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Uncompahgre Valley Water Users Association ana Montrose Partners Docket No. P-6423 ~ al. 2 Uncompahgre Valley Water Users Association ana -Montrose Partners Docket No. P-6423 et al. 3 from making any application until February 2, 1985. II Unaer ordinary circumstances, the deadline for competition-will be reached before the end of Uncor.1pahgre's ostracism. This, of course, effectively denies their participation and renders I':eaningless any mention of the opportunity to participate. This is the punitive aspect of our action. But if some aJrninistrative delay or complication causes that deadline to fall after F~bruary 2, 1985, Uncompahgre would be free to join the competition, although without priority as a permittee or as first-to-file. The selection of the competition deadline, then, will control whether Uncompah~re may compete on the merits or I/hether its exclusion from consideration is total. This small circur,1stancc \lill control \lhether the ComI:lission action is remedial or punitive, and whether it is violative of procedural 2nd substantive due process. The taint to any applicant who acts in concert with Uncom- pahgre seems to create a test of good character hitherto unknown in the licensing fiel". As a consequence of this procedllre, the Commission may end up seeking the best applicant, not the cest application. Assu~ing competition for the sites goes forward without Uncompahgre, what will becom~ of the information Uncompahgre gained duriny its two years of study? Clearly the Commission intenos that it not be used by Uncompahgre. Indeed, the Com- mission re~ards that information as a sufficient substantive advantage to Uncompahgre to warrant its total excomr.1unication rather than al10\/ing it to compete on the merits stripped of its procedural advantage. ~I Ordinarily, if that information had the value the Commission attributes to it, a permittee debarred from licensing competition would sell that information to another applicant in order to recover its investment. But no buyer could use such information in support of an application, since to do so would risk a finding of guilt by association. The information thus becomes fruit of a poisoned tree, its usefulness and value destroyed. This I now regard as an unforeseen weakness in our policy of dealing with hybrid allegations only at the licensing phase. 31 We will never know what was learned during the permit study, and we deliberately exclude the proposal that may \/ell be the best use of the natural resources. If purity of the process is to be favored even over the most desirable result, it is iJTlportant, then, to inspect the fairness of our process from every possible viewpoint. It is significant to note that the record discloses no \"ron9doing on the part of Uncompahgre or its associates. !~othing it <'lid was contrary to the statute or Co~mission regulations. There is no expression in the commission's orders that Uncor.1pahgre threatens the integrity of our regulation or that it would be an unfit licensee, and the record contains no in[ormation which would support such a view or any findings r:>ade on such conclllsion. . The situation is clearly one of an applicant caught in midstream by a shift in the regulatory current, il and whose subsequent efforts to regain its balance have fallen afoul of evolving Commission attitudes. The ComP.lission has stated: "Prior to the Commission's decision in Fayetteville, the re- strictions placed on a municipal licensee in its dealings with non-municipal entities were at best ambiguous." ~I The Cor.mission's response, however, appears dispropor- tionate to the situation, especially when contrasted with other recent actions. For instance, an applicant who had clearly, if unintentionally, operated a project in violation of the statute, has been granted an exemption from licensing with no sanction. ~I tie have also (and properly, I believe) amended a license issued before Fayetteville to a municipal licensee, by adding a private collaborator as a co-licensee. 71 In that case, the Commission looked to the municipality's good faith in pursuing development and its desire to maintain local control while injecting private . y Uncompahgre is not barre~ from filing pleadings opposing the development plans of other applicants during the sanction perioo. Order Denying Reconsideration and Dismissing License Application, February 2, 1984, 26 FERC ~ 61,113 at fn. 19. y That shift was the Commission's announcement of its treatment of hybriCl applications in City of Favetteville, 16 FERC ~I 61,209 (l981). 2./ Paterson Municipal Utilities Authority, Project No. 2814-003, Oraer Approving Partial Transfer of License, June 1, 1984. y See slip opinion, page 3. 21 This policy has been affirmed by the Court of Appeals. of Bedford v. FERC, 718 F.2d 1164 (D.C. Cir. 1983). y Chris S. Difani, Project No. 7400, Order Granting Exemption, May 16, 1984. City II Paterson, supra. ~' - .l""~ '.... \..