Puget Sound Energy, Inc. v. U.S., No. 00-71276.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtCynthia Holcomb Hall
Citation310 F.3d 613
PartiesPUGET SOUND ENERGY, Inc., a Washington Corporation, Petitioner, v. UNITED STATES of America; Administration, Bonneville Power Administration, Respondents.
Docket NumberNo. 00-71276.
Decision Date17 October 2002
310 F.3d 613
PUGET SOUND ENERGY, Inc., a Washington Corporation, Petitioner,
v.
UNITED STATES of America; Administration, Bonneville Power Administration, Respondents.
No. 00-71276.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted July 10, 2002.
Filed October 17, 2002.

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COPYRIGHT MATERIAL OMITTED

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Richard W. Oehler, Perkins Coie, Seattle, WA, for the petitioner.

Barry Bennett, Bonneville Power Administration, Portland, OR, for the respondents.

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On Petition for Review of an Order of the Bonneville Power Administration. BPA No. CV-99-00421.

Before CYNTHIA HOLCOMB HALL, TASHIMA, and RAWLINSON, Circuit Judges.

OPINION

CYNTHIA HOLCOMB HALL, Circuit Judge.


In this petition for review, we are asked to determine whether the Bonneville Power Administration (the "BPA") followed required procedure in making certain charges in association with sale of the use of electric transmission lines to Petitioner Puget Sound Energy Inc. ("Puget Sound"). Before we may answer that question, however, we must determine whether the petition was brought within the statutory period for raising such challenges. In turn, answering this question requires us to consider the nature of the actions challenged by Puget Sound — whether the challenge is to a rate-making or the implementation of a rate — and the point in time at which any disputed action became "final." We hold that because the petition was brought more than 90 days after the disputed actions became final, we do not have jurisdiction to consider the substantive merits of the petition or grant Puget's request that the disputed charges be remanded to the BPA for additional administrative proceedings.

I. Factual Background

The disputes in this case arise from a rather intricate transaction in which one party is a highly regulated federal entity and the other attempted to structure the transaction so as to evade part of the regulatory system. It is therefore necessary to discuss the factual history at some length.

A. The Parties

Petitioner Puget Sound is a public utility providing energy to residential and business users in the Washington State area. The BPA is an agency of the United States established within the Department of Energy that markets hydroelectric power generated throughout the Pacific Northwest. For a detailed discussion of the history of the BPA, see Puget Sound Power & Light Co. v. United States, 23 Cl.Ct. 46, 48 (1991).

Actions of the BPA and its responsibilities as a federal power marketing agency are governed by a comprehensive statutory framework including the Northwest Power Planning and Conservation Act, 16 U.S.C. §§ 839-839h (the "Northwest Power Act," or the "Act"). See also 16 U.S.C. §§ 832-832l; 16 U.S.C. §§ 837-837h; 16 U.S.C. §§ 838-838k. While the BPA generally sells electric power, it sometimes also sells related transmission services to various other utilities. In doing so, the BPA is required to establish a rate for each type of transaction. 16 U.S.C. § 839e(a)(1). Rates must be developed in formal evidentiary hearings before a hearing officer. 16 U.S.C. § 839e(i). The BPA's Administrator is specifically required to, (1) publish notice of the proposed rate in the Federal Register with a statement of justification, (2) develop a full and complete record including public comments, (3) furnish an adequate opportunity for interested parties to cross-examine its witnesses and offer rebuttal to material it places in the record, and (4) issue a final decision which establishes rates based upon the record developed and includes a "full and complete justification." 16 U.S.C. §§ 839e(i)(1)-(5). Once the BPA issues a rate decision, it is then reviewed by the Federal Energy Regulatory Commission

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(the "FERC"), and becomes effective upon interim or final approval. 16 U.S.C. §§ 839e(a)(2), (i)(6).

In addition, the Northwest Power Act creates a system of judicial review that is peculiar to the BPA. Section 9(e)(5) of the Act expressly provides that suits challenging a final action taken by the BPA under the Act or the implementation of such an action are subject to our exclusive jurisdiction. 16 U.S.C. § 839f(e)(5). Section 9(e)(5) of the Act reads in pertinent part:

Suits to challenge the constitutionality of this chapter, or any action thereunder, final actions and decisions taken pursuant to this chapter by the Administrator or the Council, or the implementation of such final actions, whether brought pursuant to this chapter, the Bonneville Project Act [16 U.S.C. 832 et seq.], the Act of August 31, 1964 (16 U.S.C. §§ 837-837h), or the Federal Columbia River Transmission System Act (16 U.S.C. § 838 and following), shall be filed in the United States court of appeals for the region. Such suits shall be filed within ninety days of the time such action or decision is deemed final, or, if notice of the action is required by this chapter to be published in the Federal Register, within ninety days from such notice, or be barred.... Suits challenging any other actions under this chapter shall be filed in the appropriate court.

16 U.S.C. § 839f(e)(5). A rate determination is specifically enumerated as a "final action" taken pursuant to the Act, 16 U.S.C. § 839f(e)(1)(G), and it is "deemed final" upon confirmation and approval by the FERC. 16 U.S.C. § 839f(e)(4)(D). Thus, judicial review of disputes over a rate or the implementation of a rate are placed within our exclusive jurisdiction.

B. The Transaction

The BPA is authorized to own and operate power transmission lines. One such set of lines is the Pacific Northwest-Pacific Southwest AC Intertie, a series of lines and facilities that link the Pacific Northwest to California. In 1984, the BPA was directed to participate in an upgrade project called the Third AC Intertie along with the Transmission Agency of Northern California ("TANC") and an Oregon utility called PacifiCorp. Pursuant to a request from the Chairman of the House Committee on Energy and Commerce, the BPA also developed a proposal for the participation of non-federal utilities through payment for part of the cost of the project in exchange for use of the lines to carry the purchasers' own electricity.

The BPA's initial proposal did not generate great enthusiasm among potentially interested buyers. Therefore, beginning in 1990, the BPA engaged in a series of negotiations with the eventual purchasers (the "Capacity Owners"), including Puget Sound, to determine the terms under which both sides would be willing to accept their participation. This resulted in a set of memoranda of understanding ("MOU's") signed in 1991. According to these MOU's, the BPA would reserve the first 800 MW increase in electric capacity from the Third AC Intertie for its own use, and sell its share of the second 800 MW increase (725 MW) to the Capacity Owners. Once the BPA established a formal rate, and upon execution of capacity ownership agreements with each of the Capacity Owners, the latter would make a lump-sum payment to the BPA based on the BPA's estimated cost of the facilities needed to produce the second 800 MW increase. After the Third AC Intertie began operation, this payment would then be adjusted to reflect the actual costs of construction, which the parties inelegantly refer to as a

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"true-up to actuals."1

Subsequently, on August 25, 1992, the BPA began a formal rate-making proceeding (the "CO-94 Rate Case") pursuant to Section 7 of the Northwest Power Act, 16 U.S.C. §§ 839-839(h). Puget Sound participated in this process and did not object to the BPA's testimony or data during the hearings. On March 25, 1994, the BPA issued the final record of decision ("ROD") establishing the pricing methodology for calculating the lump-sum payment. This methodology was published in "Schedule CO-94" and in a separate cost estimate. The FERC granted final approval of the rate on June 20, 1994. United States Dep't of Energy-Bonneville Power Admin., 61 FERC ¶ 61,351.

The pricing methodology set forth in Schedule CO-94 is fairly simple. It provides a basic formula for subtracting costs for the facilities needed for the capacity kept by the BPA from those which would supply capacity to the Capacity Owners, and for converting this number to a price calculated as dollars per kilowatt. The notes to this formula provide that the price would be based on "the construction costs (including direct, indirect, and overhead costs) of the facilities associated with the Third AC Intertie System Reinforcements and the Alvey-Meridian Transmission Line." The Alvey-Meridian Line is a line which was constructed by PacifiCorp, 50% of the capacity of which was acquired for the Third AC Intertie and paid for by BPA. The ROD also includes a list of facilities constructed as part of the Third AC Intertie and their allocation to the various parties.

Schedule CO-94 does not directly treat accounting issues related to cost allocation other than that direct, indirect, and overhead costs would be included in the price, and there is little discussion of such issues in general in the ROD. During the hearings, BPA witnesses testified somewhat cursorily that the estimated cost to the capacity owners, $215/kw, was determined by applying 1989 program planning estimates to the proposed pricing methodology. In addition, the ROD contains testimony that "the lump-sum payment would be adjusted to reflect the difference, in dollars per kilowatt, between estimated and actual costs (including BPA's normal allocation of corporate overhead and indirect expenses) of facilities [constructed for the project]." The notice of rate-making placed in the Federal Register to announce the CO-94 Rate Case also contains a statement that the BPA's "normal allocation of corporate overhead and indirect expenses" would apply.

Meanwhile, the Capacity Owners and BPA continued negotiating various details of the transaction and drafting the contract that...

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9 practice notes
  • Prawoto v. Primelending A Tex. Corp., Case No. CV 09-06631 MMM (SSx).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • 4 Mayo 2010
    ...of justice, the court “shall” transfer the action to the appropriate federal court. See id.; Puget Sound Energy, Inc. v. United States, 310 F.3d 613, 620-21 (9th Cir.2002). See also Patriot Contract Services, LLC v. United States, No. C-04-5428 MJJ, 2005 WL 851019, *1 (N.D.Cal. Apr. 13, 200......
  • Del Puerto Water Dist. v. U.S. Bureau of Reclamat., No. CIVF025934OWWDLB.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • 13 Mayo 2003
    ...has arrived at a definitive position on the issue that inflicts an actual, concrete injury." Puget Sound Energy, Inc. v. U.S., 310 F.3d 613, 624-625 (9th Cir.2002) citing Ma v. Reno, 114 F.3d 128, 130 (9th Cir.1997) (quoting Darby v. Cisneros, 509 U.S. 137, 144, 113 S.Ct. 2539, 125 L.Ed.2d ......
  • Gherebi v. Bush, No. 03-55785.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 18 Diciembre 2003
    ...jurisdiction under 28 U.S.C. § 1631. Because § 1631 relates to subject matter jurisdiction, see, e.g., Puget Sound Energy, Inc. v. U.S., 310 F.3d 613, 621 (9th Cir.2002), and because subject matter jurisdiction over habeas petitions lies in all of the district courts, we reject that argumen......
  • Indus. Cust., Nw Util. v. Bonneville Power, No. 03-71626.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 24 Mayo 2005
    ...so, we have looked to the "more general doctrine of finality in administrative agency law." See Puget Sound Energy, Inc. v. United States, 310 F.3d 613, 624 (9th Cir. 2002). The finality doctrine is "concerned with whether the initial decisionmaker has arrived at a definitive position on th......
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10 cases
  • Prawoto v. Primelending A Tex. Corp., Case No. CV 09-06631 MMM (SSx).
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • 4 Mayo 2010
    ...of justice, the court “shall” transfer the action to the appropriate federal court. See id.; Puget Sound Energy, Inc. v. United States, 310 F.3d 613, 620-21 (9th Cir.2002). See also Patriot Contract Services, LLC v. United States, No. C-04-5428 MJJ, 2005 WL 851019, *1 (N.D.Cal. Apr. 13, 200......
  • Gherebi v. Bush, 03-55785.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 18 Diciembre 2003
    ...jurisdiction under 28 U.S.C. § 1631. Because § 1631 relates to subject matter jurisdiction, see, e.g., Puget Sound Energy, Inc. v. U.S., 310 F.3d 613, 621 (9th Cir.2002), and because subject matter jurisdiction over habeas petitions lies in all of the district courts, we reject that argumen......
  • Del Puerto Water Dist. v. U.S. Bureau of Reclamat., CIVF025934OWWDLB.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • 13 Mayo 2003
    ...has arrived at a definitive position on the issue that inflicts an actual, concrete injury." Puget Sound Energy, Inc. v. U.S., 310 F.3d 613, 624-625 (9th Cir.2002) citing Ma v. Reno, 114 F.3d 128, 130 (9th Cir.1997) (quoting Darby v. Cisneros, 509 U.S. 137, 144, 113 S.Ct. 2539, 125 L.Ed.2d ......
  • Impact Energy Res., LLC v. Salazar, s. 11–4043
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • 5 Septiembre 2012
    ...have looked to the ‘more general doctrine of finality in administrative agency law.’ ” (quoting Puget Sound Energy, Inc. v. United States, 310 F.3d 613, 624 (9th Cir.2002))). The Court of Appeals for the D.C. Circuit was confronted with an issue strikingly similar to the one we face here in......
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