* Center For Environmental Law & Policy, Et Al., Appellants V. Dept Of Ecology, Et Al., Respondents

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i'\~ A/,\'.;<
2016 OCT i7 	Ail 10: 3
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
CENTER FOR ENVIRONMENTAL LAW
AND POLICY, AMERICAN
WHITEWATER, and NORTH
CASCADES CONSERVATION
COUNCIL,
Appellants,
v.
WASHINGTON DEPARTMENT OF
ECOLOGY; PUBLIC UTILITY
DISTRICT NO. 1 OF OKANOGAN
COUNTY, WASHINGTON;
WASHINGTON STATE POLLUTION
CONTROL HEARINGS BOARD,
Respondents.
No. 74841-6-1
ORDER DENYING MOTION
FOR RECONSIDERATION,
WITHDRAWING OPINION,
GRANTING MOTION TO
PUBLISH, AND
SUBSTITUTING OPINION
The appellants, Center for Environmental Law and Policy, American Whitewater,
and North Cascades Conservation Counsel, have filed a motion for reconsideration of
the opinion filed on 	July 	11, 	2016. 	At the 	request of the panel, the 	respondents,
Washington 	Department of Ecology and 	Public 	Utility 	District 	No. 	1 of Okanogan
County, have filed a response.
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/2
The Department has filed a motion to publish the unpublished opinion filed on
July 11, 2016, and the Center for Environmental Law & Policy, American Whitewater,
and North Cascades Conservation Council have filed a response.
A panel of the court has considered both motions and has determined that the
motion for reconsideration should be denied but the opinion should be withdrawn and a
substitute opinion 	shall 	be 	published 	in the Washington Appellate 	Reports. 	Now,
therefore, it is hereby
ORDERED that the motion for reconsideration is denied; it is further
ORDERED that the motion to publish is granted; it is further
ORDERED that the opinion filed on July 11, 2016 is withdrawn; and it is further
ORDERED 	that 	the 	substitute 	opinion 	shall 	be 	filed 	and 	published 	in 	the
Washington Appellate Reports.
DATED this 	|1^ 	day of 	{/(MjbiM/ 	2016.
WE CONCUR:
&if, <^J A^\*v~>
 	 	 	 	 	 	 	 	 	 	 	 	 	

I / 	!,, i IJ- C i
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
CENTER FOR ENVIRONMENTAL LAW
AND POLICY, AMERICAN
WHITEWATER, and NORTH CASCADES
CONSERVATION COUNCIL,
Appellants,
v.
WASHINGTON DEPARTMENT OF
ECOLOGY; PUBLIC UTILITY DISTRICT
NO. 1 OF OKANOGAN COUNTY,
WASHINGTON; WASHINGTON STATE
POLLUTION CONTROL HEARINGS
BOARD,
Respondents.
No. 74841-6-
DIVISION ONE
PUBLISHED OPINION
FILED: October 17, 2016
Appelwick, J. — The Pollution Control Hearings Board (PCHB) affirmed
the Department of Ecology's (Ecology) 	issuance of a Report of Examination
(ROE), ordering the approval of a water right for the Public Utility District No. 1 of
Okanogan County's (PUD) hydroelectric project. 	The project would divert water
from a portion of the Similkameen River through a powerhouse. 	To satisfy the
public interest requirement of RCW 90.03.290, the ROE included a condition that
the PUD would be required to ensure that the minimum flows in the bypass reach
portion of the river would be the same as those found to be adequate to protect
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/2
aesthetic values as determined by a future study. 	Appellants assert that the
PCHB erred in affirming Ecology's issuance of the ROE when the aesthetic study
has not yet been completed and when Ecology did not condition the ROE on the
minimum instream flow rule in WAC 173-549-020. We affirm.
CLEAN WATER ACT CERTIFICATION
The 	Enloe 	Dam 	is 	located 	on 	the 	Similkameen 	River 	near 	Oroville,
Washington in Okanogan County. 	Approximately 350 feet downstream from the
dam, there is a natural waterfall known as Similkameen Falls. The dam operated
to produce hydroelectric power from 1922 to 1958. 	The PUD has owned the
dam since 1945. 	The PUD seeks to resume hydropower operations at the dam.
Consequently, it launched the Enloe Dam Project (the Project).
The Project includes constructing a 	new powerhouse for 	hydropower
generation that will be situated on the bank of the river, raising the height of the
existing dam by five feet and increasing the size ofthe reservoir behind the dam.
The Project will withdraw water from the reservoir behind the dam, diverting the
water around the dam and through the new powerhouse. The diverted water will
be returned to the river 370 feet downstream from the dam, directly below the
waterfall. 	The 370-foot stretch of river impacted by the diversion is referred to as
the "bypass reach."
The PUD has received various federal and state permits or approvals for
the Project. 	The PUD received a license from the Federal Energy Regulatory
Commission 	(FERC) 	for 	construction 	of the Project. 	That license 	required
Ecology approval of a Section 401 Water Quality Certification (401 Certification)
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/3
under the authority of the Federal Clean Water Act (CWA).1 	The CWA provides
that a certification made by a certifying agency—here, Ecology2—shall include a
statement 	that 	there 	is 	a 	"reasonable 	assurance 	that 	the 	activity 	will 	be
conducted in a manner which will not violate applicable water quality standards."
40 C.F.R. § 121.2(a)(3).
Ecology 	issued 	the 	401 	Certification 	in 	July 	2012. 	Ecology 	had
investigated the 	proposal for conformance 	with 	both state and 	federal 	law.
Ecology found 	reasonable assurance that the operation of the Project would
comply with state and federal water quality standards and other appropriate
requirements of state law. 	But, it made that finding subject to several conditions.
Among them, Ecology imposed conditions specifically related to the aesthetics of
the Project. 	One such condition was that the PUD would be required to ensure
that the Project divert water from the reservoir, 	pipe it around the dam, and
release it near the base of the dam. 	This would be done at a rate of 30 cubic feet
per second (cfs) from September 16 to July 15 and 10 cfs ("10/30 flows") from
July 16 to September 15, for aesthetic purposes as well as for fish and other
aquatic life 	purposes. 	This 	condition was ostensibly to prevent water from
warming as it flowed over the dam and through the bypass reach—something
that would be harmful for fish. 	The condition did not require a minimum flow over
the dam. 	Ecology also required a monitoring 	program for the period of the
license, with a five year adaptive management approach that required increasing
1 33U.S.C. §§1313, 1341
2 RCW 90.48.260 states that the Department of Ecology is designated as
the state water pollution control agency for purposes of the CWA.
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/4
and resetting the minimum flows for a season in which water quality standards
were violated.
Several organizations—including the appellants—appealed Ecology's 401
Certification to the PCHB. 	One issue in the appeal was whether the 10/30 flows
would 	impair the 	aesthetics 	of water 	flowing 	over 	the 	dam 	and 	the 	falls.
Following cross motions for summary judgment, the PCHB decided that the 401
Certification 	provided 	reasonable 	assurance 	the 	Project 	would comply with
applicable water quality standards regarding temperature, recreation, salmonid
spawning, rearing, and migration. 	But, the PCHB denied summary judgment as
to the 	issues 	regarding 	aesthetics 	for flows 	over the 	dam 	and 	the 	falls.
Specifically, was there a reasonable assurance that water quality standards will
not be violated 	regarding 	(1) Ecology's 	finding 	that 	no minimum 	flows 	are
required 	over the 	dam, 	and 	(2) 	the adequacy of the 	10/30 flows 	Ecology
established for flows over the falls? 	As to the first issue, the PCHB stated that
while the dam is not a natural feature, it has created an aesthetic feature on the
river for many decades. 	And, it stated that minimum flows over the dam should
be considered in determining whether the 401 Certification properly provides
assurance that the operation of the Project will 	not violate the water quality
standards regarding aesthetics. 	As to the second issue, the PCHB noted that
there were disputed issues of material fact, because experts stated that 10/30
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/5
flows 	did not 	protect aesthetic values of either the dam or the natural falls.
Consequently, the PCHB held a hearing on these issues.3
On 	August 	3, 	2013, 	the 	PCHB 	issued 	a 	final 	decision 	in the 	401
Certification appeal. 	The PCHB found that if a gate limited the surface water flow
over the dam to a 10-foot width of flow, the temperature of the water as it flows
over the dam would not increase at either 10 cfs or 30 cfs. 	The PCHB concluded
that expert opinions were not determinative of whether the 10/30 flows, which
included no flows over the dam, was aesthetic. 	The PCHB concluded that the
evidence before Ecology as to the impact on aesthetics—based on an expert's
"visualization" of the flows, modeling based on aesthetic flows at 20, 40, and 80
cfs, and 	photo simulations 	of the 	views of the falls—was 	inadequate. 	It
concluded that there was insufficient evidence to make a finding that the 10/30
flows 	meet 	the 	water 	quality 	standards 	for 	aesthetic 	values 	even 	when
considering protecting the fisheries. 	The PCHB concluded that Ecology must
develop a monitoring program of the visual effect of the different flow levels,
which can be implemented as the Project commences and becomes capable of
controlling flows over the dam and the falls. 	It mandated that the flow plan
3 The CWA states that any applicant for a federal license or permit to
conduct any activity, which may result in any discharge into navigable waters,
shall provide the licensing or permitting agency a certification from the State that
the 	activity 	will 	comply 	with 	all 	applicable 	state 	and 	federal 	water quality
standards and any other appropriate requirement of state law. 	33 U.S.C. §
1341(a)(1); 	33 U.S.C. 	§ 1341(d). 	The 	PCHB 	noted that the protections for
aesthetics in RCW 90.54.020(a) and (3)(a)—general declaration of fundamentals
for utilization and management of waters in Washington—is recognized as an
"other appropriate requirement of state law" under the CWA § 401.
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/6
should include an analysis of the flows over the dam within the proposed 10-foot
wide release area.
Ultimately, the PCHB affirmed the 401 	Certification subject to additional
conditions:
The §401 	Certification is affirmed, subject to the additional
condition that 10/30 cfs minimum instream flows over the Dam and
Falls 	for 	the 	aesthetic 	values 	shall 	be 	further 	monitored 	and
evaluated by Ecology during initial operation of the Project (within
three years). 	After Ecology obtains additional data and analysis of
alternative flows over the Dam and the Falls, the 10/30 cfs flow
shall 	either 	be 	confirmed 	or 	revised 	as 	a 	condition 	of 	project
operation and 	the 	§401 	Certification. 	Ecology shall develop an
aesthetic flow monitoring program ....
As a result of the monitoring program, Ecology shall make a
finding of the aesthetic flows that meet the water quality standards
for aesthetic purposes and is consistent with this Order. 	At the
completion of the monitoring 	program, the Project shall operate
subject 	to 	those 	flows 	and 	the 	§401 	Certification 	shall 	be
conditioned to reflect such flows, either confirming the current flow
regime or revising it based on Ecology's findings.
WATER RIGHTS LAW
Washington has a multistep procedure before new water rights can be
acquired. 	Lummi Indian Nation v. Dep't of Ecology, 170 Wn.2d 247, 252, 241
P.3d 1220 (2010). 	Once a 	party has 	applied 	for 	a 	water 	right, 	Ecology
determines what water, if any, is available and finds and determines to what
beneficial use or uses it can 	be applied. 	RCW 90.03.290(1). 	If Ecology is
satisfied that water is available and the proposed use is a beneficial use, it issues
a permit specifying the amounts of water that can be taken and the beneficial
uses 	to which 	that 	water 	may 	be 	applied to. 	RCW 90.03.290(3). 	RCW
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/7
90.03.290 establishes a four part test that Ecology applies when considering an
application for a water right permit. 	Postema v. Pollution Control Hr'gs Bd., 142
Wn.2d 68, 79, 11 P.3d 726 (2000). 	Under the statute, Ecology must affirmatively
find 	(1) 	that 	water 	is 	available, 	(2) 	for 	a 	beneficial 	use, 	and 	that 	(3) 	an
appropriation will not impair existing rights, 	or (4) be detrimental to the public
welfare. 	RCW 90.03.290(3); 	Postema, 	142 Wn.2d at 79. 	And, under RCW
90.03.290(1), if the application proposes to appropriate water for the purpose of
power development, Ecology must investigate, determine and find whether the
proposed development is likely to prove detrimental to the public interest, having
in mind the highest feasible use of the waters belonging to the public. 	Where the
proposed water use threatens to prove detrimental to the public interest, it shall
be the duty of Ecology to reject the application and to refuse to issue the permit
asked for. 	RCW 90.03.290(3).
A water right permit represents only an inchoate right, which does not
become choate until the water right is perfected. 	Lummi, 170 Wn.2d at 253.
Before the right is perfected, the applicant has only an incomplete appropriative
right 	in 	good standing. 	\± 	It 	remains 	in 	good standing 	so 	long 	as 	the
requirements of law are being fulfilled, and it matures into an appropriative water
right on completion of the last step provided by law. 	]&, RCW 90.03.330 governs
water 	right 	certificates. 	Upon 	a 	showing 	satisfactory to 	Ecology 	that any
appropriation has been perfected in accordance with the provisions of chapter
90.03 RCW, 	Ecology will 	issue to the 	applicant a certificate and 	it will 	be
recorded with Ecology. 	RCW 90.03.330(1).
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/8
WATER RIGHT PROCEEDINGS
Shortly after the PCHB issued its final decision in the 401 Certification
appeal, on August 6, 2013, Ecology issued a ROE and ordered the approval of
Water Right Permit No. S4-35342.4 	The water right will authorize the PUD to
withdraw an additional 600 cfs of water from the river behind the dam. 	The ROE
noted that the only affected portion of the river would be the bypass reach with
flows 	in the 	river otherwise 	remaining 	unchanged. 	Consequently, 	Ecology
considered the use of the water to be non-consumptive,5 except with regard to
the bypass reach. 	The 10/30 minimum flows required by the 401 Certification
were incorporated into the ROE:
The water right 	holder 	must comply with 	Ecology's 401 	Water
Quality Certification 	No. 	9007, 	related to licensing 	of the Enloe
Hydroelectric Project (FERC No. 12569) on the Similkameen River,
Okanogan County, Washington issued on July 13, 2012, and any
subsequent updates.
The ROE also stated that if the 401 	Certification is modified in the future, the
water right would be subject to the conditions of the revised 401 Certification.
After Ecology issued the ROE, the Center for Environmental Law and
Policy, American Whitewater, North Cascades Conservation Council (collectively
"CELP"), and Columbia River Bioregional Education Project, 	appealed to the
PCHB seeking that it find the ROE invalid. 	The PUD filed a motion for summary
judgment on all issues raised. 	Ecology filed a joinder in support of the PUD's
4 That ROE is the subject of this appeal.
5 Water used consumptively diminishes the source and is not available for
other uses. 	By contrast, 	non-consumptive water use does 	not diminish the
source or impair future water use.
8
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/9
motion. 	On March 31, 2014, CELP filed a cross motion for summary judgment.
CELP made three arguments. 	First, it argued that Ecology has not and cannot
meet its statutory duty to make a final public interest determination under RCW
90.03.290 	until 	it completes 	the 	aesthetic flow 	study 	mandated 	in the 	401
Certification. 	Secondly, 	it argued 	that 	because 	Ecology 	lacked 	adequate
information to make a public interest determination, it could only deny the water
right or issue a preliminary permit. 	Finally, it asserted that the ROE does not
condition the PUD's water right on the Similkameen's instream flows as required
by WAC 173-549-020. 	Both parties agreed that there were no genuine issues of
material fact and that the matter could be resolved on summary judgment.
On June 24, 2014, the PCHB issued an order granting summary judgment
in favor of the PUD and Ecology:
Ecology's 	approval of the 	application 	based 	on the terms and
conditions of the ROE is AFFIRMED on all substantive grounds,
with 	the 	exception 	that 	Ecology shall 	issue 	the 	permit with 	a
condition that sets forth the protocol for the aesthetic flow study in
the 	same 	language 	as 	the 	Board 	had 	ordered 	for the 	§401
Certification, and upon completion of the study the permit shall be
amended 	specifying 	the 	aesthetic 	minimum 	instream flows 	that
shall be protected if it is other than the 10/30 flows.
It concluded that a water right certificate shall not issue prior to the completion of
the study and the permit amendment.
On July 24, 2014, CELP filed a petition for review6 of the PCHB's decision
in Thurston County Superior Court. 	It asserted that the PCHB's decision and the
underlying 	ROE 	decision 	were 	arbitrary 	and 	capricious, 	because 	of their
6 Columbia River Bioregional Education Project did not join the petition for
review.
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/10
deliberate and unreasoned disregard of the facts and circumstances, including
legal 	mandates 	set forth 	in 	RCW 	90.03.290 	and 	WAC 	173-549-020. 	The
superior court affirmed the PCHB's decision, reasoning that CELP failed to carry
its burden of showing that the PCHB erred when it determined that it would be in
the public interest to issue the ROE subject to the same criteria that additional
facts be gathered as it did for the 401 Certification.
CELP filed a notice of appeal to this court, challenging the superior court's
judgment upholding the PCHB's decision granting PUD and Ecology summary
judgment.7
DISCUSSION
CELP makes three main arguments in this appeal. 	First, it argues that the
PCHB erred in finding that PUD's water permit complied with RCW 90.03.290's
public welfare requirement. 	It contends this is so, because Ecology improperly
made this determination in the face of incomplete information: the aesthetic study
required by the 401 	Certification is not yet complete. 	Secondly, it claims that
when faced with this incomplete information Ecology had the discretion only to
deny the permit or issue a preliminary permit—not issue the ROE. 	Finally, it
argues that the PCHB erred in finding that the ROE did not violate the minimum
instream requirements in WAC 173-549-020.
7 Northwest Hydroelectric Association (NHA) filed an amicus curiae brief in
this case opposing CELP's appeal. CELP argues that this court should disregard
NHA's brief. 	And, in a motion to strike, CELP asserts that the panel should strike
PUD's response to NHA's brief. 	Because we did not rely on the information in
the amicus curiae brief—or in PUD's response—in reaching our decision, we
need not rule on CELP's motion to strike.
10
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/11
We review PCHB orders under the Washington Administrative Procedures
Act (WAPA).8 	Port of Seattle v. Pollution Control Hr'gs Bd., 151 Wn.2d 568, 587,
90 	P.3d 659 (2004). 	This court reviews the 	PCHB's action from the same
position 	as 	the 	superior court 	and 	applies WAPA standards 	directly to 	the
PCHB's record. 	Skagit Hill Recycling. Inc. v. Skagit County, 162 Wn. App. 308,
317-18, 	253 	P.3d 	1135 	(2011). 	Under 	WAPA, 	the 	party 	challenging 	an
administrative 	order 	or 	agency 	action—here, 	CELP—bears 	the 	burden 	of
demonstrating 	its 	invalidity. 	Port 	of 	Seattle, 	151 	Wn.2d 	at 	587; 	RCW
34.05.570(1 )(a). WAPA authorizes relief in only certain circumstances, including
if the agency's order is outside the statutory authority or jurisdiction of the
agency, if the agency erroneously interprets or applies the law, or if the order is
arbitrary and capricious. 	RCW 34.05.570(3). 	Administrative action is arbitrary
and capricious if it is willful, unreasoned, and taken without regard to the facts
and circumstances. 	Dep't of Ecology v. Theodoratus, 135 Wn.2d 582, 598, 957
P.2d 1241 (1998).
Where, 	as 	here, 	the original administrative decision was on summary
judgment, the reviewing court overlays the WAPA standard of review with the
summary judgment standard. 	Skagit Hill, 	162 Wn. App. 	at 318. 	This court
reviews the PCHB's ruling made on summary judgment de novo, 	making the
same inquiry as the PCHB. 	Cornelius v. Dep't of Ecology, 182 Wn.2d 574, 585,
344 P.3d 199 (2015). 	This court's review is limited to the record before the
PCHB. 	Puget Soundkeeper All, v. Pollution Control Hr'gs Bd., 	189 Wn. App.
8 Chapter 34.05 RCW
11
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/12
127, 135, 356 P.3d 753 (2015). 	Accordingly, this court reviews the facts in the
record in the light most favorable to the nonmoving party. 	Skagit Hill, 162 Wn.
App. 	at 	318. 	Summary judgment is appropriate only where the 	undisputed
material facts entitle the moving party to judgment as a matter of law. id.
Ecology's 	decision 	to 	issue 	water 	appropriation 	permits 	under 	RCW
90.03.290 is discretionary and, therefore, will not be reversed absent a clear
showing of abuse.9 	Dep't of Ecology v. U.S. Bureau of Reclamation, 118 Wn.2d
761, 767, 827 P.2d 275 (1992). 	A party seeking a reversal under this standard
must show that the discretion was exercised in a manner which was manifestly
unreasonable or exercised on untenable grounds or for untenable reasons, 	jd.
Here, the PCHB concluded that a water right certificate shall not issue
prior to the completion of the aesthetic study. 	And, it affirmed Ecology's decision
to issue a ROE on all substantive grounds.10 	Therefore, the ultimate issues we
must decide are (1) whether Ecology had the authority to issue a ROE, ordering
the approval of an inchoate water right 	subject to the 	condition 	that it 	be
potentially later revised to adhere to the flows deemed sufficient by a future
aesthetic study and (2) whether it abused its discretion in doing so.
9 CELP argues that the standard of review is de novo. 	It notes that this
case poses purely a legal question—whether Ecology properly interpreted and
applied 	RCW 90.03.290 to authorize a water right in the face of incomplete
information. 	We review whether Ecology properly interpreted the law de novo.
But, to the extent that the 	issues in the case call for this court to determine
whether Ecology properly applied RCW 90.03.290 when it issued the water right,
we apply the abuse of discretion standard of review.
10 The PCHB determined that Ecology shall issue the permit with specific
language 	referencing the 	protocol for the aesthetic flow 	study in 	the same
language as the PCHB had ordered for the 401 	Certification. 	CELP does not
challenge the PCHB's actions, only its final decision granting summaryjudgment.
12
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/13
I. 	Public Interest
CELP asserts that the PCHB erroneously interpreted and applied the law
by affirming Ecology's issuance of the ROE when the 401 Certification study had
not yet been completed. 	It contends that it was contrary to law for the PCHB to
assume as a matter of law that there will be no detriment to the public interest
when it is undisputed that additional information is needed to make the public
interest11 	determination. 	CELP 	asserts 	that 	because 	there 	is 	no 	credible
evidence yet as to how the 10/30 flows will appear aesthetically over the dam
and the falls, that Ecology could not make the public interest finding.
RCW 90.03.290 establishes a four part test that Ecology applies when
considering an application for a water right. 	Postema, 142 Wn.2d at 79. 	Under
the statute, Ecology must affirmatively find (1) that water is available, (2) for a
beneficial use, and that (3) an appropriation will not impair existing rights, or (4)
be detrimental to the public welfare.12 	RCW 90.03.290(3); Postema, 142 Wn.2d
at 79. 	Aesthetics is a component of the public interest analysis. 	See RCW
11 The parties somewhat interchangeably use "public interest" and "public
welfare." This is likely because RCW 90.30.290 refers to both. 	The use of the
different terms does not appear to impact the parties' arguments nor does it
impact our analysis.
12 We 	note 	that Ecology and 	PUD emphasize that Ecology need only
make a finding that the Project would not likely prove detrimental to the public
welfare. 	While RCW 90.03.290(1) states that if a proposed water appropriation is
for the purpose of power development, Ecology's investigation should focus on
finding whether the proposed development is likely to prove detrimental to the
public interest, RCW 90.03.290(3) states that Ecology must enter a finding that
the water will not be detrimental to the public welfare. 	Thus, this distinction is
ultimately 	immaterial to 	determining 	whether 	Ecology 	had 	the 	authority to
condition the water right on the flow monitoring study before it had the results of
the study.
13
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/14
90.54.020(1). 	Management and utilization of Washington waters are guided by a
general declaration 	of fundamentals 	in RCW 90.54.020. 	RCW 90.54.020(1)
establishes which uses of water are deemed beneficial. 	Use for hydroelectric
power production 	and 	preservation of environmental and 	aesthetic values 	is
considered beneficial. 	\± 	RCW 90.54.020(3)(a) states that the quality of the
natural environment shall be protected and, where possible, enhanced such that
perennial rivers and streams shall 	be 	retained with base flows necessary to
provide for preservation of wildlife, scenic, aesthetic and other environmental
values, and navigational values.
While evaluating 	the 	Project, 	Ecology considered 	the 	four 	part 	test
outlined in RCW 90.03.290. 	In so doing, Ecology did not ignore the fact that
aesthetics is a necessary component of the public interest finding. 	It squarely
acknowledged the necessity of protecting aesthetics. 	In the 401 	Certification
appeal, the PCHB noted there was evidence in the record that flows could not be
manipulated under existing conditions. 	There was testimony that collecting good
data and taking accurate measurements in the bypass reach for the purpose of
analyzing different flow regimes over the falls would be dangerous based on the
velocity 	of the flows. 	In 	order to get the necessary facts to address the
aesthetics issue, the Project had to proceed subject to further study.
Ecology incorporated the same study conditions that the PCHB imposed
on the 401 	Certification—which were based on this same statutory aesthetics
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No. 74841-6-1/15
provision—to ensure that the spirit of the law was carried out.13 	As to the public
welfare requirement, Ecology found:
Given that this project will produce valuable electrical energy and
will do so in a sustainable manner, that the impacts on the bypass
reach are reduced from 	those under previous project scenarios,
that minimum instream flows necessary to protect the aesthetic and
instream resources in the bypass reach will be a required condition
of project 	operation, 	and 	that any 	negative 	impacts 	are further
mitigated by the downstream discharge channel, there is no basis
on which to determine that this 	project will be detrimental to the
public welfare.
The 	PCHB 	addressed 	whether this 	finding 	could 	be 	made 	and 	should 	be
sustained:
This case is unique because the §401 Certification has already
been 	approved 	with 	a 	condition 	for a 	study to determine 	the
aesthetic flows. 	Ecology will be developing these aesthetic flows in
compliance with the Water Resources Act of 1971, ch. 90.54 RCW,
which requires the protection of designated beneficial uses such as
aesthetics, and using the authority of the water code for issuing
water rights and the CWA for issuing a §401 Certification. 	In their
appeal of the ROE, the Appellants specify that they "do not seek
additional 	aesthetic 	analysis 	outside 	of 	the 	401 	Certification
Process 	or 	challenge 	the 	sufficiency 	of 	the 	aesthetic 	flow-
monitoring 	program 	required 	in 	the 	PCHB's 	401 	Certification
decision." 	Under these circumstances, Ecology properly exercised
its discretion to authorize the permit and address the public interest
requirements 	of 	preserving 	aesthetic 	values 	with 	similar
requirements in the §401 Certification.
Further, unlike in Black Rock[14] or Souaxin lsland[15]. this is not a
case in which available information shows that the applicant cannot
13 CELP 	argues that because water rights and 401 Certifications are
distinct 	permits with 	different 	purposes that are issued pursuant to different
statutory authority and standards, it was error for the PCHB to base its public
interest finding on the outcome of the 401 Certification aesthetic flow test. 	But,
the PCHB did not base its public interest finding on the outcome of that test. 	It
made the finding subject to the condition that the ROE eventually adhere to the
flows deemed acceptable in the aesthetic flow test.
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No. 74841-6-1/16
meet some aspect of the four-part test for a water right. 	Rather, the
Board concluded that some additional assessment is needed to
finalize the appropriate level of aesthetically protective flows on the
Similkameen River in the area of the project.
(Internal 	citations 	omitted.) 	We 	agree 	with this 	analysis. 	And, the 	PCHB
specifically added language mandating that a final water right certificate cannot
issue prior to the completion of the aesthetic study and the permit amendment, if
necessary.16 	On 	this 	record, 	Ecology's 	finding 	that 	the 	public 	welfare
requirement was satisfied was 	not arbitrary and capricious. 	Ecology did not
abuse its discretion approving the ROE with the conditions imposed.
Next, 	CELP 	maintains 	that 	because 	the 	PCHB 	found 	that 	additional
monitoring and analysis of actual minimum flows is necessary to assess the
proper protection of aesthetic values, Ecology's discretion was limited by statute
to either deny the permit or issue a preliminary permit.
14 Black Star Ranch Neigh. Ass'n v. Dep't of Ecology, No. 87-19 (Wash.
Pollution Control Hr'gs Bd. Feb. 19, 1988) (It is clear from the record that the
PCHB's reference to "Black Rock" was in fact a reference to "Black Star.").
15 Sguaxin Island Tribe v. Dep't of Ecology, No. 05-137 (Wash. Pollution
Control Hr'gs Bd. Nov. 20, 2006).
16 CELP asserts that the study required by the 401 Certification may show
that there 	is no flow level that protects both aesthetic values and the fishery
resource—a higher minimum flow may result in too high of temperatures in the
bypass reach. 	And, it asserts that it is possible that the aesthetic flow study
could 	result in 	a 	required 	flow 	that 	is so 	high 	that 	it renders 	the 	Project
uneconomical and unacceptable to PUD. 	We accept that this is a possibility. 	In
fact, we acknowledge at least three possibilities: (1) The study may indicate that
either the 10/30 flows or a different flow level is protective of aesthetics, the
fishery resource, and would be sufficient to support the Project; (2) The study
may indicate that there is no flow level that is protective of both the fishery
resource and aesthetics, and Ecology may withdraw the water right permit; (3)
The study may indicate that there is no flow level that is protective of both the
fishery resource and aesthetics, and Ecology may still decide to issue the final
water certificate. 	Importantly, Ecology's decision to amend or not amend the
conditions after the study will be subject to challenge.
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No. 74841-6-1/17
RCW 90.03.290(2)(a) states that if a water appropriation application does
not contain and the applicant does not promptly furnish sufficient information on
which to 	base findings that the proposed development is not 	likely to 	prove
detrimental to the public interest, Ecology may issue a preliminary permit. 	The
permit 	may 	be 	valid for 	up 	to 	three 	years 	while 	requiring 	the 	applicant to
complete investigations or studies. 	RCW 90.03.290(2)(a). 	CELP recognizes that
the language of this statute is clearly discretionary.
CELP also agrees Ecology has the inherent authority in its discretion to
impose conditions on any permit it issues. 	See Theodoratus, 135 Wn.2d at 597
(stating that generally, an agency which has authority to issue or deny permits
has authority to condition them); State v. Crown Zellerbach Corp., 92 Wn.2d 894,
899-900, 	602 	P.2d 	1172 	(1979) 	("[T]he 	power 	to 	disapprove 	[a 	permit]
necessarily implies the power to condition an approval."). 	However, it asserts
that when the information to make one of the four required findings under the
statute is lacking, 	a preliminary permit is the only mechanism for the permit
application to move forward.
The PCHB responded to this argument by noting:
The Board finds [RCW 90.03.290(2)(a)] to be unambiguous. 	See
State v. Keller, 	143 Wn.2d 267, 276, 19 P.3d 1030 (2001) ("The
courts do not engage in statutory interpretation of a statute that is
not ambiguousf.]"). 	Rather than limiting Ecology's authority to issue
a permanent new water right, 	the 	plain 	language of the statute
provides Ecology with authority to issue a different kind of permit (a
"preliminary permit") that ensures the application can remain 	in
good 	standing 	while 	the 	applicant 	undertakes 	"such 	surveys,
investigations, studies, and progress reports, as in the opinion of
the department may be necessary." 	RCW 90.03.290(2)(a). 	The
decision 	whether 	to 	issue 	a 	preliminary 	permit 	in 	lieu 	of 	a
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No. 74841-6-1/18
permanent new water right, when information is incomplete on an
aspect of the four-part test, 	is still a 	choice that remains within
Ecology's discretion.
We agree. 	The statute is not ambiguous and does not require construction.
Nothing in RCW 90.03.290(2) limits Ecology's authority to impose conditions on
permits that are not issued pursuant to that section. 	Therefore, we reject CELP's
argument that Ecology had the authority to issue only a preliminary permit or to
deny the permit.
We conclude that Ecology had authority to issue a ROE, and water permit,
which was subject to a condition to ascertain information that was not available
prior to proceeding with the Project. 	Ecology did 	not abuse its discretion in
determining that the 	PUD's water permit should issue subject to the stated
conditions. 	We hold that the PCHB properly granted respondents' motion for
summary judgment on these issues.
II. 	Minimum Instream Flow Rule
Next CELP argues that the PCHB erred when it found that the ROE did
not violate the minimum flow requirements in WAC 173-549-020. WAC 173-549-
020(2) 	establishes 	a 	minimum 	instream 	flow 	for the 	Similkameen 	River—
between 400 cfs and 3,400 cfs depending 	upon the month. 	WAC 173-549-
020(5), however, states that projects that would reduce the flow in a portion of
the stream's length (such as a hydroelectric project that bypasses a portion of the
stream) will be subject to instream flows as specified by Ecology. 	The flows may
be those established in WAC 173-549-020 or, when appropriate, may be flows
18
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/19
specifically tailored to that particular project and stream reach. 	WAC 173-549-
020(5).
The 	PCHB found 	that WAC 	173-549-020(5) 	explicitly excludes 	those
projects 	that 	reduce 	the 	flow 	in 	only 	a 	portion 	of 	a 	stream's 	length 	from
compliance with the 	minimum 	instream flows 	established 	by WAC 	173-549-
020(2). 	As 	a 	result, 	it 	found 	that 	the 	minimum 	instream 	flows 	for 	the
Similkameen River in WAC 173-549-020(2) do not apply to the Project unless
Ecology decides to apply those flows in its discretion.
This 	court shows 	deference 	to 	an 	agency's 	interpretation 	of 	its own
regulations. 	Puget Soundkeeper, 	189 Wn. App. at 	136. 	Nonetheless, 	the
agency's 	interpretation 	is 	not 	binding 	and 	deference 	to 	an 	agency 	is
inappropriate 	where 	the 	agency's 	interpretation 	conflicts 	with 	a 	statutory
mandate, 	jd. 	To 	interpret agency 	regulations, 	this 	court 	applies the same
principles used to interpret statutes. 	Id.
CELP argues that the ROE improperly invoked the exception in WAC 173-
549-020(5) and does not condition PUD's water right on the minimum instream
flows as required by law. 	CELP notes that the general rule for instream flows is
outlined 	in RCW 90.03.247 ("Whenever an application for a 	permit to make
beneficial use of public waters is approved relating to a stream or other water
body for which minimum flows or levels have been adopted and are in effect at
the time of approval, the permit shall be conditioned to protect the levels or
flows."). 	CELP notes that there is only one statutory exception to the general
rule_RCW 90.54.020(3)(a). 	RCW 90.54.020(3)(a) states that withdrawals of
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No. 74841-6-1/20
water which conflict with base flows 	necessary to 	provide for preservation of
wildlife, fish, scenic, aesthetic and other environmental values shall be authorized
in only those situations where it is clear that overriding considerations of the
public interest (OCPI) shall be served.
CELP 	maintains that even if the regulatory exception outlined 	in WAC
173-549-020(5) applies, all water right applications must first satisfy the OCPI
exception in RCW 90.54.020(3)(a). 	CELP asserts there was no such finding
here. 	CELP cites to Swinomish 	Indian Tribal 	Community, 	v. 	Department of
Ecology, 	178 	Wn.2d 	571, 	311 	P.3d 	6 	(2013), 	to 	support 	its assertion. 	In
Swinomish, Ecology issued an amended instream rule. 	Id. at 577-78. That rule
authorized appropriations of water that would impair the minimum instream flows
based 	on Ecology's finding 	that the uses 	of the water were for "overriding
considerations of the public interest" pursuant to RCW 90.54.020(3). 	178 Wn.2d
at 576. 	The Swinomish court held that the OCPI exception does not permit
Ecology to reallocate water that is needed to maintain the instream flows through
reservations of water for future beneficial uses. 	jd. at 602.
CELP also cites to Foster v. Department of Ecology, 184 Wn.2d 465, 362
P.3d 959 (2015) to support its assertion. 	Foster involved a challenge to a water
right permit issued by Ecology to a city, 	id, at 468-69. 	The city's application was
for a municipal water permit to meet the water needs of the city's growing
population. 	\± at 469. 	Because the appropriation would impair the minimum
flows of two waterways, the city created a mitigation plan and Ecology approved
the permit conditioned on the mitigation plan. 	\± at 469. 	Citing to Swinomish,
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No. 74841-6-1/21
the Foster court held that Ecology exceeded its authority by approving the city's
water permit under the narrow OCPI exception, because the exception permits
only temporary impairment of minimum flows—not the permanent impairment of
minimum flows, 	jd. at 474-75. 	CELP argues that likewise, here, the water right
would permanently impair the instream flows adopted in the minimum instream
flow rule. 	It argues that permanent impairment of an instream flow under the
guise of an exception that is not compliant with RCW 90.54.020 is precisely what
Foster forbids.
Unlike in Swinomish and Foster, Ecology did not approve the water right
under the OCPI exception. 	And, this was 	not because Ecology erroneously
skipped over the OCPI exception step. 	Instead, Ecology did not need to invoke
that exception, because it invoked the regulatory exception in WAC 173-549-
020(5)—a rule promulgated under chapters 90.22 RCW and 90.54 RCW.17 	RCW
90.22.010 grants Ecology express authority to establish minimum water flows.
And, RCW 90.54.040 provides that Ecology is directed, through the adoption of
rules, to insure that the waters of the state are utilized in the best interest of the
people. 	WAC 173-549-020(1) establishes the minimum instream flows for the
Similkameen River. 	And, WAC 173-549-020(5) provides a minimum instream
flow exception for hydroelectric projects such as the PUD's that are consumptive
for only a portion of the stream's length. 	Chapter 90.22 RCW and 90.54 RCW
authorized 	the 	adoption 	of 	WAC 	173-549-020, 	and 	it went 	through 	the
17 	RCW 	90.03.247 	also 	establishes 	that 	Ecology 	has 	the 	exclusive
authority to establish minimum flows and levels.
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No. 74841-6-1/22
rulemaking process. 	Therefore, whether Ecology can decrease the minimum
instream flow via a regulatory exception has been resolved. 	Notably, CELP does
not challenge the validity of WAC 173-549-020. The plain language of WAC 173-
549-020(5) is clear, and it carves out a regulatory exception to WAC 173-549-
020(1) and (2)'s minimum flows notwithstanding the statutory OCPI exception in
RCW 90.54.020(3)(a).
Still, CELP contends that when Ecology invokes the exception set forth in
WAC 173-549-020(5), which authorizes a deviation from the instream flows set
by rule, it must do so in a manner that complies with the requirements of RCW
90.54.020(3)(a). 	CELP argues that, in this case, Ecology failed to comply with
RCW 90.54.020 by "specifically tailoring" flows for the Project as is required
under WAC 173-549-020(5). 	CELP maintains that "specifically tailor" implies that
there must be some basis to justify the alternative flow. 	And, that Ecology's
exclusive reliance on flows that have been deemed in need of further study by
the PCHB was not a "specific tailoring" to the Project and stream reach.
But, 	the 	aesthetic 	flow 	testing 	required 	by the 	401 Certification 	and
incorporated into the ROE is plainly designed to result in instream flows that are
specifically tailored to the particular circumstances of the Project. 	CELP provides
no support for its implicit assertion that the flows 	specifically tailored to the
Project need be definitively determined before issuance of the ROE. 	The flow
study required 	by the 401 	Certification may confirm that the 10/30 flows are
protective of aesthetic values, in which case the flows need not change, or it may
trigger amendment of the flows in the 401 Certification and the ROE. 	In other
22
 	 	 	 	 	 	 	 	 	 	 	 	 	

No. 74841-6-1/23
words, the flows will be specifically tailored. 	CELP did not carry its burden of
demonstrating 	that 	the 	ROE 	violates 	the 	minimum 	instream 	flow 	rule.
Consequently, we hold 	that the PCHB did 	not err when it granted summary
judgment on this issue.18
We affirm.
WE CONCUR:
^ 	X	I v^G"-^)^
18 Because CELP is not the prevailing party, its request that this court
award it attorney fees and costs pursuant to RCW 4.84.350 is moot.
23