# Petition — SANTA CLARA, CALIFORNIA v. ANDRUS (Nos. 78-35, 78-9) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1317%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 ## Text a Supreme u wT 5. ©itLes1 yo _ id JUL og No. § © \ remeron ean denlidciiditenee | IN THE Supreme Court of the United States OcToOBER TERM, 1978 City OF SANTA Ciara, CALIFORNIA, Petitioner, Ceci D. Anprus, R. KertrH Hiacinson and Pactric Gas AND ELEcTRIC Company, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT f Counsel: Of Couns FrepRicK D. PALMER Epwin G. Moore JAMES D. PEMBROKE 1500 Warburton Ave. 1775 Pennsylvania Ave., N.W. Santa Clara, Calif. Suite 1200 95050 Washington, D.C. 20006 Attorneys for Petitioner Press oF Byron S. ADAMS PRINTING, INC., WASHINGTON, D. C. IS7R TABLE OF CONTENTS Page san o's atnie ence saps eT OCT TE Ea ae 1 I Slat piso ickg ou vd beac tees. 2 QuESTIONS PRESENTED ......................0.....,. 2 CoNsTITUTIONAL Provistons AND Statutes INvoLvep 3 STATEMENT OF THE CaSE ............................ 3 A. Before the District Court ................... 7 B. Before the Court of UE aul Sie cvecceee 9 Reasons ror GRANTING THE , Sethe AN adel he ote 2 10 A. Question One—Reviewability ................ 10 B. Question Two—Administrative Procedure Act 16 C. Question Three—Due Process ............... 22 Ee a a 27 APPENDIX TABLE OF AUTHORITIES CasEs: Aberdeen & Rockfish Railroad v. SCRAP, 422 U.S. 289 SEP SIT mere ain 3 Alabama Power Company v. Alabama Electric Coop- erative, Inc., 394 F.2d 672 (Sth Cir. 1972) ......., 14 Arizona Power Authority v. Morton, 549 F.2d 1231 (9th Cir.), cert. denied, 98 S.Ct. 124 EE? vheceues ce 12-13 Arizona Power Pooling Association v. Morton, 527 F.2d Woe Gime OR, TOTO) nnn vcecccccccccccccn,,. Barlow v. Collins, 397 U.S. 159 ED S04 60e ocsceees 14 Board of Regents v. Roth, 408 U.S. 564 (1972) ...... 23, 24 Bolling v. Sharpe, 347 U.S. 497 | eee 15 Califano v. Sanders, 430 U.S. 99 ae 15 Citizens to Preserve Overton Park v. Volpe, 401 U.S. WIT 56s scntncwccacunccccccescecee,... 1] ii Table of Authorities Continued Page City of Lafayette v. Louisiana Power and Light Co., —— U.S, ——, 46 U.S.L.W. 4265 (March 29, 1978) 14 Environmental Defense Fund, Inc. v. Ruckelshans, 439 F.2d 548 (D.C. Cir. 1971) ....... cece ceccuaueees 19 F. S. Royster Guano Co. v. Virginia, 253 U.S. 412 Ee a aes ohare 15 Gardiner v. Tarr, 341 F. Supp. 442 (D.D.C. 1972) .... 18 Gonzalez v. Freeman, 334 F.2d 570 (D.C. Cir. 1964) . .18, ro Greenwood Utilities v. Andrus, No. 77-179 (M.D. Ga.) . 5 Holmes v. New York City Housing Authority, 398 F.2d ee I NE oo oe robs wb bte saan eases eees 25 Ivanhoe Irrigation District v. McCracken, 357 U.S. 275 ge a Oe Be Ie er rey re ere 12 McDonald v. General Mills, 387 F. Supp. 24 (E.D. Cal. rh cr ahs suc Le oan 19 Memphis Light, Gas & Water Division v. Craft, —— U.S. ——, 56 L. Ed. 2d 30 (May 1, 1978) ......... 26 Morton v. Ruiz, 415 U.S. 199 (1974) ............. 18, 21-22 Northern California Power Agency v. Morton, 396 F. Supp. 1187 (D.D.C. 1975), aff’d per curiam, No. 75-1572 (D.C. Cir. June 16, 1976) ........... 18, 19, 25 Pence v. Kleppe, 529 F.2d 135 (9th Cir. 1976) ........ 25 Perry v. Sinderman, 408 U.S. 593 (1972) ............ 23-24 Portland v. Bonneville Power Administration, No. 77- a as aa diag we pk ahd» oa ON 5 W. G. Cosby Transfer & Storage Co. v. Froehlke, 480 ee TN OU, BOGE ccc cccccspresrccccecven 18 White v. Roughton, 530 F.2d 750 (7th Cir. 1976) ...... 25 CoNnsTITUTION AND STATUTES: United States Constitution, Fifth Amendment . .3, 15, 16, 19 United States Constitution, Fourteenth Amendment . .15, 19 American River Act of 1949, § 4, 63 Stat. 852 ........ 11 Administrative Procedure Act §3(a)(1), 5 U.S.C. §552(a)(1) .............. passim Ee eb arias oN. nuve 46s 3, 17, 20, 21, 22 GO ee eee err 3 Table of Authorities Continued iii Page Central Valley Project Authorization Act, 50 Stat. 850 11 Department of Energy Organization Act, 42 U.S.C. BE Fg ee oy eR, 4, 20 Poe ath eS 5 | i a eee 20 § 302(a)(1), 42 U.S.C. § 7152(a)(1) 2.0.0.0... 20 § 302(a) (3), 42 U.S.C. § 7152{a)(3) .........008. 4 § 501(b) (3), 42 U.S.C. § 7191(b)(3) oo... ccc cee 20 Flood Control Act of 1944, § 5, 16 U.S.C. § 825s ... . passim National Environmental Policy Act of 1969, § 102(2) CG), 4B UBS. 4 UBGRBIC) 6.5 oc cccccccccnccuc. Reclamation Project Act of 1939, §9(c), 43 U.S.C. LL | La Rend Mevuwuaes crkesctaaes passim ET I So sv ds'y eb SCRA IVS SELENE CLEA 3 Wer Mee ES 9 5 i oa Ni ud 6 ie 6045 dec kad s gaan, 3 ee rs sows wg vv Gd dn eeu oebuues tak ccs 3 Wr A ED eds cs week sha hd be cea das enkas 2 We NEM PUD 55's sok cau Ninly ao panchuccoennc. 3 MISCELLANEOUS: K. Davis, §3A Administrative Law of the Seventies WED Tie Wian cae ete es cease wen eer ee 19 K. Davis, Discretionary Justice (1969) .........0.05. 19 K. Davis, Informal Administrative Actions, Another View, 26 A.U.L. Rev. 836 (1977) .........ccccue. 19 Federal Power Commission, Hydroelectric Power Re- sources of the United States (1976) ............. 5 IN THE Supreme Court of the United States OctToper TERM, 1978 No. City or Santa Ciara, CatirorntA, Petitioner, Vv. Ceci, D, Anprus, R. Kerra Hiaainson and Paciric GAs AND EvEctric Company, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT Petitioner prays that a writ of certiorari issue to review the decision of the United States Court of Appeals for the Ninth Circuit. OPINIONS BELOW The opinion and order of the United States Court of Appeals for the Ninth Circuit is set forth at page la of the Appendix to this Petition and is reported at 572 F.2d 660. The order reversed in part and affirmed in part a judgment of the United States District Court for the Northern District of California which is set forth at page 39a of the Appendix to this Pe- tion and is reported at 418 F. Supp. 1243. 2 JURISDICTION The decision and order of the United States Court of Appeals for the Ninth Circuit issued and was en- tered February 1, 1978. The decision was amended on Denial of Rehearing and Rehearing En Bane on April 4, 1978. Accordingly, the time for filing this Petition expires on July 3, 1978. This Court’s jurisdic- tion is invoked under 28 U.S.C. § 1254(1). QUESTIONS PRESENTED 1. Do federal power marketing statutes vest un- fettered discretion in an administrator of a federally owned and operated hydroelectric project to pick and choose among a group of customers designated by Congress as preferred customers for electric energy generated at the project? 2. Does the Administrative Procedure Act, and specifically 5 U.S.C. §552(a)(1), permit ad hoc de- cision-making by federal power marketing agencies with respect to the sale of electric energy generated at federally owned and operated hydroelectric proj- ects ? 3. Does a municipally owned and operated electric utility, which qualifies under acts of Congress as a preferred customer for electric energy generated at a federally owned and operated hydroelectric project, and is in fact treated as such by the federal power marketing agency in charge of the project, have a sufficient claim of entitlement to electric service from that project to warrant due process protection ?* * Both the District Court and the Court of Appeals rejected Petitioner’s allegation of a violation of the National Environmental 3 CONSTITUTIONAL PROVISIONS AND STATUTES INVOLVED This controversy presents issues with respect to the following constitutional provisions and statutes, all of which are set forth in the Appendix beginning at 84a; The Fifth Amendment to the Constitution of the United States; The Reclamation Project Act of 1939, 43 U.S.C. § 485h(c); Section 5 of the pean —— . of 1944, 16 U.S.C. § 825s; The ministrative Procedure Act, 5 U.S.C. §6 552 (a)(1), 553, 701. STATEMENT OF THE CASE This Petition presents the question of whether a remedy exists for admitted, unjustified and unex- plained federal discrimination against a municipally owned and operated electric utility which Congress has designated as a preferred customer for federally- generated, low cost hydroelectric power and energy. 43 U.S.C. § 485h(¢) ; 16 U.S.C. § 825s. The Petition arises from a complaint for injunctive and declaratory relief filed by the City of Santa Clara, California, Petitioner, against various officers and offi- cials employed by the United States Department of the Interior. The Complaint was filed in the United States District Court for the Northern District of California. Jurisdiction was asserted under 28 U.S.C. §§ 1331, 1361, 1837 and 2201-2202 and 5 U.S.C. $$ 701, et. seq. ‘ sate Policy het of 1969, 42 U.S.C. § 4332(2)(C), If the Court grants this Petition, Petitioner intends to challenge the disposition of the NEPA issue on the basis of Aberdeen & Rockfish Rail SCRAP, 422 U.S. 289 (1975) fish Railroad v. 4 Petitioner is a municipal corporation organized under the laws of the State of California and is en- gaged, inter alia, in the retail distribution and sale of electric power and energy to its citizens and other customers. As a result, Petitioner qualifies as a pre- ferred customer of federal power marketing agencies under 43 U.S.C. § 485h(¢c) and 16 U.S.C. § 825s, Petitioner, pursuant to contact, purchases an al- legedly ever diminishing amount of electric power and energy needed for its consumers from the Central Val- ley Project (hereafter CVP), now administered by the United States Department of Energy through the Western Area Power Administration.’ In addition to Petitioner, CVP serves numerous customers similarly situated, including the Cities of Biggs, Gridley, Palo Alto, Redding, Roseville, the Sacramento Municipal Utility District, the Shasta Dam Area Public Utility District, and the Plumas Sierra Cooperative. (40a, fn. 3). All of these entities are wholesale for resale pur- chasers of CVP power and energy, are competitors of Petitioner, and will hereafter be referred to as the ‘‘super-preference’’ customers. (45a-48a, and partic- ularly fn. 14). As noted by the Court of Appeals: The Secretary of the Interior, through the Bu- reau of Reclamation, sells the power generated by the CVP at a price substantially lower than that charged by private utilities such as PGandE [Pacifie Gas and Electric Company]. Conse- *42 U.S.C. § 7152(a) (3). 5 quently, CVP power does not lack for willing purchasers, (2a-3a) (footnote omitted ).’ One of the reasons for the present litigation is that the federal Respondents have discriminated and are discriminating against Petitioner in the sale of CVP power and energy in favor of the superpreference customers, As the opinions of both the District Court and the Court of Appeals make clear, the Federal Respondents maintain that they are entitled to com- mit the entire capacity of CVP to the superpreference customers and can deny Petitioner CVP benefits, not- withstanding Petitioner’s statutory entitlement there- * This observation is not confined to CVP since it is but one of many federally owned and operated hydroelectric projects and since hydroelectric energy, as is generally known, is usually the least expensive energy available due to the inexpensive nature of the fuel ; falling water, In fact, as of January 1, 1976, 159 federally owned hydroelectric projects were in operation with a developed capacity of 27,700,528 kilowatts. New capacity under construction at that time equaled 9,304,750 kilowatts of capacity with an addi- tional 5,306,885 authorized, but not yet in process, Hydroelectric Power Resources of the United States, Federal Power Commission (January 1, 1976), In the recent past administrative and judicial proceedings have increased in number with respect to both rates and allocation of capacity and associated energy. Proposed rate increases are pend- ing for (1) the Central Valley Project; (2) the Southwestern Power Administration ; (3) the Jim Woodruff Project of the South. eastern Power Administration ; and (4) Cumberland Project of the Southeastern Power Administration. Additionally, the Department of Energy has pending a proposed allocation scheme for peaking power from the Colorado River Storage Project, and Bonneville Power Administration is in the process of developing a formula to allocate energy that it markets, At least two pending cases involve attempts to obtain allocations of preference power from federal power marketing agencies, Greenwood Utilities y. Andrus, No, 77- 179 (M.D, Ga.); Portland vy, Bonneville Power Administration, No. 77-928 (1D, Ore.), 6 to. Instead, as the Federal Respondents attempt to withdraw more and more CVP power and energy from Petitioner, this same power and energy is supposedly committed to the load growth of competitors of Peti- tioner, the superpreference customers. (4a; 42a-43a). As the controversy stands before this Court, there is no justification nor explanation for the discrimina- tory treatment of Petitioner, the only justification advanced by the Federal Respondents (congressional ratification of the discrimination) having been found lacking by both the District Court and the Court of Appeals. (21a; 6la-62a). Pacific Gas and Electric Company (PGandE), is also a party to the action and sides with the Federal Respondents. PGandE, a large, integrated private utility, purchases CVP electric power and energy un- der an agreement designated Sale, Interchange and Transmission Contract No, 14-16-200-2948A (Contract 2948A). PGandE transmits CVP power and energy to virtually all of the CVP customers over PGandE transmission lines under Contract No. 2948A. When CVP power is available in quantities in excess to the needs of the superpreference customers, it is then supposedly sold to PGandE, a non-preference custo- mer. PGandE in turn has agreed to sell to the Federal Respondents a like amount of power and energy at such future time as the needs of the superpreference customers are in excess of the CVP capacity. (13a- 15a). Another reason for the present litigation is the Federal Respondents’ relationship with PGandE. That is, since the Federal Respondents claim that their superpreference customers have both all present 7 and future rights to CVP output, the Federal Re- spondents make present sales to PGandE, a non- preference customer, ahead of Petitioner, a preference customer. Petitioner also has a contractual relationship with PGandE. In order to assure that it had a sufficient supply of power and energy to meet its needs, Peti- tioner executed a contract with PGandE which obli- gates PGandE to sell Petitioner enough power and energy to equalize its needs in the event an insufficient amount of CVP power and energy is available. In 1971, when the Federal Respondents initiated allegedly improper withdrawals of CVP power and energy uni- laterally, PGandE commenced monthly billings for power allegedly delivered by PGandE to Petitioner. Petitioner refused to pay for any of the power al- legedly delivered by PGandE to it and, pursuant to separate agreements with PGandE, commenced de- posits in an escrow account in an amount equal to the PGandE billings, less the amount PGandE would re- ceive for transmission services if Petitioner is found to have been receiving all requirements service from CVP, as it has alleged. As of the date of the filing of this Petition, the escrow account contains over $50,000,000. and is build- ing at the rate of approximately $1,500,000. per month, exclusive of interest. A. Before the District Court In an opinion rendered in response to cross motions for summary judgment, Petitioner’s challenge to the discrimination practiced by the Federal Respondents 8 elicited the following findings and holdings by the District Court: 1. The federal power marketing statutes provide ‘law to apply’’ in reviewing the challenged CVP power marketing practices. (54a-58a). 2. CVP power marketing practices discriminate against Santa Clara in favor of ‘‘superprefer- ence’’ customers similarly situated. (59a-61a). 3. The only justification advanced for the dis- crimination, congressional ratification, is ‘‘inade- quate.’’ (63a-64a). 4. The Federal Respondents never published nor made known any procedures or policies followed in allocating CVP power ‘‘at any point in time’’, and therefore violated 5 U.S.C. § 552(a) (1). (67a- 69a). 5. Petitioner has a sufficient interest in CVP power and energy entitling it to due process pro- tection and Petitioner’s right to due process was violated. (70a-77a). As a consequence, the District Court remanded the controversy to the Secretary for a new look at CVP power marketing practices consistent with the man- dates of the federal power marketing statutes and procedural due process. At the same time the District Court expressed no views on the reasonableness vel non of present practices, and having earlier found that the legality of the challenged sales to PGandE turned on the legality of the challenged, discrimina- tory power marketing practices, ordered preservation of the escrow mechanism pending the outcome on re- mand. (76a-77a). Finally, the District Court dismissed the action without prejudice. 9 B. Before the Court of Appeals Following cross-appeals, the Court of Appeals re- versed the District Court in most respects, the one major exception being agreement that Congress never ratified the discriminatory practices under challenge. (21a). The Court of Appeals’ contrary holdings were as follows: 1. Since the federal power marketing statutes do not specifically deal with which eligible prefer- ence customers are to receive power allocations, there is no ‘‘law to apply” to the controversy and the Secretary may discriminate, without reason, among preference customers. (9a-13a). 2. Sales to PGandE, a non-preference customer, ahead of Petitioner, a preference customer, are suspect and not justified by the CVP power mar- keting scheme. (13a-21la). 3. Title 5 U.S.C. §552(a)(i1) does not require the promulgation of rules to be followed in power marketing decision making and no allegation hav- ing been made that such rules exist, it was error for the District Court to find a §552(a)(1) viola- tion. (2la-26a). 4. Since the Federal Respondents have uncon- trolled discretion to discriminate in dealing with preference customers inter sese, Petitioner has no due process rights with respect to sales of CVP power among preference customers. (26a-29a). 5. Since Petitioner has a preference to CVP power against PGandE, Petitioner does have due process rights with respect to sales of CVP power to PGand E. (29a-30a). Accordingly, the Court of Appeals reversed the Dis- trict Court’s remand to the Secretary and the dismis- 10 sal of the action. Instead, the Court of Appeals re- manded the controversy to the District Court with in- structions to consider the limited issue of the legality of the suspect CVP sales to PGandE under the fed- eral power marketing statutes. REASONS FOR GRANTING THE WRIT As can be seen from the statement of Questions Presented, Petitioner believes that the Court of Ap- peals erred in three significant ways in reversing the District Court. As will be seen, each of the holdings presents conflicts with either decisions of this Court or of the various Courts of Appeal. As will also be seen, the conflicts must be resolved to give federal power marketing agencies, and other federal agencies a clear charter in the now uncertain area of accepta- ble administrative processes. Of greater importance, the three holdings, read to- gether, result in the following principle of law in the Ninth Cireuit: unexplained and unjustified discrimi- nation by a federal power marketing agency, practiced against an entity singled out by Congress for pref- erential treatment, may not be remedied by the federal judiciary. Petitioner submits that this is an unac- ceptable principle of law given the importance of fed- eral hydropower to the economic and social well being of preference customers.* A. Question One — Reviewability Petitioner maintains that both 43 U.S.C. § 485h(c) and 16 U.S.C. §825s provide the requisite ‘“‘law to apply’? in reviewing the power marketing decisions * See fn. 3, supra. 11 by the Federal Respondents in the present instance, See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 410 (1971). 43 U.S.C. §485h(¢c) (a part of the Reclamation Project Act of 1939) governs CVP sales since the Central Valley Project Authorization Act, 50 Stat. 850, incorporates the provisions of the reclamation laws for CVP operation. 43 U.S.C. § 485h(¢) provides that in the sale of power “‘. . . preference shall be given to municipalities and other public corporations or agencies .. .”’ While the CVP was not authorized under 16 U.S.C. § 825s, it nevertheless also governs CVP sales by vir- tue of long standing departmental policy, which the Federal Respondents have never disputed.’ 16 U.S.C. § 825s provides: Electric power and energy generated at reservoir projects under the control of the iy maerages of the Army and in the opinion of the Secretary of the Army not required in the operation of such projects shall be delivered to the Secretary of the Interior, who shall transmit and dispose of such power and energy im such manner as to encour- age the most widespread use thereof at the lowest possible rates to consumers consistent with sound business principles. [Emphasis supplied]. ‘The Court of Appeals did not accept this proposition, and indeed found it ‘‘questionable’’, but did not decide the issue in any event since it viewed the statute as too ‘‘vague and general to pro- vide law to apply.’’ (11a). The Distriet Court, on the other hand, did find the statute applicable and Petitioner respectfully refers this Court to the discussion at 55a, and particularly fn. 22. See also, Section 4 of the American River Act of 1959, 63 Stat. 852, which transfers the Folsom Dam, authorized under the Flood Con- trol Act of 1944, to the Central Valley Project administrator. 12 As to 43 U.S.C. §485h(c), Petitioner main- tained and maintains that an unexplained decision to discriminate among preference customers similarly situated is as reviewable under the statute as a deci- sion to sell preference power to non-preference en- tities first, the deprivation of a congressionally con- ferred benefit being as real in either event and the violation of the congressional mandate that preference ‘‘shall’’ be given equally as veal. As to 16 U.S.C. § 825s, Petitioner maintained and maintains that the mandate to the Secretary to sell power to preference entities ‘‘. . . in such manner as to encourage the most widespread use thereof .. .” provides a more than adequate guideline for review- ability where a congressionally intended beneficiary is completely excluded from power supply for no ra- tional reason; and particularly where the intended beneficiary is in the heart of the geographic area that Congress intended to be benefitted by CVP. See Ivan- hoe Irrigation District vy. McCracken, 357 U.S. 275 (1958). Simply stated, Petitioner’s claim here is that exclusion of eligible customers violates the congres- sional directive that the administrator ‘‘encourage the most widespread use’’ of the power. The Court of Appeals disagreed with the Petitioner, and held with respect to 43 U.S.C. § 485h(e) : The preference clause requires only that public entities be given a preference over private entities in the marketing of power generated by federal reclamation projects. Arizona Power Pooling As- sociation v. Morton, supra, 527 F.2d at 726-28. It does not require that all preference customers be treated equally or that all potential preference customers receive an allotment. Arizona Power 13 Authority v. Morton, supra, 549 F.2d at 1241, 1252. Where, as here, one preference entity chal- lenges the Secretary’s decision to discriminate against it in favor of other preference entities, the reclamation laws provide no law to apply to the dispute. If he so chooses, the Secretary can market all available CVP power to a single en- tity without running afoul of the preference clause. (10a) (emphasis in original). Similarly, the Court of Appeals held with respect to 16 U.S.C. § 825s that: The Flood Control Act of 1944, while arguably applicable to the sale of power generated by the CVP, is so imprecise that its interpretation re- quires a ‘‘profound exercise of discretion’’ of the sort described in the Panama Canal ease. (12a). These holdings of the Court of Appeals are consist- ent with its previous holding in Arizona Power Au- thority v. Morton, 549 F.2d 1231 (9th Cir.), cert. denied, 98 S.Ct. 124 (1977), but are in error nonethe- less. In the Morton decision, the Ninth Circuit rejected a challenge to a power marketing scheme of a federal power marketing agency due to plaintiff’s failure ‘* . . to carry its burden of demonstrating that the Marketing Criteria clearly violate the legislative in- tent behind CRSP.” /bid. at 1251. Here the rationale is similar in that Petitioner failed to elucidate to the satisfaction of the Court of Appeals the precise con- straints placed on the Federal Respondents in making power marketing decisions under different hypothet- ical circumstances under both 43 U.S.C. § 485h(¢) and 16 U.S.C. § 825s. (8a). 14 Petitioner subinits that the Ninth Circuit has thus shifted the burden from the Federal Respondents to show legislative intent to preclude judicial review (Barlow v. Collins, 397 U.S. 159 (1970)) to the plain- tiff, in each instance, requiring a precise showing of the limits placed on discretion. Since the statutes here do not specifically address the subject, judicial review does not lie according to the Ninth Circuit. One possible result of the decision by the Court of Appeals will be litigation against federal power mar- keting agencies under the federal antitrust laws. This Court recently held that a municipal electric utility may be sued under the federal antitrust laws where ‘*. , . the state itself has not directed or authorized an anticompetitive practice ...” City of Lafayette v. Louisiana Power and Light Co., —— U.S. ——, 46 U.S.L.W. 4265, 4272 (March 29, 1978). Since there was no indication in Lafayette that the holding would be restricted to state or municipal agencies, and since the Court of Appeals here finds no enforceable con- gressional policy with respect to discriminatory treat- ment of preference customers, preference customers suffering discrimination may now only have recourse to damage and injunctive action under the antitrust laws. Cf. Alabama Power Company v. Alabama Elec- tric Cooperative, Inc., 394 F.2d 672, 677-92 (5th Cir. 1972) (Godbold, J., dissenting). In other words, the Court of Appeals’ refusal to hear disputes where discrimination is alleged between or among preference customers on _ reviewability grounds will not confine these disputes to administra- tive deliberations and may, in fact, force them into federal court. The better and less disruptive course is to require federal power marketing agencies to articu- 15 late with rationality why a particular course of con- duct is adopted. Only the judiciary is in a position to ensure that the agencies meet this standard, and Pe- titioner suggests that the Ninth Cirecuit’s doctrinal approach on reviewability must be reversed. It must be remembered, too, that Petitioner asserts reviewability not only under the federal reclamation laws and the Flood Control Act of 1944, but under the Fifth Amendment as well. (65a). That is, Peti- tioner alleges a violation of its constitutional right to be free of discriminatory treatment which is not justi- fied on any rational basis by the Federal Respondents, which treatment is forbidden. by the Fifth Amend- ment as well as the Fourteenth Amendment. Bolling v. Sharpe, 347 U.S. 497, 499-500 (1954). This Court has repeatedly asserted that governmen- tal action . . must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legis- lation, so that all persons similarly cireumstanced shall be treated my F.S. Royster Guano Co. Vv. Virginia, 253 U.S. 412, 415 (1920). Petitioner has asserted again and again that its right to equal protection of the laws has been and is being violated and the Federal Respondents have yet to advance even a modicum of justification for the dis- criminatory treatment. This Court has stated that ‘‘when constitutional questions are in issue, the avail- ability of judicial review is presumed... .’’ Califano v. Sanders, 430 U.S. 99, 109 (1977). Petitioner thus submits that even if one accepts the Ninth Circuit’s finding that the reclamation laws and the Flood Control Act of 1944 vest unlimited dis- 16 cretion in the Federal Respondents to discriminate against preference customers, that the Fifth Amend- ment provides a vehicle for this controversy to be heard and that the Court of Appeals erred in not ree- ognizing this principle. B. Question Two — Administrative Procedure Act Title 5 U.S.C. §552(a)(1) provides, in part: Kach agency shall separately state and currently publish in the Federal Register for the guidance of the publie— ” ” u (D) substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general ap- plicability formulated and adopted by the agency ; and u ” 7 Except to the extent that a person has actual and timely notice of the terms thereof, a person may not in any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal Register and not so published. The District Court specifically found that, The Bureau did not publish any such description of the procedures followed in making power allo- cations to preference customers... . (67a), In response to the Federal Respondents’ attempt to invoke the statutory exception which applies when ‘‘actual and timely notice” of the procedures are given, the District Court held: The statutory exemption cannot apply where, as here, such procedures as were followed were in- completely and imprecisely delineated and com- 17 municated haphazardly, if at all, to affected par- ties. (68a). In reversing the holding of the District Court, the Court of Appeals held that: We cannot read a rulemaking requirement into Section 552, or interpret the section in such a way as to render meaningless the publie property exemption contained in Section 553. (26a). In reversing the District Court, the Court of Ap- peals acknowledged that the result permits ad hoc decisionmaking by the Federal Respondents. (25a). The Court of Appeals thus erred in three respects. First, it misinterpreted both Petitioner’s allegation with respect to 5 U.S.C. § 552(a)(1) and the District Court’s holding. Second, it reached a result at con- flict with decision of this Court and every Circuit Court of Appeal that has considered the matter. Third, it ignored a change in law with respect to 5 U.S.C. § 553’s application to the controversy prior to its holding. Petitioner has consistently argued that the Federal Respondents, at all times relevant, did have a erys- tallized power marketing policy with respect to CVP, which policy has never made known. Indeed, at all times relevant the Federal Respondents have never argued otherwise. Rather, the Federal Respondents have consistently argued that they were pursuing a policy that had been ratified by Congress. As has been seen, both the District Court and the Court of Appeals rejected the defense, thus recognizing the existence of an unpublished, but real, policy. 18 Thus the District Court was required to find a § 552(a)(1) violation. And, the remedy which the Dis- trict Court fashioned as a result of its holding * was completely consistent with that developed in other cir- cults. See, e.g., Gonzalez v. Freeman, 334 F.2d 570 (D.C, Cir. 1964); W.G. Cosby Transfer & Storage Co v. Froehlke, 480 F.2d 498 (4th Cir. 1973); North- ern California Power Agency v. Morton, 396 F. Supp. 1187 (D.D.C. 1975), aff’d per curiam, No. 75-1572 (D.C, Cir. June 16, 1976). See also Morton v. Ruiz, 415 U.S, 199 (1974) ; Gardiner v. Tarr, 341 F. Supp. 442 (D.D.C. 1972). The Court of Appeals itself recognized that its de- cision was out of step with that of Gonzalez and Cosby, saying: In each case there is language to the effect that §552 required the agency to formulate and adopt rules deseribing the grounds upon which the agency would act and the procedures that it would follow. But in neither case did the court do what the trial eourt did here, order the agency to for- mulate and adopt such rules. To the extent that these cases can be said to stand for the propo- sition that § 552 requires an agency to formulate and adopt rules, we decline to follow them. (26a) (Emphasis added). The attempted distinction implicit in the second quoted sentence, as can be seen from a review of Gon- zalez and Cosby, is nonexistent. What does exist, in the Ninth Circuit, is freedom on the part of federal °The opinion states: ‘‘As a result of the court’s holding here, and in Part II. D. infra, [relating to due process] it will be neces- sary for the Bureau to publish, or disseminate so as to provide actual notice to all interested parties, specific rules of procedure. ..’” (60a-69a), 19 agencies to govern the distribution of the benefits of government programs as they see fit. The abdication of judicial review in this instance cannot be countenanced. As the Court of Appeals for the District of Columbia has said: Judicial review must operate to ensure that the administrative process itself will confine and con- trol, the exercise of discretion. Courts should re- quire administrative officers to articulate the standards and principles that govern their discre- tionary decisions in as much detail as possible . When administrators provide a framework for principled decision making, the result will be to diminish the importance of judicial review by enhancing the integrity of the administrative process, and to improve the quality of judicial review in those cases where judicial review is sought.’ In attaining this objective, courts have two avail- able tools, Section 3(a) of the Administrative Pro- cedure Act and the due process clause of the Constitu- tion. It is not surprising that the courts have fre- quently relied upon both to sustain their holdings re- quiring publication of informal procedural rules." The action of the Ninth Cireuit, however, would re- quire reliance solely upon the Constitution itself. Wiser, Petitioner believes, is the course of action taken by the Gonzalez court in which Judge Burger especially relied upon 5 U.S.C. § 552 so as not to ele- * Environmental Defense Fund, Inc, v. Ruckelshaus, 489 F.2d 548, 598 (D.C. Cir. 1971) (emphasis added) (footnotes omitted). See also K. Davis, Informal Administrative Action, Another View, 26 A.U.L. Rev. 836 at 843, et seq. (1977) ; K, Davis, Administrative Law of the Seventies, § 3A, 7 at 75 (June, 1976); K. Davis, Dis- cretionary Justice (1969). * See, e.g., McDonald v. General Mills, 387 F.Supp. 24 (E.D.Cal. 1974) ; Northern California Power Agency v. Morton, supra. 20 vate the controversy to a constitutional dimension. Gonzalez, supra, at 580. Finally, the Court of Appeals’ reliance on the pub- lie property exemption in 5 U.S.C. §553 in holding that 5 U.S.C. §552 had not been violated was im- proper at the time of decision. On August 4, 1977, the Department of Energy Or- ganization Act*® was enacted. As regards this litiga- tion, the DOE Act’s relevance and impact stem from the creation of the Department of Energy (DOE)” and the transfer to the DOE of the power marketing functions formerly held by the Secretary of Interior. 42 U.S.C. § 7152(a) (1). In addition to this transfer of authority, the DOE Act made the provisions of the rulemaking portions of the APA applicable to, inter alia, the power mar- keting functions now exercised by the DOE. The DOE Act provides: For the purposes of this subchapter the exception from the requirement of section 553 of Title 5 provided by subsection (a)(2) of such section with respect to public property, loans, grants, or contracts shall not be available. 42 U.S.C. § 7191(b) (3). As noted, the Court of Appeals relied on the public property exception in the APA to justify its deter- mination that the Secretary’s actions were not gov- erned by Section 4 of the APA. However, the effec- * Pub. L. 95-91, 91 Stat. 567 (hereinafter DOE Act), The DOE Act has been recently codified at 42 U.S.C, §§ 7101, et seq. © 42 U.S.C, § 7131, 21 tive date of the DOE Act preceded the Ninth Cir- cuit’s decision in this case. Thus, although the Court of Appeals’ determination that the Secretary’s actions need not conform to the strictures of Section 4 of the APA may have been correct as regards actions up to August 4, 1977, Petitioner submits that actions taken by the DOE under its power marketing func- tions subsequent to its establishment on August 4, 1977 must comply with the rulemaking provisions of Section 4 of the APA. Petitioner further submits that the Court of Appeals’ failure to make this determina- tion and impose the rulemaking requirements consti- tutes further error. Although a substantial portion of Petitioner’s argu- ents concerns the past illegal decisions of the Secre- tary, Petitioner is adversely and severely injured by the current failure of DOE to review its schemes for the allocation of preference power pursuant to a rule- making proceeding conducted under the provisions of Section 4 of the APA. The present allocation plan, having been developed by the Secretary on an ad hoc basis cannot be implemented by the DOD absent See- tion 4 rulemaking proceedings since the ‘‘publie prop- erty’’ exception is no longer available in the m»~ket- ing of federal hydropower. The propriety of and requirement for the conduct of rulemaking proceedings in this instance are re- flected by decision of this Court. In Morton v. Ruiz, 415 U.S. 199 (1974), this Court, in the context of a case involving public benefits to Native Americans, underscored the necessity of plac- 22 ing the exercise of administrative discretion within the structure of rulemaking proceedings: This agency power to make rules that affect substantial individual rights and obligations car- ries with it the responsibility not only to remain consistent with the governing legislation, but also to employ procedures that conform to the law. No matter how rational or consistent with con- gressional intent a particular decision might be, the determination of eligibility cannot be made on an ad hoc basis by the dispenser of the funds. The Administrative Procedure Act was adopted to provide, inter alia, that administrative policies affecting individual rights and obligations be pro- mulgated pursuant to certain stated procedures so as to avoid the inherently arbitrary nature of unpublished ad hoe determinations. 415 U.S. at 232 (citations omitted). The power marketing scheme applied prospectively from August 4, 1977 is tainted by the ad hoe decision- making process undertaken by the Secretary prior to the DOE Act. The failure of the Court of Appeals to require rulemaking proceedings pursuant to Section 4 of the APA to determine the proper allocation of preference among preference agencies was error.” C. Question Three — Due Process The Court of Appeals’ holding with respect to due process is equally erroneous and at odds with deci- sions of this Court, other Courts of Appeals, and the Ninth Circuit itself. “ The change in law was brought to the attention of the Court of Appeals in Petitioner’s Petition for Rehearing. 23 The Court of Appeals relied on Board of Regents v. Roth, 408 U.S. 564 (1972) in holding that Peti- tioner lacks entitlement to due process protection as against other preference entities. In its treatment of Roth, the Court of Appeals observed: Having completed a year of teaching, Roth, like Santa Clara, could differentiate himself from others who sought the government benefit in ques- tion. However, Roth’s desire to be rehired, his eligibility for contract renewal, and his special status as a former employee, were all insufficient to clothe him with a ‘“‘legitimate claim of entitle- ment.’’ Because the Board of Regents could re- fuse to rehire Roth for any reason whatsoever, Roth’s interest did not rise to a level of entitle- ment. (29a). The problem with this analysis is that Roth had no “special status as a former employee’’ and could not ‘‘differentiate himself from others who sought the benefit in question.’’ Had Roth been able to do either, the Roth result would have been different, as the com- panion case, Perry v. Sinderman, 408 U.S. 593 (1972), makes clear. Tn Perry, the complainant alleged a “special status as a former employee’’ under a theory of ‘‘de facto tenure.’’ That is, while the complainant was employed on a year to year basis, and while he could not dem- onstrate either a state statute or official school policy granting him “‘special status’’, he did allege ‘‘that the college had a de facto tenure program, and that he had tenure under that program” and that he could legitimately rely upon non-binding guidelines issued by a state-wide board establishing tenure. Perry, supra, at 599-601. es ~ Oe ee ee EE SIT EE TE 24 Thus, this Court concluded in Perry: In this case the, respondent has alleged the ex- istence of rules and understandings, promulgated and fostered by state officials, that may justify his legitimate claim of entitlement to continued em- ployment absent ‘‘sufficient cause.’’ [bid. at 602- 603. Under both Roth and Perry, it is thus submitted that the District Court’s holding is unassailable: Were Santa Clara before us as just another potential customer of Bureau power, unclothed of any Congressional recognition of special privilege in the fight for power, we would have to conclude that the City’s interest did indeed go no further than an ‘‘abstract need or desire’’ or ‘‘unilateral expectation”. But the fact that Congress has seen fit to distinguish municipalities from non-public potential customers of CVP power lends a certain legitimacy to Santa Clara’s claim of entitlement. Granted, the ‘‘dimensions”’ of this property in- terest are statutorily restricted to ‘‘preferential”’ consideration therefor; nevertheless, a restriction on a property right does not eviscerate its status as a right. The preferential treatment Congress has afforded public entities clearly raises the probability that such a customer will receive power over and above that of other customers. The long history of the various laws directing the disposition of public power first to the public, at- tests to the existence of some claim of entitlement for public agencies. Accordingly, the court holds that a sufficient statutory property interest exists to call forth some degree of due process protec- tion.” (70a). (Footnotes omitted). *® See 40a-42a, for a summation of the myriad congressional enact- ments and federal pronouncements dealing with the genesis and policy of the preference clause. (45a, n.14). 25 It is also submitted that the Ninth Circuit’s hold- ing cannot be squared with its own holding in Pence v. Kleppe, 529 F.2d 135 (9th Cir. 1976) (Alaska Na- tives seeking discretionary allotments under the Alaska Native Allotment Act), the Second Circuit’s holding in Holmes v. New York City Housing Au- thority, 398 F.2d 262 (2d Cir. 1968) (applicants for scarce publie housing), the Seventh Circuit’s holding in White v. Roughton, 530 F.2d 750 (7th Cir. 1976) (applicants for welfare assistance), and the District of Columbia Circuit’s holding in Northern California Power Agency, supra (federal power marketing agency rate setting and due process). The vice of the Court of Appeals’ holding in the present case was succinctly stated by the Second Cir- cuit in Holmes: It hardly need be said that the existence of an absolute and uncontrolled discretion in an agency of government vested with the administration of a vast program, such as public housing, would be an intolerable invitation to abuse. See cab V. Allen, 326 F.2d 605, 609-610 (5th Cir., 1964), Holmes, supra, at 265. In view of the vast nature of federal hydropower marketing activities and the enormous worth of that power to preference customers, it seems to Petitioner clear beyond argument that preference customers are entitled to due process protection in all of their deal- ings with federal agencies. This Court must intercede to remove the doubt that now exists and to prevent the “intolerable invitation for abuse’’ the Ninth Circuit has extended. 26 Finally, the Ninth Circuit’s decision on due process is flatly inconsistent with this Court’s recent holding in Memphis Light, Gas & Water Division v. Craft, — US. —, 56 L. Ed.2d 30 (May 1, 1978). In Memphis, this Court held that since under Ten- nessee law an electric utility may not terminate serv- ice at will, a customer of that utility has a legitimate claim of entitlement to continued electric service re- quiring due process proceedings prior to termination of service. Here, Petitioner is served pursuant to con- tract as a preferred customer of Federal Respondents under federal law. (51a). Yet the Federal Respond- ents are continuing in their attempts to withdraw CVP power and energy from Petitioner in a manner that Petitioner alleges is in violation of its contractual rights and is in violation of its rights as a preferred customer under federal law. Petitioner submits that Federal Respondents’ con- tinual refusal to afford due process protection to Peti- tioner prior to attempted contractual withdrawals un- der the circumstances of this dispute runs afoul of Memphis and provides still another basis for the granting of Petitioner’s request for a Writ of Cer- tiorari. 27 CONCLUSION For all of the foregoing reasons, Petitioner respect- fully prays that the Writ of Certiorari issue so that this Court can resolve the uncertainty introduced into the relationship of federal power marketing agencies with preference customers by the decision of the Ninth Circuit. Respectfully submitted, Of Counsel: FREDRICK D. PALMER Epwin G. Moore JAMES D. PEMBROKE 1500 Warburton Ave. 1775 Pennsylvania Ave., N.W. Santa Clara, Calif. Suite 1200 95050 Washington, D.C. 20006 Attorneys for Petiti Dated: July 3, 1978 sib po 28 Certificate of Service I, Fredrick D. Palmer, hereby certify that on July 3, 1978 the foregoing Petition for Writ of Certiorari in the above captioned proceeding was served upon all counsel, pursuant to Rule 33 of the Supreme Court Rules, by mailing copies by first class mail, postage prepaid as follows: Wade H. McCree, Jr., Solicitor General Office of Solicitor General Department of Justice 10th and Constitution Avenue, N.W. Washington, D.C. 20530 Max Vassanelli, Esquire Department of Justice 10th and Constitution Avenue, N.W. Washington, D.C. 20530 Terry J. Houlihan, Esquire McCutchen, Doyle, Brown & Enersen 28th Floor Three Embarcadero Center San Francisco, California 94111 Freprick D. PALMER 1775 Pennsylvania Avenue, N.W. Suite 1200 Washington, D.C. 20006 Attorney for Petitioner APPENDIX la APPENDIX UNITED STATES COURT OF APPEALS, NINTH CIRCUIT City or Santa Cuara, Cauirornia, Appellant, v. Cecil Anprus, Individually and as Secretary of the In- terior, and R. Keith Higginson, Individually and as Commissioner of the Bureau of Reclamation, United States Department of Interior, Appellees. Cecil Anprus, Individually and as Secretary of the In- terior, and R. Keith Higginson, Individually and as Commissioner of the Bureau of Reclamation, United States Department of Interior, Appellants, V. City or Santa Ciara, Cairornia, Appellee. Paciric Gas & Exvecrric Company, Appellant, v. City or Santa Cuara, Cartrornia, Appellee. Nos. 77-1110, 77-1270, 77-1189 and 76-3670, Feb. 1, 1978. As Amended on Denial of Rehearing and Rehearing En Bane April 4, 1978. Appeal from the United States District Court for the Northern District of California Before Duniway and Carrer, Circuit Judges, and Burns,® District Judge. * The Honorable James M. Burns, United States District Judge for the District of Oregon, sitting by designation. 2a Duniway, Cireuit Judge: This case concerns sales by the Secretary of the In- terior of low-cost hydroelectric power generated by the Central Valley Project in California. The city of Santa Clara filed this action for declaratory and injunctive relief, challenging the Secretary’s decisions to withdraw power from the City and to deny it an allocation of “firm” (non-withdrawable) power. The Pacific Gas and Electric Company (PG&E) was allowed to intervene and counterclaim for certain funds being held in an escrow. All parties moved for summary judgment. The district court granted the Secretary’s motion as to Santa Clara’s National Environmental Policy Act (NEPA) claim, de- nied the other motions, and “remanded” the case to the Secretary for the promulgation of rules and procedures concerning the marketing power generated by the Cen- tral Valley Project. The court’s judgment also dismissed the action without prejudice. All parties appeal. We af- firm in part, reverse in part, and remand in part. Facts The Central Valley Project (CVP) is a multipurpose federal reclamation project consisting of numerous dams, hydroelectric power plants, transmission lines, and irri- gation canals, located in the Central Valley of California and its surrounding mountains.’ While production of hydroelectric power is not the primary purpose of the CVP, a substantial arnount of electricity is generated by the project and ultimately sold to a large and varied group of users in Northern and Central California. The Secretary of the Interior, through the Bureau of Reclamation, sells the power generated by the CVP at a *The CVP is described in detail in Ivanhoe Irrigation District v. McCracken, 1958, 357 U.S. 275, 280-83, 78 S.Ct. 1174, 2 L.Bd.2d 1313. 3a price substantially lower than that charged by private utilities such as PG&E.? Consequently, CVP power does not lack for willing purchasers. Section 9(c) of the Ree- lamation Project Act of 1939, 43 U.S.C. § 485h(¢), pro- vides that in sales or leases of electric power or power privileges, made by the Secretary, “preference shall be given to municipalities and other public corporations or agencies” and REA cooperatives. Santa Clara first sought an allocation of CVP power on June 1, 1960, although it was then under contract to buy power from PG&E and so could not then take power from CVP, In 1962, the Secretary informed Santa Clara and others that 250,000 kilowatts of firm power would become available to preference customers upon comple- tion of the Trinity River Division of the CVP, and in. vited applications for this new power. Santa Clara re- newed its request for power on February 19, 1962, ac- knowledging that it would be unable to receive the power until the expiration, on August 27, 1967, of its require- ments contract with PG&E. The Secretary responded that while he would not commit himself to such a future allocation, Santa Clara’s application would be kept on file for consideration nearer the time when the City could actually begin purchasing federal power. When the Trinity River Division of the CVP came on line in early 1963, the additional power which became available was allocated to other preference customers which were able to take it immediately. Between 1963 and 1964, CVP’s generating capacity in- creased further. Notice of the availability of additional power was sent to all preference entities, Santa Clara among them, asking for estimates of present load re- quirements and future load growth. The additional power *In 1976, the price of CVP power ($.005 per kilowatt hour) was roughly one-fourth of that charged by PG&E ($.019 per kilowatt hour). ta was ultimately allocated to then existing preference cus- tomers and Santa Clara was again excluded because of its inability to take power immediately. Concerned that all CVP power was fast becoming spoken for, Santa Clara telegraphed the Secretary in July, 1964, asserting that its contract with PG&E was not binding and requesting an immediate allocation of power, on a withdrawable basis if necessary. The Secre- tary replied that, while all anticipated power was ecom- mitted to meet the growth needs of other preference cus- tomers, 75,000 kilowatts could be offered to the City on a withdrawable basis. On November 30, 1965, Santa Clara finally contracted with the Secretary for the supply of 75,000 kilowatts of CVP power on a withdrawable basis. At the same time, Santa Clara entered into an agreement with PG&E which required the utility to supply the City with suffi- cient electricity to meet any power requirements not satisfied by the CVP allotment. Santa Clara’s original allotment of 75,000 kilowatts was revised upward several times after 1965 by contract amendment. The City’s allotment peaked at 120,000 kilo- watts in 1970, after which the Secretary, by unilateral contract amendment, began withdrawing power from Santa Clara to meet the needs of its older preference customers. Between 1971 and 1974, the City’s allotment was cut back from 120,000 kilowatts to 71,450 kilowatts. This amount is likely to dwindle still further if the Sec- retary has his way. During the period when Santa Clara was receiving all of its power requirements from the CVP, it continued to ask the Secretary for a nonwithdrawable allocation. How- ever, as additional power became available, the Secretary decided to hold it for preference customers already re- ceiving nonwithdrawable allotments, rather than to offer it to customers with withdrawable allocations such as 5a Santa Clara. On February 4, 1972, the Secretary finally informed Santa Clara by letter that he would not allo- cate nonwithdrawable power to the City, then or at any time. In 1971, when the government began withdrawing power from Santa Clara, PG&E began monthly billings for that portion of the City’s requirements not met by the CVP allocation and supplied by PG&E. Contending that the withdrawals were unlawful and consequently in- effective, Santa Clara insisted that its power needs were still being fully supplied by the Secretary. The City be- gan paying the moneys demanded by PC&E into an es- crow account and has done so ever since. PROCEEDINGS IN THE TriaAL Court On July 25, 1975, Santa Clara filed this action against the Secretary and the Commissioner of the Bureau of Reclamation (the federal defendants), seeking declara- tory and injunctive relief. In its complaint the City chal- lenged the withdrawal of CVP power and the Secretary’s refusal to supply it with a ‘nonwithdrawable allocation. PG&E intervened as a party-defendant, counterclaiming for declaratory relief with respect to the funds held in escrow. All parties moved for summary judgment. On July 23, 1976, the district court issued its opinion, City of Santa Clara v. Kleppe, N.D.Cal., 1976, 418 F. Supp. 1243, holding as follows: (1) Santa Clara’s action is not barred by sovereign immunity; (2) the Secretary’s contractual relationship with PG&E does not violate the reclamation laws; (3) the Secretary’s decisions allocating CVP power are reviewable; (4) Congress has not ap- proved the existing allocation scheme; (5) the Secretary violated the Administrative Procedure Act (APA) by failing to promulgate and publish rules of procedure governing the allocation of CVP power; (6) the Secre- tary’s actions denied Santa Clara due process; and (7) 6a the National Environmental Policy Act (NEPA) did not require the Secretary to file an environmental impact statement before withdrawing power from the City. The district court’s opinion contained no ruling on defend- ants’ claim that Santa Clara’s action was untimely and barred by laches. Although the trial court held that the Secretary’s mar- keting decisions were reviewable, it did not pass on the lawfulness of the existing allocation scheme. Instead, it remanded the action to the Secretary with instructions to remedy the due process and APA violations. With regard to PG&E’s counterclaim, the court ruled that the utility’s right to be reimbursed by Santa Clara would depend upon the allocation scheme adopted by the Secretary on remand. The court therefore ordered that the disputed funds remain temporarily in escrow.’ It also dismissed the action without prejudice. Z. JURISDICTION ON APPEAL Although the dismissal of the action “in its entirety” is “without prejudice,” we find that the judgment based upon it is a final judgment, appealable under 28 U.S.C. § 1291. The language “without prejudice” avoids the “on the merits” effect of Rule 41(b), F.R.Civ.P., and permits the filing of a new action by any party dissatisfied with the Secretary’s action on remand. It is still true, how- ever, that the judgment disposes of the action. Moreover, the remand is, in substance, a mandatory injunction re- quiring certain action by the Secretary, and so appeal- ’ The court later modified this decision, ordering that one quarter of the funds in escrow be disbursed to PG&E to enable the utility to recoup the costs incurred in purchasing the power ultimately resold to Santa Clara. See City of Santa Clara v. Kleppe, N.D.Cal., 1976, 428 F.Supp. 315. 7a able under 28 U.S.C. §1292(a)(1) assuming, but not de- ciding, that it is not a final judgment under § 1291. We have jurisdiction. See Gueory v. Hampton, 1974, 167 U.S.App.D.C. 1, 4, 510 F.2d 1222, 1225; Hines v. D’ Artois, 5 Cir., 1976, 581 F.2d 726, 730. TI. LACHES AND THE Statute oF LIMITATIONS The federal defendants argue that this action is barred by either the six-year statute of limitations, 28 U.S.C. § 2401(a), or the doctrine of laches. These arguments are based on the assumption that Santa Clara’s claim for relief arose no later than 1965 when the City entered into a contract with the Secretary for the supply of withdrawable CVP power. Long after 1965, however, the Secretary, through the regional director of the Bureau of Reclamation, continued to assure Santa Clara that its applications for nonwith- drawable power would receive due consideration in the future. It was not until 1972 that the Secretary informed the City by letter that all firm CVP power was commit- ted to meet the growth needs of other preference custo- mers. Until that date, the City could reasonably have be- lieved that it could, in future, secure an allocation of firm power. We therefore conclude that Santa Clara’s claim for relief did not arise until 1972, when the Secretary finally told the City, in unequivocal terms, that its appli- cations for nonwithdrawable power would not be con- sidered, then or later. TTI. REVIEWABILITY OF THE SECRETARY’S DECISIONS PG&E and the federal defendants assert that the Sec- retary’s decisions concerning the allocation CVP power are immune from judicial review. Specifically, they con- tend that the Secretary’s marketing decisions are actions 8a “committed to agency discretion by law” within the meaning of the APA, 5 U.S.C. § 701(a) (2). Judicial reviewability of administrative action is the rule and nonreviewability a narrow exception, the exist- ence of which must be clearly demonstrated. Arizona Power Pooling Ass’n v. Morton, 9 Cir., 1975, 527 F.2d 721, 727, cert. denied, 1976, 425 U.S. 911, 96 S.Ct. 1506, 47 L.Ed.2d 761. The Supreme Court has stated that re- view is precluded only “in those rare instances where ‘statutes are drawn in such broad terms that in a given ease there is no law to apply.’” Citizens To Preserve Overton Park v. Volpe, 1971, 401 U.S. 402, 410, 91 S.Ct. 814, 821, 28 L.Ed.2d 136. See also, Ness Investment Corp. v. United States Department of Agriculture, Forest Ser- vice, 9 Cir., 1975, 512 F.2d 706, 713. If, however, no law fetters the exercise of administrative discretion, the courts have no standard against which to measure the lawfulness of agency action. In such cases no issues sus- ceptible of judicial resolution are presented and the courts are accordingly without jurisdiction. Arizona Power Authority v. Morton, 9 Cir., 1977, 549 F.2d 1231, 1239, cert. denied, 1977, —— U.S. ——, 98 S.Ct. 124, 54 L.Ed.2d 97. In considering whether administrative action is “com- mitted to agency discretion by law” within the meaning of the APA, the test “is not whether a statute viewed in the abstract lacks law to be applied, but rather, whether ‘in a given case’ there is no law to be applied.” Strick- land v. Morton, 9 Cir., 1975, 519 F.2d 467, 470 (empha- sis in original). Thus the existence of some law generally applicable to the subject matter in question will not neces- sarily remove administrative action from the “com- mitted to agency discretion” rubric. There is “law to ap- ply,” only if a specific statute limits the agency’s discre- tion to act in the manner which is challenged. 9a A. The Refusal to Contract with Santa Clara for Firm Power. Santa Clara says that two statutes provide “law to apply” in evaluating the Secretary’s decisions concern- ing the sale of power generated by the CVP to Santa Clara. The first is the Central Valley Project Authoriza- tion Act, 50 Stat. 850, which incorporates generally the provisions of the reclamation laws. Section 9(c) of the Reclamation Project Act of 1939, 43 U.S.C. § 485h(c), defines a class of customers which are to receive a pref- erence in the sale of power generated by federal recla- mation projects. The class of preference customers in- cludes “municipalities and other public corporations or agencies.” Our recent decision in the case of Arizona Power Auw- thority v. Morton, supra, forecloses Santa Clara’s argu- ment that the Secretary, by providing other public en- tities with nonwithdrawable power allocations while de- nying such a “firm” allocation to Santa Clara, thereby violated the terms of the preference clause. In that case a group of preference customers for power in Arizona challenged the Secretary’s decision to allocate most of the power produced by Colorado River Storage Project (CRSP) generating facilities to preference customers lo- cated in the “upper basin” states of Wyoming, Colorado, Utah and New Mexico. We held that the Secretary was obliged to market power generated by CRSP facilities to preference customers in accord with the dictates of the Reclamation Project Act of 1939, 43 U.S.C. § 485h(c), but concluded that the preference clause permitted the Secre- tary to discriminate against some preference entities in favor of others. “[I]t would appear in light of his broad discretion that the Secretary may adopt whatever geo- graphic preference he desires and that we have no juris- diction to review his action.” 549 F.2d at 1241. 10a The preference clause requires only that public entities be given a preference over private entities in the mar- keting of power generated by federal reclamation pro)- ects. Arizona Power Pooling Ass’n v. Morton, supra, 527 F.2d at 726-28. It does not require that all preference customers be treated equally or that all potential pref- erence customers receive an allotment. Arizona Power Authority v. Morton, supra, 549 F.2d at 1241, 1252. Where, as here, one preference entity challenges the Secretary’s decision to discriminate against it in favor of other preference entities, the reclamation laws pro- vide no law to apply to the dispute. If he so chooses, the Secretary can market all available CVP power ‘o a single public entity without running afoul of the preference clause. In Arizona v. California, 1963, 373 U.S. 546, 83 S.Ct. 1468, 10 L.Ed.2d 542, the Court considered the scope of the Secretary’s authority to allocate the waters of the Colorado River pursuant to the Boulder Canyon Project Act. The Court stated: The general authority to make contracts normally in- cludes the power to choose with whom and upon what terms the contracts will be made. When Congress in an Act grants authority to contract, that authority is no less than the general authority, unless Congress has placed some limit on it... . [W]e are persuaded that had Congress intended . . . to fetter the Sec- retary’s discretion, it would have done so in clear and unequivocal terms . . . 373 U.S. at 580, 83 S.Ct. at 1487. Nothing in the legislative history of the Reclamation Project Act of 1939 suggests that Congress intended to limit the Secretary’s discretion to interpret the prefer- ence clause in making decisions as to whether or how or on what terms he will sell power to particular preference customers as compared to other preference customers. lla Santa Clara also relies on Section 5 of the Flood Control Act of 1944, 16 U.S.C. § 825s, as providing an alternative standard against which the Secretary’s mar- keting decisions can be measured. In pertinent part, sec- tion 5 provides that power is to be disposed of “in such manner as to encourage the most widespread use thereof consistent with sound business principles.” By its terms this directive governs only the sale of power generated by flood control projects operated by the Department of the Army. The standard’s applicability to the sale of power generated by the CVP, which is operated by the Bureau of Reclamation, is therefore questionable. Santa Clara maintains that the federal defendants themselves, as a matter of departmental policy, have long regarded the provisions of the Flood Control Act as applicable to the marketing of CVP power. We find it unnecessary to decide whether the Flood Control Act does apply to the sale of power generated by the CVP because the stand- ard that it contains, even if applicable, is too vague and general to provide law to apply. The Flood Control Act’s directive to market power in such a way as to “encourage the most widespread use thereof” “could be interpreted in many different ways, such as to require that power be sold to as many dif- ‘erent preference entities as possible, thereby fostering the most widespread geographic use of the power, or to mandate sale of the power to those preference entities whose customers present the most diversified mix of agri- cultural, industrial or residential users, or to require sale of federal power to those preference entities which serve the largest number of ultimate consumers. Clearly, the “most widespread use” standard is suscep- tible of widely divergent interpretations. As we said of another law in Strickland v. Morton, supra, “(t]he provi- sions of this statute breathe discretion at every pore.” 519 F.2d at 469. The statute permits the exercise of the widest administrative discretion by the Secretary. It 12a does not supply “law to apply.” See Arizona Power Au- thority v. Morton, supra, 549 F.2d at 1252. In Panama Canal Co. v. Grace Lines, Inc., 1958, 356 U.S. 309, 78 S.Ct. 752, 2 L.Ed.2d 788, the Court was asked to review the federally chartered Canal Company’s deci- sion to require ships passing through the Canal to pay particular tolls. While the applicable statute set out in some detail the criteria to be considered by the Company in prescribing tolls, the Court concluded that the Com- pany’s discretion in interpreting the statute was so broad as to bring it within 5 U.S.C. §701(a)(2) (formerly § 1009) and thus to preclude judicial reviews: Where the matter is peradventure clear, where the agency is clearly derelict in failing to act, where the inaction or action turns on a mistake of law, then judicial relief is often available . . . But where the duty to act turns on matters of doubtful or highly debatable inference from loose statutory terms, the very construction of the statute is a distinct and pro- found exercise of discretion. 356 U.S. at 318, 78 S.Ct. at 757. We conclude that the Secretary’s refusal to allocate non- withdrawable power to Santa Clara is unreviewable be- cause there is “no law to apply.” The preference clause contained in the Reclamation Project Act of 1939 does not prevent the Secretary from discriminating against some preference entities to the benefit of others. The Flood Control Act of 1944, while arguably applicable to the sale of power generated by the CVP, is so impre- cise that its interpretation requires a “profound exercise of discretion” of the sort described in the Panama Canal case. The trial court’s finding that the Secretary’s mar- keting decisions as to the terms on which he will market power to preference customers are roviewable is in error. Decisions concerning the proper allocation of CVP power 13a among preference entities are “action committed to agency discretion by law” within the meaning of the APA and as such are unreviewable.* B. The Sale of Power to PG&E. Santa Clara challenges the Secretary’s decision to sell massive quantities of CVP power to PG&E, a privately owned utility. While we have concluded that the pref- erence clause contained in section 9(c) of the Reclama- tion Project Act of 1939 does not provide law to apply to the Secretary’s decision to allocate CVP power among preference customers in one fashion rather than another, the statute clearly does provide a standard against which the propriety of sales to non-preference entities such as PG&E can be measured. Arizona Power Pooling Ass’n v. Morton, supra.* * Although the argument was not raised in the trial court, Santa Clara now argues on appeal that inclusion of the Folsom Dam in the CVP network mandates application of a power marketing stand- ard similar to that contained in the Flood Control Act. Section 4 of the American River Act of 1949, 63 Stat. 852, directs the Secre- tary of the Interior to operate Folsom Dam ‘‘in such a manner as will effectuate the fullest and most economic utilization of the land and water resources of the Central Valley project of California for the widest public benefit.’’ This marking standard is as imprecise as that contained in the Flood Control Act and we reject the argument that it provides law to apply to the instant dispute. *As we said in Kast Oakland-Fruitvale Planning Council v. Rumsfeld, 9 Cir., 1972, 471 F.2d 524: Agency action is made unreviewable by 5 U.S.C. § 701(a) (2) only ‘‘to the extent’’ that it is committed to agency discretion. ... An ‘fall or nothing’’ approach to reviewability would, in specific cases, either be unfair to persons aggrieved by agency action, or impose an unwise burden upon the agency or the courts. Accordingly, separable issues appropriate for judicia) determina- tion are to be reviewed, though other aspects of the agency ac- tion may be committed to the agency’s expertise and discretion. If a statute or regulation establishes a rule governing the conduct of the agency with respect to an aspect of the agency activa, a l4a PG&E and the federal defendants do not argue other- wise. They concede the applicability of the preference clause but contend that the present marketing scheme does not violate the clause because power is not sold out- right to PG&E but is rather “banked” temporarily with the utility pursuant to government contract. The contract provides that all CVP power which is sold to PG&E is subject to the Secretary’s right to repurchase at a later date, at the original price plus a “handling charge,” plus the difference in cost to PG&E of producing the power sold to the Secretary over PG&E’s similar cost at the time it bought. The Secretary maintains that this arrangement is de- signed to enable him to supply the growth needs of se- lected preference customers until 1980. By “banking” power with PG&E during periods when the total output of the CVP exceeds the demands of these selected custo- mers, the Secretary creates an “account” which he can drawn on to satisfy their requirements when demand out- strips supply. It is more accurate to state that the con- tract requires that an account be kept of all power sold to PG&E and that the Secretary may thereafter pur- chase power, up to that amount, from PG&E. PG&E sells the power that it buys from the Secretary to its customers at its price. To describe this arrangement as “banking” is to use an inaccurate and somewhat mislead- ing figure of speech. The relationship between the Secretary and PG&E and the Secretary’s preference customers such as Santa Clara is further complicated by two facts. The first is that court may determine whether the agency has complied with that rule, although the court still may not review other aspects of the agency action as to which there are no reasonably fixed rules to apply. The presence of a judicially enforceable rule both justi- fies judicial review, and limits its scope. 471 F.2d at 533-4. 15a CVP power is fed into PG&E’s distribution system and is transmitted by PG&E over its lines to preference customers and to PG&E’s own customers. At the same time, power produced by PG&E is also fed into the same distribution system. Once that happens, it is physically impossible, or at least not practicable, to identify any particular unit of power as CVP power or as PG&E power. Thus, in theory, PG&E receives CVP power from CVP and transmits it (or “wheels” it) to Santa Clara over PG&E's lines. In fact, the transmitted power can- not be and is not so identified. The problem is solved by bookkeeping. Track is kept of the amount of CVP power that enters the PG&E system. The Secretary tells PG&K how much of it is for each preference customer. PG&E supplies that amount of power to each. The Secretary then bills each preference customer for that power at the Secretary’s price. CVP power received by PG&E and not treated as transmitted to preference customers of the Secretary is treated as sold by the Secretary to PG&K and PG&E pays the Secretary for it. This is the power that is said to be “banked” under the PG&E contract with the Secretary. The second fact is that there is now being fed into the PG&E system more government produced power than is being produced by CVP power plants. This is because of the creation of the Northwest intertie, whereby substantial amounts of power are being transmitted to the CVP area from the Northwest. The PG&E contract with the Secre- tary relates to that power as well as to CVP power, It is suggested that the Northwest power never would have been available to preference customers in the CVP area without the cooperation of PG&E embodied in the contract with the Secretary. We assume that this is true, but that fact cannot diminish the Secretary’s legal obligation to sell to preference customers. Neither the Secretary nor PG&E argues that the full ‘‘ Project Dependable Capacity’’ as de- fined in the contract, paragraphs 9(a) and (i) and 11, is l6a not subject to the preference clause. Their only argument is that the ‘‘banking’’ provisions of the contract satisfy the requirements of the preference clause. The trial court concluded that the ‘‘banking’’ of CVP power with PG&E was not violative of the preference clause. We conclude that the present marketing scheme involves the sale of power to PG&E and that the terms of the preference provisions are not satisfied by the govern- ment’s repurchase right. The preference clause states a clear legislative intent and requirement that the Secretary shall favor public en- tities in the sale of power generated by federal reclamation projects. As we noted recently in Arizona Power Pooling Ass'n v. Morton, supra, ‘‘(t]he text of the preference pro- vision is couched in mandatory terms, stating that ‘pref- erence shall be given’ (emphasis added) to certain public entities in governmental sales or leases of electric power or power privileges.’’ 527 F.2d at 727. The Secretary is thus given a very specific directive to market federal power to preference customers if any are ready and willing to purchase it. It is only if the available supply exceeds the demands of interested preference customers that the Sec- retary may offer federal) power to private entities. 41 Op.A.G. 236, 1955, Disposition of Surplus Power Generated At Clark Hill Reservoir Project.* *In advising the Secretary as to the propriety of his proposed scheme for allocating power generated by the Clark Hill Reservoir Project, Attorney General Brownell was called upon to interpret the Flood Control Act of 1944, which contains a preference clause almost identical to that contained in the Reclamation Project Act of 1939. The Attorney General construed the preference provision to require that ‘‘when the Secretary of the Interior has before him iwo competing offers to purchase power, one by a preference cus- tomer, and the former does not have at the time the physical means to take and distribute the power, he must contract with the prefer- ence customer on condition that such customer will, within a rea- 17a In this case the Secretary has marketed CVP power to PG&E, a non-preference entity, during times when a prefer- ence customer was having its allotment gradually reduced, over its objection. It is claimed that PG&E’s allotment was more than adequate to satisfy Santa Clara’s full require- ments.’ Nevertheless, the Secretary has, since 1971, pro- gressively reduced Santa Clara’s withdrawable allocation. In defense of the Secretary’s arrangement with PG&E, he maintains that he is storing up power with the utility for the future benefit of selected preference customers. In oe ee ee ee sonable time to be fixed by the Secretary, obtain the means for taking and delivering the power.’’ Disposition of Surplus Power Generated At Clark Hill Reservoir Project, supra, 41 Op.A.G. at 243.44. Thus, in Attorney General Brownell’s estimation, even the present inability of a preference customer to take federal power is insufficient to justify a decision by the Secretary to permanently commit the power to a non-preference customer. Here, of course, Santa Clara is able to take its full power requirements from the CVP and has done so in the past. ’ The following is a comparison of the CVP power sold to Santa Clara as compared to the amount sold to PG&E [in kilowatts] : SANTA CLARA PG&E 1965 71,490 282,183 1966 78,863 198,063 1967 89,367 81,377 1968 92,031 79,713 1969 106,128 55,944 1970 116,471 26,406 1971 112,696 — 278,724 1972 89,200 382,000 1973 86,550 382,000 1974 73,300 387,786 1975 73,800 337,000 The sales to PG&E are in such high quantity that this nonprefer- ence customer has become the Bureau’s largest customer. (Opening Brief of Santa Clara, pp. 44-45). These figures are not disputed by the Secretary or by PG&E. 18a the meantime, however, to the extent that Santa Clara could have purchased the power, a private utility is proft- ing from the low cost of federal power at the expense of a preference entity. This result, we think, does violence to the plain meaning and intent of the preference provision. While the stated goal of the banking arrangement is consonant with the preference clause, inasmuch as all CVP power is ultimately committed to meet the needs of public entities, the propriety of the goal cannot save the scheme if its interim effects are violative of the statute. That may be the case here. Congress intended public entities, when- ever possible, to benefit from the sale of low cost federal power. An arrangement which enables a nonpreference en- tity to reap a benefit which Congress sought to bestow npon public entities, even temporarily, flies in the face of that intent. It is no answer for the Secretary to say that he is merely ‘‘banking’’ power with the utility, rather than selling it outright. A sale is no less a sale because the buyer is ob- liged, upon the seller’s demand, to resell an equivalent amount to the seller, The plain fact is that the power which is conveyed to PG&E does not sit idly in storage, awaiting withdrawal by the government. Instead it is resold by PG&E to its own customers at a substantial mark up. This is a sale, regardless of the verbiage employed to character- ize the arrangement. In United States v. City and County of San Francisco, 1940, 310 U.S. 16, 60 S.Ct. 749, 84 L.Ed. 1050 the Court considered a challenge to the sale by San Francisco to PG&E of power generated from the Hetch Hetchy project in Yosemite National Park. Section 6 of the Raker Act, 38 Stat. 242, which governed disposition of the power by San Francisco, prohibited the City ‘‘from ever selling or letting to any corporation or individual, except a municipality or municipal water district or irrigation district, the right to sell or sublet the water or the electric energy sold or given 19a to it’’ by the United States. San Francisco argued that al- though it conveyed power to PG&K, section 6 was not violated because the power was ‘‘consigned”’ and not sold, to the utility, which acted as ‘‘agent’’ for the City in trans- mitting and selling the power. The court concluded that San Francisco’s contractual relationship with PG&E con- travened the legislative intent behind the Raker Act re- gardless of the words used to describe it: Terminology of consignment of power, rather than of transfer by sale, and verbal description of the power Company as the City’s agent or consignee, are not sufficient to take the actions of the parties under the contract out of § 6. Congress, in effect trustee of public lands for all the people, has by this Act sought to pro- tect and control the disposition of a section of the pub- lic domain. The City has in fact followed a course of conduct which Congress, by §6, has forbidden. Mere words and ingenuity of contractual expression, what- ever their effect between the parties, cannot by de- scription make permissible a course of conduct for- bidden by law. When we look behind the word descrip- tion of the arrangement between the City and the power Company to what was actually done, we see that the City has—contrary to the terms of § 6—abdicated its control over the sale and ultimate distribution of Hetch-Hetchy power. 310 U.S. at 28, 60 S.Ct. at 756. While the preference clause directs the Secretary to ex- tend a preference to public entities in the sale of power generated by federal reclamation projects, that mandate is qualified slightly by the following proviso: No contract relating to ... electric power or power privileges shall be made unless, in the judgment of the Secretary, it will not impair the efficiency of the proj- ect for irrigation purposes. 43 U.S.C. § 485h(c). 20a Thus the Secretary is prohibited from selling CVP power to a preference entity if, in his estimation, to do so would have the effect of cutting back on the power necessary to operate the project’s pumping facilities. Before the trial court, the Secretary sought to justify the sale of power to PG&E on the sole ground that the government’s right to repurchase power ‘‘banked’’ with the utility satistied the preference clause. The issue of the CVP’s efficiency for irrigation purposes, and the likely im- pact of the present marketing scheme, or of Santa Clara’s attack upon it, on that efficiency, were not addressed by eny of the parties in their moving papers upon which the trial court rendered its decision. In light of the paucity of information adduced on this key issue, we are loathe to hold the sale of power to PG&E at Santa Clara’s expense flatly invalid. It is conceivable that the Secretary’s decision to favor PG&E over Santa Clara in the marketing of CVP power could be justified as a measure designed to maximize the project’s efficiency for its primary purpose, which is irrigation. Because we think that the Secretary should be given an opportunity to defend the present marketing scheme on this basis, we con- clude that we should remand for further fact finding on the limited issue of the sale of power to PG&E and its propriety under the reclamation laws. PG&E and the Secretary argue that during at least part of the period beginning in 1972, when the Secretary was gradually reducing Santa Clara’s allotment, CVP did not have the energy necessary to supply Santa Clara, and Santa Clara was not willing or able to take such intermittent power as was being sold to PG&E. It is also claimed that some of the power sold by the Secretary to PG&E may not have been subject to the preference clause. The trial court did not decide these questions. They can be considered on remand, as can the issue of CVP’s efficiency for irrigation purposes if the Secretary chooses to raise it. 2la C. Congressional Approval. The federal defendants argue that Congress ratified the existing power allocation scheme when it appropriated moneys for the construction of an extra bigh voltage inter- tie between the Pacific Northwest and Pacific Southwest. To show ratification, the government must sustain the heavy burden of demonstrating congressional knowledge of the precise course of action alleged to have been ac- quiesced in. United Stutes v. Beebe, 1901, 180 U.S. 343, 354, 21 S.Ct. 371, 45 L.Ed. 563; United States v. Georgia-Pacific Co., 9 Cir., 1970, 421 F.2d 92, 102 n. 28. We fully agree with the district court’s determination that the record in this case ‘‘does not support a finding of congressional knowledge of the exclusion of post-1964 pref- erence customers from receiving nonwithdrawable CVP power sufficient to equate passage of the appropriations bills with ratification of the exclusion.’’ City of Santa Clara v. Kleppe, supra, 418 F.Supp. at 1256. Similar efforts to infer congressional approval of specific agency actions from the enactment of general appropriations measures proved unsuccessful in Arizona Power Pooling Ass’n v. Morton, supra, 527 F.2d at 725-26. See also, Associated Electric Co- operative Inc. v. Morton, 1974, 165 U.S.App.D.C. 344, 351- 52, 507 F.2d 1167, 1174-75, cert. denied, 1975, 423 U.S. 830, 96 S.Ct. 49, 46 L.Ed.2d 47. We think that those decisions are controlling here. IV. Rute MAKING AND THE ADMINISTRATIVE ProcepurE Act Santa Clara urges, and the district court found, that the procedures followed by the Secretary in arriving at his marketing decisions failed to comport with certain provi- sions contained in the APA. While we have concluded that the Secretary’s scheme for allocating CVP power among preference customers is substantially unreviewable, the adequacy of the procedures utilized in formulating the marketing scheme is a separable issue. East Oakland-Fruit- 22a vale Planning Council v. Rumsfeld, 9 Cir., 1972, 471 F.2d 524, 533-35. See also, Moore-McCormack Lines, Inc. v. United States, Ct.Cl., 1969, 413 F.2d 568, 581; Saferstein, ‘‘Nonreviewability: A Functional Analysis of ‘Committed to Agency Discretion,’ ’’ 82 Harv.L.Rev. 367, 372 (1968). The rule making section of the APA, 5 U.S.C. $553, requires federal agencies to notify the public, conduct hear- ings, and consider the input of interested parties, before promulgating new substantive rules. However, that section expressly exempts from the rule making requirement all matters ‘‘relating to . . . public property.’’ 5 U.S.C. § 553 (a)(2). Power generated by federal reclamation projects is certainly public property; hence the Secretary, in de- ciding how to allocate CVE output, is not bound to follow the procedures mandated by 5 U.S.C. § 553. Associated Electric Cooperative, Inc. v. Morton, supra, 165 U.S. App. D.C. at 354-55, 507 F.2d at 1177-78. Northern California Power Agency v. Morton, D.D.C., 1975, 396 F.Supp. 1187, 1191 n. 6, aff’d 1976, 176 U.S.App.D.C. 241, 539 F.2d 243, Santa Clara nonetheless argues, and the trial court held, that 5 U.S.C. § 552, the ‘Public Information”? section of the APA, requires the Secretary to promulgate rules to be followed in arriving at power marketing decisions. In per- tinent part, 5 U.S.C. § 552(a) (1) provides that each agency shall publish in the Federal Register : (B) statements of the general course and method by which its functions are channeled and determined ... (C) rules of procedure ... (D) substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretation of general applicability formulated and adopted by the agency .. . As amended in 1966, section 552 also provides that ‘‘[e]x- cept to the extent that a person has actual and timely notice 23a of the terms thereof, a person may not in any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal Register and not so published.’’ On its face, section 552 requires only the publication of existing rules and not the promulgation of new ones. The section requires agencies to make ‘‘available’’ procedures by which their functions ‘‘are channeled and determined,”’ aud the substantive rules and general policies which have been ‘‘adopted”’ or ‘‘formulated and adopted.’’ This inter- pretation is bolstered by the existence of an entirely sep- arate section, $553, headed ‘‘rule-making,’’ and by the legislative history of the APA itself. The legislative history suggests that in enacting § 552, Congress was concerned ex- clusively with the dearth of published descriptions concern- ing agency structure, function, and procedure. In 1941, the Senate Judiciary Committee held extensive hearings on the soon to be enacted APA. During those hear- ings, spokesmen for numerous agencies repeatedly voiced that fear that the publication provisions contained in the proposed law might be construed to require them to de- velop new rules and regulations. Dean Acheson, Chairman of the Committee appointed by President Roosevelt to make recommendations for improving administrative pro- cedure, addressed these fears in a formal statement to the Senate Judiciary Committee. Of the predecessor provision of section 552, Acheson said: . . . [I]n order that persons may know what the policies and interpretations of an agency are, we sug- gest in section 201(2) that all such policies and inter- pretations, and the procedures whether formal or in- formal, and the forms of an agency be made available. There has been some misunderstanding about the scope of this subsection (2). It is not intended to re- qui~e agencies to make up policies and interpretations of law, or procedures, out of whole cloth merely for 24a the sake of making them. Rather this section is in- tended to require agencies to make available to the public those policies and procedures which have become crystallized, which through experience have been for- mulated and adopted. Hearings before a subcommittee of the Senate Judiciary Committee on S. 674, 8. 675 and S. 918, 77th Cong., 1st Sess. 829 (1941), The House and Senate Reports on the APA likewise suggest that Congress, in enacting § 552, sought only to in- sure that those administrative rules which had ‘‘crystal- lized’? would be made available to the public: The public information requirements of section 3 are in many ways the most important, far-reaching, and useful provisions of the bill. For the information and protection of the public wherever located, these provi- sions require agencies to take the mystery out of ad- ministrative procedure by stating it. The section has been drawn upon the theory that administrative opera- tions and procedures are public property which the general public, rather than a few specialists or lobby- ists, is entitled to know or to have the ready means of knowing with definiteness and assurance. Senate Committee on the Judiciary, Administrative Procedure Act, S.Rep.No. 752, 79th Cong., Ist Sess, 198 (1945). See also House Committee on the Judiciary, Administrative Procedure Act, H.Rep.No. 1980, 79th Cong., 2d Sess, 255 (1946), Santa Clara cites Morton v. Ruiz, 1974, 415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270, for the proposition that § 552 requires not simply the publication of established rules but also the formulation of new ones, In that case the Bureau of Indian Affairs (BIA) refused to provide general assist- ance benefits to an Indian couple who had left their reserva- tion to settle in a nearby Indian community. In summarily denying the couple’s application for benefits, the BIA cited 25a a provision contained in its Indian Affairs Manual, an internal operations brochure, which restricted benefits to Indians remaining on the reservation. The Court held that this restriction was based on an impermissible construction of the act which established the assistance program and on this basis the Court held it invalid. The Court went on to announce in dicta that even if the restriction were consonant with congressional intent, sec- tion 552 required publication of the eligibility requirements for receiving benefits. The policy of restricting benefits to on-reservation Indians involved in Morton v. Rute had clearly ‘‘crystallized.’’ Indeed, it was enshrined in an in- ternal operations manual. Because the rule had already been formulated by the BIA and was routinely applied by the agency, section 552 required publication. Here, in contrast, it is not alleged that the Secretary has formulated any rules, substantive or procedural, for the allocation of CVP power. That being so, there is apparently nothing to publish, While some may deplore this state of affairs, the rule making section of the APA, § 553, manifests a clear legislative intent to permit ad hoc decision making in the distribution of public property. Senate Committee on the Judiciary, Administrative Procedure Act, S.Rep.No. 752, 79th Cong., 1st Sess. 199 (1945).* Duke City Lumber * With regard to the public property exemption to the rule making requirement, the Senate Report on the APA states: The exception of propriety matters is included because ss principal consideration in most such cases relate to mechanics a interpretations or policy, and it is deemed wise to encourage an facilitate the issuance of rules by dispensing with all mandatory procedural requirements. None of these exceptions, however, is to be taken as encouraging agencies not to adopt voluntary public rule making procedures where useful to the agency or beneficial to the public. The exceptions merely confer a complete discretion upon agencies to decide what, if any, public rule making pro- cedures they will adopt in a given situation. ... 8.Rep.No. 752, 79th Cong., 1st Sess., at 199 (1945). 26a Co. v. Bute, D.D.C., 1974, 382 F.Supp. 362, 373, aff’d, 176 U.S.App.D.C. 218, 539 F.2d 220, cert. denied, 1977, 429 U.S. 1039, 97 S.Ct. 737, 50 L.Ed.2d 751. We cannot read a rule making requirement into § 552, or interpret the section in such a way as to render meaningless the public property exemption contained in § 553. In Gonealez v. Freeman, 1964, 118 U.S.App.D.C. 180, 334 F.2d 570, and W. G. Cosby Transfer & Storage Corp. v. Froehlke, 4 Cir., 1973, 480 F.2d 498, 5 U.S.C. § 552 was interpreted to require agencies to promulgate rules and procedures which had not theretofore been “crystallized.” The actua) holding in each case was that the agency in- volved could not terminats a business relationship exist- ing between the agency and the plaintiff without afford- ing a due process type hearing. In each case there is language to the effect that $552 required the agency to formulate and adopt rules describing the grounds upon which the agency would act and the procedures that it would follow. But in neither case did the court do what the trial court did here, order the agency to formu- late and adopt such rules. To the extent that these cases can be said to stand for the proposition that § 552 re- quires an agency to formulate and adopt rules, we de- cline to follow them. The trial court’s decision in this case, insofar as it requires the Secretary to formulate and adopt rules governing his decisions in marketing power to preference customers, is in error. V. Dvr Process Santa Clara argues that it has a sufficient property in- terest in CVP power to entitle it to due process protec- tion. The trial court agreed, and further held that the federal defendants had failed to accord Santa Clara that process which was due. The court therefore ordered the federal defendants, inter alia, to (1) re-evaluate the 27a present power allocation scheme with an eye toward pos- sible revision; (2) announce the standards used in devis- ing the allocation scheme then proposed; (3) afford all interested parties an opportunity to comment on the proposed marketing plan; (4) hold a public hearing on the proposed marketing plan; and (5) announce the spe- cific findings relied on in devising the plan ultimately adopted. City of Santa Clara v. Kleppe, supra, 418 F. Supp. at 1261-62. PG&E argues that Santa Clara is not a “person” en- titled to due process protection under the Fifth Amend- ment. PG&E relies primarily on South Carolina v. Kat- zenbach, 1966, 383 U.S. 301, 323-24, 86 S.Ct. 803, 15 L.Ed. 2d 769, where the Court held that a state is not a “per- son” entitled to due process protection, reasoning that a municipality cannot be a “person” if its progenitor, the state, is not. We are by no means convinced that PG&E’s argument is correct. See Township of River Vale v. Town of Orangetown, 2 Cir., 1968, 403 F.2d 684, 686, holding that “a municipal corporation like any other cor- poration is a ‘person’ within the meaning of the [Consti- tution].” See also, Aguayo v. Richardson, 2 Cir., 1973, 473 F.2d 1090, 1100-01, cert. denied, 1974, 414 U.S. 1146, 94 S.Ct. 900, 39 L.Ed.2d 101. We need not decide the question. For the purpose of this case, we assume that Santa Clara is a “person.” PG&E and the federal defendants assert that Santa Clara has no protectible “property” interest in CVP power. The trial court based its holding that Santa Clara has such an interest on the City’s status as a preference customer under the reclamation laws. In so holding, the trial court was speaking of an interest of Santa Clara vis-a-vis other actual and potential preference customers. The court had already held that sales of CVP power to PG&E under the contract between it and the Secretary did not violate the preference clause. Thus the court had —- aes > ~~ + — —-- - ™ “42 ee Dr, ee a a ee 28a no occasion to decide whether Santa Clara had a “prop- erty” interest vis-a-vis PG&E. We first consider “property” interest as against other preference entities. While the test for identifying a prop- erty interest sufficient to merit invocation of the Due Process clause “is not clearly defined,” Pence v. Kleppe, 9 Cir., 1976, 529 F.2d 125, 141, the Supreme Court has stated that: To have a property interest in a benefit, a person clearly must have more than an abstract need or de- sire for it. He must have more than a unilateral ex- pectation of it. He must, instead, have a legitimate claim of entitlement to it. Board of Regents v. Roth, 1972, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed. 2d 548. See also, Geneva Towers Tenants Organization v. Fed- erated Mortgage Investors, 9 Cir., 1974, 504 F.2d 483 at 489, The exact perimeters of the “entitlement” concept are as yet unclear. See Note, “Statutory Entitlement and the Concept of Property,” 86 Yale L.J.No. 4, p. 695 (1977). After reviewing the Supreme Court’s recent decisions concerning statutorily created property interests, the au- thor of the note concluded that “a statute will create an entitlement to a governmental benefit either if the statute sets out conditions under which the benefit must be granted or if the statute sets out the only conditions under which the benefit may be denied.” 86 Yale L.J. at 696 (emphasis in original). Under this test, Santa Clara no “entitlement” to CVP power, as against other pre- ferred entities. We think that Roth itself is dispositive of this phase of the case. There the Court held that an un- tenured teacher had no property interest in being rehired because his employment contract gave his employer un- bridled discretion to refuse to renew after one year, The 29a employer did not have to justify its decision not to re- new the contract by showing “sufficient cause.” Thus Roth had only an “abstract concern in being rehired,” rather than a legitimate claim of entitlement. Roth v. Board of Regents, swpra, 408 U.S. at 578, 92 S.Ct. 2701. Having completed a year of teaching, Roth, like Santa Clara, could differentiate himself from others who sought the government benefit in question. However, Roth’s de- sire to be rehired, his eligibility for contract renewal, and his special status as a former employee, were all insufficient to clothe him with a “legitimate claim of en- titlement.” Because the Board of Regents could refuse to rehire Roth for any reason whatsoever, Roth’s interest did not rise to the level of an entitlement. Santa Clara’s situation vis-a-vis other preferred en- tities is comparable. While the City enjoys a statutory preference under the reclamation laws, the Secretary re- mains free to allocate the total power output of the CVP to other preference users. The Secretary need not justify his decision to discriminate against some preference en- tities in favor of others and, as we hold today his deci- sion to so discriminate is not judicially reviewable. Given the discretion which the reclamation laws vest in the Secretary in this respect, we cannot accept Santa Clara’s contention that it has any “entitlement” to power gen- erated by the CVP as against other preferred entities. The trial court’s holding that Santa Clara’s status as a preference entity supported a claim of entitlement as against other preferred entities is erroneous. The City has no “property” interest in CVP power as against other preferred entities and consequently no procedural safe- guards are constitutionally required in deciding between them. We next consider “property” interest as against non- preference entities such as PG&E. It is clear that Santa Clara does have such an interest. In essence, our deci- — +s -*s => [9 oe > oO ~~ 30a sion in Arizona Power Pooling Ass’n v. Morton, supra, so holds. To similar effect is Pence v. Kleppe, supra. There we held that Alaska natives, seeking allotments under the Alaska Native Allotment Act, had sufficient property interests to entitle them to due process, 529 F.2d at 140-42. What process is due? We have held in part III B, supra, that it is a violation of the preference clause for the Secretary to sell CVP power to PG&E to the extent that he is refusing to sell it to an eligible preference entity that has offered to buy it and is ready, willing and able to receive it. There is but one justification possible for a refusal to sell to such a preference entity while selling to a non-preference entity: that, in the judgment of the Secretary, to sell to the preference entity will ‘‘im- pair the efficiency of the project for irrigation purposes,” 43 U.S.C. § 485h(c). It is not disputed that Santa Clara is a preferred en- tity that has asked for the power. The Secretary and PG&E claim that Santa Clara was not willing or able to receive what the Secretary could sell to it, and that dur- ing certain times the Secretary did not have power avail- able to sell to Santa Clara. The Secretary may also claim that selling to Santa Clara would or will impair the effi- ciency of the project for irrigation purposes. All of these claims can be considered and decided by the trial court. We see no need to remand this case to the Secretary for a due process type hearing. VI. PG&E’s CounTEeRcLAmM In 1971, the Secretary began withdrawing power from Santa Clara, gradually cutting back on the City’s 1970 allotment of 120,000 kilowatts. Pursuant to a contract be- tween PG&E and Santa Clara, executed in 1969, PG&E is obligated to supply Santa Clara’s power requirements 3la to the extent that they are not met by the Secretary. Taking the position that the Secretary’s attempted with- drawals were illegal and therefore ineffective, Santa Clara refused after 1971 to pay PG&E for any of the power purportedly supplied by it. Because, as we have seen, PG&E transmits CVP power over its own lines pur- suant to government contract, so that it is not possible to differentiate CVP power from PG&E power except by reference to written records, Santa Clara took the posi- tion that the power purportedly furnished by PG&E was actually CVP power coming in over PG&E's transmission lines. Since 1971, the money claimed by PG&E has been paid into an escrow account which as of March 1, 1977, contained nearly $30,000,000. PG&E and the Secretary both argue that regardless of the result in this case, PG&E is entitled to all of the money in the escrow. As we have seen, the trial court has, as an interim measure, awarded one-fourth of the money in the escrow to PG&E. (note 3, supra) If, as we surmise, the government cannot justify the marketing of power to PG&E while denying it to Santa Clara as a measure designed to safeguard the CVP’s efficiency for irrigation purposes, then the past sales to PG&E of so much power as Santa Clara sought and was refused exceeded the Secretary’s statutory authority un- der the reclamation laws. These past sales are void if un- lawful, for administrative actions taken in violation of statutory authorization or requirement are of no effect. Utah Power & Light Co. v. United States, 1917, 243 U.S. 389, 410, 37 S.Ct. 387, 61 L.Ed. 791; Federal Crop Insur- ance Corp. v. Merrill, 1947, 332 U.S. 380, 384, 68 S.Ct. i 92 L.Ed. 10; Federal Maritime Commission v. Anglo- Canadian Shipping Co., 9 Cir., 1964, 385 F.2d 255, 258. The trial court decided that PG&E’s right to the dis- puted funds hinges on the lawfulness of the Secretary’s decision to sell power to PG&E while refusing to allocate 32a as much power to Santa Clara as that City requested. Consequently, the court concluded, the fate of the escrow account must await action by the district court on re- mand, PG&E and the Secretary vigorov ly attack this ruling. Their position, as stated by couns.! for PG&E, is that power cannot be retroactively allocated to Santa Clara because “[a]t all times pertinent to this case all commer- cially available CVP power was sold to someone... . Ac- cordingly, any retroactive reallocation of CVP power would necessarily entail either a whole or partial recis- sion of some or even all of the sales transactions between the United States and its CVP customers from August 1971 to the present.” Opening Brief of PG&E at 17. We think, however, that a reallocation of power to Santa Clara, retroactive to 1971 when the withdrawals began, can be accomplished without affecting past sales to other CVP customers. This is so because the Secretary has, over the years, and pursuant to his contract with PG&E, built up a sizeable “bank account” with PG&E. Presum- ably, that bank account is now available to retroactively satisfy the City’s power needs. Should the district court conclude on remand that the marketing of power to PG&E cannot be justified by ref- erence to the reclamation laws, the government’s “bank account” can simply be adjusted downward to reflect past sales to Santa Clara of so much power as the City sought unsuccessfully in the years after 1971. Such a re- adjustment of the bank account need affect neither past sales of power to other CVP users nor prior trnsactions between PG&E and its customers, aside from Santa Clara. Without intending to bind the trial court to our sug- gestions, it seems to us that the consequences would be substantially as follows: First, PG&E would be entitled to draw from the es- crow the full amount (less, of course, what is has already 33a received) that Santa Clara would have paid to the Secre- tary for the power that it is “receiving” retroactively. PG&E has paid the Secretary for that power, thereby discharging what should have been Santa Clara’s duty. In addition, because it is Santa Clara that withheld the money, PG&E should receive interest at a reasonable rate on the moneys paid to it from the dates when those moneys should have been paid. (See 28 U.S.C. $1961). The remaining money in the escrow would go to Santa Clara. Second, the power reallocated to Santa Clara should be treated as drawn from the Secretary’s “bank account” with PG&E, thereby diminishing the amount of the power that the Secretary is entitled, under the PG&E contract, to repurchase. Third, because PG&E will have received for the power sold by it to Santa Clara only the price that Santa Clara would have paid to the Secretary if he had allocated that power to Santa Clara, but that power is being treated as drawn by the Secretary from the “bank account,” it would appear that PG&E will have a claim against the Secre- tary. Presumably, that claim would be for the contract price applicable under the Secretary’s contract with PG&E at the times as of which reallocation is made, less the price PG&E will have received from Santa Clara, plus reasonable interest for late payment. (See 28 U.S.C. § 2411(b) and § 2516.) However, PG&E has counterclaimed only against Santa Clara. It has not filed any claim for relief against the Secretary. We express no opinion as to whether such a claim against the Secretary can be filed or considered by the trial court, see 28 U.S.C. §1346(a)(2), Lowell O. West Lumber Sales v. United States, 9 Cir., 1959, 270 F.2d 12, 19-20, or in the Court of Claims, see 28 U.S.C. § 1491. 34a We base our assumptions as to interest upon a further assumption that PG&E is an innocent third party, caught between the conflicting claims of Santa Clara and the position of the Secretary. These suggestions are in line with the ancient and favorite maximum of equity, that equity regards that as done which ought to be done. It is readily applicable here, because all parties to the contracts that are involved, PG&E, the Secretary, and Santa Clara, are before the court, and because what we suggest does not invalidate or violate either contract. The contract between PG&E and the Secretary expressly provides that the Secretary is to supply all of his preferred customers before selling to PG&E. It also expressly provides for the so-called banking arrangement. The contract between PG&E and Santa Clara requires sale by PG&E and purchase by Santa Clara of only that amount of power that exceeds the amount sold by the Secretary to Santa Clara. The foregoing suggestions are just that; they are not directions because we recognize that the questions giving rise to them have not been fully considered up to now, and all parties should have an opportunity to present their views about them to the trial court. That court is to arrive at its own decision, taking into account, but not being bound by, our suggestions. VIL. Sovereign IMMUNITY On October 21, 1976, Congress enacted Public Law 94 574, amending 5 U.S.C. § 702, to remove the defense of sovereign immunity in an action seeking relief other than money damages and stating a claim that an agency or officer or employee thereof acted or failed to act in an official capacity or under color of legal authority. In Hill v. United States, 9 Cir., 1978, 571 F.2d 1098 at 1102 (Slip op., page 45 at 49) we held that this amendment is ap- 35a plicable to a pending action. This statute would have the effect of removing the defense of sovereign immunity, if it were otherwise available in this case. However, it is not necessary to rely on that statute here. It has long been established that sovereign immunity poses no bar to a suit against a federal officer who is alleged to have acted unconstitutionally or in excess of his statutory authority. Larson v. Domestic & Foreign Commerce Corp., 1949, 337 U.S. 682, 689, 69 S.Ct. 1457, 93 L.Ed. 1628; Starbuck v. City and County of San Francisco, 9 Cir., 1977, 556 F.2d 450, 457 n.14; Washing- ton v. Udall, 9 Cir., 1969, 417 F.2d 1310, 1314. PG&E and the federal defendants concede that Santa Clara’s various claims fall squarely within these excep- tions to the general rule that an action cannot be main- tained against the sovereign, absent consent. However, they cite Larson v. Domestic & Foreign Commerce Corp., supra, for the proposition that . & suit may fail, as one against the sovereign, even if it is claimed that the officer being sued has acted unconstitutionally or beyond his statutory pow- ers, if the relief requested cannot be granted by merely ordering the cessation of the conduct com- plained of but will require affirmative action by the sovereign or disposition of unquestionably sovereign property. 337 U.S. at 691, n. 11, 69 S.Ct. at 1462. This court has never interpreted Larson as an absolute bar to every action against the sovereign in which affirm- ative relief or the recovery of government property is sought. Washington v. Udall, supra, 417 F.2d at 1317-18. We have construed the case more narrowly to mean “not that a suit must fail but only that it may fail if the relief sought would work an intolerable burden on the govern- ~~ wWwoee wx“ ee eee Le eee 36a ment which outweighs any considerations of private harm.” De Lao v. Califano, 9 Cir., 1977, 560 F.2d 1384 at 1391. The retroactive power allocation which Santa Clara seeks would not, we think, work an intolerable burden on governmental functioning. As noted above, the relief re- quested by the City can be granted by simply adjusting the government’s bank account with PG&E. Such an ad- justment would not affect prior transactions between the government and its other CVP customers. It would merely hasten depletion of the bank account and so would accel- erate the date upon which customer demand for CVP power will exceed the available supply. Inasmuch as all of the banked power is ultimately committed to prefer- ence users, depletion of the account with PG&E is, in any event, inevitable. We do not think that the govern- ment will bear an intolerable burden if it is forced to repurchase banked power at an earlier date than was initially anticipated. Balancing the economic injury which Santa Clara has suffered by virtue of its partial exclu- sion from the CVP against the minimal inconvenience which the government will experience if the Secretary is forced to alter slightly his long-range marketing plan, we conclude that this action is not barred on grounds of sovereign immunity. \ ITI. Tae Nationa, EnvrronMENTAL Pouicy Act Santa Clara argued below and reiterates here that the Secretary violated NEPA, 42 U.S.C. § 4321 et seq., by failing to file an environmental impact statement before denying the City’s requests for firm power and initiating power withdrawals. NEPA, which requires agencies to file environmental impact statements whenever “major Federal actions” are contemplated, defines those actions as ones “significantly affecting the quality of the human 37a environment.” 42 U.S.C. §4332(2)(C). The trial court concluded that the Secretary’s marketing decisions were not major Federal actions of this kind and because no factual dispute was presented with respect to that key issue, granted the federal defendants’ motion for sum- mary judgment. Seeking to bring the Secretary’s allocation decisions within NEPA’s definition of major Federal action, Santa Clara alleges that the government’s refusal to sell it firm power will (1) force the City to construct its own gen- erating facilities, and (2) cause industries to relocate to communities where electricity is available at lower cost. These effects, the City claims, will have a significant deleterious impact on the environment. Because the amount of low cost CVP power is finite, demand will likely outstrip supply in the future as it has in the past. Regardless of whether it is Santa Clara or some other preference entity that is forced to look to private sources for the supply of electric power, the en- vironmental consequences will be similar. If the demand for power exceeds the available supply, then new gen- erating facilities must be constructed somewhere, if not in Santa Clara. Even accepting as true Santa Clara’s rather fanciful hypotheses concerning the likely impact of the Secre- tary’s decisions on its small piece of the environment, we think it highly improbable that one allocation scheme will have a more deleterious impact than any other when the total geographic area served by the CVP is considered. As the court stated in Hamly v. Kleindienst, 2 Cir., 1972, 471 F.2d 823, 830, cert. denied, 1973, 412 U.S. 908, 93 S.Ct. 2290, 36 L.Ed.2d 974, an agency must consider “in deciding whether a major federal action will ‘signifi- cantly’ affect the quality of the human environment... the absolute quantitative adverse environmental effects of the action itself.” No such absolute effects are threat- 38a ened by the Secretary’s decision to allocate CVP power in one way rather than another. ConcLusION The summary judgment against Santa Clara on its claim under the National Environmental Policy Act is affirmed. The judgment dismissing the action is reversed. The decision that the Secretary’s actions in deciding the terms on which he will sell power to one preference customer as compared to others are reviewable is re- versed. The decision that the Secretary’s sale of power to PG&E does not violate the preference clause is vacated. The decision that the Secretary is required to formulate and adopt rules governing the sale of CVP power is re- versed. The remand of the action to the Secretary for that purpose is reversed. In all other respects, the decision of the trial court is affirmed. The case is remanded to the trial court for further pro- ceedings consistent with parts III B, V, and VI of this opinion. 39a UNITED STATES DISTRICT COURT, N. D. CALIFORNIA. City or Santa Ciara, Cauirornia, Plaintiff, Vv. Thomas Kuepre, Individually and as Secretary of the In- terior, and Gilbert Stamm, Individually and as Com- missioner of the Bureau of Reclamation, United States Department of the Interior, Defendants, Pacific Gas & Electric Co., Intervenor-Defendant. No. C-75-1574. July 23, 1976. DEcIsION Conti, District Judge. This case brings for judicial resolution a controversy over low cost federal hydroelectric power emanating from the Bureau of Reclamation’s California Central Valley Project (CVP). The principal parties are the California City of Santa Clara on one side and the U.S. Department of the Interior and its Bureau of Reclamation on the other. Pacific Gas & Electric, a private utility company, has in- tervened as party defendant. Simply stated, Santa Clara wants more low cost federal power than the federal de- fendants have allocated to it, and suggests that the Bu- reau’s allocation scheme is legally defective. The Bureau responds that how it allocates the CVP power under its control is unreviewably discretionary, but, for that matter, the allocation scheme was fairly formulated and is ration- ally based. PG&E, long an integral part of the Bureau’s power allocation plan, and the source to which Santa Clara would most likely have to look for satisfaction of its power needs if the court upholds the Bureau’s scheme, supports 40a the Bureau’s position. Santa Clara would prefer to pur- chase CVP power at $.005 per kilowatt-hour rather than PG&E power at $.019 per kilowatt-hour.' I. Project Authority and Background. CVP is a multipurpose project consisiing of numerous dams, hydroelectric power generation and transmission facilities and irrigation canals, located in the Central Val- ley of California and the surrounding mountains.’ Al- though the production of hydro-generated power is not the primary purpose of the Project, the amount of elec- tricity generated is substantial and serves a large number of customers in northern and central California.’ The Central Valley Project Authorization Act, 50 Stat. 850, provides in part: Sec. 2... . The entire Central Valley proje [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1317%3A1. Public record. Not legal advice.