Opinion ID: 2735161
Heading Depth: 2
Heading Rank: 3

Heading: The Port Townsend Contracts (PNGC I)

Text: Aside from the 2007 Block Contracts with the aluminum DSIs, also at issue in PNGC I was an arrangement between BPA and its sole remaining non-aluminum DSI, the Port Townsend Paper Company (“Port Townsend”). Under this arrangement, BPA agreed to “provide Port Townsend with its full requirements for power . . . to be supplied through” the Clallam County public utility (“Clallam”). PNGC I, 580 F.3d at 802. BPA would sell Clallam the power at the PF rate “plus the margin typically charged by [public utilities] to their industrial customers,” and Clallam would then sell the power to Port Townsend. Id. In effect, therefore, BPA would be selling power to Port Townsend, via Clallam, “at a rate below both the market rate and the IP rate,” id. at 823, but not as low as the PF rate. We invalidated the Port Townsend arrangement as inconsistent with BPA’s statutory obligations. Id. at 824. BPA, we explained, is not obligated to sell Port Townsend power at all, much less at a subsidized rate, and had provided no convincing explanation as to why doing so comported “with ‘sound business principles.’” Id. (quoting 16 U.S.C. § 838g).