal re-foreseeable programmatic effects. DOE admits that sources, upon which future agency ac-in some instances NEPA may require review of tions will be based.

programmatic decisions that prescribe future ac-tions, even though project-specific NEPA review (3) Adoption of programs, such as a will occur before a particular project is undertaken. group of concerted actions to implement FN31 Nonetheless, DOE maintains that the NIETCs a specific policy or plan; systematic and are not programmatic decisions*1102 with reason- connected agency decisions allocating ably-foreseeable future effects because each NIETC agency resources to implement a specific is not a plan to guide land management or energy statutory program or executive directive.

policy decisions, but merely makes available a federal procedural remedy (i.e., a forum for the (4) Approval of specific projects, such as consideration of interstate transmission lines), in construction or management activities the event that FERC finds relevant State forums to located in a defined geographic area.

be inadequate per the standards set by Congress. Projects include actions approved by DOE maintains that the addition of a backstop fed- permit or other regulatory decision as eral forum does not mean that States and FERC well as federal and federally assisted will approve a greater number of projects and it activities.

does not favor transmission solutions over non-transmission alternatives ... nor particular genera- Id. DOE appears to recognize that NI-tion sources over others. DOE recognizes that it is ETCs may be federal actions under sub-tasked with choosing the geographic boundaries of section (b)(3).

the National-Interest Corridors, but asserts that pe-Third, DOE denies that the NIETCs could have titioners have failed to show that these boundaries any impacts on sensitive areas such as critical hab-circumscribe relevant alternatives as they place no itat for endangered species, scenic rivers, wilder-limits on State siting authorities.

ness areas, and historic sites. DOE points out that an EIS must be prepared whenever substantial

Page 31 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) questions are raised about whether a specific According to DOE, there are no foreseeable ad-project may have a significant effect. DOE further verse effects from the mere threat of federal inter-asserts that petitioners have the burden of showing vention because potential acceleration of State that the potential impacts to sensitive resources are proceedings does not dictate the outcome of those a reasonably foreseeable result of the designa- proceedings and because DOE does not have any tions. DOE maintains that [t]he very breadth of discretion to alter the statutory time frames, which these designations belies any suggestion that im- might preclude meaningful review of their poten-pacts can be meaningfully evaluated at the designa- tial effects.

tion stage, even if it is assumed that the designation will prompt additional transmission projects. DOE There may be merit to some of DOE's argu-disagrees with petitioners' claim that the inclusion ments in terms of limiting the scope of *1103 an of land within a corridor will discourage conserva- EIS or in explaining why an EA and not an EIS tion, opining that a NIETC might as readily spur should be prepared, but they fail both as a matter of the expansion of parks and conservation easements law and fact to justify DOE's failure to undertake within the Corridors, as interested parties seek to any study of the potential environmental impacts.

FN32 protect sensitive resources. DOE further ar-DOE's primary argument appears to be that be-gues that claims of potential habitat fragmentation cause the NIETCs do not approve any specific sites, within a corridor cannot be meaningfully reviewed they have no meaningful environmental impact.

because of the many variables and wide range of al-This perspective fails to appreciate that a decision ternatives. DOE claims that any suggestion that en-to encourage, through a number of incentives, the vironmentally sensitive areas might be excluded siting of transmission facilities in one municipality from the corridors confuses DOE's threshold task rather than another has effects in both municipalit-(designating areas with congestion problems) with ies in terms of the values of land and proposed and the States' and FERC's subsequent task (evaluating potential uses of land. The effects may be difficult proposed solutions).

to measure and may be determined ultimately to be FN32. This argument exposes a weakness too imprecise to influence the Designation, but this in DOE's position. In essence, DOE here is precisely the type of determination that only can reasons that because people see the Desig- be intelligently made after the preparation of at nation as threatening conservation efforts, least an EA.

they will redouble their efforts to protect Recognition of these consequences flowing sensitive resources.

from the NIETCs defeats most of DOE's reasons for Fourth, DOE argues that the NIETCs do not di- not preparing an EA or EIS. Without such a study, minish any legal protections because Congress it is impossible to fairly determine whether project-provided that nothing in § 216 alters federal envir- specific impacts are reasonably foreseeable, wheth-FN33 onmental laws, including laws requiring special au- er there are programmatic effects, and thorization for use of federal lands or federal per- whether the Designation has any impact on sensit-mits for impacting air and water resources. The ive areas. Furthermore, the NIETCs do diminish NIETCs do not allow power companies to run legal protections at least as to whether any particu-away from state and federal environmental and lar geographic area should be included in a cor-land use laws because they, in themselves, have no ridor. The particular siting of a transmission facility preemptive effect, and FERC's authority to preempt may be challenged before a State or FERC, but a State law under § 216(b) is project-specific and challenge to a specific site cannot challenge the in-limited to circumstances enumerated by Congress. clusion of the area involved in the NIETCs by DOE. Thus, the alleged impact of the NIETCs' in-

Page 32 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) clusion of particular areas as within the corridors, Together with the Department of Interior, DOE pre-and the exclusion of other areas, are subject to re- pared the required PEIS. See 42 U.S.C. § 15926(a) view for environmental impacts at this time or not (2) (providing for the preparation of any environ-at all. mental reviews that may be required *1104 to com-plete the designation of such corridors).

FN33. DOE's argument that the Designa-tion is not a programmatic decision be- The federal agencies issued the PEIS in Octo-cause it is not a plan to guide land man- ber 2007. Two aspects of the PEIS are of particular agement or energy policy decisions and relevance to this case. First, in response to the ques-merely makes available a federal proced- tion why conduct an environmental review under ural remedy does not withstand scrutiny. NEPA and prepare a programmatic analysis, the This argument assumes that making avail- PEIS's executive summary states:

able a federal procedural remedy is not a plan to guide land management or energy Section 368 requires the Agencies to conduct any policy. Here, the converse is true. The fed- environmental reviews necessary to complete eral remedy was created as part of an en- the designation of Section 368 energy corridors.

ergy plan. Moreover, the Designation is The proposed designation of Section 368 energy more than a procedural remedy because corridors would not result in any direct impacts it also creates authority for federal action on the ground that may significantly affect the (by FERC) where no such authority previ- quality of the human environment.

ously existed, and arms that authority with Nevertheless, the Agencies have decided to pre-the power of eminent domain.

pare a PEIS to conduct a detailed environmental

c. The relevance of the environmental study for the analysis at the programmatic level and to integ-FN34 West-wide Corridors rate NEPA at the earliest possible time.

Any remaining doubt as to whether it is pos-sible to consider the environmental impacts of the FN34. The executive summary goes on to NIETCs dissipates in light of DOE's preparation of state:

a Programmatic Environmental Impact Statement (PEIS) for its designation of the West-wide Cor- NEPA requires that federal agencies pre-ridors for federal lands in eleven western states. See pare a detailed statement for major fed-U.S. Department of Energy et al., Programmatic eral actions significantly affecting the Environmental Impact Statement, Designation of quality of the human environment. Here, Energy Corridors on Federal Land in the 11 West- the Agencies have concluded that pre-ern States (DOE/EIS-0386), 2007 (hereinafter paring a PEIS at this time to examine re-PEIS). A separate and distinct provision in the gion-wide environmental concerns is ap-EPAct, § 368 of the Energy Policy Act of 2005 ( propriate, even in the absence of on-Pub.L. No. 109-58, § 368, 119 Stat. 727, codified the-ground environmental impacts res-at 42 U.S.C. § 15926), directs federal land- ulting from the designation. Actual local management agencies to identify rights-of-way environmental impacts must inevitably across lands they administer to serve as energy cor- await site-specific proposals and the re-ridors. DOE points out that the statute provides that quired site-specific environmental re-any corridor designated under this section shall, at view.

a minimum, specify the centerline, width, and com-patible uses of the corridor. 42 U.S.C. § 15926(e). ...

Page 33 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072)

The decision to prepare an EIS for a pro- the creation of the PEIS and its impact on the res-grammatic action such as that described ulting corridor designation is strong evidence both by Section 368 is supported by Council that it is possible to determine the environmental on Environmental Quality (CEQ) regula- impacts of a proposed energy corridor and that the tions at Title 40, Part 1502.4(b), of the study of such environmental impacts may result in Code of Federal Regulations (40 C.F.R. modifications of a corridor's boundaries. The West-1502.4(b)), which states that wide Corridors Designation, like the NIETC Desig-Environmental Impact Statements may nation, did not approve any specific sites, but desig-be prepared and are sometimes required nated specific areas for sites. Nonetheless, the lead for broad federal action such as the ad- agencies, including DOE, reshaped the corridors in option of new agency programs or regu- *1105 response to the PEIS to exclude certain sens-lations (section 1508.8). Agencies shall itive lands. Certainly § 15926 contains a more spe-prepare statements on broad action so cific requirement for a study of environmental im-that they are relevant to policy and are pacts than § 216, but DOE's ability to undertake a timed to coincide with meaningful points PEIS for West-wide Corridors, and to modify the in agency planning and decision mak- boundaries based on the PEIS, undermines its as-ing. sertion that it is not possible to evaluate the envir-onmental impacts of a NIETC.

PEIS, supra, Executive Summary, at ES.8 (footnote omitted). 3. DOE has not adequately documented its decision DOE also asserts that it has adequately docu-Second, after identifying an unrestricted mented its decision not to undertake any review un-conceptual West-wide network of energy transport der NEPA. It argues that similar to the situation in paths, the executive summary explained: Northcoast, neither NIETC is a specific proposal with environmental consequences that can be mean-Next, the locations of individual segments of the ingfully evaluated at this time. 136 F.3d at 663 conceptual network defined in Step 1 were ex-(internal quotations omitted). We doubt that a NI-amined and revised to avoid major known envir-ETC is similar to the management guidelines at is-onmental, land use, and regulatory constraints sue in Northcoast, but even if we were to engage in (such as topography, wilderness areas, cultural this fiction, this case does not contain the critical resources, military test and training areas, and factual element present in Northcoast: a record that Tribal and state natural and cultural resource supports the reasonableness of the agency's de-areas, etc.).... The revision resulted in a prelimin-cision not to prepare an EIS or EA. We cannot ac-ary West-wide energy corridor network that cept DOE's unsupported conclusion that its final avoided private, state and Tribal lands, many im-agency action that covers ten States and over a 100 portant known natural and cultural resources, and million acres does not, as a matter of law, have many areas incompatible with energy transport some environmental impact. See Alaska Ctr., 189 corridors because of regulatory or land use con-F.3d at 859; The Steamboaters, 759 F.2d at 1393. If straints while meeting the requirements and ob-the smaller West-wide Corridors are worthy of a jectives of Section 368.

PEIS, as detailed in the statement's executive sum-PEIS, supra, at ES.12.2.1. mary, then a much larger NIETC is also pre-sumptively worthy of an EA or EIS. In any event, We recognize that the PEIS and the West-wide DOE has failed to present the documentation neces-Designation were undertaken pursuant to a separate sary to allow us to determine that there are no en-and distinct provision of the EPAct. Nonetheless, vironmental impacts or that DOE took a hard

Page 34 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) look at the environmental impacts. historic properties, and environmentally sensitive lands. In light of the agencies' sensitivity to envir-

4. The failure to undertake an environmental study onmental*1106 impacts in their creation of the is not harmless error West-wide Corridors, we cannot conclude that the

[20] Finally, DOE suggests, citing 40 C.F.R. § DOE's failure to undertake a study of the NIETCs' 1500.3, that even if we were to determine that a environmental impacts constitutes harmless error.

formal EA was required to document DOE's no ef-fects determination, DOE's failure to do so was, at In sum, NEPA requires that for all major Fed-most, harmless error. As noted in Section III C, eral actions significantly affecting the quality of the supra, following the issuance of the Supreme human environment an agency must prepare a de-Court's opinion in Sanders, 129 S.Ct. 1696, we tailed statement on the environmental impact of the place the burden on petitioners to show that the action and any adverse environmental effects. 42 failure to undertake an environmental study is not U.S.C. § 4332(c). DOE did not prepare an EIS or harmless error. Here, even a cursory review of peti- even an EA for its NIETC Designation. Its tioners' contentions raises substantial questions ... proffered reasons for not doing sothe NIETC as to whether [the NIETCs] may cause significant Designation is not a major Federal action, NEPA degradation of some human environmental factor. review will take place in subsequent requests for Klamath Siskiyou Wildlands, 468 F.3d at 562 specific sitings, and there are no significant impacts FN35 (internal citation omitted). from the Designationare not persuasive as a mat-ter of law and are not supported by the record. Ac-FN35. We note that DOE's reference to a cordingly, because DOE has not shown that it has part of the regulation is no substitute for its taken the requisite hard look at the environmental obligation to supply a convincing state- consequences of the NIETCs, we vacate the NIETC ment of reasons why potential effects are Designation and remand the matter to DOE to pre-insignificant. The Steamboaters, 759 F.2d pare at least an EA to determine whether there are at 1393. The regulation does state, as DOE any environmental impacts that significantly affect notes, that any trivial violation of [CEQ] the quality of human environment, and whether, if regulations [does] not give rise to any in- FN36 so, the impacts warrant adjustments.

dependent cause of action. However it also provides that the provisions of the FN36. In Northwest Environmental Advoc-Act and of these regulations must be read ates v. EPA, we noted that when the EPA together as a whole in order to comply acted outside its authority and failed to fol-with the spirit and letter of the law. 40 low Congress's clear mandate, the appro-C.F.R. § 1500.3. Here, the failure to under- priate remedy was to vacate that action.

take any environmental review unsuppor- 537 F.3d 1006, 1026-27 (9th Cir.2008).

ted by a record that factually supports such a decision is not a trivial violation. VI. THE ENDANGERED SPECIES ACT AND THE NATIONAL HISTORIC PRESERVA-For example, petitioners note that the Southw- TION ACT est Corridor includes the Joshua Tree National Park Petitioners also argue that DOE violated the and the Sonoran Desert National Monument. It in- Endangered Species Act (ESA), 16 U.S.C. § 1531 cludes more than three million acres of national , by failing to consult with the Secretary of Interior wildlife refuge as well as national parks and 57 pursuant to 16 U.S.C. § 1536(a)(2). We have re-state beaches, reserves and recreational areas. The cently stated that [t]he threshold for triggering the Mid-Atlantic Corridor encompasses four national Endangered Species Act is relatively low; consulta-forests, over a million acres of national reserves, tion is required whenever a federal action may af-

Page 35 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) fect listed species or critical habitat. Cal. ex rel. specifically directed DOE to undertake a Conges-Lockyer v. USDA, 575 F.3d 999, 1018 (2009) tion Study in consultation with affected States. 16 (quoting 50 C.F.R. § 402.14(a)) (emphasis added). U.S.C. § 824p(a)(1). It further directed that in un-DOE responds that petitioners' arguments concern- dertaking this study and in designating any national ing the ESA echo their NEPA arguments. interest electric transmission corridors, DOE was to comply with NEPA. We determine that DOE failed Petitioners also contend that DOE violated the to consult with the affected States prior to issuing National Historical Preservation Act (NHPA) by its Congestion Study and that this failure was preju-failing to comply with 16 U.S.C. § 470f, which re- dicial to the States. Accordingly, the Congestion quires that it accept comments from certain entities, Study is vacated. We further find that DOE's state-including the Advisory Council on Historic Preser- ment that its designation of NIETCs does not sig-vation (ACHP), prior to the approval of the ex- nificantly affect the quality of the human environ-penditure of any Federal funds on an undertaking ment is not supported by sufficient evidence to that has the potential to adversely affect historic show that DOE has taken the requisite hard look properties. See 36 C.F.R. §§ 800.1(c); 800.3(a); at the environmental consequences. See Kleppe v.

800.16(y). DOE argues that it reasonably declined Sierra Club, 427 U.S. at 410 n. 21, 96 S.Ct. 2718; to initiate historic-preservation review under California ex rel. Lockyer, 575 F.3d at 1012. We NHPA, and further claims that it adequately re- further find that the record does not allow us to sponded to the two letters it received from the conclude that the failure to take a hard look at the ACHP. environmental consequences was harmless. Accord-ingly, the Designation of the NIETCs is vacated. In As we hold that the Congestion Study and the light of our vacation of the Congestion Study and NIETCs Designation must be vacated and the mat-the NIETCs Designation, we decline to consider the ter remanded to the DOE, we need not consider pe-petitioners' challenges (1) under the Endangered titioners' claims under the ESA and NHPA. Should Species Act, (2) under the National Historic Preser-DOE on remand designate NIETCs in a manner that vation Act, and (3) to specific aspects of the petitioners believe violates either the ESA or Mid-Atlantic Corridor and the Southwest Corridor.

NHPA, they can then seek judicial review of those decisions. The petitions for review are GRANTED, the Congestion Study and Designation of NIETCs are VII. CHALLENGES TO SPECIFIC ASPECTS VACATED, and the matter is REMANDED for OF THE NIETCS further proceedings consistent with this opinion.

Petitioners have raised numerous challenges to particular aspects of the Mid-Atlantic Corridor and IKUTA, Circuit Judge, dissenting:

the Southwest Corridor. However, as the Designa- This is a tale of two errors. First, the DOE tion of these corridors is vacated, these challenges erred by not consulting with affected states at the are moot and we need not address them. Petitioners threshold of a massive, year-long, nationwide study will have the opportunity to *1107 present their of electric transmission congestion. But this error concerns to DOE in the proceedings on remand. We was harmless. Petitioners have not shown that are confident that whatever actions DOE takes, the DOE's error prevented them from submitting in-subsequent challenges to those actions (if any) will formation or making arguments to DOE, nor have turn, at least in part, on facts and arguments that are they shown that DOE would have made a different not before us now. decision absent the error. In short, they have failed to offer even a scintilla of evidence to establish pre-CONCLUSION judice. Under controlling Supreme Court precedent, In the Energy Policy Act of 2005, Congress

Page 36 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) therefore, we must uphold DOE's actions. Shinseki calls, by submitting written comments, or by some

v. Sanders, --- U.S. ----, 129 S.Ct. 1696, combination of these various channels. Moreover, 1704-06, 173 L.Ed.2d 532 (2009). DOE considered and responded to these comments when it issued its final study and designation order, But here is where the second error comes in, and no state now claims that it lacked notice of namely, the majority's ruling that DOE must com- DOE's invitation to solicit comments or had specif-plete the entire process again even though its con- ic arguments or studies that it was unable to submit.

sultation error caused no harm. Instead of recogniz- In fact, the petitioners do not (and cannot) demon-ing that Sanders rejected the presumption of preju- strate any prejudice from DOE's failure to engage dice articulated in Riverbend Farms, Inc. v. in formal consultation: they cannot show that the Madigan, 958 F.2d 1479, 1487 (9th Cir.1992), the outcome would have been different had they been majority employs this discredited approach to nulli- formally consulted, nor can they point to any spe-fy DOE's efforts. In doing so, the majority inflicts cific information or arguments that they were un-the only real injury in this saga. I respectfully dis- able to submit because of the lack of consultation.

sent. Accordingly, as explained in detail below, the states' failure to show any actual harm attributable I

to the lack of consultation dooms their claims under Motivated by concerns about the reliability of controlling Supreme Court precedent, Sanders, 129 the national electricity system, Congress instructed S.Ct. at 1704-06, and the majority errs in holding DOE to conduct a study of electric transmission otherwise.

congestion and use it to designate any geographic area experiencing electric energy transmission ca- II pacity constraints or congestion that adversely af- The Administrative Procedure Act (APA) in-fects consumers as a national interest electric trans- forms federal courts that, in reviewing agency ac-mission corridor. 16 U.S.C. § 824p(a)(1), (2). tions, due account shall be taken of the rule of pre-DOE's *1108 efforts resulted in the Congestion judicial error. 5 U.S.C. § 706. This section re-Study, 71 Fed.Reg. 45,047 (Aug. 8, 2006), and the quires courts to apply the harmless error rule in re-Designation Order, 72 Fed.Reg. 56,992 (Oct. 5, viewing challenges to administrative agency pro-2007), which examined congestion in over 150,000 ceedings. See, e.g., Nat'l Ass'n of Home Builders v.

miles of transmission lines and designated over 119 Defenders of Wildlife, 551 U.S. 644, 659-60, 127 million acres over ten states as national interest S.Ct. 2518, 168 L.Ed.2d 467 (2007) (In adminis-electric transmission corridors (NIETCs). trative law, as in federal civil and criminal litiga-tion, there is a harmless error rule. (quoting PDK Although I agree with the majority that the Labs., Inc. v. U.S. DEA, 362 F.3d 786, 799 DOE failed to engage in consultation with affected (D.C.Cir.2004))). Although Section 706 of the APA States, § 824p, the record shows that this failure does not specify which party bears the burden of neither impacted the outcome of the designation showing that prejudice resulted from alleged process nor deprived petitioners of the required op-agency error, the general rule is that the party chal-portunity to contribute all comments, facts, and lenging an erroneous procedure or ruling must carry analysis that they wished to submit. The affected the burden. See, e.g., NLRB v. Seine & Line Fisher-states had actual notice that DOE was producing a men's Union of San Pedro, 374 F.2d 974, 981 (9th congestion study that would inform its decision to Cir.1967) ( [T]he burden of showing that preju-designate NIETCs, and all but two of them actually dice has resulted is on the party claiming injury participated and provided feedback by directly in-from the erroneous rulings.) (quoting Palmer v.

teracting with DOE personnel at various in-person Hoffman, 318 U.S. 109, 116, 63 S.Ct. 477, 87 L.Ed.

conferences, one-on-one meetings, or conference

Page 37 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) 645 (1943)). facts and evidence to establish prejudice and explain why the erroneous ruling caused harm.

In a handful of cases involving alleged agency Id. at 1706. In this regard, the Court specifically failures to comply with notice, comment, and con- disapproved the challenger's argument for the cre-sultation requirements, we departed from this long- ation of a special rule that placed upon the standing rule. We justified this departure based on agency the burden of proving that a notice error did our concern that the burden for establishing preju- not cause harm. Id. Third, the Court held that dice in such cases was too heavy. As we explained while courts may sometimes make empirically in Riverbend Farms, if the harmless error rule based generalizations about what kinds of errors are were to look solely to result, an agency could al- likely, as a factual matter, to prove harmful, such ways claim that it would have adopted the same generalizations must be based on case-specific rule even if it had complied with APA procedures. factors; they cannot be rigid, mandatory presump-958 F.2d at 1487. Therefore, we shifted *1109 the tions. Id. at 1707. The factors that inform such gen-burden to the agency by presuming that an agency's eralizations are best left to the court that sees suf-failure to provide notice or consultation was preju- ficient case-specific raw material so as to draw dicial. See Paulsen v. Daniels, 413 F.3d 999, 1006 such empirical conclusions. Id.

(9th Cir.2005) (presuming that the Bureau of Pris-ons's failure to comply with the APA's notice and FN1. Though Sanders addressed the harm-comment requirements was prejudicial and thus less error standard in the context of appeals shifting the burden to the agency to prove other- from the United States Court of Appeals wise). for Veterans Claims, the Court made clear that its articulation of the harmless error A rule applies to our interpretation of the The Riverbend Farms approach is contrary to APA in all administrative contexts. Spe-the Supreme Court's recent decision in Sanders. In cifically, the Supreme Court stated that the considering the rule of prejudicial error in the requirement that the Veterans Court take agency context, the Supreme Court repudiated the due account of the rule of prejudicial er-Federal Circuit's mandatory presumption that cer- ror, 38 U.S.C. § 7261(b)(2), should be in-tain types of notice errors were per se prejudicial. terpreted in the same manner as § 706 in FN1 129 S.Ct. at 1704. Rejecting a rule that when the APA. Sanders, 129 S.Ct. at 1704. Our an agency provides a claimant with notice that is sister circuits have complied with this dir-deficient in any respect, the agency should pre- ective by interpreting Sanders as a clarific-sume that the error is prejudicial, id. at 1702, ation of the harmless error standard in oth-Sanders enunciated a number of general principles. er agency contexts. See, e.g., Jicarilla First, the Court prohibited reliance on a mandatory Apache Nation v. U.S. Dept. of Interior, presumption of prejudice because doing so would 613 F.3d 1112, 1121 (D.C.Cir.2010) frustrate Congress's express preference for determ- (citing and applying Sanders in a suit by ining the harmlessness of an error on a fact-spe- an Indian tribe against the Department of cific, case-by-case basis. Id. at 1705. Second, the the Interior); In re Chapman, 595 F.3d Court held that the burden of showing that an error 1330, 1338-40 (Fed.Cir.2010) (citing and is harmful normally falls upon the party attacking applying Sanders in the patent context).

the agency's determination. Id. at 1706. Unless the Commentators have also acknowledged circumstances of the case make clear to the appel- Sanders's effect on the harmless error rule late judge that the ruling, if erroneous, was harm- in the administrative agency context. See ful, the party seeking reversal must marshal[ ] the Craig Smith, Taking Due Account of the

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APA's Prejudicial-Error Rule, 96 Va. prevented specific facts or arguments from being L.Rev. 1727, 1740 (2010). presented to an agency and entered into the admin-istrative record or that the error prevented the peti-Thus, Sanders instructs federal appellate courts tioner from mounting a credible challenge to the that they must take a case-by-case approach to de- agency action. Craig Smith, Taking Due Account termining whether an agency's error, whether pro- of the APA's Prejudicial-Error Rule, 96 Va. L.Rev.

cedural or substantive, has a harmful effect. Under 1727, 1744, 1746 (2010) (citing cases). This Sanders, we may neither presume prejudice nor record-based approach, see id. at 1744, is consist-place the burden of proof on the agency to disprove ent with the basic agency law principle that prejudice. The Supreme Court's direction to apply notions of fairness and informed administrative the same kind of harmless-error rule that courts decisionmaking require that agency decisions be ordinarily apply in civil cases, id. at 1704, *1110 made only after affording interested parties notice and to eschew presumptions in favor of a case- and an opportunity to comment, Chrysler Corp. v.

specific approach is clearly irreconcilable with Brown, 441 U.S. 281, 316, 99 S.Ct. 1705, 60 the rule that an agency's notice and comment failure L.Ed.2d 208 (1979); see also Sanders, 129 S.Ct. at is harmless only where the agency's mistake 1707 (stating that in evaluating an agency's error clearly had no bearing on the procedure used, for harmlessness, a reviewing court could consider Riverbend Farms, 958 F.2d at 1487 (quoting the error's likely effects on the perceived fairness, Sagebrush Rebellion, Inc. v. Hodel, 790 F.2d 760, integrity, or public reputation of judicial proceed-764-65 (9th Cir.1986)). Therefore, our burden- ings.).

shifting presumption of prejudice has been super-seded. See Miller v. Gammie, 335 F.3d 889, 892-93 The D.C. Circuit has applied this record-based (9th Cir.2003) (en banc). Indeed, we are bound by test in a number of key cases. In Gerber v. Norton, the later and controlling authority, and [must] reject 294 F.3d 173 (D.C.Cir.2002), for example, the U.S.

the prior circuit opinion as having been effectively Fish & Wildlife Service issued an incidental take overruled. Id. at 893. permit allowing real estate developers to build on an area inhabited by the endangered Delmarva fox B squirrel. Id. at 175-76. Although the Service pub-Despite the majority's insistence to the con- lished the draft take permit, it erred by failing to trary, Maj. Op. at 1094 n. 21, the concern that an- publish a map of the proposed mitigation site for imated our rule in the Riverbend Farms line of the squirrels. Id. at 177, 179. After a conservation cases, namely that it would be impossible for group challenged this error, the D.C. Circuit held plaintiffs to establish prejudice as a result of pro- that the challengers successfully demonstrated pre-cedural errors, was unwarranted. As noted above, judice by identifying three specific critiques of the we based the burden-shifting presumption of preju- permit that they would have provided had they seen dice approach on the concern that it would be virtu- the map. Id. at 182. In reaching this conclusion, the ally impossible to mount a successful challenge to court articulated the rule that in order to show pre-an agency's procedural error. This conclusion, in judice, a plaintiff must indicate with reasonable turn, was based on the assumption that a petitioner specificity what portions of the documents it ob-could demonstrate prejudice only by showing that jects to and how it might have responded if given an agency's outcome would have been different ab- the opportunity. Id. at 182 (internal quotation sent the error. Riverbend Farms, 958 F.2d at 1487. marks omitted). Similarly, in Owner-Operator In-But as shown by our sister circuits, this assumption dep. Drivers Ass'n, Inc. v. Fed. Motor Carrier is not correct: a party can also show prejudice by Safety Admin., the D.C. Circuit held that the peti-establishing that an agency's procedural error tioner satisfied its burden of establishing prejudice

Page 39 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) by raising arguments that *1111 amply demon- identify any comment that they were prevented strate[d] that it would have mounted a credible from making and that would have made a differ-challenge had it been afforded an opportunity to do ence in the result); Texas v. Lyng, 868 F.2d 795, FN2 so. 494 F.3d 188, 202-03 (D.C.Cir.2007). 800 (5th Cir.1989) (holding that agency's procedur-al error was harmless because appellants [did] not FN2. See also Am. Radio Relay League, explain what they would have said in response to Inc. v. FCC, 524 F.3d 227, 230, 237-38 the ... report and [did] not identify any new in-(D.C.Cir.2008) (holding that the FCC's formation they would have submitted to the agency failure to comply with notice- if given the opportunity).

and-comment requirements was not harm-less error because the appellant showed Indeed, we have applied a similar principle on that redacted portions of FCC reports occasion. See Safari Aviation, Inc. v. Garvey, 300 appear[ed] to contain information in ten- F.3d 1144, 1152 (9th Cir.2002) (concluding that sion with the [Commission's] conclusion agency's failure to consider comments before pro-and that it could offer commentary that mulgating a final rule was harmless because the would illuminate unaddressed strengths substance of the comments had been extensively and weaknesses of the FCC's data (second commented on and discussed in previous rulemak-alteration in original) (internal quotation ing proceedings).

marks omitted)); U.S. Telecom Ass'n v.

FCC, 400 F.3d 29, 41 (D.C.Cir.2005) In sum, a challenger can carry its burden of (holding that the challengers had failed to showing prejudice from an agency's procedural er-show prejudice from the agency's failure to ror by demonstrating with reasonable specificity label its notice as Notice of Proposed that it could present specific facts or arguments to Rulemaking where they cannot identify a an agency that may allow it to mount a credible single additional comment that they would challenge, or can point to key omissions in data have made but for the labeling of the no- and methodology that makes the agency's decision tice, nor any other deficiency in the rule- unreliable. Am. Radio, 524 F.3d at 237-38 (internal making process.). quotation marks omitted). Under this standard, the concern we expressed in Riverbend Farms, that a Other circuits have likewise adopted the D.C. challenger could never succeed in showing preju-Circuit's rule for showing prejudice when the dice due to a procedural error, is unwarranted, and agency has made a procedural error. See, e.g., so is any presumption of prejudice based on that Miami-Dade Cnty. v. EPA, 529 F.3d 1049, 1061 concern.

(11th Cir.2008) (citing the D.C. Circuit's decision in Owner-Operator and holding that to show preju- III dice from the lack of opportunity to comment on a Rather than comply with Sanders in this case, proposed rule, the petitioner must indicate with the majority applies Riverbend Farm's superseded reasonable specificity the aspect of the rule to presumption of prejudice, holding that an error is which it objects and how it might have responded if not harmless unless it clearly had no bearing on given the opportunity (internal quotation marks the procedure used or the substance of [the] de-omitted)); Conservation Law Found. v. Evans, 360 cision reached. Maj. Op. at 1090 (quoting River-F.3d 21, 29-30 (1st Cir.2004) (holding that bend Farms, 958 F.2d at 1487). Because this articu-agency's failure to demonstrate good cause for lation of the harmless error rule requires the agency waiving notice and comment requirement was to prove a negative, that an error clearly had no harmless since conservation groups could not *1112 bearing on its procedure or decision, the test effectively presumes prejudice and shifts the

Page 40 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) burden to the agency to prove otherwise. Indeed, the majority is not offering an empirically this language not only creates a presumption of pre- based generalization, permitted by judice, it also suggests that a procedural error is Sanders because the majority provides no prejudicial per se, because it is doubtful that an empirical evidence that a failure to consult agency could ever carry the heavy burden of prov- caused any actual harm. There is no such ing that a procedural error clearly had no bearing evidence in this case.

on the procedure used. Id. (emphasis added).

Building on this language, the majority indicates The majority's further explanation that the af-that a failure to consult is per se prejudicial because fected states have shown prejudice because DOE FN3 made a discretionary decision, and when an agency it affects the interactive process itself. Maj.

Op at 1092. makes a discretionary decision, it might be influ-enced by consultation, is just another tautology.

FN3. In fact, Riverbend Farms did not Maj. Op. at 1093. Specifically, the majority claims hold that the failure to engage in notice that DOE admit[ted] that its determinations and and comment was per se prejudicial: it cla- conclusions in the Congestion Study were not de-rified that such a procedural error is harm- cisions compelled by some mathematical formulae, less where its purpose has been satisfied, but important discretionary decisions for which id. at 1477, and concluded that the there was little guidance, and that in such situ-agency's failure to comply with a notice ations, [t]he value of consulting with an agency and comment requirement in that case was before it makes a decision is greatest. Id. In other harmless. Id. at 1488. Thus, in indicating words, the states are harmed by the failure to con-that a failure to consult with the states is sult because they did not have the opportunity to per se prejudicial, the majority goes bey- consult. Again, this is nothing more than a restate-ond the holding in Riverbend Farms. ment of the presumption that when an agency fails to consult, it is per se prejudicial.

The majority's adherence to the presumption of prejudice rejected by Sanders is demonstrated by its As a review of the record amply demonstrates, explanation of how the petitioners in this case if the majority had complied with Sanders, 129 proved harm. First, according to the majority, the S.Ct. at 1704-06, and placed the burden of showing affected states have shown harm because they did prejudice on the affected states, it would have con-not have an opportunity to consult before DOE fi- cluded that DOE's error was harmless. First, the af-nalized its decision. Maj. Op. at 1092-93 (alteration fected states were well aware of DOE's plans for in original). This is nothing but a tautology (the af- the study and NIETC designation. Six months be-fected states were harmed by DOE's failure to con- fore issuing its congestion study, DOE published a sult because the DOE failed to consult with them), Notice of Inquiry in the Federal Register seeking and a presumption of prejudice by another name. comments and information relevant to DOE's plans FN4 for conducting the congestion study. Through this notice, DOE requested comments on draft criteria FN4. The majority also suggests that per for gauging the suitability of geographic areas as Sanders, it could make an empirically NIETCs and announce[d] a public technical confer-based generalization[ ] that a failure to ence concerning the criteria for evaluation of can-consult prior to making a discretionary de- didate areas as NIETCs. *1113 71 Fed.Reg. 5660, cision, when such consultation is mandated 5660 (Feb. 2, 2006). DOE specifically stated that it by law, is the type of error that is likely to would consider well-supported recommendations prove harmful. Maj. Op. at 1093 n. 18 from affected States and interested parties (quoting Sanders, 129 S.Ct. at 1707). But

Page 41 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) throughout the study process regarding areas be- Given the undisputed fact that the affected lieved to merit urgent attention from the Depart- states had ample opportunity to provide their views ment. Id. at 5661. The notice also contained lists to DOE, Maj. Op. at 1090-91, which received and FN5 of transmission plans and studies already under considered them, petitioners must show some review by DOE, and asked the public to send in- other basis for their claim that DOE's failure to con-formation about existing, specific transmission sult was harmful. They have failed to carry this bur-studies and other plans, that DOE should review. den. Indeed, the petitioners' briefs barely address Id. at 5662. the issue of prejudice, let alone marshal evidence showing what harm the petitioners suffered, what Second, the states not only had the opportunity specific information they would have provided that to comment on how the study should be conducted, was not already in the record, or how consultation but they used the opportunity to do so. Many states would have affected the outcome of DOE's de-and state entities submitted comments in response cisionmaking process.

to DOE's notice, including most of the state peti-tioners in this case and entities from those states. FN5. Indeed, the state petitioners concede Specifically, representatives from the California that only two states, Virginia and Arizona, Energy Commission, California Public Utilities did not submit comments or otherwise Commission, Arkansas Public Service Commission, avail themselves of the consultation oppor-and Illinois Commerce Commission were confer- tunities afforded by DOE during its cre-ence panelists at a public technical conference ation of the Congestion Study. Neither where DOE discussed issues raised by commenters state suggested that it did not have actual regarding the ongoing Congestion Study. Confer- notice of DOE's Congestion Study, and ence participants also included officials from Iowa, neither state alleged it had new informa-New York, California, Illinois, Arkansas, Wyom- tion that it would have presented had it ing, Florida, Pennsylvania, Michigan, Kentucky, been consulted by DOE.

New Jersey, Vermont, Idaho, New Mexico, Utah, and the District of Columbia. The Western States assert merely that DOE failed to respond to the request for consultation by DOE also reached out to affected states through five Arizona commissioners. Without more, this multiple meetings with the National Association of fails to show that the Western States suffered any Regulatory Utility Commissioners (NARUC), a harm. And the Western States do not provide any quasi-governmental organization that includes rep- further evidence of prejudice: they do not state how resentatives of all fifty states, the District of consultation would have affected the outcome of Columbia, Puerto Rico, and the Virgin Islands, and DOE's Congestion Study or NIETC designation, whose membership represents all of the state com- nor do they *1114 explain with reasonable spe-missions responsible for economic and safety regu- cificity what additional information or arguments lation of the retail operations of utilities. Similarly, they could have made had they been consulted. See DOE participated in conference calls with repres- Mkt. St. Ry. v. R.R. Comm'n of Cal., 324 U.S. 548, entatives from state entities, and met and corres- 561-62, 65 S.Ct. 770, 89 L.Ed. 1171 (1945) ponded with the New York Public Service Commis- (holding the Railroad Commission's error harmless sion and the Florida Public Service Commission, in the absence of any showing of ... prejudice by the Connecticut Department of Public Utility Con- the petitioners who made [n]o contention ... that trol, the New Jersey Board of Public Utilities, the the information was erroneous or was misunder-California Public Utilities Commission, and the stood by the Commission, and no contention ... that Pennsylvania Public Utilities Commission. the Company could have disproved it or explained

Page 42 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) away its effect for the purpose for which the Com- preted this data differently or reached a different mission used it). Having failed to show prejudice, decision. Nor do the Eastern States identify any ad-the Western States cannot prevail on their claim ditional facts and information they would have sup-merely because DOE made a technical error. plied, or different arguments they would have made, had they been consulted. Therefore, the East-The Eastern States similarly fail to show preju- ern States have not carried their burden of showing dice. In attempting to do so, they raise only a single that they were prejudiced by DOE's failure to con-argument, namely that DOE incorrectly interpreted sult.

data as to the location and magnitude of conges-tion in New York. The Eastern States argue that In holding that DOE's failure to consult with DOE's incorrect and flawed documentation and the states was per se prejudicial, despite the states' interpretation of data could have been prevented if failure to demonstrate any harm, the majority em-DOE had consulted with the New York Public Ser- ploys the sort of mandatory presumption rejected in vice Commission (NYSPC), which could have Sanders. The majority attempts to distinguish identified discrepancies between data from the Sanders on the ground that it involved a notice er-Congestion Study and the 2005 State of the Market ror rather than a consultation error, see Maj. Op. at Report prepared by the New York Independent Sys- 1090-91, asserting that a notice error is harmful tem Operator (NYISO). only if it affects the outcome of agency decision-making, while a consultation error is harmful in it-This argument is belied by the record. After the self because Congress intended for there to be con-Congestion Study was complete, NYSPC informed sultation, and a consultation error deprives parties DOE about alleged material discrepancies between of the opportunity to consult. Maj. Op. at 1090-91.

DOE's study and the 2005 report produced by But Sanders's prejudicial error principles cannot be NYISO. In response, DOE explained that the dis- so *1115 confined. In considering whether an error crepancies and reporting errors identified by New is harmless, there is no principled basis for distin-York did not affect the analysis and findings of the guishing among any of the steps an agency must Congestion Study. 72 Fed.Reg. 25,838, 25,859 take before reaching its final decision, whether the (May 7, 2007). Specifically, DOE explained that step involves consultation, notice and comment, or NYISO market data on congestion are not directly merely notice. While an error in fulfilling any of comparable to the Congestion Study's simulation these steps necessarily affects the decisionmaking results because the congestion study simulations process, a plaintiff must prove that such an error reflect forward-looking data while NYISO relied on actually caused harm. Because there is no evidence real-time congestion data. Id. at 25,858. In addition, of prejudice beyond the mere fact that DOE failed DOE explained, its Congestion Study simulations to consult the affected states, nor any basis for the reflected NYISO's planning data, whereas majority's assertion that there is substantial doubt NYISO's report was based on its operational data. as to whether DOE would have made the same find-Id. Finally, according to the DOE, the Congestion ings had it consulted with the affected States, Maj.

Study accounted for new generation capacity that Op. at 1093 (quoting Kurzon v. United States was added after NYISO's study, and considered fu- Postal Service, 539 F.2d 788 (1st Cir.1976)), the ture capacity additions as well. Id. at 25,859. majority errs in invalidating the DOE's Congestion Study and Designation Order.

Because DOE considered the Eastern States' concerns and offered a reasonable explanation for IV the discrepancies identified by the NYSPC, the The majority compounds its error by reaching Eastern States have failed to show that had DOE out to discuss DOE's decision not to prepare NEPA consulted with New York, DOE would have inter-

Page 43 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) documentation regarding the potential environment- with its promulgation of regulations governing the al impacts of the Designation Order. Maj. Op. at process for issuing permits for the construction or 1102-04. Because the majority vacates the Desig- modification of electric transmission facilities in nation Order, its discussion of this issue is entirely areas designated as national interest corridors.

superfluous. Worse, the majority is entirely wrong Piedmont Envtl. Council v. FERC, 558 F.3d 304, in concluding that DOE's decision is a harmful er- 316-17 (4th Cir.2009). As the Fourth Circuit ex-ror. In fact, DOE adequately complied with NEPA, plained, such environmental planning would have 42 U.S.C. § 4332(2)(C), by documenting its de- no practical value, because FERC could not identi-termination that no environmental impact statement fy projects that are likely to be sited and permitted, (EIS) was required in the Designation Order. and thus did not have information about the ulti-mate geographic footprint of the permitting pro-The Supreme Court has set a practical limit to gram. Id. at 316. In the *1116 absence of such in-NEPA's requirement that federal agencies docu- formation, FERC could not present a credible for-ment the environmental impact of proposed pro- ward look [that] would ... be a useful tool for basic grams. Where it is impossible to predict the level program planning. Id. In other words, NEPA does of activity that will occur in a region, it is not require a futile act: if it is not possible to con-impossible to analyze the environmental con- nect a federal plan to any particular action on the sequences and the resource commitments involved ground, there is no purpose in preparing an environ-in, and the alternatives to, such activity. Kleppe v. mental study about the effects of that plan.

Sierra Club, 427 U.S. 390, 402, 96 S.Ct. 2718, 49 L.Ed.2d 576 (1976). Under such circumstances, any The Supreme Court's common sense rule ap-attempt to prepare an environmental analysis plies to DOE's Designation Order because the order would be little more than a study ... containing es- cannot be connected to any particular action on the timates of potential development and attendant en- ground. In explaining why it cannot meaningfully vironmental consequences. Id. In other words, un- examine environmental impacts of the designation less there is a plan for development that defines of NIETCs, the Designation Order notes, National fairly precisely the scope and limits of the pro- Corridor designations have no environmental im-posed development of the region, there is no fac- pact because [t]hey are only designations of geo-tual predicate for the production of an environment- graphic areas in which DOE has identified electric al impact statement of the type envisioned by congestion or constraint problems. Other than NEPA. Id. identifying the 119 million acres where congestion is a problem, the DOE cannot determine the num-Applying such a practical common sense limit- ber, size, or location of new transmission facilities ation, we have likewise held that an EIS was not that might be permitted within the National Cor-necessary for an action plan prepared by the Forest ridors. Nor does DOE know whether any new Service because it was a broad program lacking any electricity generation, or what type of generation, identifiable concrete effects, did not call for specif- will develop in the future. Further, DOE has no ic activities with a direct impact on a particular site, control over how and when any such development did not propose site specific activity, and did not might occur and therefore cannot predict or estim-call for specific actions directly impacting the phys- ate its impacts. Likewise, the siting decisions that ical environment. Northcoast Envtl. Ctr. v. Glick- may be made by FERC and various state agencies man, 136 F.3d 660, 668-70 (9th Cir.1998). The in the future are too attenuated and speculative Fourth Circuit adopted a similar approach in decid- to be meaningfully evaluated at the designation ing that FERC was not required to prepare an envir- stage.

onmental assessment (EA) or EIS in connection

Page 44 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072)

Ultimately, because [c]umulative impacts are would entail, there was no credible basis on speculative and DOE cannot predict the level of which to base a biological assessment.

activity that will occur anywhere in the 119 million acres it has designated, it cannot analyze the pos- *1117 To the extent that an EA was required sible impacts, resource commitments, or alternat- under DOE's regulations, 40 C.F.R. § 1501.4(b),

ives. As in Kleppe, any environmental report would DOE satisfied that requirement in the Designation be little more than a study ... containing estimates Order itself. An EA is a concise public document of potential development and attendant environ- that provides an agency sufficient evidence and mental consequences. 427 U.S. at 402, 96 S.Ct. analysis for determining whether to prepare an en-2718. Such environmental planning would have no vironmental impact statement or a finding of no practical value; it could not present a credible for- significant impact. 40 C.F.R. § 1508.9(a)(1). As ward look that would be a useful tool for basic pro- explained above, the Designation Order provided a gram planning. Piedmont Envtl. Council, 558 F.3d reasoned discussion of the relevant factors and con-at 316. cluded that an EIS was not required because DOE could not meaningfully evaluate environmental im-The majority points to the efforts by DOE and pacts at this juncture. In light of DOE's reasoned Bureau of Land Management (BLM) to prepare a statements, the majority errs in suggesting that Programmatic EIS for a much smaller project that DOE did not adequately explain its decision.

involved the designation of energy corridors solely Maj. Op. at 1097 (quoting Alaska Ctr. for Env't v.

on federal land. Maj. Op. at 1101-02. Rather than U.S. Forest Serv., 189 F.3d 851, 859 (9th Cir.1999)

FN6 serve as evidence that DOE could have prepared a ). Again, the majority departs from the Su-meaningful environmental report in this case, as the preme Court's direction that courts should not func-majority claims, the PEIS in fact documents the op- tion as citadels of technicality that automatically posite. The PEIS admits up front that the agencies reverse agency action for errors that have no actual cannot make any predictions about whether or impact. Sanders, 129 S.Ct. at 1705 (quoting Kot-where future applicants would seek to site their teakos, 328 U.S. at 759, 66 S.Ct. 1239); see also projects, or about what sort of project might be McDonough Power Equip., Inc. v. Greenwood, 464 proposed at a particular location (e.g., an under- U.S. 548, 553, 104 S.Ct. 845, 78 L.Ed.2d 663 ground pipeline as opposed to an aboveground (1984).

transmission line). Nor can the agencies predict whether any potential future project would involve FN6. Though the majority does not reach electricity, gas, hydrogen, or oil energy transport the states' arguments that DOE violated the systems. At this level of generality, it is not sur- Endangered Species Act, 16 U.S.C. § prising that the agencies concluded that land use 1536(a)(2), and the National Historical impacts from designating corridors on federal land Preservation Act (NHPA), 16 U.S.C. § are substantially the same as the land use impacts 470f, I would also hold that DOE's stat-from not designating such corridors. See Dep't of utory obligations were not triggered under Energy et al., Programmatic Environmental Impact either statute because the effects of the Statement, Designation of Energy Corridors on Designation Order on endangered species, Federal land in the 11 Western States, S-25 critical habitats, and historic properties (Nov.2008). The agencies are even blunter in their were too speculative.

consideration of the effect the corridor designation V

project has on endangered species: without know-Instead of taking the common sense approach ing the specifics of when and where a project would mandated by the Supreme Court in reviewing occur within a corridor, or what such a project agency action, the majority here invalidates two im-

Page 45 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 (Cite as: 631 F.3d 1072) portant studies because of a technical procedural er-ror that had no adverse effect. The majority takes this step in reliance on precedent that has been su-perseded by the Supreme Court. Its unnecessary ex-position of federal environmental law is equally flawed, ignoring both controlling Supreme Court precedent and common sense. I respectfully dissent.

C.A.9,2011.

California Wilderness Coalition v. U.S. Dept. of Energy 631 F.3d 1072, 72 ERC 1033, Util. L. Rep. P 14,799, 11 Cal. Daily Op. Serv. 1522, 2011 Daily Journal D.A.R. 1851 END OF DOCUMENT

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