Central Electric Cooperative, Inc. v. Bonneville Power Administration, U.S. Department of Energy, and Direct Service Industrial Customers, Intervenors

This case is brought as a direct proceeding under the Pacific Northwest Electric Power Planning and Conservation Act, 16 U.S.C. § 839f(e)(5) (1982) (“Regional Act”). Central Electric Cooperative (“CEC”), a utility, claims that Bonneville Power Administration (“BPA”) breached their Residential Purchase and Sale Agreement by refusing to acknowledge a rate increase which would have led to an enhancement of the subsidy BPA is obliged to give under the contract. At issue is whether BPA’s action should be reviewed in the context of contract law or administrative law; the latter would entitle BPA’s action to due deference. We find that principles of administrative law govern.

FACTS

BPA is the marketing agent for all electric power generated by federal generating plants in the Pacific Northwest. During the power shortages of the mid-1970’s, investor-owned utility (“IOU”) customers of BPA lost their access to federal power and built their own generating stations. A disparity developed between rates paid by residential IOU customers and the lower rates paid by residential customers of publicly-owned utilities, which received power from BPA at a lower cost. In 1980, Congress enacted the…