Arizona Power Pooling Ass'n v. Morton
| Decision Date | 24 September 1975 |
| Docket Number | 74--1173,74--1168,Nos. 74--1167,s. 74--1167 |
| Citation | 527 F.2d 721 |
| Parties | , 5 Envtl. L. Rep. 20,708, 6 Envtl. L. Rep. 20,178 ARIZONA POWER POOLING ASSOCIATION, an Arizona Corporation, Plaintiff- Appellant, Arizona Power Authority, an agency of the State of Arizona, et al., Intervenors, v. Rogers C. B. MORTON, Individually and as Secretary of the Interior of theUnited States, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Before TUTTLE, * KOELSCH and BROWNING, Circuit Judges.
This is an appeal from an order of the district court granting the government's motion for summary judgment and dismissing with prejudice an action which sought for the plaintiffs a preference right to bid for federally owned electric power. Appellant, 1 a non-profit Arizona corporation comprised of consumerowned utilities (the 'Association'), 2 brought suit in federal district court 3 to compel the Secretary of the Interior to negotiate with it for the purchase and sale of certain thermal power to which the government is entitled by virtue of its participation in the construction and operation of a thermal power plant in Arizona constituting part of the Colorado River Basin Project. The Association alleged that the Secretary had violated a duty imposed on him by federal reclamation laws requiring preference to be given to entities such as itself in the sale of federally-owned electric power. Also named as defendants were those private investor-owned utility companies with which the Secretary had contracted to sell the power at issue. The district court granted summary judgment for defendants, holding that the Secretary's decision with respect to which entities were to be allowed an opportunity to purchase thermal power was not judicially reviewable, and that Congress had approved any possible violation of the preference provision by accepting the Secretary's plan for the Central Arizona Project as submitted, and appropriating funds for its implementation.
We are unable to agree with the district court's decision, and consequently must reverse. First, we hold that the preference clause does apply to the sales of interim thermal power at issue, and that merely by appropriating funds for the Central Arizona Project, Congress cannot be deemed to have authorized any contravention of the preference clause so as to render the Secretary's actions unreviewable. Furthermore, we find that the Secretary's decision regarding which entities would be allowed to purchase interim power from the project was not one 'committed to agency discretion' within the meaning of the Administrative Procedure Act, and was therefore judicially reviewable.
The Colorado River Basin Project Act, 43 U.S.C. § 1501 et seq., was passed by Congress in 1968 to develop the water resources of the Colorado River Basin. One of the Act's central components was the Central Arizona Project (CAP), 43 U.S.C. §§ 1521--28, which was designed to furnish irrigation and municipal water to water-deficient areas of Arizona and western New Mexico. To accomplish the objective of obtaining energy to lift water from the Colorado River to the level needed for irrigation, § 1523(a) authorized and directed the Secretary of the Interior:
'to continue to a conclusion appropriate engineering and economic studies and to recommend the most feasible plan for the construction and operation of hydroelectric generating and transmission facilities, the purchase of electrical energy, the purchase of entitlement to electrical plant capacity, or any combination thereof, including participation, operation, or construction by non-Federal entities, for the purpose of supplying the power requirements of the Central Arizona Project and augmenting the Lower Colorado River Basin Development Fund: Provided, That nothing in this section or in this Act contained shall be construed to authorize the study or construction of any dams on the main stream of the Colorado River between Hoover Dam and Glen Canyon Dam.' 43 U.S.C. § 1523(a).
The final proviso in this section was a result of conservationist opposition to additional dam sites along the river, and its inclusion virtually precluded the possibility of obtaining the needed energy from hydroelectric sources. Section 1523(b) was consequently added to permit the Secretary to obtain energy through agreements pertaining to thermal power sources, and to dispose of such energy when it was not needed for the CAP:
43 U.S.C. § 1523(b).
Pursuant to this statutory authorization, the Secretary entered into an agreement with certain public and private interests which were building a thermal generating power plant near Page, Arizona, known as the Navajo plant. The non-federal participants were the Salt River Project, the Los Angeles Department of Water and Power, the Arizona Public Service Company, Nevada Power Company, and Tucson Gas & Electric Company. By virtue of its participation in the construction of the Navajo project, the Bureau of Reclamation was to obtain an entitlement of 24.3% (561 megawatts) of the plant's power output, which would eventually be utilized for CAP purposes.
The Navajo plant, however, was scheduled to begin operation around 1974, whereas the CAP would not be operational, and hence would have no need of any of the Navajo power, until nearly 1980. Consequently, there existed a considerable amount of 'interim power' available from the Navajo project which the Secretary was authorized to market under § 1523(b).
In seeking to dispose of this interim power, it is undisputed that the Secretary refused to offer the Association the opportunity to become a purchaser, and contracted instead with those public and private interests involved in the construction of the thermal plant, together with Southern California Edison, another private investor-owned utility company. 4 The Secretary's choice of entities to which he offered the opportunity to purchase power was made despite a general provision in the Colorado River Basin Project Act, 43 U.S.C. § 1554, which states that '(e)xcept as otherwise provided in this Act, in constructing, operating, and maintaining the units of the projects herein and hereafter authorized, the Secretary shall be governed by the Federal reclamation laws (citations omitted) to which laws this Act shall be deemed a supplement.' The Federal Reclamation Project Act of 1939 contains a preference clause applying to any sale of electric power or lease of power privileges by the United States:
43 U.S.C. § 485h(c).
It is upon this provision and its incorporation into the Colorado River Basin Project Act by virtue of 43 U.S.C. § 1554 that appellant and intervenors, all of whom qualify as preference customers, base their claim that the Secretary violated his statutory duty by contracting to sell the interim power to the privately-owned utility companies without first offering the Association the opportunity to purchase it.
On September 30, 1969, pursuant to statutory requirement, 5 the Secretary submitted his recommended plan for obtaining energy for the CAP to Congress in a letter which outlined in detail the contractual arrangements involved in actually securing the thermal power necessary for the CAP. The only reference made to the existence and disposition of interim power, however, was a statement that Southern California Edison Company would be involved 'as a purchaser of a major portion of United States entitlement to generation and transmission prior to need for Central Arizona Project pumping.' 6 Congress approved the Secretary's plan as submitted, and has since continued to appropriate funds for the development of the CAP. 7
In moving for summary judgment, defendants below made three arguments: first, that it was clear from...
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