Puget Sound Power & Light Co. v. United States

23 Cl. Ct. 46, 1991 U.S. Claims LEXIS 149, 1991 WL 67521
CourtUnited States Court of Claims
DecidedApril 30, 1991
DocketNo. 90-193C
StatusPublished
Cited by16 cases

This text of 23 Cl. Ct. 46 (Puget Sound Power & Light Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Puget Sound Power & Light Co. v. United States, 23 Cl. Ct. 46, 1991 U.S. Claims LEXIS 149, 1991 WL 67521 (cc 1991).

Opinion

OPINION

YOCK, Judge.

This case, involving a challenge to the Bonneville Power Administration’s extrare-gional sales of surplus power (electricity) outside of the Pacific Northwest states, is currently before the Court on the Government’s motion to dismiss for lack of subject matter jurisdiction. After oral argument, and for the reasons discussed herein, the Government’s motion is granted, but 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 (1988).

FACTUAL BACKGROUND

The plaintiff, Puget Sound Power and Light Company (Puget) is an investor-owned utility company that provides electric service to retail customers located within the state of Washington. Its principal place of business is Bellevue, Washington. The Bonneville Power Administration (BPA) is an agency of the United States, established within the Department of Energy. 16 U.S.C. §§ 832 et seq. (1988)1 and 42 U.S.C. §§ 7101 et seq. BPA is a marketing agency that sells (generally wholesale) electrical power generated at federal dam sites located throughout the Pacific Northwest states of Washington, Oregon, Idaho, and that part of Montana lying west of the Continental Divide. 16 U.S.C. §§ 832, 838g, 839e(a)(l). Pursuant to statute, BPA is authorized to negotiate and enter into long-term contracts for the supply of electrical power, which are “[s]ubject to * * * such rate schedules as the Secretary of Energy may approve” and which “contain * * * such provisions as the [BPA] administrator and purchaser agree upon for the equitable adjustment of rates at appropriate intervals, not less frequently than once in every five years.” 16 U.S.C. § 832d(a). Between 1976 and 1988, Puget entered into such contracts for the wholesale purchase of federal electrical power.

In order to fully understand the decision in this case, it is important to have a general comprehension of the statutory and regulatory framework in which this case arises.

As work progressed in the 1930’s upon the “Bonneville Project” being constructed by the U.S. Army Corps of Engineers along the main stem of the Columbia River, the method and priority for distributing electrical power generated by that project became the subject of intense public debate. Public power advocates sought to have Congress (1) grant preference to publicly-owned utilities in obtaining power from the project and (2) establish a body with powers similar to those of the Tennessee Valley Authority to operate the dams. E.g., S.Rep. No. 689, 74th Cong., 1st Sess. (1935); H.R.Rep. No. 2790, 74th Cong., 1st Sess. (1935). Private power interests, on the other hand, advocated a more limited federal role with project operation and power sales controlled solely by the Corps. Bonneville Power Administration, Columbia River Power For The People: A History of Policies of the Bonneville Power [48]*48Administration, 79-80 (1981) (BPA History)-

When Congress acted upon this matter in 1937, it did not adopt the positions advocated by the public or the private power interests, but instead enacted a compromise. Bonneville Project Act of 1937, 50 Stat. 731, 16 U.S.C. §§ 832-832d. Congress specified that the first priority for the purchase of electricity from the Bonneville Project was to be given to “public bodies and cooperatives,” i.e., “[sjtates, public power districts, counties, and municipalities,” 16 U.S.C. §§ 832, 837, and that a new agency, the BPA, be created to market electric power generated from the operation of the Bonneville Project throughout the states of Washington, Oregon, Idaho, and that part of Montana lying west of the Continental Divide. Congress, however, allowed the Corps to retain sole responsibility for the daily operation of the dams and construction of additional hydroelectric projects in the Pacific Northwest. 16 U.S.C. § 832a(a); see generally, BPA History, at 55-62.

Because of the Corps’s massive development of federal dams in the Pacific Northwest during the 1930’s and 1940’s, BPA had an abundance of low cost federal hy-dropower for many years. H.R.Rep. No. 976, 96th Cong., 2d Sess., pt. II at 27 (1980), reprinted in 1980 U.S.Code Cong. & Ad.News 6023, 6024-6025. This allowed BPA to not only satisfy the needs of its preference customers, i.e., government agencies and publicly-owned utilities, but to enter into contracts for the sale of power to investor-owned utilities (IOU’s) and to privately-owned, electro-process industries, such as aluminum companies, which utilize large quantities of electrical power. Id. Thereafter, the electro-process industries that received power from BPA became known as direct service industrial customers (DSI’s) because they purchased large quantities of wholesale electrical power directly from BPA, rather than purchasing retail power from an IOU. See Aluminum Co. of America v. Central Lincoln Peoples’ Util. District, 467 U.S. 380, 384, 104 S.Ct. 2472, 2476, 81 L.Ed.2d 301 (1984) (hereinafter ALCOA v. Central Lincoln PUD).

Initially, BPA entered into contracts with DSI’s and IOU’s for the sale of firm power.2 Id. In 1948, however, the increasing demand for power in the Northwest caused BPA to modify its industrial sales policy to require that, whenever feasible, a new contract signed with a DSI would provide that some portion of the power sought would only be supplied as nonfirm energy.3 Id.

By the late 1960’s, BPA and virtually all of its customers believed that the abun[49]*49dance of cheap federal hydropower in the Pacific Northwest was coming to an end, because there were no economically and environmentally acceptable sites for the construction of additional large-scale, federal hydroelectric projects in the region. Additional hydroelectric projects were essential, since projected increases in electrical consumption for the region indicated that current generating capacity would soon be exhausted. H.R.Rep. No. 976, 96th Cong., 2d Sess., pt. II at 28 (1980), reprinted in 1980 U.S.Code Cong. & Ad.News 6023, 6025-26. BPA, therefore, announced in 1973 that its power sales to IOU’s would cease later that year, with the expiration of the IOU’s 20-year contracts, since BPA believed it would need power previously sold to the IOU’s to serve its preference customers’ growing needs. Id. at 29, reprinted in 1980 U.S.Code Cong. & Ad. News 6027; H.R.Rep. No. 976, 96th Cong., 2d Sess. pt. I at 24 (1980), reprinted in 1980 U.S.Code Cong. & Ad.News 5989, 5990.

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23 Cl. Ct. 46, 1991 U.S. Claims LEXIS 149, 1991 WL 67521, Counsel Stack Legal Research, https://law.counselstack.com/opinion/puget-sound-power-light-co-v-united-states-cc-1991.