Keating v. Federal Energy Regulatory Commission

In 1992, the Federal Energy Regulatory Commission (FERC) (defendant) granted Joseph Keating (plaintiff) a license to build a hydroelectric power plant in a national forest. FERC stayed the statutory deadline to commence construction while Keating sought water rights. Keating planned to divert water from a creek and water discharged from a nearby mine. The United States Forest Service (USFS) granted Keating a special-use permit to use federal riparian rights that required obtaining appropriative water rights from the state. When Keating applied, multiple entities protested, especially the mine, which had its own FERC permit for a hydroelectric plant. The California State Water Resources Control Board (water board) required Keating to show he could secure the necessary access and a point-of-discharge permit to obtain a hearing on his application. Keating claimed he could condemn the diversion-point property but instead tried unsuccessfully to negotiate access with the mine. After 15 years, FERC lifted the stay, explaining that Keating’s ability to commence construction still depended on approval of his then six-year-old application for water rights, which in turn depended on obtaining access to the diversion site and a point-of-discharge permit, license amendments Keating had not requested, and the USFS approving construction plans Keating had not submitted. FERC concluded it had no reasonable assurance Keating would be able to start construction “anytime in the foreseeable future” and lifted the stay such that the deadline to commence construction expired. Keating petitioned for judicial review, claiming the record did not support FERC’s conclusion and that his reliance on the stay should equitably estop FERC from lifting it.