United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT




Submitted December 4, 2007         Decided December 21, 2007

                        No. 05-1206

                 ENERGIE GROUP, LLC AND
                   ELAINE HITCHCOCK,
                      PETITIONERS

                              v.

       FEDERAL ENERGY REGULATORY COMMISSION,
                    RESPONDENT



                     Consolidated with
                     06-1141, 06-1429



          On Petitions for Review of Orders of the
          Federal Energy Regulatory Commission




    Carolyn Elefant was on the brief for petitioners.

   John S. Moot, General Counsel, Federal Energy
Regulatory Commission, Robert H. Solomon, Solicitor, and
Carol J. Banta, Attorney, were on the brief for respondent.
                              2

    Before: HENDERSON, GARLAND and BROWN, Circuit
Judges.

    Opinion for the Court filed by Circuit Judge BROWN.

     BROWN, Circuit Judge: These consolidated petitions seek
review of the Federal Energy Regulatory Commission’s
(FERC’s) denial of preliminary permits and licenses to
construct and operate hydroelectric power plants on existing
dams. In each case, FERC denied the permits and then the
licenses because it found the responsible individuals unfit.
We considered this case on the record from the agency and on
the briefs filed by the parties, pursuant to D.C. Circuit Rule
34(j). We deny the petitions.

                              I

                              A

     Energie Group (Energie), L.L.C., has three shareholders,
including Elaine Hitchcock, who has operated a number of
hydroelectric projects in the past. This appeal involves a
project she organized at Williams Dam in Indiana. FERC has
already terminated an earlier project run by Ms. Hitchcock at
Williams Dam for noncompliance, and its order in this case
described other projects in which Ms. Hitchcock’s companies
violated the terms of their licenses, failed to comply with
FERC orders, or operated dams improperly and unsafely.
Energie Group, 109 F.E.R.C. ¶ 62,225 at 64,493 (2004).
FERC noted Hitchcock had operated one project without a
license at all, a violation culminating in a $15,000 civil
penalty in 1995. Id.

    Because the Commission found Hitchcock, “as an agent
for Energie[,] responsible for the management of the
company,” it denied Energie’s permit application. Id. at
64,495. Although, as a general policy, the Commission will
                              3

issue preliminary permits unless a permanent legal
impediment precludes it, FERC had previously found Ms.
Hitchcock unfit to hold a license, a fact that undermined any
public interest in granting Energie a preliminary permit.
Energie Group, 111 F.E.R.C. ¶ 61,072, at 61,339 (2005).
Accordingly, FERC denied a request for rehearing submitted
by both Energie and Ms. Hitchcock. Id. Energie also applied
for a license while its permit application was pending, and, as
anticipated, FERC denied the license application, [JA 173],
and denied Energie’s and Ms. Hitchcock’s requests for
reinstatement of the license application and for
reconsideration. Energie Group, 116 F.E.R.C. ¶ 61,220
(2006); Energie Group, 117 F.E.R.C. ¶ 61,124 (2006).

     Energie timely petitioned this court to review FERC’s
denial of a permit and denial of a license. We held the permit
denial petition in abeyance, at Energie’s request, until the
license proceedings concluded.

                              B

     Charles Mierek is the president and sole shareholder of
Appalachian Rivers Resource Enhancement, L.L.C. (ARRE).
ARRE applied for a preliminary permit to study a proposed
hydroelectric project on the Cheoah River in North Carolina,
and FERC denied the permit because of the noncompliance
record of another company owned and controlled by Mr.
Mierek. Appalachian Rivers Res. Enhancement, 113 F.E.R.C.
¶ 61,043 (2005). That company, Clifton Power Corporation,
had committed serious compliance violations of a compliance
order by failing to install and monitor necessary flow gauges.
Id. at 61,108–09. FERC imposed a civil penalty of $15,000,
which Clifton Power still has not paid. Id. The agency
concluded Mr. Mierek “lacks the necessary fitness to receive
any additional licenses”; and since FERC would not issue a
license “to any entity controlled or directed by Mr. Mierek,”
                              4

the Commission denied ARRE a preliminary permit. Id. at
61,109.

     FERC denied two further ARRE permit applications on
the same grounds, Appalachian Rivers Res. Enhancement,
113 F.E.R.C. ¶ 62,098 (2005); Appalachian Rivers Res.
Enhancement, 113 F.E.R.C. ¶ 62,100 (2005), and denied
rehearing requested by ARRE in all three cases, in which
Clifton Power and Mr. Mierek intervened. Appalachian
Rivers Res. Enhancement, 114 F.E.R.C. ¶ 61,145 (2006).

     ARRE timely petitioned this court to review the permit
denials. We consolidated the petition with Energie’s petitions
for our consideration.

                              II

    Because we agree FERC may consider fitness in
evaluating applications for new permits and licenses under the
Federal Power Act, we deny the petitions.

                              A

    A license under the Federal Power Act confers both
benefits and obligations. A licensee is authorized to operate a
hydroelectric project on the terms and conditions imposed by
FERC as part of the license, 16 U.S.C. § 799, and the
government may sue to revoke a license for violation of its
terms, § 820. To obtain a license, an applicant must submit a
substantial amount of data, and the preliminary permit process
helps applicants gather necessary information. § 797(f). The
holder of a preliminary permit for a project has priority over
other license applicants for that project. § 798.

     In considering a license application, FERC assesses the
public interest, broadly defined, keeping in mind that the
license will allow the holder “to appropriate water resources
                               5

from the public domain.” Udall v. FPC, 387 U.S. 428, 450
(1967). “The general fitness of the licensee-applicant” is a
valid consideration, Cooley v. FERC, 843 F.2d 1464, 1471
(D.C. Cir. 1988); see also Turbine Indus., Inc., 68 F.E.R.C. ¶
61,127 (1994) (order to show cause why FERC should not
deny applicant a license for lack of fitness), and has
occasionally been dispositive. See Carl E. Hitchcock, Elaine
Hitchcock, & Energie Dev. Co., 69 F.E.R.C. ¶ 61,382, at
62,447 (1994) (denying license after “a long-term and
pervasive pattern of … noncompliance with … the FPA ….”).

     In deciding whether to grant a permit, FERC also has
discretion to consider the fitness of the applicant. See 16
U.S.C. § 800(a) (FERC “may give preference to the applicant
[whose] plans … are best adapted … to the public interest”
and likely to be implemented). “Under an application for a
preliminary permit, the Commission is concerned with the
general fitness of the applicant and with his good faith and
purpose to prosecute his declared intent ….” Robert P.
Wilson, 28 F.P.C. 571, 575 (1962). Although denying a
permit is a departure from FERC’s general policy of granting
permits whenever there is no legal bar, FERC has deviated
from this policy when information already available indicates
no license will result. Symbiotics, L.L.C. v. FERC, 110 F.
App’x 76, 81 (10th Cir., Sept. 21, 2004) (known
environmental problems at a site were “analogous” to
foreclosure by a permanent legal barrier). That is FERC’s
explanation for denying permits to Energie and ARRE. 111
F.E.R.C. ¶ 61,072, at 61,339; 113 F.E.R.C. ¶ 61,043, at
61,109.

                               B

    Petitioners also argue FERC may not look behind a
corporate veil to examine the individuals who will actually
operate a hydroelectric project. They cite no authority for this
proposition besides Mr. Mierek’s appeal of his other
                              6

company’s civil penalty, Clifton Power Corp. v. FERC, 88
F.3d 1258 (1996). However, Clifton Power is inapposite; we
simply said FERC “may not base Clifton’s penalty in part on
the violations of another entity.” Id. at 1267. By no means
did we suggest FERC may not, in its discretion, base a
decision on a new license on such an important factor as who
will actually be running the project. FERC has in the past
looked to the individuals behind a corporation, e.g. Turbine
Indus., Inc., 68 F.E.R.C. ¶ 61,127, at 61,611–12, and we see
no reason it cannot continue to do so.


                             III

    Petitioners’ other claims, that FERC acted arbitrarily and
capriciously and infringed their due process rights, do not
merit discussion. Accordingly, the petitions are
                                                      Denied.
