Pacific Power & Light Co. v. Duncan

• Decision Date: 21 October 1980
• Docket Number: Civ. No. 80-82.
• Citation: 499 F. Supp. 672
• Parties: PACIFIC POWER & LIGHT COMPANY, Plaintiff, v. Charles William DUNCAN, Jr., Secretary of the United States Department of Energy; Ruth M. Davis, Assistant Secretary of the United States Department of Energy for Resource Application; and Sterling Munro, Administrator of the Bonneville Power Administration, Defendants. Portland General Electric Company, and Public Utility Commissioner of Oregon, Intervenors-Plaintiffs. Public Power Council, Intervenor-Defendant.
• Court: U.S. District Court — District of Oregon

499 F. Supp. 672

PACIFIC POWER & LIGHT COMPANY, Plaintiff, v. Charles William DUNCAN, Jr., Secretary of the United States Department of Energy; Ruth M. Davis, Assistant Secretary of the United States Department of Energy for Resource Application; and Sterling Munro, Administrator of the Bonneville Power Administration, Defendants.

Portland General Electric Company, and Public Utility Commissioner of Oregon, Intervenors-Plaintiffs.

Public Power Council, Intervenor-Defendant.

Civ. No. 80-82.

United States District Court, D. Oregon.

October 21, 1980.

Hugh Smith, George M. Galloway, Stoel, Rives, Boley, Fraser & Wyse, Portland, Or., for plaintiff.

Sidney I. Lezak, U. S. Atty., Thomas C. Lee, Asst. U. S. Atty., Portland, Or., for government defendants.

James W. Durham, Warren Hastings, Alvin Alexanderson, Portland, Or., for intervenor-plaintiff Portland Gen. Elec.

James M. Brown, Atty. Gen., Paul A. Graham, Asst. Atty. Gen., Dept. of Justice, Salem, Or., for intervenor-plaintiff State of Oregon.

Norman A. Stoll, Alan S. Larsen, Stoll & Stoll, P. C., Portland, Or., for intervenor-defendant.

AMENDED OPINION

PANNER, Judge.

OVERVIEW

Rate increases for electricity distributed by the Bonneville Power Administration (BPA) were proposed by its Administrator. An Assistant Secretary of the Department of Energy (DOE) approved the rates on an interim basis under authority delegated to her by the Secretary of Energy. Pursuant to the same delegation order, the Federal Energy Regulatory Commission (FERC) is now reviewing the proposed rate changes. Pacific Power & Light (PP&L) filed this suit against the Secretary, the Assistant Secretary, and the Administrator, challenging the interim rates. Portland General Electric (PGE) and the Public Utility Commissioner of the State of Oregon (PUC) intervened as plaintiffs, and the Public Power Council (PPC) intervened as a defendant.

Before trial, the government filed a motion to dismiss and a motion for summary judgment. I deferred ruling on the motions and conducted an abbreviated trial on stipulated facts. The parties have presented all relevant evidence. For the reasons outlined below, I reach the merits and grant judgment for the defendants.

The problem arises as a result of the transfer of authority over the BPA from the former Federal Power Commission (FPC) and Secretary of the Interior to the new DOE and FERC. The division of responsibility between the DOE and the FERC differs significantly from the division that existed between the FPC and the Secretary of the Interior. Under the new system, proposed rate increases by the BPA and similar entities are subject to interim approval by an Assistant Secretary of the DOE before full consideration by the FERC.

The central issue in this case is whether Congress, in enacting the DOE legislation, granted ratemaking authority for the BPA to the Secretary of Energy. I conclude that it did.

To the extent that plaintiffs base their challenges on contract, the remedy of specific performance is not available against the government. To the extent that the plaintiffs challenge the power of the Secretary of Energy to approve interim rates, I find that the Secretary has such power. To the extent that plaintiffs challenge the procedures employed in promulgating and approving the rates, I find that the defendants followed appropriate procedures. Finally, to the extent that the plaintiffs challenge the substance of the interim rates, I hold that judicial review is precluded because there is "no law to apply."

Accordingly, I grant judgment to the defendants.

FACTS

I rely upon the following stipulated facts: numbers 1, 5, 19, 25, 26, 27, 28, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 44 and 45. Objections to the relevancy of any of these stipulated facts are overruled. See generally, Port of Astoria, Oregon v. Hodel, 595 F.2d 467, 471-73 (9th Cir. 1979); Natural Resources Defense Council v. Hodel, 435 F.Supp. 590, 591-95 (D.Or.1977) (outline the BPA's role in the Pacific Northwest).

ISSUES

1. Are claims under a government contract cognizable in this forum?

2. Does the Secretary of Energy have the authority to approve interim rates of the BPA?

3. Have the plaintiffs been given all the process due them?

4. With respect to the substance of the interim rates, is there any law to apply?

JURISDICTION

42 U.S.C. § 7192 provides in pertinent part:

(a) Judicial review of agency action taken under any law the functions of which are vested by law in, or transferred or delegated to the Secretary, the Commission or any officer, employee, or component of the Department shall, notwithstanding such vesting, transfer, or delegation, be made in the manner specified in or for such law.

(b) Notwithstanding the amount in controversy, the district courts of the United States shall have exclusive original jurisdiction of all other cases or controversies arising exclusively under this chapter, or under rules, regulations, or orders issued exclusively thereunder ....

42 U.S.C. § 7191 provides in pertinent part:

(a)(1) Subject to the other requirements of this subchapter, the provisions of subchapter II of chapter 5 of title 5 5 U.S.C. §§ 551 et seq. shall apply in accordance with its terms to any rule or regulation, or any order having the applicability and effect of a rule ....

5 U.S.C. § 702 provides for judicial review of agency action, limiting that review by stating:

Nothing herein (1) affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; or (2) confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.

5 U.S.C. § 701 also provides in pertinent part that:

(a) This chapter applies, according to the provisions thereof, except to the extent that—

(1) statutes preclude judicial review; or

(2) agency action is committed to agency discretion by law.

As stated in City of Santa Clara, California v. Andrus, 572 F.2d 660, 669 n. 5 (9th Cir.), cert. denied, 439 U.S. 859, 99 S.Ct. 176, 58 L.Ed.2d 167 (1978) (quoting East Oakland-Fruitvale Planning Council v. Rumsfeld, 471 F.2d 524, 533-34 (9th Cir. 1972)):

Agency action is made unreviewable by 5 U.S.C. § 701(a)(2) only "to the extent" that it is committed to agency discretion. ... An "all or nothing" approach to reviewability would, in specific cases, either be unfair to persons aggrieved by agency action, or impose an unwise burden upon the agency or the courts. Accordingly, separable issues appropriate for judicial determination are to be reviewed, though other aspects of the agency action may be committed to the agency's expertise and discretion.

If a statute or regulation establishes a rule governing the conduct of the agency with respect to an aspect of the agency action, a court may determine whether the agency has complied with that rule, although the court still may not review other aspects of the agency action as to which there are no reasonably fixed rules to apply. The presence of a judicially enforceable rule both justifies judicial review, and limits its scope.

SCOPE OF REVIEW

Because the plaintiffs challenge an agency's actions, I am limited to a very narrow scope of review. As a general rule:

The analysis of the proper scope of review begins with the Supreme Court's decision in Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 91 S.Ct. 814, 28 L.Ed.2d 136 ... (1971). ... The appropriate standard of review was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. at 413-14, 91 S.Ct. at 822. ... Under this standard, de novo review of the agency's action was not warranted. Id. at 415 , 91 S.Ct. at 823. ... De novo review is authorized only where the action is adjudicatory and agency fact-finding procedures are inadequate, or where issues not before the agency are raised in a proceeding to enforce nonadjudicatory agency action.

Nevertheless, the Court held that the reviewing court is required to engage in a "substantial inquiry," i. e., "a thorough, probing, in-depth review." Id. Pursuant to this inquiry, the reviewing court must first consider whether the Secretary acted within the scope of his authority. Next, to determine whether the decision was arbitrary or capricious, the court must consider whether the decision was "based on a consideration of the relevant factors and whether there has been a clear error in judgment." Id. Although this factual inquiry is to be "searching and careful" the ultimate standard of review is narrow. "The court is not empowered to substitute its judgment for that of the agency." Id. at 416 91 S.Ct. at 823. ... Finally, the court must inquire whether the Secretary followed the necessary procedural requirements.

Asarco, Inc. v. U.S.E.P.A., 616 F.2d 1153, 1158 (9th Cir. 1980). The scope of review is even more restricted when applied to energy regulatory agencies:

The breadth and complexity of the Commission's FPC responsibilities demand that it be given every reasonable opportunity to formulate methods of regulation appropriate for the solution of its intensely practical difficulties. This Court has therefore repeatedly stated that the Commission's orders may not be overturned if they produce "no arbitrary result." ...

. . . . .

... The responsibilities of a reviewing court are essentially three. First, it must determine whether the Commission's order, viewed in light of the relevant facts and of the Commission's broad regulatory duties, abused or exceeded its authority. Second, the court must examine the manner in which the Commission has employed the methods of regulation which it has itself selected, and must decide whether each of the order's essential elements is supported by substantial evidence. Third, the court must determine whether the order may reasonably be expected to ... provide appropriate protection to the

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