Kaiser Aluminum & Chemical Corp. v. Bonneville Power Administration

261 F.3d 843, 2001 WL 921191
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 16, 2001
DocketNos. 00-70375, 00-70379, 00-70559
StatusPublished
Cited by1 cases

This text of 261 F.3d 843 (Kaiser Aluminum & Chemical Corp. v. Bonneville Power Administration) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kaiser Aluminum & Chemical Corp. v. Bonneville Power Administration, 261 F.3d 843, 2001 WL 921191 (9th Cir. 2001).

Opinion

RAWLINSON, Circuit Judge:

Petitioners Kaiser Aluminum & Chemical Corp. (“Kaiser”), ALCOA Inc. (“ALCOA”) and Vanaleo, Inc. (‘Vanaleo”) seek review of final Bonneville Power Administration (“BPA”) decisions denying Petitioners’ requests to purchase Surplus Firm Power at the IP-96 rate. Kaiser also requests a determination that its claims be decided by arbitration pursuant to an arbitration clause in a contract between Kaiser and BPA.1

We have exclusive jurisdiction over the petitions pursuant to 16 U.S.C. § 839f(e)(5). The petitions are timely because they were filed within ninety days of BPA’s final decision. Id. Because of our exclusive jurisdiction, Kaiser’s claims are not arbitrable. BPA’s decisions were reasonable and not contrary to statutes. Accordingly, we dismiss the petitions. BACKGROUND

Respondent Bonneville Power Administration (“BPA”) is a federal agency charged by Congress with marketing the hydroelectric power generated by a series of dams along the Columbia River. See 16 U.S.C. §§ 832-832m. Petitioners Kaiser, ALCOA and Vanaleo are aluminum smelters permitted by the Northwest Power Act to buy electric power directly from BPA as Direct Service Industrial customers (“DSIs”). See 16 U.S.C. §§ 839a(8), 839c(d)(4)(A), and 839c(g).

BPA is governed largely by four statutes: the Bonneville Project Act of 1937, 16 U.S.C. §§ 832-832m (“Project Act”); the Pacific Northwest Consumer Power Preference Act of 1964, 16 U.S.C. §§ 837-837h (“Preference Act”); the Pacific Northwest Federal Transmission System Act of 1974, 16 U.S.C. §§ 838-8381 (“Transmission Act”); and the Pacific Northwest Electric Power Planning and Conservation Act of 1980, 16 U.S.C. §§ 839-839h (“Northwest Power Act”). In Association of Public Agency Customers (“APAC") v. Bonneville Power Administration, 126 F.3d 1158, 1164 (9th Cir.1997), we recognized that “[tjhese statutes subject BPA to a variety of detailed and potentially conflicting statutory directives.” For example, the “Northwest Power Act requires BPA to set its rates for electric power at a level sufficient to meet its costs and to repay the federal debt incurred in building the projects included in the Federal Columbia River Power System.” Id. (citing 16 U.S.C. §§ 838g, 839(4), 839e(a)(l)). In APAC, we noted that while such a requirement would tend to encourage higher rates, “the Transmission System Act requires that 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.’ ” Id. (quoting 16 U.S.C. § 838g). Additionally, “BPA must also be environmentally conscious, support energy conservation, and act to protect the fish and wildlife of the Columbia River basin.” Id. (citing 16 U.S.C. §§ 839, 839b).

BPA’s customers include federal agencies, public bodies (including public utilities), private utilities, and DSIs such as Petitioners. See Aluminum Co. of America (“ALCOA I”) v. Central Lincoln Peoples’ Utility Dist., 467 U.S. 380, 384 & n. 2, 104 S.Ct. 2472, 81 L.Ed.2d 301 (1984). [846]*846Public bodies are “preference” customers to whom BPA is required to give priority over non-preference customers. Id. at 384, 104 S.Ct. 2472 (citing 16 U.S.C. § 832c(b)). BPA’s primary marketing area, however, is the Pacific Northwest, which includes Washington, Oregon, Idaho, the part of Montana west of the Continental Divide, and the parts of Utah, Wyoming and Nevada that are within the Columbia River drainage. See Aluminum Co. of America (“ALCOA II") v. Bonneville Power Admin., 903 F.2d 585, 588 (9th Cir.1990) (citing 16 U.S.C. § 839a(14)). Under the Preference Act, BPA may sell power outside the Pacific Northwest, but only if it has surplus energy to do so.2 Id. (citing 16 U.S.C. § 837a). “Surplus energy” is defined as “electric energy generated at Federal hydroelectric plants in the Pacific Northwest which would otherwise be wasted because of the lack of a market therefore in the Pacific Northwest at any established rate.” 16 U.S.C. § 837(c).

In the 1970s, projections showed that due to increases in power demands, preferences to Northwest public bodies would soon require all of BPA’s power. ALCOA I, 467 U.S. at 385, 104 S.Ct. 2472. Accordingly, in 1973, BPA announced that new contracts to private utilities would not be offered. Id. While BPA signed contracts with DSIs in 1975, BPA advised the DSIs that their new contracts would not likely be renewed when they expired, sometime between 1981—1991. Id. In order to avoid disputes over BPA’s proposed power allocations, in 1980, Congress enacted the Northwest Power Act. Id. at 385-86, 104 S.Ct. 2472. The Northwest Power Act allowed BPA to acquire resources to increase the supply of federal power, and required BPA to enter into long term contracts providing DSIs the same amount of power to which they were entitled under the 1975 contracts. Id. at 386-87, 104 S.Ct. 2472 (citing Section 5(d)(1)(B) of the Northwest Power Act, 16 U.S.C. § 839c(d)(1)(B)). Pursuant to this directive, in 1981, BPA entered into 20-year contracts with the DSIs (the “1981 Contracts”). See APAC, 126 F.3d at 1165. The 1981 contracts allowed the DSIs to vary them power load depending upon market conditions and to terminate their contracts with one year’s notice to BPA. See id.; see also Power Sales Contract between ALCOA and BPA executed on August 31, 1981, ¶¶ 2(a), 4-5. The 1981 contracts also required any DSI desiring to continue purchasing BPA power after the 20-year term to request a replacement contract by June 30, 1993. See APAC, 126 F.3d at 1166.

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261 F.3d 843, 2001 WL 921191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kaiser-aluminum-chemical-corp-v-bonneville-power-administration-ca9-2001.