Opinion ID: 2735161
Heading Depth: 3
Heading Rank: 1

Heading: Rate-Setting Guidelines

Text: A complex of statutory provisions dictates how BPA must proceed when selling federal power. First, BPA must give priority, as well as its most favorable cost-based rate (“the PF rate”), to publicly owned utilities, cooperatives, and federal agencies, known as “preference customers.” PNGC I, 580 F.3d at 798–99, 802; PGE, 501 F.3d at 1013–15; see 16 U.S.C. §§ 839c(b), 839e(b). Preference customers are also the only group whose energy needs BPA is required, as opposed to authorized, to meet. See PNGC I, 580 F.3d at 811. After meeting the preference customers’ needs, BPA may, if it so chooses, sell surplus power directly to certain longstanding industrial customers (“direct-service industrial customers” or “DSIs”) at a higher but still-cost based rate (“the IP rate”), or to anyone else at market rates. Id. at 799, 802–03; PGE, 501 F.3d at 1014; see 16 U.S.C. § 839e(c).1 “Regardless of the type of customer, BPA must charge a rate that, at a minimum, recoups BPA’s own costs of generating or acquiring the electricity.” Alcoa, Inc. v. BPA, 698 F.3d 774, 780 (9th Cir. 2012); see 16 U.S.C. § 839e(a)(1). 1 This summary is simplified, and so omits some of BPA’s less relevant rate-setting strictures, detailed more fully in PNGC I, 580 F.3d at 802–03. ICNU V. BPA 11