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

Heading: Inconsistency with the Residential Exchange

Text: Program Settlement Agreements Finally, BPA reasonably explained why the refund decisions here challenged were not inconsistent with BPA’s earlier decision to seek recovery of the different payments that had been declared unlawful by this court in PGE. After we invalidated the settlement agreements in PGE, the question then arose whether BPA would seek to recover the improperly passed-on payments from the IOUs. BPA concluded that, after our PGE decision, the IOUs could not legally retain the funds, reasoning that, because the Court held that BPA acted beyond the scope of its statutory authority when it executed the 2000 REP Settlement Agreements and the Court did not carve out any exception with respect to the invalidity clause or any other clause, BPA believes the 2000 REP Settlement Agreements are invalid in their entirety. As a result, the invalidity clause is also invalid and cannot be used as a shield to prohibit BPA from recovering 2000 REP Settlement Agreement benefits from the IOUs through the Lookback proposal. 2007 Supplemental Wholesale Power Rate Case Final Record of Decision, p. 178. In the ROD here challenged, BPA provided two bases for reconciling its decision not to seek repayment in this instance with its contrary decision regarding the Exchange Program settlement agreement overpayments. First, BPA interpreted 40 ICNU V. BPA PGE as a ruling “that the REP Settlement Agreements were void ab initio,” whereas PNGC I and PNGC II only partially invalidated the contracts at issue. Second, BPA characterized the DSI contracts here at issue as exercises of BPA’s “commercial role” as a power marketer, and thus distinguishable from the Exchange Program settlement agreements, which it characterized as exercises of “BPA’s sovereign role as a regulatory administrator of the REP.”9 “Unexplained [agency] inconsistency is . . . a reason for holding an interpretation to be an arbitrary and capricious change from agency practice under the Administrative Procedure Act.” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005); see also 5 U.S.C. § 706(2)(A). Here, however, BPA has provided a reasoned explanation as to how the two situations vary sufficiently that they may be treated differently. BPA’s decision not to seek refunds here is therefore not arbitrary or capricious as inconsistent with its contrary conclusion post-PGE.