Indus. Cust., Nw Util. v. Bonneville Power, 03-71626.
| Decision Date | 24 May 2005 |
| Docket Number | No. 03-71894.,No. 03-71931.,No. 03-71626.,03-71626.,03-71894.,03-71931. |
| Citation | 408 F.3d 638 |
| Parties | INDUSTRIAL CUSTOMERS OF NORTHWEST UTILITIES; Benton Rural Electric Association; Columbia-Snake River Irrigators Association; Umatilla Electric; Eastern Oregon Irrigators Association, Petitioners, Puget Sound Energy; Avista Corporation; Pacific Northwest Generating Company (PNGC); Public Utility District No. 1 of Snohomish County, Washington, Petitioner-Intervenor, v. BONNEVILLE POWER ADMINISTRATION, Respondent, Pacificorp; Portland General Electric Company, Respondent-Intervenor. Public Utility District No. 1 of Benton County; Public Utility District No. 1 of Cowlitz County; Public Utility District No. 1 of Franklin County; Public Utility District No. 2 of Grant County; Public Utility District No. 1 of Grays Harbor County; Public Utility District No. 1 of Pendoreille County; The City of Seattle; Seattle City Light Department (Generating Public Utilities); Public Power Council, Petitioners, Pacific Northwest Generating Company (PNGC); Puget Sound Energy; Avista Corporation; Public Utility District No. 1 of Snohomish County, Washington, Petitioner-Intervenor, v. Bonneville Power Administration, Respondent, Pacificorp; Portland General Electric Company, Respondent-Intervenor. Alcoa, Inc., Petitioner, Pacific Northwest Generating Company (PNGC); Puget Sound Energy; Avista Corporation; Public Utility District No. 1 of Snohomish County, Washington, Petitioner-Intervenor, v. Bonneville Power Administration, Respondent, Pacificorp; Portland General Electric Company, Respondent-Intervenor. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Michael B. Early, Portland, OR, for petitioner Alcoa Inc.
Melinda J. Davison, Irion A. Sanger, Davison Van Cleve, Portland, OR, for petitioners Industrial Customers of Northwest Utilities, Benton Rural Electric Association, Columbia-Snake River Irrigators Association, Umatilla Electric, Eastern Oregon Irrigators Association.
Denise Peterson, Portland, OR, for petitioner Public Power Council.
Raymond S. Kindley, Schwabe, Williamson & Wyatt, Portland, OR, for petitioners Public Utility District No. 1 of Benton County, Public Utility District No. 1 of Cowlitz County, Public Utility District No. 1 of Franklin County, Public Utility District No. 2 of Grant County, Public Utility District No. 1 of Grays Harbor County, Public Utility District No. 1 of Pendoreille County, the City of Seattle, Seattle City Light Department.
Michael J. Gianunzio, Eric Lee Christensen, Everett, WA, for petitioner Public Utility District No. 1 of Snohomish County, Washington.
Gary A. Dahlke, R. Blair Strong, Paine, Hamblen, Coffin, Brooke, & Miller, LLP, Spokane, WA, for petitioner-intervenor Avista Corporation.
R. Erick Johnson, Portland, OR, for petitioner-intervenor Pacific Northwest Generating Company.
Kirstin S. Dodge, Perkins Coie, LLP, Bellevue, WA, for petitioner-intervenor Puget Sound Energy.
Eric Lee Christensen, Michael J. Gianunzio, Everett, WA, for petitioner-intervenor Public Utility District No. 1 of Snohomish County, Washington.
Randy A. Roach, Marybeth Van Buren, Karin J. Immergut, United States Attorney, District of Oregon, Stephen J. Odell, Assistant U.S. Attorney, Kurt R. Casad, Special Assistant U.S. Attorney, Portland, OR, for respondent Bonneville Power Administration.
Marcus Wood, Stephen C. Hall, Stoel Rives LLP, Portland, OR, for respondent-intervenor Pacificorp.
Loretta Mabinton, Portland, OR, for respondent-intervenor Portland General Electric Company.
On Petition for Review of an Order of the Bonneville Power Administration.
Before: D.W. NELSON, THOMAS, Circuit Judges, and EZRA,* District Judge.
This consolidated appeal presents the question, inter alia, of whether the Bonneville Power Administration ("BPA") determination to commence a rate hearing to decide whether the BPA should impose Safety-Net Cost Recovery Adjustment Charges is a final agency decision subject to judicial review. We conclude that it is not and dismiss the petitions for review for lack of jurisdiction.
The BPA is a federal agency within the United States Department of Energy created by Congress in 1937 to market hydroelectric power generated by the Federal Columbia River Power System, a series of dams along the Columbia River in Oregon and Washington. 16 U.S.C. §§ 832-832m. Congress has since expanded the BPA's mandate to include marketing authority over nearly all the electric power generated by federal facilities in the Pacific Northwest. Id. § 838f. The BPA is charged with oversight of the federal high-voltage transmission system used to deliver power generated at a federally owned and operated facility, as well as non-federal power to its customers. Id. § 838b. It owns and operates approximately eighty percent of the Pacific Northwest's high-voltage transmission system and markets approximately forty percent of the electric power consumed in the Pacific Northwest. Ass'n of Pub. Agency Customers, Inc. v. BPA, 126 F.3d 1158, 1163 (9th Cir. 1997).
The BPA's general authority is derived from four organic statutes: the Bonneville Project Act of 1937 ("the Project Act"), 16 U.S.C. §§ 832-832m; the Regional Preference Act, id. §§ 837-837h; the Columbia River Transmission Act ("the Transmission Act"), id. §§ 838-838l; and the Pacific Northwest Electric Power Planning and Conservation Act of 1980 ("the Northwest Power Act"), id. §§ 839-839h. Ass'n of Pub. Agency Customers, 126 F.3d at 1164. The BPA's rate-making authority is derived from the Project Act, the Transmission Act, the Northwest Power Act, and the Flood Control Act of 1944, 16 U.S.C. § 825s. Pursuant to the Northwest Power Act, the BPA's power rates are established by the BPA, but subject to approval by the Federal Energy Regulatory Commission ("FERC"). Id. § 829e. After 1974, when Congress transformed the BPA into a self-financing agency, see id. § 838i, the power rates charged by the BPA became its source of revenue. Cent. Lincoln Peoples' Util. Dist. v. Johnson, 735 F.2d 1101, 1116 (9th Cir. 1984).
The Northwest Power Act requires the BPA to establish rates that will "produce sufficient revenues to ensure BPA's fiscal independence and repay the U.S. Treasury for the federal funds that were borrowed to build the projects in the Federal Columbia River Power System." Cal. Energy Comm'n v. BPA, 909 F.2d 1298, 1303 (9th Cir. 1990); 16 U.S.C. §§ 838g, 839e(a)(1). At the same time, Congress requires that the BPA market federal power "with a view to encouraging the widest possible diversified use of electric power at the lowest possible rates to consumers consistent with sound business principles." 16 U.S.C. §§ 838g, 839e(a)(1).
The BPA Administrator is required periodically to revise rates to recover the capital costs and expenses associated with the Columbia River Power System. See id. §§ 832f, 838g, 839e(a)(1). The procedures governing the establishment of rates are set by statute and include the following: issuance of a Federal Register notice announcing the proposed rates; one or more hearings; the opportunity to submit written views, supporting information, questions, or arguments; and a decision by the Administrator based on the record developed during the hearing process. Id. § 839e. Rates established by the BPA only become effective after approval by FERC. Id. § 839e(a)(2).
The rate schedules proposed by the BPA are termed "General Rate Schedule Provisions" ("GRSP"). The origins of the present controversy arose out of a supplemental rate proposal promulgated by the BPA in 2001. The BPA had previously proposed new wholesale power rates to be effective on October 1, 2001, 64 Fed.Reg. 44,318 (1999), and different rates to be effective Fiscal Year 2002, 65 Fed.Reg. 44,041 (2000).
After these filings, increased load obligations and higher market prices caused the BPA to determine that its rate proposals would be insufficient to assure it could cover costs and repay U.S. Treasury obligations. On December 1, 2000, the BPA published its proposed amendments to the 2002 whole-sale power rate adjustment proposal. 65 Fed.Reg. 75,272 (2000). Further market changes caused the BPA to issue supplemental wholesale power rate filing on June 29, 2001. 66 Fed.Reg. 37,664 (2001). The supplemental proposal adjusted the previous GRSP by replacing the capped single Cost Recovery Adjustment Clause ("CRAC") with a three-component CRAC: the Load-Based CRAC (or "LB CRAC", as it is referenced in the BPA filings) designed to cover augmentations costs; the Financial-Based CRAC (or "FB CRAC") designed to cover net revenue, and the Safety-Net CRAC (or "SN CRAC"), available if there were a likelihood of missing a treasury or other creditor payment.
The CRACs were created to allow the BPA to address any financial shortfalls without having to raise base rates. In particular, the CRACs were intended to increase the BPA's Treasury Payment Probability to what it considered acceptable levels. FERC granted interim approval of the CRAC proposal on September 28, 2001 and final approval on July 21, 2003. 104 FERC ¶ 61,093 (2003).
When triggered, the Safety-Net CRAC allowed "an upward adjustment to posted power rates subject to the FB CRAC by modifying the FB CRAC parameters." Under the GRSP, the Safety-Net CRAC would be available if the Administrator determined that, after implementation of the Financial-Based CRAC and any adjustments, either of the following conditions existed:
• The BPA forecasts a fifty percent or greater probability that it will nonetheless miss its next payment to Treasury or other creditor, or
• The BPA has missed a payment to the Department of the Treasury or has satisfied its obligation to the Department of the Treasury but has missed a payment to any other creditor.
Under the supplemental proposal, once the BPA Administrator determined that these conditions existed, the BPA would "propose changes to the...
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