Beaunit Corporation v. Alabama Power Company

Congress authorized a comprehensive program to develop the Coosa River in Alabama by a series of dams licensed by the Federal Power Commission (FPC), the predecessor to the Federal Energy Regulatory Commission. Beaunit Corporation (plaintiff) owned a textile-manufacturing plant on the river. The plant discharged toxic industrial waste, but enough water flowed in the river to dissipate and mix the waste to levels within Alabama water-quality standards. Alabama Power Company (defendant) already owned a hydroelectric plant three miles downstream of the textile plant and obtained an FPC license to build a second power plant seven miles upstream. Because the new plant was a “peaking plant” operated to produce electricity only during peak demand periods, Alabama Power released water from the dam and through the plant only intermittently. Although monthly and annual totals matched previous flows, the textile plant could no longer continuously pump its waste into the river without violating water-quality standards. The river often flowed too slowly for the water to absorb and dissipate the industrial wastes enough to meet water-quality standards. The textile plant had to spend $650,000 to build a new waste lagoon and treatment facilities and sued the power company to recover the expense, arguing Alabama Power had interfered with the textile plant’s right to continuous and uninterrupted flows in the river.