Pacific Northwest Generating Cooperative v. Bonneville Power Administration

In Pacific Northwest Generating Coop. v. Dep’t of Energy (“PNGC”), 550 F.3d 846 (9th Cir.2008), amended on denial of reh’g, No. 05-75638, 2009 WL 2386294 (9th Cir. Aug.5, 2009), this court held invalid a central provision of a five-year contract between the Bonneville Power Administration (“BPA”) and the aluminum company Alcoa, Inc. (“Alcoa”). Less than a month after we issued the PNGC opinion, BPA announced that it and Alcoa had agreed to an amended version of the invalidated provision that would govern the nine-month period ending September 30, 2009 (the original five-year contract would have expired in September 2011). Petitioners Pacific Northwest Generating Cooperative (“PNGC”), Public Power Council (“PPC”), and Industrial Customers of Northwest Utilities (“ICNU”) challenge BPA’s decision to execute the amended contract.

We agree with the petitioners’ challenge and therefore grant their petitions for review. Although under no obligation to contract with Alcoa, BPA agreed voluntarily to make a nearly $32 million cash “benefit” payment to the aluminum company, so that the company could purchase power from one of BPA’s competitors. BPA’s justifications for this unusual…