Trinity County Public Utilities Dist. v. Harrington

• Decision Date: 23 January 1986
• Docket Number: No. 85-1874,85-1874
• Citation: 781 F.2d 163
• Parties: TRINITY COUNTY PUBLIC UTILITIES DISTRICT, Hayfork Valley Public Utility District, Calaveras Public Power Agency, Tuolumne County Public Power Agency, Plaintiffs-Appellants, v. John S. HARRINGTON, et. al., Defendants-Appellees, and Northern California Power Agency, and Sacramento Municipal Utility District, Intervenors-Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 163

781 F.2d 163

TRINITY COUNTY PUBLIC UTILITIES DISTRICT, Hayfork Valley Public Utility District, Calaveras Public Power Agency, Tuolumne County Public Power Agency, Plaintiffs-Appellants, v. John S. HARRINGTON, et. al., Defendants-Appellees and Northern California Power Agency, and Sacramento Municipal Utility District, Intervenors-Defendants-Appellees.

No. 85-1874.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 11, 1985.

Decided Jan. 23, 1986.

Dian M. Grueneich, Heller, Ehrman, White, & McAuliffe, San Francisco, Cal., Eric Redman, Heller, Ehrman, White, & McAuliffe, Seattle, Wash., for plaintiffs-appellants.

Daniel Davidson, Spiegel & McDiarmid, Washington, D.C., C. Max Vassanelli, Atty. U.S. Dept. of Justice, Washington, D.C., David S. Kaplan, Sacramento, Cal., for defendants-appellees.

Appeal from the United States District Court for the Eastern District of California.

Before CHOY, Senior Circuit Judge, SKOPIL and SCHROEDER, Circuit Judges.

CHOY, Senior Circuit Judge:

Appellants Trinity County Public Utility District, Hayfork Valley Public Utility District, Calaveras Public Power Agency, and Tuolumne County Public Power Agency appeal the district court's grant of summary judgment against them. The district court determined that the Trinity River Division Act and the Flood Control Act of 1962 gave appellants a first preference to energy and rates based on the Central Valley Project as a whole, rather than from the Trinity and New Melones plants. We affirm.

FACTS AND PROCEDURE

The Central Valley Project ("CVP") is a multipurpose federal project that includes several hydroelectric plants in northern and central California. Since 1977, the Western Area Power Administration ("WAPA"), an agency of the United States Department of Energy, has had responsibility for marketing CVP power in excess of that needed by the Bureau of Reclamation.

In 1955, Congress passed the Trinity River Division Act ("Trinity Act"), which authorized the construction of power plants in Trinity County. The Act provided that the Trinity plants "shall be integrated and coordinated, from both a finanical and an operational standpoint, with the operation of other features of the Central Valley project ..." Trinity River Division Act of August 12, 1955, ch. 872, Pub.L. No. 84-386, 69 Stat. 719 (1955). The Act also accorded preference customers in Trinity County a first preference to 25 per cent of the "additional energy available from the Central Valley project system as a result of the construction of the plants herein authorized and their integration with that system ..." 69 Stat. at 720.

In 1962, Congress passed legislation authorizing the New Melones project, Section 203 of the Flood Control Act of 1962, Pub.L. No. 87-874, 76 Stat. 1180, 1191 ("New Melones Act"). The New Melones Act also provided for integration of the New Melones plants with the CVP and accorded customers in Tuolumne and Calaveras counties a first preference to power. Both the New Melones and Trinity Acts are administered in accordance with In 1964, Congress authorized the Secretary of the Interior to import power from the Pacific Northwest for use in California through the Pacific Northwest-Pacific Southwest Intertie ("Intertie"). ¹ The federal government has been importing power from the Intertie into the CVP area since 1971.

federal reclamation law. Pub.L. No. 84-386, 69 Stat. 719 (1955); Pub.L. No. 87-874, 76 Stat. 1191 (1962).

On June 21, 1982, October 29, 1982, and sometime after November 30, 1983, appellants contracted with WAPA for the purchase of power, pursuant to their first preference rights. On October 1, 1982, WAPA gave notice in the federal register of a proposed rate adjustment. Although appellants objected to the proposed rates, the Federal Energy Regulatory Commission ("FERC") approved WAPA's proposed rates for a five year period, from 1983 to 1988.

Appellants sought judicial relief in a district court action in which the Sacramento Municipal Utility District ("SMUD") intervened. All parties filed motions for summary judgment. Judge Garcia denied appellants' motion and granted the motions of WAPA and SMUD. Appellants timely appeal the district court's judgment.

STANDARD OF REVIEW

We review de novo the district court's ruling on questions of law concerning statutory interpretation. Chula Vista City School District v. Bell, 762 F.2d 762, 765 (9th Cir.1985). The district court here approved WAPA's and FERC's interpretations of the Trinity, New Melones, and Reclamation Acts. WAPA and FERC are the agencies charged with administration of these statutes. When faced with a problem of statutory construction, we accord great deference to the interpretation given the statute by the officers or agency charged with its administration and limit our review to determining whether the agency's interpretation is reasonable. Aluminum Co. of America v. Central Lincoln Peoples' Utility District, 467 U.S. 380, 104 S.Ct. 2472, 81 L.Ed.2d 301 (1984); Southern Pacific Transportation Co. v. Watt, 700 F.2d 550, 552 (9th Cir.1983).

DISCUSSION

I. Appellants' entitlement to Trinity & New Melones power

The plain language of the Trinity and New Melones Acts, which provides for integration of the Trinity and New Melones plants into the CVP system, defeats appellants' argument that Congress intended them to receive energy exclusively from the Trinity or New Melones plants. Section 1 of the Trinity Act authorized the construction of the Trinity River Division as "an integral part of the Central Valley Project." Pub.L. No. 84-386, 69 Stat. 719 (1955). Section 2 of the Act provides that "the Trinity River division shall be integrated and coordinated, from both a financial and an operational standpoint, with the operation of other features of the Central Valley project." 69 Stat. at 720. The authorizing legislation for the New Melones project contains similar integration language. 76 Stat. 1191.

Similarly, section 4 of the Trinity Act provides that appellants' preference rights are to CVP power, and not to power from the Trinity plant:

Contracts for the sale and delivery of the additional electric energy available from the Central Valley project power system as a result of the construction of the plants herein authorized and their integration with that system shall be made in accordance with preferences expressed in the Federal reclamation laws: PROVIDED THAT a first preference, to the extent of 25 per centum of such additional energy, shall be given, under reclamation law, to preference customers 69 Stat. 719, 720 (emphasis added). The plain language of the statute grants first preference rights to electric energy from the CVP power system, not from the New Melones or Trinity power plants.

in Trinity County, California, for use in that county, who are ready, able and willing, within twelve months after notice of availability by the Secretary, to enter into contracts for the energy ...

Appellants' reliance on Power Authority of the State of New York v. FERC, 743 F.2d 93 (2d Cir.1984) ("PASNY "), and Arizona Power Authority v. Morton, 549 F.2d 1231 (9th Cir.) cert. denied, 434 U.S. 835, 98 S.Ct. 124, 54 L.Ed.2d 97 (1977), in support of their argument that they are entitled to power from a specific source in the CVP is misplaced. In PASNY, preference customers successfully claimed that 16 U.S.C. Sec. 836(b)(1) (1982), gave them a right to power from a particular source, the hydroelectric power of the Niagara Power Project. However, in PASNY, the Niagara Redevelopment Act, unlike the statutory provisions at issue here, did not mandate that the Niagara Power Project be operated as part of an integrated system. Our holding in Arizona Power Authority v. Morton, is not inconsistent with our conclusion here. ² In Arizona Power Authority, the issue was not power allocations under the Trinity Act, but whether the Colorado River Storage Project precluded the Secretary of the Interior from basing power allocations on a customer's location. We held that it did not. Here, WAPA may consider appellants' geographic location in allocating power from the CVP system, as it has done in its proposed formula for allocating CVP power (See 50 Fed.Reg. 33314 (1985)).

In the WAPA proposed procedures, first preference customer power allocations are calculated from a formula based on the average output of the Trinity or New Melones power plants. Appellants argue that the allocation formula reinforces their claim to power from the Trinity or New Melones plants, as opposed to CVP power.

The allocation formula, however, is irrelevant to appellants' preference rights. The Trinity and New Melones Acts clearly state that appellants are entitled a percentage of CVP power. WAPA can use a formula to allocate that power based on the output of the Trinity and New Melones plants. The allocation formula does not alter appellants' rights, and it cannot be used to expand these rights to include a preferential rate in addition to a preferential power allocation.

The district court properly determined that appellants are entitled to CVP power and not to power from a specific division or project of the CVP.

II. Rate Entitlements

Appellants argue that Sec. 9(c) of the Reclamation Act, incorporated by reference into the Trinity and New Melones Acts, entitles them to a rate based on the operating costs of these respective plants, and not, as WAPA argues, on the costs of the CVP system as a whole. Section 9(c) of the Reclamation Act provides in relevant part as follows:

Any sale of electric power or lease of power privileges, made by the Secretary in connection with the operation of any project or division of a project, shall be for such periods, not to exceed forty years, and at such rates as in his judgment will produce power revenues at least sufficient to cover an appropriate share of the annual operation and maintenance cost, ... and such other fixed charges as the...