(a) An action that would normally qualify as a categorical exclusion must not be so classified if an extraordinary circumstance is present and cannot be mitigated, including through the application of other environmental regulatory processes. In order to determine whether extraordinary circumstances exist, TVA shall consider whether:

(1) The 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, parklands, or wilderness areas, and

(v) Important farmland; and

(2) The significance of the environmental impacts associated with the proposed action is or may be highly controversial.

(b) The mere presence of one or more of the resources under paragraph (a)(1) of this section does not by itself preclude use of a categorical exclusion. Rather, the determination that extraordinary circumstances are present 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 degree of the potential effect of a proposed action on these resource conditions.