Court Opinion

ID: 3036826
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:55:05.158903+00
Date Added: 2024-06-11T11:48:43.748267
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

PUBLIC POWER COUNCIL, INC.,           
                       Petitioner,
                v.                        No. 04-73240
BONNEVILLE POWER
ADMINISTRATION,                           BPA No.
                                             SN-03
                     Respondent,
PORTLAND GENERAL ELECTRIC
COMPANY,
                      Intervenor.
                                      

CANBY UTILITY BOARD,                  
                        Petitioner,
PORTLAND GENERAL ELECTRIC                 No. 04-73934
COMPANY,
                     Intervenor,           BPA No.
                                           SN-03 Rate
                v.
BONNEVILLE POWER
ADMINISTRATION,
                    Respondent.
                                      

                           3783
3784            PUBLIC POWER COUNCIL v. BPA

ALCOA INCORPORATED,                   
                        Petitioner,
PORTLAND GENERAL ELECTRIC                  No. 04-73939
COMPANY,
                     Intervenor,           BPA No.
                                          EF03-2011-000
                v.
BONNEVILLE POWER
ADMINISTRATION,
                    Respondent.
                                      

INDUSTRIAL CUSTOMERS OF               
NORTHWEST UTILITIES; BENTON
RURAL ELECTRIC ASSOCIATION;
COLUMBIA - SNAKE RIVER                    No. 04-73952
IRRIGATORS ASSOCIATION,
                       Petitioners,        BPA No.
                                           Power Act
                v.                         OPINION
BONNEVILLE POWER
ADMINISTRATION,
                      Respondent.
                                      
        On Petitions for Review of an Order of the
            Bonneville Power Administration

                  Argued and Submitted
             March 8, 2006—Portland, Oregon

                    Filed April 4, 2006

 Before: Ferdinand F. Fernandez, A. Wallace Tashima, and
             Richard A. Paez, Circuit Judges.
PUBLIC POWER COUNCIL v. BPA   3785
Opinion by Judge Fernandez
               PUBLIC POWER COUNCIL v. BPA             3787

                        COUNSEL

Nancy Baker and Mark R. Thompson, Portland, Oregon, for
Public Power Council.

Paul M. Murphy, Murphy & Buchal LLP, Portland, Oregon,
for Canby Utility Board.

William H. Walters, Miller Nash LLP, Portland, Oregon, for
Alcoa Incorporated.

Melinda J. Davison, Davison Van Cleeve, PC, Portland, Ore-
gon, for Industrial Customers of Northwest Utilities, Benton
Rural Electric Association, and Columbia-Snake River Irriga-
tors Association, Michael J. Gianunzio, Everett, Washington,
for Public Utility District No. 1 of Snohomish County, Wash-
ington.

Kurt R. Casad, Special Assistant U.S. Attorney, Portland,
Oregon, for Bonneville Power Administration.
3788            PUBLIC POWER COUNCIL v. BPA
Loretta Mabinton, Assistant General Counsel, Portland, Ore-
gon, for Portland General Electric Company; Gary Dahlke,
Paine, Hamblen, Coffin, Brooke & Miller LLP, Spokane,
Washington, for Avista Corporation; James R. Thompson,
Boise, Idaho, for Idaho Power Company; W. Wayne Harper,
Butte, Montana, NorthWestern Energy; Stephen C. Hall, Stoel
Rives LLP, Portland, Oregon, for PacifiCorp; Kirstin S.
Dodge, Perkins Coie LLP, Bellevue, Washington, for Puget
Sound Energy, Inc., intervenors.

                         OPINION

FERNANDEZ, Circuit Judge:

   Public Power Council, Inc., and others (collectively PPC)
petition for a review of the decision of the Bonneville Power
Administration (BPA) to trigger the Safety-Net Cost Recov-
ery Adjustment Clause (SN CRAC) portion of its General
Rate Schedule Provisions (GRSPs), as a result of which a rate
setting proceeding took place. Canby Utility Board also peti-
tions for a review on the basis that because it had a special
contract with BPA, its rates could not be changed in any
event. We deny the petitions.

                     BACKGROUND

   BPA is a “self-financing power marketing agency,” which
markets wholesale electricity from federal hydroelectric
plants and several other power plants in the Pacific North-
west. Aluminum Co. of Am. v. Bonneville Power Admin., 903
F.2d 585, 588 (9th Cir. 1990). “It owns and operates approxi-
mately eighty percent of the Pacific Northwest’s high-voltage
transmission system and markets approximately forty percent
of the electric power consumed in the Pacific Northwest.”
Indus. Customers of N.W. Utils. v. Bonneville Power Admin.,
408 F.3d 638, 641 (9th Cir. 2005). “BPA’s customers include
                 PUBLIC POWER COUNCIL v. BPA                 3789
federal agencies, public bodies (including public utilities), pri-
vate utilities,” and Direct Service Industrial customers. Kaiser
Aluminum & Chem. Corp. v. Bonneville Power Admin., 261
F.3d 843, 845 (9th Cir. 2001).

   Essentially, BPA is governed by four organic statutes: “the
Bonneville Project Act of 1937, 16 U.S.C. §§ 832-832m
(‘Project Act’); the Pacific Northwest Consumer Power Pref-
erence Act of 1964, 16 U.S.C. §§ 837-837h (‘Preference
Act’); the Pacific Northwest Federal Transmission System
Act of 1974, 16 U.S.C. §§ 838-838l (‘Transmission Act’); and
the Pacific Northwest Electric Power Planning and Conserva-
tion Act of 1980, 16 U.S.C. §§ 839-839h (‘Northwest Power
Act’).” Kaiser Aluminum & Chem. Corp., 261 F.3d at 845. It
is authorized to issue and sell bonds to the United States Trea-
sury “to assist in financing the construction, acquisition, and
replacement of the transmission system.” 16 U.S.C.
§ 838k(a). However, it must repay a projected amount of
those bonds each fiscal year; if it fails to do so, the Treasury,
with some exceptions, may increase the applicable interest
rate for that year’s outstanding bonds. Id.

   Since 1974, BPA’s electricity sales have been its source of
revenue. See Indus. Customers, 408 F.3d at 641. Thus, the
Northwest Power Act requires BPA “to establish rates that
will produce sufficient revenues to ensure BPA’s fiscal inde-
pendence and repay the U.S. Treasury for the federal funds
that were borrowed to build the projects in the Federal
Columbia River Power System.” Cal. Energy Comm’n v.
Bonneville Power Admin., 909 F.2d 1298, 1303 (9th Cir.
1990). At the same time, “[t]he statute also requires that rates
be as low as possible consistent with sound business princi-
ples.” Cent. Lincoln Peoples’ Util. Dist. v. Johnson, 735 F.2d
1101, 1116 (9th Cir. 1984).

   In order to fulfill its mission, BPA must periodically revise
its rates. See Indus. Customers, 408 F.3d at 642. It does so
pursuant to § 7 of the Northwest Power Act (16 U.S.C.
3790              PUBLIC POWER COUNCIL v. BPA
§ 839e). Its power rates, other charges, cost adjustments and
rate methodology are then defined in its wholesale power rate
schedules. The rate schedules contain GRSPs, which set out
the provisions that govern the various rates in question. See
Indus. Customers, 408 F.3d at 642.

   In August of 1999, BPA proposed to revise its wholesale
power rates for the five year period between October 1, 2001,
and September 30, 2006 (the “WP-02 Rates”).1 BPA con-
ducted hearings in accordance with § 7(i) of the Northwest
Power Act (16 U.S.C. § 839e(i)). Those are hereafter referred
to as the “WP-02 Rate Proceeding.” On May 10, 2000, BPA
completed the final record of decision for the proposed WP-
02 Rates (May 2000 ROD). On July 6, 2000, BPA filed its
proposed WP-02 Rates with the Federal Energy Regulatory
Commission (FERC) for approval.

   During the summer of 2000, however, wholesale power
rates rose precipitously. As a result, BPA’s proposed WP-02
Rates became far more attractive to prospective customers. Its
preference customers thus sought to purchase much more
power for the 2002-2006 period than BPA had anticipated.
Supplying that would require BPA to make up any shortfall
in its production capacity by purchasing power on the open
market. It, therefore, became concerned that the WP-02 Rates
established in the May 2000 ROD would not be sufficient to
cover its costs. Consequently, on August 4, 2000, BPA filed
a motion with FERC to stay review of BPA’s WP-02 Rates.
See BPA’s Proposed Safety-Net Cost Recovery Adjustment
Clause Adjustment to 2002 Wholesale Power Rates, 68 Fed.
Reg. 12,048, 12,049 (Mar. 13, 2003).

   On September 4, 2000, BPA notified FERC that it would
pursue modifications to the WP-02 Rates. In October 2000,
after a public comment period, it notified FERC and parties
to the WP-02 Rate Proceeding that it was initiating a limited
  1
   BPA’s fiscal year runs from October 1 to September 30.
                PUBLIC POWER COUNCIL v. BPA                 3791
§ 7(i) (16 U.S.C. § 839e(i)) hearing, in which it would revise
the WP-02 Rates in order to address its increased load obliga-
tions and high market prices. It matched its actions to its
words, and on December 1, 2000, it proposed amendments to
the proposed WP-02 Rates. BPA’s Proposed Amendments to
2002 Wholesale Power Rate Adjustment Proposal, 65 Fed.
Reg. 75,272 (Dec. 1, 2000); see also Indus. Customers, 408
F.3d at 642. Once again, however, BPA’s announcement of
proposed rates was followed by a downturn in its financial
outlook. Its forecast for cash reserves dropped substantially,
while market prices rose significantly more than expected.
Those developments induced BPA to make various additional
changes to its proposed amendments to the WP-02 Rates. See
Indus. Customers, 408 F.3d at 642. That process led to the fil-
ing of the WP-02 Supplemental Proposal (June 2001 ROD)
and to the ultimate adoption of three Cost Recovery Adjust-
ment Clauses (CRACs) as a part of the GRSPs. Those were:

   (1) The Load Based CRAC (LB CRAC), which triggers
if BPA’s augmentation cost (cost of purchasing power on the
open market) exceeds the forecasted amount. Essentially, the
LB CRAC is a formula for increasing base rates by a certain
percentage, depending on what BPA pays to acquire excess
power.

   (2) The Financial Based CRAC (FB CRAC), which trig-
gers if BPA’s accumulated net revenues fall below a certain
threshold. Like the LB CRAC, the triggering of the FB CRAC
results in a percentage increase to BPA’s base power rates.

  (3) Finally, the SN CRAC, which triggers if, after imple-
mentation of the FB CRAC, BPA has missed, or reasonably
expects to miss, a payment to the United States Treasury or
another creditor. The disputes here revolve around the SN
CRAC. As we have indicated previously:

    Under the GRSP, the Safety-Net CRAC would be
    available if the Administrator determined that, after
3792            PUBLIC POWER COUNCIL v. BPA
    implementation of the Financial-Based CRAC and
    any adjustments, either of the following conditions
    existed:

    •   The BPA forecasts a fifty percent or greater prob-
        ability that it will nonetheless miss its next pay-
        ment to Treasury or other creditor, or

    •   The BPA has missed a payment to the Depart-
        ment of the Treasury or has satisfied its obliga-
        tion to the Department of the Treasury but has
        missed a payment to any other creditor.

Id. As is apparent, unlike the LB CRAC and the FB CRAC,
the SN CRAC is not a precise formula; it does not, by itself,
revise BPA rates. Rather, if triggered, the SN CRAC allows
BPA to revise the FB CRAC parameters in order to “achieve
a high probability that the remainder of Treasury payments
during the [WP-02] rate period will be made in full.” Id. at
642-43 (internal quotation marks omitted).

   After the adoption and FERC interim approval of the new
CRACs, BPA’s financial condition began to deteriorate fur-
ther. By January of 2003, an updated financial forecast
showed that its net revenue gap for the 2002-2006 period had
increased to $950,000,000. BPA analyzed its Treasury Pay-
ment Probability (TPP) to determine whether to trigger the
SN CRAC. The results of that analysis indicated a twenty-six
percent TPP. BPA’s Administrator thus determined that the
SN CRAC trigger requirements had been satisfied—BPA had
less than a fifty percent chance of making its next Treasury
payment, which was due in September of 2003. Thus, on Feb-
ruary 7, 2003, BPA notified its customers and interested par-
ties that BPA was triggering the SN CRAC.

  Pursuant to the GRSPs, BPA held workshops and published
notice in the Federal Register. BPA Proposed Safety-Net Cost
Recovery Adjustment Clause Adjustment to 2002 Wholesale
                  PUBLIC POWER COUNCIL v. BPA                    3793
Power Rates, 68 Fed. Reg. 12,048. BPA then held a formal
expedited hearing under § 7(i) (16 U.S.C. § 839e(i)) to estab-
lish changes in the amount, duration, and timing parameters
of the FB CRAC.2 On June 30, 2003, after the conclusion of
the SN CRAC hearing, BPA issued its final SN-03 CRAC
ROD with an accompanying appendix, and FERC granted
final confirmation and approval. Order Confirming and
Approving Rates on a Final Basis, 107 FERC ¶ 61,138
(F.E.R.C. May 10, 2004). These petitions followed.

      JURISDICTION AND STANDARDS OF REVIEW

  We have jurisdiction to review final actions of BPA. 16
U.S.C. § 839f(e)(5); see also Indus. Customers, 408 F.3d at
644.

   Section 9(e)(2) of the Northwest Power Act (16 U.S.C.
§ 839f(e)(2)) provides that the Administrative Procedure Act
(APA), 5 U.S.C. §§ 701-06, governs the scope of judicial
review of BPA’s final actions. Under the APA, we must
uphold BPA’s actions unless they are “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A). In other words, we may not sub-
stitute our own judgment for that of BPA; we must simply
assess whether BPA relied on improper factors, failed to con-
sider an important aspect of the question, “offered an explana-
tion for its decision that runs counter to the evidence before
[it], or [rendered a decision that] is so implausible that it could
not be ascribed to a difference in view or the product of
agency expertise.” Motor Vehicle Mfrs. Ass’n v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S. Ct. 2856, 2867,
77 L. Ed. 2d 443 (1983); see also Brower v. Evans, 257 F.3d
1058, 1065 (9th Cir. 2001). This highly deferential standard
presumes BPA’s actions to be valid. Cal. Energy Comm’n,
909 F.2d at 1306.
  2
   At that time, certain BPA customers asked us to review BPA’s trigger
determination. We rejected the request because BPA’s decision was not
yet final. Indus. Customers, 408 F.3d at 644-45.
3794             PUBLIC POWER COUNCIL v. BPA
   We also give substantial deference to actions that BPA
undertakes pursuant to its enabling legislation. See Dep’t of
Water & Power v. Bonneville Power Admin., 759 F.2d 684,
690-91 (9th Cir. 1985); see also Chevron U.S.A. Inc. v. Natu-
ral Res. Def. Council, Inc., 467 U.S. 837, 842-44, 104 S. Ct.
2778, 2781-82, 81 L. Ed. 2d 694 (1984). And we have recog-
nized that Congress “granted BPA an unusually expansive
mandate to operate with a business-oriented philosophy.
Accordingly, it seems particularly wise to defer to the
[BPA’s] actions in furthering its business interests . . . .”
Ass’n of Pub. Agency Customers, Inc. v. Bonneville Power
Admin., 126 F.3d 1158, 1171 (9th Cir. 1997).

   Rate making decisions are also entitled to deference. See
Cal. Energy Comm’n, 909 F.2d at 1306 (“BPA is entitled to
. . . deference in ratemaking decisions, even where it has an
interest in the outcome.”). It is true that “final determinations
regarding rates . . . shall be supported by substantial evidence
in the rulemaking record . . . considered as a whole.” 16
U.S.C. § 839f(e)(2). Yet, substantial evidence is simply “more
than a mere scintilla. It means such relevant evidence as a rea-
sonable mind might accept as adequate to support a conclu-
sion.” Richardson v. Perales, 402 U.S. 389, 401, 91 S. Ct.
1420, 1427, 28 L. Ed. 2d 842 (1971) (internal quotation marks
omitted).

                         DISCUSSION

   Principally, the arguments before us revolve around the
claim that BPA improperly invoked the SN CRAC trigger.
We will, therefore, first consider those arguments. We will
then take up Canby’s separate arguments.

A.     SN CRAC Trigger Decision

    BPA was entitled to trigger the SN CRAC proceedings if
it forecasted a fifty percent or greater probability that it would
miss the next payment to the United States Treasury. Here,
                 PUBLIC POWER COUNCIL v. BPA                3795
BPA made that forecast, but PPC asserts that the forecast was
made arbitrarily and capriciously because at least $76,000,000
of available cash was not considered. We agree with BPA that
it did not need to consider that cash and, therefore, reject
PPC’s claims. We shall explain.

   [1] It is noteworthy that the SN CRAC does not itself set
any new rates; rather, once it is triggered, a proceeding to
determine the amount of the increase in rates, if any, is com-
menced. Moreover, the SN CRAC does not spell out any par-
ticular methodology that BPA must use in making the forecast
that will trigger the proceeding. It does not state that all cash
reserves must be considered to be available for use, or even
that there must be an emergency. It simply refers to the mak-
ing of a “forecast.” Certainly, nothing in the provision indi-
cates that before the SN CRAC trigger can be invoked, BPA
must find itself driven to the wall and must project the use of
every last scrap of available cash that could conceivably be
used to make a payment to the Treasury. Of course,
$76,000,000 does not exactly sound like a scrap, so more
must be said about that amount and its provenance. As it is,
the cash came from a particular source.

   Energy Northwest (ENW) is a joint operating agency that
manages several power generating stations in the Pacific
Northwest. BPA markets the power generated at ENW’s
Columbia Generating Station. In exchange, BPA is contractu-
ally obligated to pay the principal and interest on ENW-issued
bonds that were sold in order to finance ENW’s generation
projects. As a result, when ENW refinances its bond debt at
BPA’s request, BPA is temporarily relieved of making those
principal and interest payments—that can free up significant
amounts of cash for BPA’s use.

  At an earlier time, ENW had agreed to extend the principal
due in fiscal year 2003 into the 2013-2018 period by refinanc-
ing the bonds. The result was that BPA would have up to
$315,000,000 in surplus cash available to it, and by February
3796             PUBLIC POWER COUNCIL v. BPA
2003, when the SN CRAC was triggered by BPA, it had
already realized $76,000,000 from that particular source. That
is the money which PPC insists BPA had to take into account
in making its TPP forecast, and it is essentially undisputed
that had the amount been taken into account, the TPP would
have exceeded fifty percent. Therefore, the SN CRAC could
not have been triggered. But it is not quite as simple as that.

   What PPC chooses to overlook is the fact that ENW was
not required to make the refinancing decision in the first
place, but that it was induced to do so for a particular business
reason. That reason was bound up with BPA’s Debt Optim-
ization Program, a program that had been in place for some
three years before the trigger date came around. Under the
Debt Optimization Program, when ENW agrees to refinance
its bonds, the cash that is freed up is to be used by BPA for
the purpose of paying down BPA’s United States Treasury
debt, which carries a higher interest rate. That paydown has
significant financial benefits for BPA in the long run and, ulti-
mately, reduces its fixed debt costs. It does not, however,
affect BPA’s obligation to make the current payment.

   Because the very reason for the ENW refinancing was to
fund a particular use of the savings thereby generated, sound
and honorable business practices pointed to BPA’s use of the
money in the manner anticipated by both it and ENW. Most
immediately, BPA would breach faith with ENW were it to
divert the money to a use other than that intended. But there
is more. In essence, that diversion would also have a bad
effect on the market for ENW bonds because analysts would
see that the saved money was just being used up on what
amounted to current BPA expenses, rather than being used to
reduce future expenses. Moreover, the high interest rate debt
to the United States Treasury would remain as a burden. In a
sense, the seed corn of the future would be devoured in the
famine of the present. And, of course, the ultimate financial
problem would not be solved, but, rather, would be deferred
to future years. In the long term, the ENW bond debt would
                  PUBLIC POWER COUNCIL v. BPA                    3797
remain, while the debt to the United States Treasury would
not be commensurately reduced. That might well then require
BPA to raise its power rates even further in order to cover
accumulated shortfalls.

   [2] In light of those eximious reasons for BPA’s forecasting
in the way it did, we are not able to say that BPA failed to
proceed in accordance with “sound business principles.”
Ass’n of Pub. Agency Customers, 126 F.3d at 1171 (internal
quotation marks omitted). On the contrary, this is a situation
where “it seems particularly wise to defer to the agency’s
actions in furthering its business interests, especially when the
agency is responding to unprecedented changes in the mar-
ket.” Id. Especially is the above true when we reflect on the
fact that the SN CRAC is itself a part of the GRSPs, which
are much more than mere contract terms. See Cent. Lincoln,
735 F.2d at 1128. They are entirely bound up with BPA’s rate
making responsibilities, and we owe deference to the BPA in
that area. See Cal. Energy Comm’n, 909 F.2d at 1306; see
also Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512,
114 S. Ct. 2381, 2386-87, 129 L. Ed. 2d 405 (1994).

   [3] In fine, although other approaches were possible, even
reasonable, the confluence of the reasons given by BPA and
the deference we owe to it preclude us from determining that
BPA acted arbitrarily or capriciously when it made its fore-
cast and pulled the SN CRAC trigger.

B.    The Canby Claims

  Canby asserts that even if the SN CRAC was properly
invoked and the SN CRAC proceedings were properly con-
ducted,3 it cannot be subject to the changed rates. That is so,
  3
   Canby does complain that the SN CRAC was not properly followed in
one respect because it went beyond the parameters set forth in the June
2001 ROD, but that issue was not raised in the proceedings before the
BPA and cannot now be raised before us. See Universal Health Servs.,
Inc. v. Thompson, 363 F.3d 1013, 1019-20 (9th Cir. 2004); Cal. Dep’t of
Water Res. v. FERC, 341 F.3d 906, 910-11 (9th Cir. 2003).
3798                PUBLIC POWER COUNCIL v. BPA
it says, because of a provision in its contract with BPA.4

   On September 15, 2000, Canby entered into a five-year
contract to purchase power from BPA. That contract was to
be subject to the WP-02 Rates for which the 2002 GRSPs had
not yet been adopted. When they were adopted, they included
the SN CRAC. None of this is disputed.

    But when BPA first sent the proposed contract to Canby,
it included a provision that allowed BPA to adjust rates pursu-
ant to the “Cost Recovery Adjustment Clause in the 2002
GRSPs, or successor GRSPs.” That is a fairly standard provi-
sion because most contracts are for a ten-year period, whereas
sets of GRSPs are for a five-year period. Canby asked that the
“or successor GRSPs” language be stricken. BPA agreed, and
the final contract was revised accordingly.

   Canby now argues that the eliding of the language “or suc-
cessor GRSPs” was, in effect, designed to eliminate applica-
tion of the SN CRAC to its rates. It would be surprising to
discover that at a time of great uncertainty, BPA chose to tie
its own hands by the elliptical route of eliminating a few
words from a contract. Canby submitted no evidence at the
SN CRAC hearings to support that reading of the contract.5
  4
     Were Canby’s claim a pure contract claim, we would not have jurisdic-
tion over it. As it is, the claim is inexorably intertwined with the rate pro-
ceedings themselves. Thus, jurisdiction does lie in this court. See
Transmission Agency of N. Cal. v. Sierra Pac. Power Co., 295 F.3d 918,
926-27 (9th Cir. 2002); Cent. Elec. Coop., Inc. v. Bonneville Power
Admin., 835 F.2d 199, 203-04 (9th Cir. 1987); Atl. Richfield Co. v. Bonne-
ville Power Admin., 818 F.2d 701, 705 (9th Cir. 1987) (per curiam); Pac.
Power & Light Co. v. Bonneville Power Admin., 795 F.2d 810, 814-16
(9th Cir. 1986).
   5
     We are well aware of the fact that Canby tried to submit some evidence
in support of its argument when it briefed its position at the BPA, and
included some information in the excerpts of record that it filed with us.
But Canby could not expand the administrative record by submitting evi-
dence with a brief filed with the BPA after the hearing closed. See Proce-
                   PUBLIC POWER COUNCIL v. BPA                      3799
   [4] When the brume generated by Canby’s arguments is
blown away, it becomes apparent that BPA properly deemed
Canby to be subject to the SN CRAC proceedings and the
results of those proceedings. Simply put, once it is agreed that
the SN CRAC, which contemplated changes to the FB CRAC,
was part of the 2002 GRSPs to which Canby was subject, it
inexorably follows that the utilization of those very provisions
in the intended manner merely modified the existing CRAC
portion of the GRSPs, as was contemplated by the provisions
themselves. That did not, and could not, result in “successor
GRSPs.” The 2002 GRSPs remained intact in a somewhat dif-
ferent and modified form, but a form contemplated when they
were adopted. To put it another way, just as a human being
can use an exercise or study regimen to modify himself with-
out creating a successor person,6 so too could the GRSPs be
modified by use of the SN CRAC without creating a succes-
sor to the GRSPs themselves.

   [5] In short, Canby cannot avoid the adjusted rates by
pointing to the absence of the phrase “or successor GRSPs”
in its contract with BPA. Simply put, it was reasonable for
BPA to conclude that the deleted phrase was mere surplusage
in a five-year contract.

                           CONCLUSION

  When BPA adopted the WP-02 Rates, which included the

dures Governing Bonneville Power Administration; Rate Hearings
§ 1010.13, 51 Fed. Reg. 7611, 7613-14, 7617 (Mar. 5, 1986). And we
have already stricken that evidence from the excerpts. Therefore, we have
confined ourselves to the administrative record itself. See 16 U.S.C.
§ 839f(e)(2); see also Fla. Power & Light Co. v. Lorion, 470 U.S. 729,
743-44, 105 S. Ct. 1598, 1607, 84 L. Ed. 2d 643 (1985); S.W. Ctr. for Bio-
logical Diversity v. U.S. Forest Serv., 100 F.3d 1443, 1450-51 (9th Cir.
1996).
   6
     Of course, we might colloquially say that “X is a new man,” but we
do not mean that a successor human being has come on the scene.
3800            PUBLIC POWER COUNCIL v. BPA
three CRACs, it did so in a time of great uncertainty. Thus,
although everyone undoubtedly hoped it would never have to
be used, the SN CRAC, which allowed for an upward adjust-
ment of rates, was made a part of the GRSPs. Alas, BPA fell
on hard times and decided to trigger the SN CRAC in order
to share its pain with its customers. Everyone’s hopes were
dashed.

   PPC, however, clinging to a fragment of a hope, has
asserted that BPA improperly triggered the SN CRAC. We
are constrained to hold that BPA did not act in a manner that
was either arbitrary or capricious when it did so. Nor had
BPA disabled itself from sharing its pain with Canby. Ah, if
only there were some anodyne for all of the participants in
this saga. But none there is.

  Petitions DENIED.