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

Heading: Port Townsend-Clallam

Text: In contrast to its treatment of the Alcoa Amendment, BPA’s decision not to seek repayment from Port Townsend was in no respect unreasonable. Whether and how much BPA could recover from Port Townsend is entirely uncertain, both legally and practically. And, given the small amount of power sold under the Port Townsend Contract, the amount of any recovery would necessarily be quite small, making it unlikely that the costs of litigation would be justified. First, unlike the aluminum DSI contracts, the Port Townsend Contract involved a sale of power, not a subsidy, though at an unlawfully low rate. So it is unclear exactly what amount, if any, Port Townsend would owe BPA. Perhaps BPA could argue that Port Townsend owes it the difference between what it paid and what the same amount of power would have cost at the higher IP rate. But Port Townsend could plausibly counter that, had the rate been higher, it would have purchased less power, or even no power at all, given its struggles to stay open in the face of large financial losses and its reliance on the power prices provided by BPA to do so. 38 ICNU V. BPA A second, supervening problem with recovering under the Port Townsend Contract, BPA concluded, is that, unlike the aluminum DSI contracts, this arrangement was structured as two separate bilateral contracts: one between BPA and Clallam, and one between Clallam and Port Townsend. The ROD observed that BPA had no direct contract with Port Townsend, and that, although it could try to back-bill Clallam, “it is far from clear . . . that Port Townsend would voluntarily remit [the back-billed] amount to Clallam” in return. Third, the ROD noted that Port Townsend could argue that any claims against it were discharged in Port Townsend’s bankruptcy. BPA expressed skepticism about this assessment, noting that Port Townsend’s bankruptcy plan was approved in January 2007, while PNGC I was not issued until December 2008. Thus, BPA could argue that its claims against Port Townsend were not yet within “fair contemplation” at the time of the bankruptcy proceedings, and therefore were not discharged. But even if not a legal bar to recovery, Port Townsend’s bankruptcy supports the overall reasonableness of BPA’s decision, as it casts doubt on Port Townsend’s practical ability to satisfy any judgment that BPA might secure. BPA’s justifications for not pursuing recovery under the Port Townsend Contract are perhaps not as well substantiated as they could be. Nevertheless, BPA’s decision not to pursue recovery from Port Townsend does have a sufficient reasonable basis, to which this court must defer. See PNGC II, 596 F.3d at 1085. ICNU V. BPA 39