Puget Sound Energy, Inc. v. United States

47 Fed. Cl. 506, 2000 U.S. Claims LEXIS 177, 2000 WL 1281173
CourtUnited States Court of Federal Claims
DecidedSeptember 11, 2000
DocketNo. 99-421C
StatusPublished
Cited by10 cases

This text of 47 Fed. Cl. 506 (Puget Sound Energy, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Puget Sound Energy, Inc. v. United States, 47 Fed. Cl. 506, 2000 U.S. Claims LEXIS 177, 2000 WL 1281173 (uscfc 2000).

Opinion

OPINION

BASKIR, Chief Judge.

This case is currently before us on defendant Bonneville Power Administration’s (Bonneville or BPA) motion to dismiss on jurisdictional grounds the complaint of plaintiff, Puget Sound Energy, Inc. (Puget), disputing construction costs of the Pacific Northwest AC Intertie. Defendant’s motion is granted. However, in lieu of dismissal, the complaint is to be transferred to the United States Court of Appeals for the Ninth Circuit pursuant to 28 U.S.C. § 1631.

I. Background of the Dispute

Puget Sound is primarily a public utility, providing energy to residential and business users in the Washington State area. The Bonneville Power Administration is an agency of the United States that sells electrical 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).

On July 1, 1999, Puget filed a complaint in this Court alleging a breach by defendant of the Pacific Northwest AC (“alternating current”) Intertie Capacity Ownership Agreement. The Third AC Intertie is part of the Pacific Northwest AC Intertie, which is an electric power transmission line that provides north-to-south and south-to-north power transmission capacity between the Pacific Northwest and the California-Oregon border. Pursuant to the Capacity Rate Schedule, CO-94, incorporated in the Capacity Ownership Agreement, Puget and other Capacity Owners paid a share of the Third AC Intertie construction costs. The agreement sets forth the items which the parties agreed should make up the reimbursable construction costs.

[508]*508The parties dispute the bill. Puget contends this Court has jurisdiction over the disagreement under the Tucker Act’s grant regarding contract disputes. By contrast, BPA contends this is really a dispute over the rate Puget is to pay, the CO-94 rate, and thus is governed by the Northwest Power Act’s special jurisdictional grant to the United States Court of Appeals for the Ninth Circuit.

The CO-94 rate schedule and the ratemaking procedure that established it were preceded by discussions between Bonneville, Puget, and other capacity owners. On September 18, 1991, Bonneville and Puget executed a memorandum of understanding which set out the pricing methodology for transmission capacity ownership and which was subsequently incorporated in the CO-94 rate. In the memorandum, Puget agreed not to challenge the ratemaking proceeding if Bonneville used the memorandum’s pricing methodology.

Puget pays Bonneville for capacity ownership rights for 400 megawatts in accordance with the CO-94 rate schedule. The CO-94 rate schedule was established on the record in the formal rate proceeding in which Puget participated, held pursuant to the Pacific Northwest Electric Power Planning and Conservation Act, 16 U.S.C. §§ 839-839h (Northwest Power Act or Act) (all section references hereafter, unless otherwise specified, are to 16 U.S.C.). On March 25, 1994, Bonneville issued a Final Record of Decision which adopted the CO-94 rate schedule and included estimates of Bonneville’s Third AC Intertie Project costs, including overhead. The Federal Energy Regulatory Commission (“FERC”) gave interim approval on May 9, 1994, and final approval on June 20, 1994.

The CO-94 rate schedule provided that upon completion of the Third AC Intertie Project, Bonneville would adjust Puget’s initial lump sum payment to reflect the actual cost of construction, what the parties inelegantly refer to as “true-up to actuals.” Bonneville did this calculation on December 29, 1995, and provided a refund to Puget. Later, on September 15, 1997, the Capacity Owners commenced an audit as was their right under the Capacity Agreement; on January 16, 1998, they submitted a draft audit report to Bonneville seeking a further refund. The report questioned overhead construction charges attributed to another Capacity Owner’s facilities, spare parts charges, and certain capitalized construction costs. Bonneville agreed to refund certain expenses on February 20, 1998, but not others. On May 7, 1998, the Capacity Owners submitted a final audit report and a rebuttal to Bonneville’s response to them draft audit report. Bonneville sent a second letter on June 4, 1998, restating its position that the charges at issue were proper. Bonneville subsequently sent a third letter on May 19, 1999, noting, apparently for the first time, that the dispute involved a challenge to rate-making subject to exclusive Ninth Circuit review.

We turn next to examine the Act, and cases that have interpreted its jurisdictional provisions.

II. The Statutory Scheme and Judicial Review

The Northwest Power Act governs the sale of power and its transmission; the establishment of rates; administration of regional and extra-regional preference for power; and methods for administrative and judicial review of Bonneville’s actions. The Act governs the establishment of Bonneville’s rates for the sale of electric power and for the transmission of non-Federal power over the Federal transmission system. The Act requires Bonneville to review and adjust its rates to recover its costs:

The administration shall establish, and periodically review and revise, rates for the sale and disposition of electric energy and capacity and for the transmission of non-Federal power. Such rates shall be established and, as appropriate, revised to recover, in accordance with sound business principles, the costs associated with the acquisition, conservation, and transmission of electric power, including the amortization of the Federal investment ... over a reasonable period of years and the other costs and expenses incurred by the Administrator pursuant to this chapter and other provisions of law. [509]*509Section 839e(a)(l). Pursuant to the Northwest Power Act, FERC reviews Bonneville’s rates. Section 839e(a)(2).

Section 839f(e) of the Act governs judicial review of Bonneville’s final rate setting actions, and its implementation of final actions and certain other disputes. This includes “final rate determinations under section 7 [of the Northwest Power Act].” Section 839f(e)(l)(G). And rate determinations are final “upon confirmation and approval by the Federal Energy Regulatory Commission.” Section 839(f)(e)(4). Of greatest significance here is Section 839f(e)(5) which provides that suits challenging action under the Act “be filed in the U.S. Court of Appeals for the region,” that is, the Ninth Circuit:

Suits to challenge the constitutionality of this chapter, or any action taken thereunder, final actions and decisions taken pursuant to this chapter by the Administrator or the Council, or the implementation of such final actions [brought under the Act or under three other acts] ... 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____

(emphasis added).

The Circuit’s jurisdiction, however, is not plenary.

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47 Fed. Cl. 506, 2000 U.S. Claims LEXIS 177, 2000 WL 1281173, Counsel Stack Legal Research, https://law.counselstack.com/opinion/puget-sound-energy-inc-v-united-states-uscfc-2000.