Document: 467 U.S. 380 104 S.Ct. 2472 81 L.Ed.2d 301 ALUMINUM COMPANY OF AMERICA et al., Petitionersv.CENTRAL LINCOLN PEOPLES' UTILITY DISTRICT al. No. 82-1071. Supreme Court of the United States Argued Jan. 9, 1984. Decided June 5, Syllabus Since enactment Bonneville Project Act 1937 (Project Act), Power Administration (BPA) has marketed low-cost hydroelectric power generated by a series dams along Columbia River. BPA sells two types power: "firm" (energy that expects to produce under predictable streamflow conditions) and "nonfirm" is in excess firm provided only when such exists). BPA's customers include three groups: (1) "public bodies cooperatives," which public utilities are "preference" whom required give priority over nonpreference customers; (2) private, investor-owned (IOUs); (3) direct-service industrial (DSIs), purchase directly from instead through utility. IOUs DSIs "nonpreference" customers. As demand for increased exceed generating capability, Congress moved avert customer struggle enacting 1980 Pacific Northwest Electric Planning Conservation (Regional Act). Section 5(a) requires all sales be subject preference provisions Act. 5(d)(1)(B) offer each existing DSI new contract provides "an amount power" equivalent was entitled its 1975 contract. 10(c) does not "alter, diminish, abridge, or otherwise affect" federal laws preference. Pursuant Regional Act, Administrator offered contracts same specified contracts, but, based upon his interpretation statute legislative history, concluded terms need as they had been contracts. Those portion supplied could interrupted "at any time," thus making enabling interrupt it whenever wanted nonfirm power. The provision would conflict with directive § 5(d)(1)(A) should provide Administrator's reserves loads. Accordingly, allowed interruption protect obligations, reducing available utilities. Respondent challenged petition review Appeals, claiming those violated accorded §§ interruptible on conditions greater "amount than violation Appeals agreed found unreasonable. Held: 1. Giving deference due, fully reasonable one, particularly absence statutory affirmatively indicating contrary. It conclude simply involve number kilowatts, and, contrary respondents' argument, preclude curtailing situations can interrupted. Nor there merit argument While section preserves system merely determines different receives "conflicting competing" applications he authorized allocate. part an administrative allocation power; sold pursuant allocated statute. Act's provisions, incorporated therefore do apply latter offer. Pp. 24792483. 2. history confirms interpretation. That shows paid specific attention DSIs, consulted relationship between broader purposes. There no indication intended have governing interruptibility were 24832484. 3. Because comprehensively establish broad discretion negotiate them. Sales intricately related "exchange" program established reduce disparity whereby consumers served enjoyed much cheaper IOUs. 24842485. 686 F.2d 708, reversed remanded. M. Laurence Popofsky, San Francisco, Cal., petitioners. Jerrold J. Ganzfried, Washington, D.C., respondent support James T. Waldron, Portland, Or., respondents. Justice BLACKMUN delivered opinion Court. 1 1937, 50 Stat. 731, 16 U.S.C. 832 seq. Although 4(a) 832c(a), directs "give cooperatives" selling power, many years surplus satisfy needs region. however, became issue significant area concern. In 1980, what appeared emerging 94 2697, 839 several Some respondents1 brought this suit challenge signed certain Ninth Circuit held We now reverse judgment, remand case further proceedings. 2 * Before discussing rise dispute, aspects generation scheme must explained. 3 depends River system, cannot predict accuracy generate. historically "Firm energy conditions. "Nonfirm" exists. 4 groups relevant case.2 primary group refers includes other entities.3 These entities customers, their competing received. See 4(b) 832c(b). (IOUs), (DSIs). large end-users sell them apply. Once signed, makes clear "binding accordance thereof." 5(a), 832d(a). 5 early obligated supply customer's full contractual requirements "firm," noninterruptible basis. 1948, increasing caused modify policy so require that, where feasible, some This condition meant necessary unique among ability tolerate interruptions service; able because processes withstand periodic without damage. Utilities, hand, basis residential service. 6 1970's alter policies even more drastically. Projections at time showed demand, soon H.R.Rep. 96976, pt. 1, pp. 2327 (1980), U.S.Code Cong. & Admin.News 5989. announced 1973 offered. addition, 1975, 25% advised expired during 19811991 period, likely renewed. 7 increase threatened obtain meet needs. 1976, informed load growth after July 1983, began consider how divide 8 high cost alternative sources vigorously pursue ways regain access cheap Most important, areas designed qualify eligible allocations power.4 way allocating stakes involved buying become very high, competition contentious litigation. uncertainty inherent situation greatly complicated efforts plan future 9 To avoid prospect unproductive endless litigation, enacted cooperation region establishing mechanism comprehensive federal/state planning. 6, 839b 839d. For first time, moreover, acquire resources power.5 839c, sought disputes requiring enter into initial set various 10 839c(d)(1)(B), "[a]fter effective date [Dec. 1980], shall . direct service long term dated January April 1975. ." replace scheduled expire times period 19811991. indicated "provide loads within region."6 11 directive, new, 20 year Based (the "top quartile") time." made top quartile enabled 5(d)(1)(A)'s loads" (emphasis added). loads, make energy. 46 Fed.Reg. 44340 (1981). 12 aspect center present dispute. Under hourly "if basis," too unreliable use demands general basis, nevertheless attractive used substitute themselves. manner, purchases shut down own facilities maintenance, if generate cheaply BPA. Alternatively, appear "arbitrage" using displace then users BPA.7 By reduced 13 Shortly decision execution agreements, respondents Appeals. core proposed preference, said, reserved states: "All 1937. Respondents also relied 839g(c), affect Federal cooperatives sale federally electric power." argue these assert effectively 839c(d)(1)(B). 14 Central Lincoln Peoples' Utility District v. Johnson, 708 (CA9 1982). court heavily preserved longstanding practice importance issue, we granted certiorari. 460 1050, 103 1496, 75 928 (1983). II A. 15 law principles, given great weight. "We often noted agency charged administration substantial deference." Blum Bacon, 457 132, 141, 102 2355, 2361, 72 728 (1982). "To uphold [the agency's interpretation] 'we find [its] construction result reached question arisen instance judicial proceedings.' provisions." American Paper Institute, Inc. Service Corp., 461 402, 422423, 1921, 1933, 76 22 (1983), quoting Unemployment Compensation Comm'n Aragon, 329 143, 153, 67 245, 250, 91 L.Ed. 136 (1946). principles particular force context case. regulation technical complex. expertise area, intimately drafting consideration Congress. Following statute, immediately interpreted manner challenge. Thus, represents " 'a contemporaneous men responsibility setting machinery motion, parts work efficiently smoothly while yet untried new.' Udall Tallman, 16, 85 792, 801, 616 (1965), Reactor Co. Electricians, 367 396, 408, 1529, 1535, 924 (1961). 17 convinced one. expressly long-term beyond dispute plain language mandates contain essentially arguments position. Neither persuasive. 18 First, claim violate curtail interrupted, received Petitioners contend, quantity measured kilowatts. They phrase determine "quality" 19 distinction valid one seen reference "amount" referred kilowatts sold. included Kaiser Aluminum Chemical Corp. (1975), App. Pet. Cert. N2, N5. contend fail requirement. Sections 3(17) lend former "shall loads." defines needed "firm customers" shortages. least inference desires view. Report Senate Committee Energy Natural Resources clearly explains: "[T]he 'firm Administrator' mean will supplied). S.Rep. 96272, p. 23 (1979). reserves, serve 21 Respondents' time" order incorrect phrase. parties agree DSIs' second quality lower before. Memorandum Opposition Motion Temporary Injunction Stay Pending Review, filed Sept. 8, 1981, (table comparing contracts). endorsed, perhaps required, before.8 If, it, remained but before, apparent smaller total power," seek define short, contemplated insisted get "same definition phrase; therefore, intended. true, assert, existed But allocate administratively. instant case, applications. offer.9 implicitly proves much. nothing either rules distinguishes quartiles. difference quartiles treat uncommitted, subjected did provide. product requirement provisions. likewise purposes applying offering If correct quartile, well. committed contract, determined 5a, appears, view render meaningless 5(d)(1)(B). mandated applied. presumably precisely achieve differs produce; perceived problem, chosen solution.10 24 supported 5(g)(7) 839c(g)(7). "deem[s]" "to sufficient purpose entering contracts" Through express legal fiction, ensured lacked necessitated acquisition additional outside facilities. executed purchased desire. Such truly incongruous, almost unlimited When "deemed" specified" sensible assume regard govern statutorily mandated. B 25 put forward record gives 26 Reports both Houses obligations. contains following explanation dealing sales. 27 "The industries reserve obligations forth Administrator. peaking similar approximately equal percent reason, including low critical 28 passage flatly contradicts argument. sentence "the Administrator." noticeably devoid suggestion rest reinforces House indicates understanding: 29 "Approximately treated resource operation operating may restricted unanticipated regional 2, 48 6046. 30 little meaning if, reason. 31 source significant. bill still consideration, conferred Committee's staff furnished understanding operate. quoted above verbatim incorporation provision. Appendix III Letter Aug. 19, Rep. Kazen, Chairman, Subcommittee Water Resources, I23 (discussing shared 32 rely points, neither controverted. demonstrate already clear—that Brief 2330. contest point. whether changed; DSIs. equally uncommitted applies. 33 show Id., 2123. point uncontroverted. so, pointed anything C 34 our especially appropriate situation, goals. behalf 5(c), 839c(c). 35 exchange rate relief supra, produced favored (preference customers) private (nonpreference customers). consequence, lived operates disparity. Very briefly, consists arrangement average cost, benefits passed consumers. 36 trade expensive obviously money-losing contemplates covered pay considerably higher price users. 7(c)(1), 839e(c)(1), initially charge "sufficient [cover] net costs incurred Administrator" program. explained interrelationship detail: 37 "[The DSIs] significantly rates permit region's utilities' load. share lower-cost resources. back customers' utilization [sic] requirements. loss revenue effect returned industry rates. providing wholesale parity utilities, amendment serves cure major problem." 5995. 38 integrally related. finance BPAs turn manage complex absent statement him them.11 39 foregoing reasons, judgment reversed, remanded proceedings consistent opinion.12 40 ordered. 41 STEVENS, dissenting. 42 provides: 43 subsection (g) 'industrial power.' 44 to" (DSIs) 45 virtually guaranteed; quartile," actual somewhere 100 stated contracts.1 amounts guaranteed. No longer time. changing larger plainly inconsistent 5(d)(1)(B), 47 "contracts to, than, companies BPA, continue region." (1980) supplied), 6027.2 comply Act.3 49 attempts square holding drawing "quantity" "quality." believes contracts; since Ante, 24802481. proffered nonexistent, however. Kilowatts fungible. Interruptibility affects receives, receives. receive less freely hence violates 1981 contingencies applicable concludes, ante, 390-391, object fact accept conclusion quantity. substantially fairly remote possibility lesser trade-off entitlements Whatever comparison tells us about intent aware altering contrary, thought entitlement n. supra. 51 Moreover, questionable constitute real respect quartile. majority explains, 392, anticipated delayed completion unexpectedly poor performance conservation measures. Prior authority expand resources; function market constructed Army Corps Engineers. 386 5. Hence, permits contracts.4 Surely relatively insignificant somewhat esoteric modification persuasive evidence congressional itself. 52 comfort majority. All says is: 53 839c(d)(1)(A).5 54 entitled. entitle picked rather obtuse expressing idea. 55 I read says. loads.6 event shortfall, seeking change rights purchasers power.7 ordering sheds light extent obligation governed 5(d)(1)(A), 5(d)(1)(B).8 56 indicate Court's respectfully dissent. Throughout opinion, "respondents" refer who Appeals' judgment. Secretary Department Energy, nominally though urge reversal below. addition categories, agencies 5(b)(3) 839c(b)(3). pertinency 832b, bodies" "States, districts, counties, municipalities, subdivisions "cooperatives" "nonprofit-making organizations citizens supplying members kind goods, commodities, services, nearly possible cost." ones, proportion benefited most 80% State Washington 20% Oregon Supply Conservation: Hearings H.R.9020, H.R.9664, H.R.5862 before Interior Insular Affairs, 95th Cong., 1st Sess., 3, (1977). own, construct, output capability electricity plants except short-term deficiencies; entirely marketing disposed Engineers called Bureau Reclamation (now Service). 2627 (1980). "reserves" planning shortages benefit 3(17), 839a(17) discussion seems resale prohibited. resell 47; Reply 18, 58. specifically deny this, emphasize "other uses" Public Council 2021; 25. take conceded arbitrage Affairs Report, example, "will against measures implemented acquired BPA." 5989, copied letter written explaining Cert., I23. A Report. described similarly passages differ dissent apparently concedes post, 403-405, endorsing acknowledges leads inconsistency, claims "aware provisions" assuming forgot improvident ignorance Congress, mention focus reliance misplaced. "Savings Provisions." reassure regions country feared Act—by precedent weaken commitment exists statutes regions. 3435 (1980); cf. 126 Cong.Rec. 29803 (remarks Udall). irrelevant say meaningless. prior continues subsequent Even 839c(f). might exist, annual seasonal fluctuations, secures faster commitments. Mellem, Darkness Dawn? Generating Conserving Electricity Northwest: Primer 58 Wash.L.Rev. 269273 decide One argues affirm narrow scope. Portland General Company Given disposition necessarily reject Apparently two-thirds being preceding 36. seem actually amounts. 1415, context, majority's protection contracts: conditions, approxiamtely completition reginal measures, procedures commitments customs [sic], technological improvements purposes." last sentence, paragraph assurance analysis submitted estimated projected revenues legislation done past, 86 96 59. relies "deference" borne mind here statute: administering deference, courts final authorities issues construction. constructions adjudication rulemaking, mandate frustrate implement. crucial outset correctly construed Act." FEC Democratic Senatorial Campaign Comm., 454 27, 3132, 38, 42, 70 (1981) (citations omitted). worth noting model consistency. Environmental Impact Statement, issued December "[a]t reason." 31. Similarly, summary original draft stated: "BPA load, Operating Demand plus Auxiliary Power, duration." 74. lack clarity characterized position surely override import words enacted. Gilbert, 429 125, 97 401, 411, 343 (1976). doubtful circumstances permitted Act; commercial frustration defense permitting "reserves": 'Reserves' means (A) (B) interrupt, curtail, withdraw, portions customers." 839a(17). much, 24832484, something committee reports state done. speak prohibit willing buy it. City Santa Clara Andrus, 572 660, 670671 (CA9), cert. denied, 439 859, 99 177, 167 (1978); Arizona Pooling Assn. Morton, 527 721, 727728 1975), 425 911, 1506, 761 Part IIC 24842485, points out subsidy implying, suppose, good sense exploit sales, limited which" And levels Rather, explains why old

Category: 8