Industrial Customers of Northwest Utilities v. Bonneville Power Administration

Opinion by Judge BERZON; Partial Concurrence and Partial Dissent by Judge REINHARDT.

The Bonneville Power Administration (“BPA”) is an agency within the Department of Energy that markets the energy output of federal power projects in the Pacific Northwest. In two previous decisions, we invalidated three sets of contractual arrangements in which BPA agreed to subsidize certain longtime industrial customers rather than sell them power directly. See Pac. Nw. Gen. Coop. v. Bonneville Power Admin. (“PNGC II”), 596 F.3d 1065 (9th Cir.2010); Pac. Nw. Gen. Coop. v. Dep’t of Energy (“PNGC I”), 580 F.3d 792 (9th Cir.2009). We held these subsidy arrangements unreasonable and contrary to BPA’s statutory authority, as they did not comport with Congress’s mandate that BPA operate in a businesslike manner. See 16 U.S.C. §§ 839f(b), 838g.

In both cases, we remanded to BPA the question whether it could or should seek refunds of the improper subsidies. On remand, BPA concluded that it was contractually barred from seeking refunds as *916 to some of the invalidated contracts, and that it had no legal or equitable basis for seeking refunds as to the others. Moreover, BPA concluded, if it did pursue…

concurring in part and dissenting in part:

I concur in the majority opinion in part, but dissent from section B. l.a which relates to the 2007 Block Contracts. The question in that section is whether BPA may use a contractual damages waiver provision to strip itself of its obligation to seek recovery of $100 to $200 million in funds that it expended not only illegally but contrary to the statutory limits on its authority. The answer to that question is necessarily no. The majority’s contrary answer allows BPA to violate its statutory limitations at will and to shield itself against taking any measure to remedy its unlawful actions. I would hold that this damages waiver provision, as applied, op *932 erates in excess of BPA’s statutory authority.

In my view, this case is controlled by our holding in Portland General Electric Co. v. Bonneville Power Administration (PGE), 501 F.3d 1009 (9th Cir.2007). In PGE, we held that BPA’s contracting and settlement powers are “limited by the constraints of the [Northwest Power Act].” We explained:

Id. at 1030 . We then went on to list a series of contracts that would clearly lie outside of the authority that Congress granted to BPA. For…