Opinion ID: 447995
Heading Depth: 2
Heading Rank: 3

Heading: PGE's Objections

Text: 20 Plaintiff PGE objects to the March offer on the grounds that the offer constitutes ratemaking without adherence to the statutory ratemaking procedures. PGE argues that, by offering power to the DSI's at the NF-2 rate, which rate was previously unavailable to them, BPA effectively changed the DSI rate that is contained in schedule IP-2. PGE claims that the use of the NF-2 rate and the label nonfirm for the sales was merely a device to manipulate the DSI price. 21 PGE focuses its attack on the mitigation factor, contending that it did not stimulate any new sales of energy but simply lowered the rate for energy that certain customers were already purchasing under their long-term contracts. PGE claims that the substitution of nonfirm energy at the NF-2 rate for firm energy at the IP-2 rate is contrary to the availability provision of the NF-2 rate schedule, which provides that [t]his schedule is not available for the purchase of energy which BPA has a firm obligation to supply. 22 PGE alleges that it and other customers are harmed by BPA's lowering of the DSI rate because BPA is under a statutory mandate to meet its costs and therefore any losses from the challenged transactions must ultimately be reflected in higher rates charged to PGE and other customers. PGE asserts that even if BPA's profits from increased sales under the March offer exceeded its losses caused by the mitigation factor, BPA was still left in a worse position than it would have been in had it not established the mitigation factor. Thus PGE asserts that it and others in a similar position were made worse off by the mitigation factor even if all the short run benefits BPA anticipated were realized. 2 23 BPA responds that it was not creating a new rate, but simply exercising its power to enter into contracts under the existing rates. BPA argues that its contracting authority allows it to determine how much of each type of service will be sold to each customer, and that it was acting within that authority when it contracted to sell some nonfirm service to the DSI's at the NF-2 rate in addition to what the DSI's were currently purchasing at the IP-2 rate and when, through the mitigation factor, it contracted to substitute nonfirm service at the NF-2 rate for some of the power that Martin-Marietta, Intalco, and Pennwalt had already been purchasing at the IP-2 rate. Figuratively put, BPA claims it sells apples and oranges at different prices and that when it fills one market basket with eight apples and four oranges, rather than six of each, it has changed the price of neither. Only the total price of the basket has been changed. 24 BPA also alleges that PGE lacks standing to bring this action, that the action is barred by the Regional Act's statute of limitations, and the PGE is barred from bringing this action because it failed to raise its objections before the agency. 25 We will address these threshold issues before turning to the merits of the case.