Court Opinion

ID: 9473154
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:21:10.372017+00
Date Added: 2024-06-11T17:43:21.294019
License: Public Domain

NORRIS, Circuit Judge,
dissenting:
Congress has carefully circumscribed the statutory authority of the Bonneville Power Administration (“BPA”) to sell hydroelectric power in the Pacific Northwest by requiring BPA to follow detailed procedures in establishing rates. 16 U.S.C. § 839e(i). In this case it is undisputed that BPA sold surplus hydroelectric power to aluminum manufacturers, referred to as direct service industrial customers (“DSI’s”), at rates not established in conformity with the statutory procedures.
Portland General Electric Company (“PGE”) challenges the sales to the DSI’s because the statutory ratemaking procedures were not followed. The majority excuses BPA’s failure to conform to the statutory ratemaking procedures because of what the majority considers to be the “unusual circumstances” of the case.
Thus, the majority carves out an “unusual circumstances” exception to the absolute statutory command that “in establishing rates ... the Administrator shall use the following procedures ...” 16 U.S.C. 839e(i).1 I submit that the majority’s statutory exception is created out of whole judicial cloth. It finds no support either in the statutory language or legislative history. Indeed, Judge Sneed cites no language in the statute that he relies upon, nor does he cite any legislative history to support his “unusual circumstances” exception. The consequence of this judicially fashioned exception is to confer upon the BPA undefined discretion to bypass the statutory ratemaking procedures whenever it considers it expedient to do so. The only check on the BPA’s discretion is review by this court under the majority’s vague “unusual circumstances” standard.
In this case, the majority has determined that “unusual circumstances” justified the sales to the DSI’s at rates not adopted pursuant to the ratemaking procedures because of a substantial surplus of power created by a combination of abnormally high stream flows and reduced demand for power resulting from a recession. The majority reasons that under these circumstances, BPA’s decision to sell nonfirm energy to DSI’s without following the rate-making procedures appears to have made good economic sense.
On the face of it, the majority’s reasoning is seductive. There is considerable appeal in the argument that by selling the nonfirm energy to DSPs at bargain rates the BPA would succeed in both reducing the surplus of hydroelectric power and stimulating the depressed economy of the Pacific Northwest by inducing aluminum companies to increase production. The Congress, however, has not given this court the authority to ratify sales of power by *1485BPA in contravention of the statutory rate-making procedures on the basis of our judgment that the sales made good business sense under the circumstances. Moreover, if this court is to review BPA’s business judgment as though we were a board of directors reviewing management decisions, we should have an evidentiary record before us. Here there is nothing except BPA’s word that it thought the sale of power to DSI’s seemed to be a good idea. There is no testimony. There are no documents. There are no opinions of experts agreeing or disagreeing with BPA. For all we know from this record, the disputed sales were nothing more than a windfall to the aluminum companies at the expense of other BPA customers such as PGE. For all we know, the twin goals of disposing of surplus power and stimulating the economy of the Pacific Northwest would have been achieved more effectively and equitably if the surplus power had been offered at reduced rates to all BPA customers, not just the DSI’s. The point is that the majority’s opinion that the sales to the DSI’s made good economic sense is based on nothing but surmise.
I believe that we are remiss in starting down the road of reviewing BPA power sales under a vague “unusual circumstances” exception to the clear and unequivocal congressional command that BPA must follow prescribed ratemaking procedures in selling power. Whether BPA should have greater flexibility in ratemaking is a question that should be decided by the Congress, not this court. Indeed, Congress has created at least one exception to the ratemaking procedural requirements by giving BPA the flexibility to sell power outside the United States at negotiated rates above rates established in ratemaking procedures for nonfirm power sold domestically. 16 U.S.C. § 839e(l). Perhaps BPA should have similar flexibility when confronted with an exceptional surplus of power such as existed in the spring of 1983. But once again, that is for Congress, not this court to decide.

. Judge Sneed, in interpreting the statute to create an "unusual circumstances” exception, does not rely upon the rule that a statutory interpretation made by an administrator of an agency is entitled to special deference. See, e.g., Chevron, U.S.A., Inc. v. Natural Resources Defense Council, — U.S. —, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984). This lack of deference is not surprising because Judge Sneed’s theory was not advanced by any of the party’s involved in this appeal. BPA simply argued that the statutory ratemaking procedures were inapplicable because the sales to the DSI’s did not involve ratemaking. Curiously, the Federal Energy Regulatory Commission ("FERC”), in its amicus brief, argues still a different theory for validating the sales: The transactions should not be subject to ratemaking procedures because they were changes in rate schedules rather than in the rates. Brief Amicus Curiae of FERC at 6.