CALIFORNIA ENERGY COMMISSION, ET AL., PETITIONERS V. BONNEVILLE
POWER ADMINISTRATION, ET AL.

   PUGET SOUND POWER & LIGHT COMPANY, CROSS-PETITIONER V. BONNEVILLE
POWER ADMINISTRATION, ET AL.

   No. 90-1256, No. 90-1415

   In The Supreme Court Of The United States

   October Term, 1990

   On Petition And Cross-Petition For A Writ Of Certiorari To The
United States Court Of Appeals For The Ninth Circuit

   Brief For The Respondents In Opposition

            TABLE OF CONTENTS
   Questions Presented
   Opinion below
   Jurisdiction
   Statement
   Argument
   Conclusion

                             OPINION BELOW

   The opinion of the court of appeals (Pet. App. A1-A36) is reported
at 909 F.2d 1298.

                             JURISDICTION

   The judgment of the court of appeals was entered on July 26, 1990.
A petition for rehearing was denied on October 5, 1990.  Pet. App.
D1-D4.  On December 21, 1990, Justice O'Connor extended the time
within which to file a petition for a writ of certiorari to and
including February 4, 1991.  The petition was filed on that date.  The
cross-petition for a writ of certiorari was filed on March 8, 1991.
The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

                          QUESTIONS PRESENTED

   1. Whether the court of appeals, in reviewing the challenge to the
Long Term Intertie Access Policy promulgated by the Bonneville Power
Administration, properly deferred to the Administrator's construction
of the governing statutory scheme under the Pacific Northwest Electric
Power Planning and Conservation Act, 16 U.S.C. 839 et seq., the
Federal Columbia River Transmission System Act, 16 U.S.C. 838 et seq.,
the Pacific Northwest Consumer Power Preference Act of 1964, 16 U.S.C.
837 et seq., and the Bonneville Project Act of 1937, 16 U.S.C. 832 et
seq.

   2. Whether the court of appeals correctly upheld the
Administrator's allocation of access to the Pacific Northwest-Pacific
Southwest Intertie, which preferred utilities in the Pacific Northwest
over Canadian and other extra-regional utilities.

                               STATEMENT

   Petitioners and cross-petitioner, various California utility
regulatory bodies, several California utilities, and one Washington
utility, have challenged the validity of the Long Term Intertie Access
Policy promulgated by the Bonneville Power Administration to allocate
electric transmission capacity in the Pacific Intertie among various
utilities connected to that high voltage energy transmission system.

   1. Respondent Bonneville Power Administration (BPA) is an
independent, self-financed agency within the United States Department
of Energy.  BPA markets electric energy generated largely from dams in
the Federal Columbia River Power System.  As part of that task, BPA
operates a large transmission system, including the federal share of
the Pacific Intertie, a high voltage electrical energy transmission
system connecting BPA and utilities in the Pacific Northwest with
utilities in California.  /1/ Congress approved construction of the
Intertie in order to create a market for surplus federal electric
power and thereby help BPA repay the federal investment in Northwest
hydroelectric facilities.  BPA currently owes approximately $8 billion
to the United States Treasury.  Pet. App. E57.

   The Intertie's capacity is finite.  As a result, shortly after the
Intertie was completed in 1968, BPA and utilities in the Pacific
Northwest entered into an agreement regarding short-term allocation of
BPA's Intertie capacity -- the Exportable Agreement of 1969.  The
Agreement was based on the following fundamental characteristic of the
power generation system.  The ability of a hydroelectric dam to store
energy in the form of water is limited to the capacity of the
reservoirs behind the dams.  When river flows are high, reservoirs
full, and markets not available, "spill" -- the flow of excess water
past turbines without the generation of energy -- takes place and
results in the loss of the electrical generation capacity of the
spilled water.  The Agreement therefore allocated federal Intertie
capacity on a pro rata basis among BPA and Pacific Northwest
generating utilities for surplus energy that might otherwise be wasted
because of the need to spill.  /2/ When a spill was threatened, the
Agreement reserved federal Intertie capacity for the use of BPA and
Pacific Northwest generators.  At these times, the Agreement excluded
extra-regional utilities, including Canadian sources, from access to
the Intertie.  Pet. App. C6.

   2. In the early 1980s, an unexpected increase in the availability
of surplus power in the Pacific Northwest and elsewhere, together with
a significant downturn in BPA's finances, prompted BPA to reexamine
the allocation of Intertie capacity.  Pet. App. E3-E4.  As a result,
BPA initiated the extensive administrative process that ultimately led
to the final Long Term Intertie Access Policy (LTIAP) at issue here.

   In 1984, after public hearings and opportunity for comment, BPA
promulgated the Interim Near Term Access Policy.  That policy included
a formula allocation provision governing short-term surplus sales.
Pet. App. C9-C10.  In relevant part, that provision incorporated the
pro rata allocation of the Exportable Agreement in times of spill.
Id. at C10 (Condition 1).  Where spill was not threatened, but where
BPA and Northwest utilities had hourly surplus power exceeding
available federal Intertie capacity, that capacity was allocated
according to a ratio that approximated each party's surplus to the sum
of all declared surplus Id. at C11-C12 (Condition 2).  Where spill was
not threatened and where declared surplus in the region did not exceed
the available capacity of the federal Intertie, each Northwest party
was permitted access to the Intertie to the full extent of its
surplus, and any remaining capacity was made available for Canadian
and other extra-regional utilities.  Id. at C10-C11 (Condition 3).

   Petitioner Department of Water and Power of the City of Los Angeles
challenged BPA's Interim Near Term Access Policy, including its
provisions excluding Canadian power other than in Condition 3.  In
Department of Water & Power v. Bonneville Power Admin. (LADWP), 759
F.2d 684 (9th Cir. 1985) (Pet. App. C1-C24), the court of appeals
rejected that challenge, concluding that BPA may properly allocate its
Intertie capacity on a pro rata basis and that BPA may prefer itself
and Pacific Northwest utilities over Canadian and other extra-regional
utilities.  As the court explained, "Congress intended that the
Intertie be used primarily for the benefit of Northwest and Southwest
utilities and not for the benefit of Canadian utilities." Pet. App.
C22.

   3. Following the development of the Interim Policy, BPA continued
with its extensive administrative process and promulgated the Near
Term Intertie Access Policy in 1985.  In relevant part, the Near Term
Policy carried forward the allocation scheme under the three
Conditions established by the Interim Near Term Policy.  Pet. App.
B5-B6.  Petitioners California Energy Commission (CEC) and California
Public Utilities Commission (CPUC) promptly challenged the Near Term
Policy.  Petitioners contended that BPA exceeded its authority by
allocating Intertie access on a pro rata basis and that, under 16
U.S.C. 837e and 838d, BPA could not limit access by Canadian and
extra-regional utilities.

   On the basis of its earlier LADWP decision, the court of appeals
rejected petitioners' challenge, holding that BPA's allocation scheme
and preference for Northwest utilities were lawful.  California Energy
Resources Conservation & Dev. Comm'n v. Bonneville Power Admin. (CEC
I), 831 F.2d 1467 (9th Cir. 1987) (Pet. App. B1-B25), cert. denied,
488 U.S. 818 (1988).

   4. In May 1988, after further administrative proceedings, BPA
adopted the final Long Term Intertie Access Policy (LTIAP).  In
relevant part, BPA adhered to the basic short-term allocation scheme
contained in the prior policies.  Under Condition 1, which obtains
during periods of threatened spill, the Intertie's available capacity
is allocated on an hourly pro rata basis among BPA and those Northwest
utilities declaring surplus power.  Pet. App. E6-E10.  Under Condition
2, which obtains during periods when the declared supply of surplus
energy in the Northwest exceeds Intertie capacity, the Intertie's
capacity is allocated on that same pro rata basis.  Id. at E11.  Under
Condition 3, which obtains "when the declarations of BPA and Northwest
utilities are less than Intertie capacity," ibid., access by BPA and
the Northwest utilities for their declared surplus amounts is
unrestricted, with Canadian utilities and others permitted access to
any remaining capacity, id. at E11-E12.

   Petitioners, including cross-petitioner (collectively petitioners),
and others had complained to BPA that the hourly allocation scheme
under the proposed LTIAP unnecessarily limited competition.  As a
result, BPA's final LTIAP suspended the operation of the Conditions 2
and 3 allocations in favor of an 18-month experiment where no
individual nonfederal allocations would be made after BPA received its
allocation.  Instead, under Condition 2, all short-term capacity not
used by BPA would be made available to the Northwest utilities as a
block, to be allocated on a first-come, first-served basis to those
utilities arranging transactions with California utilities.  This
allocation for Northwest utilities would also obtain under Condition
3;  any remaining capacity would be made available to Canadian and
other extra-regional utilities.  As it turned out, water levels
allowed the experiment to proceed on only 20 days out of the
originally planned 18-month period.  BPA has thus extended the
experiment until September 1991, in order to gather more data.  See 55
Fed. Reg. 13,824 (1990).

   In the meantime, petitioners and others challenged the LTIAP before
the court of appeals under 16 U.S.C. 839(e)(5).  They contended, among
other claims, that BPA's construction of the governing statutory
scheme should not be accorded substantial deference "because it has an
economic interest in obtaining a larger share of the economic benefits
of the interregional transactions." Pet. App. A13.  On the merits,
petitioners argued that the LTIAP unlawfully discriminates against
Canadian power, contrary to the provisions of the Federal Columbia
River Transmission System Act (Transmission Act) and the Preference
Act.  See 16 U.S.C. 837e, 838d.

   5. In July 1990, the court of appeals "conclude(d) that BPA's
actions and decisions in developing the LTIAP were not arbitrary and
capricious and (therefore) affirm(ed) the LTIAP in its entirety." Pet.
App. A36.  Following Aluminum Co. of America v. Central Lincoln
Peoples' Util. Dist., 467 U.S. 380, 389-390 (1984), the court of
appeals concluded that "(b)ecause BPA drafted the Northwest Power Act,
its interpretation of the Act is to be given 'great weight' and should
be upheld if reasonable." Pet. App. A12.  The court disagreed with
petitioner's suggestion that BPA should not receive such deference
"because it has an economic interest" in the subject matter under
review.  Id. at A13.  As the court explained, "BPA did not draft the
LTIAP to maximize its revenues," and it had previously "rejected the
argument that BPA is entitled to no deference in ratemaking decisions,
even where it has an interest in the outcome." Ibid. (citing Aluminum
Co. of America v. Bonneville Power Admin., 891 F.2d 748, 757 n.12 (9th
Cir. 1989)).  Turning to petitioners' substantive attack on the LTIAP,
the court pointed out that it had previously reviewed and rejected
that contention in LADWP, 759 F.2d at 693-694 (Pet. App. C20-C22).
The court therefore reaffirmed that ruling.  Pet. App. A25-A26 & n.14.

                               ARGUMENT

   1. Petitioners contend that the court of appeals erred in deferring
to BPA's construction of the governing statutory scheme, where the
agency has a "direct and immediate financial interest in (its) own
decision ( )." Pet. 13;  Cross-Pet. 11-12.  As an initial matter,
petitioners overstate the circumstances under which BPA operates.
First, as the court of appeals expressly found, "BPA did not draft the
LTIAP to maximize its revenues." Pet. App. A13.  Second, petitioners'
branding of BPA as "proprietary" (Pet. 13) is a mischaracterization.
Although BPA is self-financed and not funded by tax revenues, it is
not a profit-making firm.  Rather, Congress expressly charged the
agency with maintaining "the lowest possible rates to consumers
consistent with sound business principles," 16 U.S.C. 838g, while at
the same time directing it to recover costs and make timely repayment
of the $8 billion federal investment in the Columbia River Power
System.  /3/

   In any event, this Court's decision in Aluminum Co. of America v.
Central Lincoln Peoples' Util. Dist., 467 U.S. 380 (1984) (ALCOA),
forecloses petitioners' contention.  There, BPA specifically informed
the Court of its substantial financial stake in the statutory question
at issue.  See Brief for Federal Respondent at 19, Aluminum Co. of
America v. Central Lincoln Peoples' Util. Dist., No. 82-1071.
Nonetheless, this Court held that "(u)nder established administrative
law principles, it is clear that the Administrator's interpretation of
the (Pacific Northwest Electric Power Planning and Conservation Act,
16 U.S.C. 839 et seq.,) is to be given great weight." ALCOA, 467 U.S.
at 389.

   Petitioners' claim (Pet. 13-14;  Cross-Pet. 11) that the court of
appeals' decision conflicts with National Fuel Gas Supply Corp. v.
FERC, 811 F.2d 1563 (D.C. Cir. 1987), is insubstantial.  The isolated
statement petitioners seize upon -- that "deference would be
inappropriate * * * if the agency itself were an interested party to
the (settlement) agreement," id. at 1571 -- has no application here.
BPA is not construing an agreement between private parties;  BPA is
construing its own governing statutory scheme.  Indeed, the statement
petitioners trumpet had no application to the case before the D.C.
Circuit.  There, the court of appeals reviewed FERC's construction of
a settlement agreement to which the agency was not a party.  In those
circumstances, given the agency's acknowledged expertise and the fact
that "Congress required the Commission to take an active role in
approving (settlement) agreement(s)," ibid., the D.C. Circuit did not
hesitate to defer to FERC's reading of the agreement at issue, id. at
1568-1572.  That is precisely what the court of appeals did here.

   Petitioners' suggestion (Pet. 14-15;  Cross-Pet. 11-12) that the
courts of appeals are divided over whether an agency is entitled to
deference when construing the scope of its own jurisdiction is
similarly unpersuasive.  This Court has consistently deferred to
agencies' determinations regarding their statutory jurisdiction.  See,
e.g., Massachusetts v. Morash, 490 U.S. 107, 114-118 (1989);  K Mart
Corp. v. Cartier, Inc., 486 U.S. 281, 292-293 (1988);  EEOC v.
Commercial Office Prods. Co., 486 U.S. 107, 114-116 (1988);  NLRB v.
Food & Commercial Workers Local 23, 484 U.S. 112, 123-128 (1987);
Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 845 (1986);
Chemical Manufacturers Ass'n v. Natural Resources Defense Council,
Inc., 470 U.S. 116, 125-126 (1985);  Capital Cities Cable, Inc. v.
Crisp, 467 U.S. 691, 700 (1984);  see also Chevron U.S.A. Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 842-844 (1984).
 Indeed, as Justice Scalia recently stated, "it is settled law that
the rule of deference applies even to an agency's interpretation of
its own statutory authority or jurisdiction." Mississippi Power &
Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 381 (1988)
(concurring in the judgment);  see Dole v. United Steelworkers, 110 S.
Ct. 929, 944 (1990) (White, J., dissenting).  For that reason, the
lower court have had little difficulty applying that principle of
administrative law.  See, e.g., Puerto Rico Maritime Shipping Auth. v.
Valley Freight Sys., Inc., 856 F.2d 546, 552 (3d Cir. 1988);  Wyckoff
Co. v. EPA, 796 F.2d 1197, 1200-1201 (9th Cir. 1986).

   Finally, petitioners' assertion (Pet. 14) that decisions of the
D.C. and Eighth Circuits conflict with this approach lacks foundation.
 In Ohio Power Co. v. FERC, 880 F.2d 1400 (D.C. Cir. 1989), rev'd on
other grounds sub nom. Arcadia, Ohio v. Ohio Power Co., 111 S. Ct. 415
(1990), the court of appeals declined to defer to the agency's
interpretation not because the statute at issue involved the agency's
jurisdiction, but rather because the agency itself claimed no such
deference since that statute "cannot be said to be entrusted to FERC's
administration." 880 F.2d at 1405.  /4/ And in Missouri v. Andrews,
787 F.2d 270 (8th Cir. 1986), aff'd on other grounds sub nom. ETSI
Pipeline Project v. Missouri, 484 U.S. 495 (1988), the court of
appeals refused to defer to the Secretary of the Interior's
construction of Section 9(c) of the Flood Control Act because the
court of appeals' "review of the Act and its legislative history
convince(d) (the court) that Congress did not intend to grant the
Secretary * * * the authority (at issue)." 787 F.2d at 287.  That
decision, contrary to petitioners' suggestion, is merely a
straightforward application of the Chevron framework.

   2. Turning to the merits of the underlying controversy, petitioners
contend (Pet. 16-21) that the court of appeals erred in upholding the
Administrator's allocation of access to the Pacific Northwest
Pacific-Southwest Intertie, which preferred utilities in the Pacific
Northwest over Canadian and other extra-regional utilities.  In
petitioners' view, Section 6 of the Preference Act, 16 U.S.C. 837e,
and Section 6 of the Transmission Act, 16 U.S.C. 838d, /5/ mandate
that BPA give Canadian and other extra-regional utilities the same
Intertie access as nonfederal Pacific Northwest utilities to arrange
transactions with California utilities.  /6/

   a. Congress enacted the Preference Act in 1964 as part of the
legislative package authorizing construction of the Intertie.  See
Pub. L. No. 88-257, 77 Stat. 844 (1963);  Pub. L. No. 88-511, 78 Stat.
682 (1964).  On its face, Section 6 of the Preference Act requires BPA
to make excess capacity "available as a carrier." 16 U.S.C. 837e.
Under the LTIAP, BPA makes available excess Intertie capacity as a
carrier for transmission of energy for the Northwest utilities and
others.  That is all that the statute requires.  Contrary to
petitioners' submission, the plain terms of 16 U.S.C. 837e do not
circumscribe the Administrator's discretion in allocating excess
Intertie capacity and do not require BPA to transmit Canadian power on
the same terms as Northwest power.

   Even if resort to the legislative record were appropriate, that
record fully supports the decision below.  The House Report states
that the Administrator "may" enter into agreements for the wheeling of
energy generated in Canada.  H.R. Rep. 590, 88th Cong., 1st Sess. 9
(1963);  see also S. Rep. No. 122, 88th Cong., 1st Sess. 12 (1963).
Although petitioners point out (Pet. 18) that the House Report states
that non-Treaty Canadian power "stands on the same basis as any other
non-Federal energy," H.R. Rep. 590, supra, at 9, the very next
sentence makes plain that this statement merely distinguishes
non-Treaty Canadian power from the priority access granted to Canadian
Treaty power by statute.  See 16 U.S.C. 837h.  /7/ In context,
therefore, the Report does not suggest that Canadian power must be
given the same access as that afforded to Pacific Northwest utilities.
 /8/

   BPA's contemporaneous construction of the statute further suggests
that Congress had no intention of treating non-Treaty Canadian power
on the same basis as Northwest power.  The Department of the Interior
(BPA's parent agency at that time) reported to Congress that "BPA has
assured the public and private utilities of its service area access
over (BPA's) lines to California, Nevada, and Arizona markets." U.S.
Dep't of the Interior, Report to the Appropriations Committees of the
Congress of the United States Recommending a Plan of Construction and
Ownership of EHV Electric Interties Between the Pacific Northwest and
Pacific Southwest 27 (Comm. Print 1964) (emphasis added).  And in
recommending enactment of the Preference Act, the Conference Committee
expressly endorsed that report.  H.R. Conf. Rep. No. 1822, 88th Cong.,
2d Sess. 3-4 (1964).  Moreover, BPA's first implementations of the
legislation -- the Exportable Agreement and other Intertie agreements
-- were each limited to Northwest and Southwest utilities and did not
include any Canadian utility.  And the Secretary of the Interior
transmitted these agreements -- including the provisions regarding pro
rata allocations -- to Congress.

   b. Petitioners fare no better in invoking the "plain language"
(Pet. 16) of Section 6 of the Transmission Act, 16 U.S.C. 838d.  As
the prefatory provision of the Act makes clear, Congress enacted the
statute "in order to enable the Secretary of the Interior to carry out
the policies of (the Preference Act) relating to the marketing of
electric power from hydroelectric projects in the Pacific Northwest."
16 U.S.C. 838(a) (emphasis added).  In other words, Congress
identified Pacific Northwest power as the intended beneficiary of the
Act.  Indeed, petitioners' construction would create serious anomalies
in the statutory scheme.  For example, Congress has imposed several
limitations to insure that the benefits of Northwest power are made
available primarily to the Pacific Northwest area.  See, e.g., 16
U.S.C. 837b(a) (BPA must stop sales of surplus energy to California if
Northwest needs the power);  16 U.S.C. 837b(d) (nonfederal Northwest
utilities making firm sales to California have limited ability to rely
on BPA's firm sales).  Under petitioners' "equal access" theory,
Canadian power would not be subject to these limitations and, as a
result, would presumably have a competitive advantage.

   The legislative record confirms that Congress enacted Section 838d
in order to clarify BPA's obligation to treat public and private
utilities alike in granting access to its transmission system.  See
H.R. Rep. No. 1375, 93d Cong., 2d Sess. 5 (1974);  see also S. Rep.
No. 1030, 93d Cong., 2d Sess. 9 (1974) (BPA's obligation is limited to
transmitting power "in and from the Pacific Northwest.").  The
statutory provision thus stands in contrast to BPA's obligation -- as
a seller of Federal power -- "at all times * * * (to) give preference
and priority to public bodies and cooperatives." 16 U.S.C. 832c(a).
Congress inserted the Transmission Act's "fair and nondiscriminatory"
language to preclude preference utilities from asserting that they had
priority over investor-owned utilities to BPA's transmission services.
 See H.R. Rep. No. 1375, supra, at 5.  /9/

   3. Finally, petitioners' complaint (Pet. 21-23) that the LTIAP
transfers substantial wealth from California utilities to the Pacific
Northwest is premature.  BPA adopted the policy based on its
considered judgment that the LTIAP could be expected to divide the
benefits of the Intertie in roughly equal proportions between the two
regions.  Pet. App. E247.  Nonetheless, in response to comments by
petitioners and others, BPA incorporated an experiment in the LTIAP to
test the impact of more open competition among nonfederal Northwest
utilities in Condition 2 and among all utilities in Condition 3.  See
Pet. App. E10-E12, E37-E38.  BPA has since extended this experiment to
October 1, 1991, in order to gather more data.  See 55 Fed. Reg.
13,824 (1990).  In these circumstances, petitioners' complaint here
seeks to sidestep BPA's ongoing efforts to minimize any unnecessary
economic upheaval.  /10/

                              CONCLUSION

   The petition and cross-petition for a writ of certiorari should be
denied.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   STUART M. GERSON

      Assistant Attorney General

   DENNIS G. LINDER

   DOUGLAS LETTER

   THOMAS MILLET

   SHAWN JENSEN

      Attorneys

   HARVARD P. SPIGAL

      General Counsel

   JAMES O. LUCE

      Assistant General Counsel

   STEPHEN R. LARSON

      Attorney Bonneville Power Administration

   APRIL 1991

   /1/ BPA controls a majority of the Intertie north of the
Oregon-California border.  California utilities, including petitioners
Pacific Gas & Electric Company and Southern California Edison Company,
own and control the southern portion of the Intertie.  Pet. App. E58.

   /2/ Section 1(b) of the Pacific Northwest Consumer Power Preference
Act of 1964 (Preference Act), 16 U.S.C. 837(b), defines the Pacific
Northwest to include Oregon, Washington, and portions of Montana,
Nevada, Utah, Wyoming, and Idaho.  The Pacific Northwest Electric
Power Planning and Conservation Act, 16 U.S.C. 839a(14)(A), later
included the entire State of Idaho.

   /3/ Petitioners thus mistakenly suggest (Pet. 15) that BPA operates
as a traditional business, as do other independent government
corporations, such as the Federal Home Loan Mortgage Corporation, see
12 U.S.C. 1452-1455, and the Student Loan Marketing Association, see
20 U.S.C. 1087-2.

   /4/ Similar reasoning accounts for the court of appeals' declining
to defer to the agency's construction of the statute at issue in New
York Shipping Ass'n v. Federal Maritime Comm'n, 854 F.2d 1338, 1362
(D.C. Cir. 1988)) ("We note with interest that this is not a case in
which the Commission lays claim to any deference for its
interpretation.").

   /5/ Section 6 of the Pacific Northwest Consumer Power Preference
Act of 1964, 16 U.S.C. 837e, provides in pertinent part:

      Any capacity in Federal transmission lines connecting, either by
      themselves or with non-Federal lines, a generating plant in the
      Pacific Northwest or Canada with the other area or with any
      other area outside the Pacific Northwest, which is not required
      for the transmission of Federal energy or the energy described
      in section 837h of this title, shall be made available as a
      carrier for transmission of other electric energy between such
      areas.

Section 6 of the Federal Columbia River Transmission System Act, 16
U.S.C. 838d, provides:

      The Administrator shall make available to all utilities on a
      fair and nondiscriminatory basis, any capacity in the Federal
      transmission system which he determines to be in excess of the
      capacity required to transmit electric power generated or
      acquired by the United States.

   /6/ Cross-petitioner Puget Sound Power & Light Company challenges
(Cross-Pet. i) BPA's allocation of "Assured Delivery" amounts among
Pacific Northwest utilities.  That challenge is groundless.  Under the
Assured Delivery provisions of the LTIAP, each utility granted an
Assured Delivery allocation is guaranteed access to the Intertie in
the amount allocated in order to permit firm power sales.  Unallocated
Assured Delivery capacity remains available for seasonal exchanges of
power.  BPA did not grant cross-petitioner an Assured Delivery
allocation because that utility did not have any average firm surplus
power that could be used for firm sales.  See Pet. App. E169-E170.
Nonetheless, BPA agreed to review cross-petitioner's complaint upon
completion of the planned third Intertie.  Id. at E71.  In the
meantime, cross-petitioner, along with other utilities, may seek to
obtain Assured Delivery for seasonal exchanges.  Id. at E162-E171.

   Cross-petitioner also challenges in passing (Cross Pet. 5-7) the
Condition 1 "true-up" mechanism that retains any unused BPA
allocations for later BPA use.  Because the unsold federal energy
represented by the unused allocations is likely being retained behind
the federal dams, the need for that Intertie capacity continues
through time.  Failure to incorporate such a mechanism could increase
the amount of spill on the federal hydroelectric system.  Pet. App.
E88-E89.  The true-up mechanism therefore properly ensures that
federal needs have priority use of the Intertie.

   /7/ So-called "Canadian Treaty power" refers to Canada's share of
power generated at hydroelectric facilities in the Pacific Northwest
as a result of the increased water flows from the Canadian reservoirs
built in conjunction with the Treaty.  Canada is entitled to one half
of this generation.  See Treaty Relating to Cooperative Development of
the Water Resources of the Columbia River Basin, Jan. 17, 1961, United
States-Canada, 15 U.S.T. 1555, T.I.A.S. No. 5638.  BPA must provide
priority intertie access for Canadian Treaty power sold to California
utilities.  No such transactions currently exist, however.  See LADWP,
759 F.2d at 694 n.15.

   /8/ Indeed, throughout the legislative record, descriptions of the
benefits accruing from an intertie system focused on benefits flowing
to the Pacific Northwest and the Pacific Southwest.  See H.R. Conf.
Rep. No. 1822, 88th Cong., 2d Sess. 7 (reprinting letter from
Secretary of Interior);  H.R. Rep. No. 590, supra, at 2;  U.S. Dep't
of the Interior, Report to the Appropriations Committees of the
Congress of the United States Recommending a Plan of Construction and
Ownership of EHV Electric Interties Between the Pacific Northwest and
Pacific Southwest 32 (Comm. Print 1964).

   /9/ Moreover, despite oversight hearings on BPA's pertinent
Intertie access policies, Congress has not expressed opposition to
them.  See Oversight Hearings on Intertie Access Policy of the
Bonneville Power Administration Before the Subcomm. on Water and Power
Resources of the House Comm. on Interior and Insular Affairs, 100th
Cong., 1st Sess. (1987);  Oversight Hearing on Potential Impacts of
the Proposed U.S.-Canada Free Trade Agreement on California and
Pacific Northwest Power Resources Before the Subcomm. on Water and
Power of the House Comm. on Interior and Insular Affairs, 100th Cong.,
2d Sess. (1988).  Congress's failure to revise or repeal those
policies construing the governing statutory scheme "is persuasive
evidence that the interpretation is one intended by Congress."
Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 846 (1986)
(quoting NLRB v. Bell Aerospace Co., 416 U.S. 267, 274-275 (1974)).

   /10/ Petitioners gloss over the fact that, in addition to the
rights provided to Canadian power in Condition 3, the LTIAP provides
opportunities for transmission of firm Canadian power to California
utilities.  Pet. App. E38-E39, E196-E197.