(a) If TVA determines that a categorical exclusion(s) covers a proposed action, TVA will evaluate the action for extraordinary circumstances in which a normally excluded action may have a significant effect.

(1) If an extraordinary circumstance exists, TVA may categorically exclude the proposed action if it determines that there are circumstances that lessen the impacts or other conditions sufficient to avoid significant effects or that the action may be modified to avoid the potential to result in significant effects.

(2) If TVA cannot categorically exclude the proposed action due to the presence of an extraordinary circumstance, TVA will prepare an EA or EIS, as appropriate.

(b) Examples of extraordinary circumstances to be considered are:

(1) The proposed action has the potential to significantly impact environmental resources, including the following resources:

(i) Species listed or proposed to be listed under the Endangered Species Act, or the proposed or designated Critical Habitat for these species;

(ii) Wetlands or floodplains;

(iii) Cultural or historical resources;

(iv) Areas having special designation or recognition such as wild and scenic rivers, sacred sites, parklands, or wilderness areas; and

(v) Important farmland, as defined in 7 CFR part 657; and

(2) There is substantial scientific controversy regarding the significance of the environmental impacts of the proposed action.

(c) The mere presence of one or more of the resources under paragraph (b)(1) of this section does not by itself preclude the use of a categorical exclusion. Rather, the determination that an extraordinary circumstance(s) exists depends upon the finding of a causal relationship between a proposed action and the potential effect on these resource conditions, and, if such a relationship exists, the relative degree of the potential effect of a proposed action on these resource conditions.

(d) TVA will document its review for extraordinary circumstances for categories of actions that are likely to result in a physical effect on the environment. No documentation of the extraordinary circumstances review is required for categories of actions that would not result in a physical effect on the environment or carry little risk of significant environmental effects.