735 F.2d 1101 (9th Cir. 1984), 83-7532, Central Lincoln Peoples' Utility Dist. v. Johnson

Docket Nº83-7532 and 83- 7553.
Citation735 F.2d 1101
Party NameCENTRAL LINCOLN PEOPLES' UTILITY DISTRICT, et al., Petitioners, v. Peter JOHNSON, As Administrator of the Bonneville Power Administration, Department of Energy, James Edwards, as Secretary of the Department of Energy, and the United States of America, et al., Respondents. John J. LOBDELL, Public Utility Commissioner of Oregon, et al., Petitioners,
Case DateFebruary 09, 1984
CourtUnited States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 1101

735 F.2d 1101 (9th Cir. 1984)

CENTRAL LINCOLN PEOPLES' UTILITY DISTRICT, et al., Petitioners,

v.

Peter JOHNSON, As Administrator of the Bonneville Power

Administration, Department of Energy, James Edwards, as

Secretary of the Department of Energy, and the United States

of America, et al., Respondents.

John J. LOBDELL, Public Utility Commissioner of Oregon, et

al., Petitioners,

v.

FEDERAL ENERGY REGULATORY COMMISSION, Respondent.

PACIFIC CARBIDE & ALLOYS CO., Aluminum Company of America,

Alumax Pacific Corporation, et al., Petitioners,

v.

FEDERAL ENERGY REGULATORY COMMISSION, Respondent.

CENTRAL LINCOLN PEOPLES' UTILITY DISTRICT, et al.,

v.

Peter JOHNSON, as Administrator of the Bonneville Power

Administration, et al., Respondents.

Nos. 81-7622, 81-7628, 81-7629, 81-7632, 81-7633, 81-7635 to

81-7637, 82-7710, 83-7016, 83-7514, 83-7520,

83-7522, 83-7523, 83-7528, 83-7530,

83-7532 and 83- 7553.

United States Court of Appeals, Ninth Circuit

February 9, 1984

Page 1102

[Copyrighted Material Omitted]

Page 1103

[Copyrighted Material Omitted]

Argued Dec. 17, 1982.

Submitted Sept. 13, 1983.

As Amended on Denial of Rehearing and Rehearing En Banc May 10, 1984.

Page 1104

Alan Larsen, Schwabe, Williamson, Wyatt, Moore & Roberts, Portland, Or., for Central Lincoln People's Utility Dist.

Allan M. Garten, Garvey, Schubert, Adams & Baker, Portland, Or., for intervenor Intern. Paper.

Page 1105

William David Sprayberry, Vancouver, Wash., for Public Power Council.

Peter G. Fairchild, San Francisco, Cal., for Cal. PUC.

Eric Redman, Preston, Thorgrisom, Ellis & Holman, Seattle, Wash., for Direct Service.

Clyde E. Hirschfeld, Rosemead, Cal., for Southern Cal. Edison.

Daniel W. Meek, Sacramento, Cal., for Cal. Energy Com'n.

Michael Peter Alcantar, Los Angeles, Cal., for Los Angeles Water & Power.

A. Kirk McKenzie, San Francisco, Cal., for PG & E.

Paul Graham, Asst. Atty. Gen., Salem, Or., for Or. PUC.

John D. Ballach, Seattle, Wash., Alvin Alexanderson, Portland, Or., for Investor Owned.

Thomas Lee, Asst. U.S. Atty., Edward A. Finklea, Portland, Or., for Bonneville Power.

Joanne Leveque, Washington, D.C., for FERC.

Petitions for Review of 1981 Rate Determinations of the Bonneville Power Administration and of Agency Action Unlawfully Withheld.

Before SCHROEDER, ALARCON, and NORRIS, Circuit Judges.

SCHROEDER, Circuit Judge.

I. INTRODUCTION

These consolidated cases concern the 1981 wholesale power and transmission rates adopted by the Administrator of the Bonneville Power Administration (BPA). These are the first rates promulgated under the Pacific Northwest Electric Power Planning and Conservation Act (the Act), 16 U.S.C. Sec. 839-839h (1982). The petitioners in the principal case, Central Lincoln II, 1 challenge numerous aspects of the rates themselves, as well as the procedures followed by BPA in adopting them. This court has jurisdiction over petitions to review final rates under 16 U.S.C. Sec. 839f(e)(5). Rate determinations become final upon confirmation and approval by the Federal Energy Regulatory Commission (FERC). 16 U.S.C. Sec. 839e(a)(2).

These rates initially took effect only on an interim basis pending review by FERC. Order Confirming, Approving, and Placing Increased Wholesale Power Rates In Effect On An Interim Basis, 46 Fed.Reg. 33,542 (1981). 2 Proceedings in this court began in 1981 with petitions seeking review of BPA's rate determinations before FERC had completed its review of any of the rates. FERC's failure, for two years, to complete its review of any of the rates gave rise to considerable concern. See Energy and Water Development Appropriations For 1983: Hearings Before the Subcomm. on Energy and Water Development of the House Comm. on Appropriations, 97th Cong, 2d Sess., 110-16 (1982). Some petitioners therefore filed a separate Petition for Review of Agency Action Unlawfully Withheld to compel FERC to act. Pacific Carbide & Alloys Co. v. FERC, No. 83-7016 (9th Cir. filed Jan. 17, 1983). The petitioners argued that FERC's failure to act was equivalent to a final action. See Environmental Defense Fund v. Hardin, 428 F.2d 1093, 1098 (D.C.Cir.1970). It was

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also suggested that such an order to compel the agency to complete its review was appropriate under the All Writs Act, 28 U.S.C. Sec. 1651(a), as relief in aid of our prospective jurisdiction to review the final rates. See FTC v. Dean Foods, 384 U.S. 597, 86 S.Ct. 1738, 16 L.Ed.2d 802 (1966). On June 15, 1983, FERC gave final approval to the regional rates which constitute all but a relatively small segment of the 1981 rates. Order Confirming and Approving Rates on a Final Basis, 48 Fed.Reg. 28,317 (1983). The petitioners in Pacific Carbide are therefore no longer seeking an order to compel FERC to act and that petition is moot.

Moot as well are the original, pre-June 15, 1983 petitions for review. New petitions for review have been filed to review the rates that have received final administrative approval, and those petitions are now ripe for decision.

Petitioners concerned about the scope of review that FERC would exercise over the regional rates challenged the order it has issued in that regard, Order Resolving Scope of Commission's Jurisdiction, Granting Intervention, and Establishing Further Procedures, 20 FERC (CCH) p 61,292 (Sept. 1, 1982) (hereinafter FERC Jurisdiction Order). Lobdell v. FERC, No. 82-7710 (9th Cir. filed Nov. 29, 1982). Those issues are subsumed in our review of the final rates, and we do not need to decide whether an independent jurisdictional basis existed for our review of the order before the rates became final. All petitions have been consolidated for our determination.

In this opinion we must consider the following issues:

a) whether we have jurisdiction to review those rates that FERC has not yet finally approved;

b) whether FERC properly exercised a narrow scope of review over the rates established by BPA;

c) whether BPA followed appropriate procedures in its rate-making; and

d) whether there is merit to any of the petitioners' substantive challenges to the rates established by BPA and approved by FERC.

We conclude that we do not have jurisdiction to review the rates themselves until FERC has confirmed and approved them. Accordingly we do not consider the merits of the petitions filed by the California Energy Commission, the California Utilities, the State of California, and the California Public Utilities Commission challenging the nonregional rates for which FERC approval is still pending. 3 We do consider the petitions challenging the regional rates and hold that FERC properly applied a narrow scope of review to the BPA rates; we further hold that the rates as promulgated by BPA are not procedurally defective, and, finally, that the petitioners' challenges to the evidence supporting the rates as promulgated must fail.

II. BACKGROUND OF THE ACT AND THE PARTIES TO THIS PROCEEDING

Because this case requires us to construe a unique piece of energy legislation, we begin with a brief look at its background and operation. Congress adopted the Act on December 5, 1980 to respond to increasing demand for the finite supply of inexpensive hydroelectric power generated on the Columbia River System, and to avert protracted legal battles over the allocation of this federal resource. See Central Lincoln Peoples' Utility District v. Johnson, 686 F.2d 708, 714 (9th Cir.1982), cert. granted, 460 U.S. 1050, 103 S.Ct. 1496, 75 L.Ed.2d 928 (1983) (hereinafter Central Lincoln I); Public Power Council v. Johnson, 674 F.2d 791, 795 (9th Cir.1982); H.R.Rep. No. 976, Part II, 96th Cong., 2d Sess. (1980) (hereinafter House Report, Part II), reprinted in United States Department of Energy, Legislative History of the Pacific

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Northwest Electric Power Planning and Conservation Act, at 243 (1981) (hereinafter BPA Legislative History ); H.R.Rep. No. 976, Part I, 96th Cong., 2d Sess. 24-26 (1980) (hereinafter House Report, Part I), reprinted in BPA Legislative History, at 333; S.Rep. No. 272, 96th Cong., 1st Sess. (1979), U.S.Code Cong. & Admin.News 1980, p. 5989 reprinted in BPA Legislative History, at 445 (hereinafter Senate Report). The Act is intended to provide a comprehensive solution to the Pacific Northwest's electric power problems. Public Power Council v. Johnson, 674 F.2d at 792. See generally Blumm, The Northwest's Hydroelectric Heritage: Prologue to the Pacific Northwest Electric Power Planning and Conservation Act, 58 Wash.L.Rev. 177 (1983).

To assure the region an adequate supply of electricity, the Act grants the BPA Administrator authority to acquire additional power sources, 16 U.S.C. Sec. 839d, and to initiate conservation measures. 16 U.S.C. Secs. 839b, 839d and 839f(j). The Act also creates a regional planning council to govern BPA's acquisition of major resources and to implement the Act's fish and wildlife preservation provisions. 16 U.S.C. Sec. 839b. Further, the Act guarantees public participation in the decisions made regarding electric power. 16 U.S.C. Secs. 839(3), 839b. Finally, the Act sets forth directives, stressing cost recoupment, for the Administrator to follow in establishing rates both for electric energy sales and for the transmission of non-federal power. 16 U.S.C. Sec. 839e.

Under limited circumstances the Act authorizes the sale of power outside of the Pacific Northwest. 16 U.S.C. Sec. 839c(f) (nonregional sales). Such sales generally are to the Southwest states, principally California. These sales ensure that surplus hydropower is not wasted. Instead, the surplus power...

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