California Energy Resources Conservation & Development Commission v. Bonneville Power Administration

Introduction

These are consolidated petitions to review the Bonneville Power Administration’s [BPA] interim access policy for the Pacific Northwest-Pacific Southwest Inter-tie, a system of high voltage lines transmitting federal and non-federal power from the Pacific Northwest to the Southwest. The petitioners are: (1) the California Public Utilities Commission (CPUC), a government entity responsible for insuring reasonable rates for the State’s energy consumers, Cal.Pub.Util.Code §§ 301-322, and (2) the California Energy Resources Conservation and Development Commission (CEC), a state agency that adopts energy policies, forecasts energy needs, and certifies construction of power plants in California, Cal. Pub. Res. Code §§ 25200 , 25216. The essence of their claim is that the access policy unlawfully excludes low cost energy generated in the Pacific Northwest and Canada from BPA’s transmission lines and thus prevents that lower cost energy from reaching California electric power consumers.

This is the second challenge to the interim policy. In the first, we upheld it over the objections of the Los Angeles Department of Water and Power. Department of Water & Power of the City of…

dissenting:

I am troubled by Judge Schroeder’s opinion in this obviously important case. While it may be that Department of Water and Power of the City of Los Angeles v. Bonneville Power Administration, 759 F.2d 684 (9th Cir.1985), forecloses appellants’ claims that the BPA’s Interim Access Policy arbitrarily favors the BPA itself and discriminates against Canadian utilities in violation of the statutory mandate, 1 that case does not foreclose a challenge to the BPA’s policy of discriminating against Pacific Southwest utilities and energy consumers in favor of Pacific Northwest utilities.

The BPA’s pro rata allocation scheme for available intertie capacity — a scheme which if implemented by a private party would plainly violate the antitrust laws — paternalistically restricts price competition among Northwest utilities and denies Southwest utilities and energy consumers the benefit of free market pricing for surplus energy offered for sale by privately-owned Northwest utilities. The interim access policy’s interference with free market pricing simply creates a cartel for the Northwest utility companies in the sale of power to the Southwest. 2 The BPA’s statutory mission,…