M-S-R Public Power v. Bonneville Power Admin., No. 99-71536.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtTrott
Citation297 F.3d 833
PartiesM-S-R PUBLIC POWER AGENCY, Petitioner, v. BONNEVILLE POWER ADMINISTRATION, an agency of the United States, Respondent. Columbia Falls Aluminum Company; Goldendale Aluminum Company; Kaiser Aluminum & Chemical Corporation; Northwest Aluminum Company; Reynolds Metals Company, Petitioners, Industrial Customers of Northwest Utilities, Intervenor, v. Bonneville Power Administration, Respondent. Alcoa Inc., Petitioner, v. Bonneville Power Administration, Respondent. M-S-R Public Power Agency, Petitioner, v. Bonneville Power Administration, Respondent. M-S-R Public Power Agency, Petitioner, v. Bonneville Power Administration, Respondent. Alcoa Inc., Petitioner, v. Bonneville Power Administration, Respondent. Columbia Falls Aluminum Company; Goldendale Aluminum Company; Kaiser Aluminum & Chemical Corporation; Northwest Aluminum Company, Petitioners, v. Bonneville Power Administration, Respondent.
Docket NumberNo. 99-71537.,No. 01-70480.,No. 01-70469.,No. 99-71545.,No. 00-71724.,No. 01-70433.,No. 99-71536.
Decision Date11 July 2002

Page 833

297 F.3d 833
M-S-R PUBLIC POWER AGENCY, Petitioner,
v.
BONNEVILLE POWER ADMINISTRATION, an agency of the United States, Respondent.
Columbia Falls Aluminum Company; Goldendale Aluminum Company; Kaiser Aluminum & Chemical Corporation; Northwest Aluminum Company; Reynolds Metals Company, Petitioners,
Industrial Customers of Northwest Utilities, Intervenor,
v.
Bonneville Power Administration, Respondent.
Alcoa Inc., Petitioner,
v.
Bonneville Power Administration, Respondent.
M-S-R Public Power Agency, Petitioner,
v.
Bonneville Power Administration, Respondent.
M-S-R Public Power Agency, Petitioner,
v.
Bonneville Power Administration, Respondent.
Alcoa Inc., Petitioner,
v.
Bonneville Power Administration, Respondent.
Columbia Falls Aluminum Company; Goldendale Aluminum Company; Kaiser Aluminum & Chemical Corporation; Northwest Aluminum Company, Petitioners,
v.
Bonneville Power Administration, Respondent.
No. 99-71536.
No. 99-71537.
No. 99-71545.
No. 00-71724.
No. 01-70433.
No. 01-70469.
No. 01-70480.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted May 7, 2002.
Filed July 11, 2002.
As Amended August 9, 2002.

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Paul M. Murphy, Murphy & Buchal LLP, Portland, OR, for the petitioners.

James D. Pembroke, Duncan, Weinberg, Genzer, & Pembroke, P.C., Washington, DC, for the petitioners.

Richmond F. Allan, Duncan, Weinberg, Genzer, & Pembroke, P.C., Washington, DC, for the petitioners.

William B. Crow, Miller Nash LLP, Portland, OR, for the petitioners.

William H. Walters, Miller Nash LLP, Portland, OR, for the petitioners.

David J. Adler, Special Assistant United States Attorney, District of Oregon, Portland, OR, for the respondent.

On Petition for Review of an Order of the Bonneville Power Administration.

Before: TROTT, T.G. NELSON, Circuit Judges, and SHADUR,* District Judge.

TROTT, Circuit Judge.


Pursuant to its 1996 Excess Federal Power Policy, the Bonneville Power Administration ("BPA" or "Bonneville") issues annual ten-year forecasts of the amount of "excess federal power" it anticipates will be available for sale to its customers during those years. Among those customers are the Petitioners: M-S-R Public Power Agency ("M-S-R"), a public entity located in California, and several aluminum companies ("Aluminum Companies") located in the Pacific Northwest.1 M-S-R filed a timely petition challenging (1) BPA's method for calculating its 1999 and 2000 ten-year forecasts of excess federal power, (2) the timeliness of BPA's 1999 and 2000 written notices of available excess federal power, and (3) the timeliness of BPA's 2000 final ten-year forecast of excess federal power. The Aluminum Companies also challenged BPA's method for calculating excess federal power, but based their petition on different grounds than M-S-R.

This Court has original jurisdiction over these petitions pursuant to section 9(e)(5) of the Pacific Northwest Electric Power Planning and Conservation Act ("Northwest Power Act"), 16 U.S.C. § 839f(e)(5). We deny M-S-R's petitions challenging BPA's forecasts of excess federal power and dismiss for lack of jurisdiction M-S-R's timeliness claims. We grant the Aluminum Companies' petitions because BPA's method for forecasting excess federal power was contrary to clear congressional intent.

BACKGROUND

In recent years, the demand for BPA's power has out-stripped its supply. Anticipating such power shortfalls, Congress instituted certain statutory directives and preferences that guide BPA's allocation of power while ensuring it operates "for the benefit of the general public, and particularly of domestic and rural consumers." 16 U.S.C. § 832c(a); see also Aluminum Co. of Am. v. Cent. Lincoln Peoples' Util.

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Dist., 467 U.S. 380, 393, 104 S.Ct. 2472, 81 L.Ed.2d 301 (1984) ("[T]he preference system ... determines the priority of different customers when the Administrator receives `conflicting or competing' applications for power that the Administrator is authorized to allocate administratively."). For instance, Bonneville must serve the power requirements of each "public body and cooperative" and each investor-owned utility, 16 U.S.C. § 839c(b)(1),2 giving "preference and priority" to public bodies and cooperatives. 16 U.S.C. §§ 832c(a)-(b), 839c(a). By contrast, Bonneville is not obligated to sell any power to direct service industrial customers ("DSIs"), including the Aluminum Companies, which purchase power directly from BPA for their own use. 16 U.S.C. § 839c.3

Furthermore, Congress has prioritized the needs of Pacific Northwest customers over those of users outside the region. 16 U.S.C. §§ 832m(b)(1), 837a, 837b. Thus, BPA's sales of energy outside the region are limited to power that would otherwise be wasted, i.e., power "for which there is no market in the Pacific Northwest at any rate established for the disposition of such energy." 16 U.S.C. §§ 839f(c); 837(c). This power is called "surplus" power, and numerous restrictions are placed on its sale. Perhaps most significantly, surplus power is delivered only on a provisional basis, allowing BPA to recall surplus power deliveries or cancel future ones when necessary to meet the energy requirements of Pacific Northwest customers. 16 U.S.C. §§ 837b(a)-(b), 839f(c).

Excess Federal Power

As the market for electric energy became more competitive in the early 1990s, BPA customers migrated to other providers, leaving BPA with an increasing amount of surplus power which, with its sales restrictions, was difficult to sell. In response, Congress passed the Water Development Appropriations Act of 1996 ("Excess Federal Power Act"), codified at 16 U.S.C. § 832m, which created a subspecies of surplus power called "excess federal power." Congress defined "excess federal power" as "electric power that has become surplus" due to:

any reduction in the quantity of electric power that the Administrator is contractually required to supply to [its public utility customers under 16 U.S.C. § 839c(b) and to its DSI customers under 16 U.S.C. § 839c(d)], due to the election by customers ... to purchase electric power from other suppliers, as compared to the quantity of electric power that the Administrator was contractually required to supply as of January 1, 1995.

16 U.S.C. § 832m(a)(3)(A).4 The Excess Federal Power Act authorized Bonneville to sell power to non-regional customers without the statutory restrictions, including the right to recall, that applied to the sale of traditional surplus power. 16 U.S.C. § 832m(b).

In March 1996, BPA initiated notice and comment proceedings to develop a policy to interpret and implement its excess federal power marketing authority under 16 U.S.C. § 832m. The result was Bonneville's Excess Federal Power Policy ("EFP Policy") and the accompanying Record of Decision ("EFP-Decision"). 61 Fed.Reg. 50,810 (Sept. 27, 1996). The EFP Policy

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established the method for calculating excess federal power:

To determine the energy component of excess federal power, each year Bonneville will prepare a current forecast, in average megawatts, of Firm Contractual Obligations based upon its then-current contracts. In order to allow for sales or dispositions of excess federal power under Delayed-Delivery Contracts with delivery terms of up to 7 years, Bonneville will produce a 10-year annual energy (average megawatts) forecast of its then-current Firm Contractual Obligations. For each year of the forecast period, the excess federal power in firm energy from reductions in Firm Contractual Obligations will equal the difference between the forecasted Firm Contractual Obligations and 8298 aMW.

Id. at 50,811.5 The 8298 aMW ("average megawatts") figure represented BPA's total firm energy obligations as of January 1, 1995; 2907 aMW were attributable to DSIs.

With the passage of the Northwest Power Act in 1980, Congress had directed BPA to offer twenty-year power sales contracts to its existing customers, including DSIs. 16 U.S.C. § 839c(g)(1); Ass'n. of Pub. Agency Customers, Inc. ("APAC") v. Bonneville Power Admin., 126 F.3d 1158, 1165 (9th Cir.1997). By mid-1999, Bonneville predicted that customer demand for energy after October 2001 — when its long-term contracts would expire — would outstrip supply and prevent Bonneville from fully servicing the DSIs' power needs. The parties entered into a "Compromise Agreement," under which BPA agreed to sell the DSIs a total of 1440 aMW annually starting in October 2001. Because 16 U.S.C. § 839c(d) authorized but did not obligate BPA to sell the DSIs any power, the Compromise Agreement amounted to a take-it-or-leave-it offer. Most DSIs took it. Following the Compromise Agreement, Bonneville used 1440 aMW rather than 2907 aMW as its power obligation to the DSIs in calculating its 1999 and 2000 ten-year forecasts for excess federal power.

The Firm Sales Power Agreement

On September 30, 1997, Bonneville and M-S-R executed a contract for the sale of excess federal power. Though the contract was called the Firm Power Sales Agreement ("Sales Agreement"), the contract was really for excess federal power, as that term is defined in 16 U.S.C. § 832m, Bonneville's EFP Policy, and its EFP-Decision. The Sales Agreement guaranteed that BPA would sell M-S-R excess federal power through September 2004, and potentially until April 2013, "unless terminated earlier as provided for in section 13."6 Section 13(b)(1) of the Sales Agreement required that Bonneville provide M-S-R with an annual forecast of available excess federal power for the upcoming ten years. Bonneville's determinations of future power were to be based on "the Excess Federal Power forecast, ... then-current methodologies and policies, and statutory or contractual obligations," and calculated "within the reasonable discretion of Bonneville."

Section 13(b)(2) required that BPA determine, within 30 days of issuing each ten-year...

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13 practice notes
  • Golden Northwest Alum. v. Bonneville Power Admin., No. 03-73426.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • May 3, 2007
    ...Elec. v. BPA, 501 F.3d 1009 (9th Cir.2007); Pub. Power Council, Inc. v. BPA, 442 F.3d 1204 (9th Cir.2006); M-S-R Pub. Power Agency v. BPA, 297 F.3d 833 (9th Cir.2002) (as amended); Ass'n of Pub. Agency Customers, Inc. v. BPA, 126 F.3d 1158 (9th Cir.1997). We focus here only on those facts d......
  • Ass'n of Pub. Agency Customers v. Bonneville Power Admin., No. 11-73178
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • October 28, 2013
    ...Power Council, Inc. v. Bonneville Power Admin., 442 F.3d 1204, 1206 (9th Cir. 2006); M-S-R Pub. Power Agency v. Bonneville Power Admin., 297 F.3d 833, 836-37 (9th Cir. 2002) (as amended); Ass'n of Pub. Agency Customers, Inc. v. Bonneville Power Admin., 126 F.3d 1158, 1163-65 (9th Cir. 1997)......
  • Marceau v. Blackfeet Housing Authority, No. 04-35210.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • July 21, 2006
    ...Skokomish Indian Tribe v. United States, 410 F.3d 506, 511 (9th Cir.2005) (en banc); M-S-R Pub. Power Agency v. Bonneville Power Admin., 297 F.3d 833, 840 (9th Cir.2002); Wilkins v. United States, 279 F.3d 782, 785 (9th Cir.2002). We see no reason to disturb that conclusion here. Because Tu......
  • United States v. Sandwich Isles Commc'ns, Inc., Civ. No. 18-00145 JMS-RT
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Hawaii)
    • July 22, 2019
    ...Isles seeks damages of not less than $200 million, ECF No. 26-2 ¶ 136). See, e.g. , M-S-R Pub. Power Agency v. Bonneville Power Admin. , 297 F.3d 833, 840 (9th Cir. 2002) ("The Tucker Act confers exclusive jurisdiction on the Court of Federal Claims for contract claims against the governmen......
  • Request a trial to view additional results
13 cases
  • Golden Northwest Alum. v. Bonneville Power Admin., No. 03-73426.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • May 3, 2007
    ...Elec. v. BPA, 501 F.3d 1009 (9th Cir.2007); Pub. Power Council, Inc. v. BPA, 442 F.3d 1204 (9th Cir.2006); M-S-R Pub. Power Agency v. BPA, 297 F.3d 833 (9th Cir.2002) (as amended); Ass'n of Pub. Agency Customers, Inc. v. BPA, 126 F.3d 1158 (9th Cir.1997). We focus here only on those facts d......
  • Ass'n of Pub. Agency Customers v. Bonneville Power Admin., No. 11-73178
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • October 28, 2013
    ...Power Council, Inc. v. Bonneville Power Admin., 442 F.3d 1204, 1206 (9th Cir. 2006); M-S-R Pub. Power Agency v. Bonneville Power Admin., 297 F.3d 833, 836-37 (9th Cir. 2002) (as amended); Ass'n of Pub. Agency Customers, Inc. v. Bonneville Power Admin., 126 F.3d 1158, 1163-65 (9th Cir. 1997)......
  • Marceau v. Blackfeet Housing Authority, No. 04-35210.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • July 21, 2006
    ...Skokomish Indian Tribe v. United States, 410 F.3d 506, 511 (9th Cir.2005) (en banc); M-S-R Pub. Power Agency v. Bonneville Power Admin., 297 F.3d 833, 840 (9th Cir.2002); Wilkins v. United States, 279 F.3d 782, 785 (9th Cir.2002). We see no reason to disturb that conclusion here. Because Tu......
  • United States v. Sandwich Isles Commc'ns, Inc., Civ. No. 18-00145 JMS-RT
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Hawaii)
    • July 22, 2019
    ...Isles seeks damages of not less than $200 million, ECF No. 26-2 ¶ 136). See, e.g. , M-S-R Pub. Power Agency v. Bonneville Power Admin. , 297 F.3d 833, 840 (9th Cir. 2002) ("The Tucker Act confers exclusive jurisdiction on the Court of Federal Claims for contract claims against the governmen......
  • Request a trial to view additional results

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