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

RIDED

Ee Ss AUG .3 1988

Nos. 87-1835 and 87-1836

JOSEPH F. SPANIOL, IRs

In the Supreme Court of the United States

OCTOBER TERM, 1988

CALIFORNIA ENERGY RESOURCES CONSERVATION AND

DEVELOPMENT COMMISSION, PETITIONER

\

\ V.

BONNEVILLE POWER ADMINISTRATION, ET AL.

CALIFORNIA PUBLIC UTILITIES COMMISSION, PETITIONER

v.

BONNEVILLE POWER ADMINISTRATION, ET AL.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

CHARLES FRIED

Solicitor General

JOHN R. BOLTON

Assistant Attorney General

DENNIS G. LINDER

WM. ROBERT IRVIN

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

HARVARD P. SPIGAL

General Counsel

Bonneville Power Administration

Portland, Oregon 97208

QUESTIONS PRESENTED

1. Whether the Near Term Intertie’- Access Policy

(NTIAP) adopted by the Bonneville Power Administra-

tion (BPA), which does not impose any charges for BPA

power or for transmission of nonfederal power, is never-

theless a “rate[ ] or rate schedule[ }” within the meaning of

16 U.S.C. 839e(k).

2. Whether the NTIAP’s distinctions between North-

west utilities and extraregional utilities comply with BPA’s

statutory obligations to “ma[k]e available” excess capacity

on the Pacific Northwest-Pacific Southwest Intertie “as a

carrier for transmission of other electric energy” (16

U.S.C. 837e), and to “make available to all utilities on a

fair and nondiscriminatory basis, any capacity in the

Federal transmission system which [the Administrator of

BPA] determines to be in excess of the capacity required to

transmit electric power generated or acquired by the

United States” (16 U.S.C. 838d).

3. Whether the NTIAP is invalid on the ground that it

does not promote competition to the maximum extent

possible.

(1)

TABLE ()F CONTENTS

Page

ee LG Le Seek e yas ees eGb Aen l

a aw alee Make wale a l

i era aha. Lads ba kde ad One cd eee Be aaes 8 2

OE EEE NE 2 ee ee ere 10

ee eR NG i gala ab wile prgia nk sw ae Raw n 24

TABLE OF AUTHORITIES

Cases:

Aluminum Co. of America v. Central Lincoln Peoples’

ee SD asc ee esesesceens 13

ep oR as | 14

Champaign-Urbana News v. J.L. Cummins, 632 F.2d 680

rs PU i ko asn Wawa d bree 48 90a 19

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984) ..... 13

Connecticut Dep’t of Income Maintenance v. Heckler,

a 13

EEOC v. Commercial Office Prods. Co., No. 86-1696

ek a in ae kG wie aie asa 13

Gulf States Utils. Co. v. FPC, 411 U.S. 747 (1973) ...... 20, 21

Jet Courier Serv. v. Federal Reserve Bank, 713 F.2d 1221

ns Ne ea a ean gen ale 19

K mart Corp. v. Cartier, Inc., No. 86-495 (May 31,

NEE SS I ae ee i3

Latin America/Pacific Coast Steamship Conf. v. Federal

Maritime Comm’n, 465 F.2d 542 (D.C. Cir.), cert.

CE 21, 22

Lukhard v. Reed, No. 85-1358 (Apr. 22, 1987) .......... 13

Maryland People’s Counsel v. FERC, 761 F.2d 780

gS Ee er 20

McLean Trucking Co. v. United States, 321 U.S. 67

a ai ee A ea een ee 23

NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974) ....... 14

Northern Natural Gas Co. v. FPC, 399 F.2d 953 (D.C.

ls oe aks a Ga hae 4 > cm ep 0 ae Ae se 19, 21, 22

IV

Cases — Continued: Page

Otter Tail Power Co. v. United States, 410 U.S. 366

Ss 6 bie a et Weel) cava baa e heehee ieee 21

Public Utilities Comm’n of California v. United States

Dep’t of Energy, 33 F.E.R.C. 4 61,235 (1985), reh’g

denied, 39 F.E.R.C. ¢ 61,088 (1987) ................ 6, 12

Sea-Land Serv., Inc. v. Alaska R.R., 659 F.2d 243 (D.C.

Cir. 1981), cert. denied, 455 U.S. 919 (1982) .......... 19

Seatrain Lines, Inc. v. Federal Maritime Comm’n, 460

Pe es ooo ia5 ska ioddescsras ers 22

Udall vy. Taipei, FOO U.S. 1 (USES) ..2 0 cc cccssccacess 16

U.S. Department of Energy, Bonneville Power Adminis-

tration, 29 F.E.R.C. { 63,039 (1984) ................ 18

United States v. City of Fulton, 475 U.S. 657 (1986) ..... i3

United States v. Riverside Bayview Homes, Inc., 474

SEG csc kS4 PENS Cob adeesedhehasashass 13

United States v. Terminal R.R. Ass’n, 224 U.S. 383

CO C5656 ioe dou aba ake hase ee eeeNesrine tas 23

Wisniewski v. United States, 353 U.S. 901 (1957) ........ 11

Statutes:

Bonneville Project Act of 1937, 16 U.S.C. 832-832/...... 2

a Oe dd ales eee a eee es 17

Ee oe a eesti atanaans 3

Federal Columbia River Transmission System Act,

Oe ee I sven cud seenssccecenh ede dkiane 2

a kc nena oe kewtte ieee nn wake wae 14

ras id nes 000d bsapeen as 606% 8, 12, 17, 19

See cs ac cdcxsne as eesaenesanneees 3

Federal Power Act, 16 U.S.C. 79la ef seq. ............. 21

ein we ee hans dene ee 20

Pacific Northwest Electric Power Planning and Con-

servation Act, 16 U.S.C. $39-G9OR ... ccc cee cnnes 2

® | 2s te: rr ree 3

SF ED wad acnoccwaccdcdiasccngns 11

Se, Be Beas ED occ ccc cwevesencass 8, 10

on evokes snewdwewane 8

2 Se 20

Pacific Northwest-Pacific Southwest Regional Preference

Act, 16 U.S.C. (& Supp. IV) 837-837h ............... 2

Bs EE ai nk n an avewerebeeaktsceaneess 2

Statutes — Continued: Page

ee ok a ha eile sn wide Aad ee ee 19

ee a as ao ano heck ace he eee 19

a ee ah a a aw Algae 8, 12, 14, 19

es aaa Saag wai bbad oaks Lae eo OeRS 15

Shipping Act, 1916, 46 U.S.C. 801 ef seg. .............. 22

PUA: Bis Ss Is SG So keen cay taav ear enan 14

Miscellaneous:

132 Cong. Rec. S 15388 (daily ed. Oct. 6, 1986) ......... 14

et Se nee ee 5

Fe sD Reel boda ko xvas deavkadsecees 6

H.R. Conf. Rep. 1794, 88th Cong., 2d Sess. (1964) ...... 16

H.R. Conf. Rep. 1822, 88th Cong., 2d Sess. (1964) ...... 16, 17

H.R. Rep. 590, 88th Cong., Ist Sess. (1963) ............ 3 37

H.R. Rep. 93-1375, 93d Cong., 2d Sess. (1974) ......... 17

S. Rep. 1326, 88th Cong., 2d Sess. (1964) .............. 16

S. Rep. 93-1030, 93d Cong., 2d Sess. (1974) ............ 18

U.S. Dep’t of the Interior, Report to the Appropriations

Committees of the Congress of the United States

Recommending a Plan of Construction and Ownership

of EHV Electric Interties Between the Pacific North-

17

west and Pacific Southwest (Comm. Print 1964) ...... 15,

In the Supreme Court of the Gnited States

OCTOBER TERM, 1988

No. 87-1835

CALIFORNIA ENERGY RESOURCES CONSERVATION AND

DEVELOPMENT COMMISSION, PETITIONER

v.

BONNEVILLE POWER ADMINISTRATION, ET AL.

No. 87-1836

CALIFORNIA PUBLIC UTILITIES COMMISSION, PETITIONER

Vv.

BONNEVILLE POWER ADMINISTRATION, ET AL.

ON PETITIONS FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. Al-A27)

is reported at 831 F.2d 1467.

JURISDICTION

The judgment of the court of appeals was entered on

November 6, 1987. A petition for rehearing was denied on

February 4, 1988 (Pet. App. C1l-C2). The petitions for a

writ of certiorari were filed on May 4, 1988. The jurisdic-

tion of this Court is invoked under 28 U.S.C. 1254(1).

(1)

a

2

STATEMENT

1. The Bonneville Power Administration. (BPA) is an

independent, self-financed power marketing agency within

the United States Department of Energy. BPA’s opera-

tions are governed by the Pacific Northwest Electric

Power Planning and Conservation Act (Northwest Power

Act), 16 U.S.C. 839-839h; the Bonneville Project Act of

1937, 16 U.S.C. 832-832/; the Pacific Northwest-Pacific

Southwest Regional Preference Act (Regional Preference

Act), 16 U.S.C. (& Supp. IV) 837-837h; and the Federal

Columbia River Transmission System Act (Transmission

System Act), 16 U.S.C. 838-838k.

In addition to marketing hydroelectric power generated

by 31 federal dams in the Pacific Northwest, BPA oper-

ates a system of electric power transmission lines within

the Pacific Northwest.! BPA transmits both federal and

nonfederal firm power (i.e., power that is assured to be

continuously available) and nonfirm power (i.e., power

that is available only when supply exceeds firm power

commitments) on its transmission lines. Nonfederal power

is transmitted over capacity not required for BPA’s own

use.

Among BPA’s transmission lines is a large portion of

the Pacific Northwest-Pacific Southwest Intertie, a con-

gressionally authorized system of transmission lines that

allows the Pacific Northwest and Pacific Southwest to ex-

change power when one region has a surplus and the other

has heavy demand (16 U.S.C. 838-838k). BPA owns and

operates most of the Intertie lines north of the Oregon-

' The Pacific Northwest is defined by statute (16 U.S.C. 837(b)) as

(1) Oregon, Washington, Idaho, and Montana east of the continental

divide; (2) parts of Nevada, Utah, and Wyoming that are within the

Columbia River drainage basin; and (3) contiguous areas within 75

miles of the above.

3

California border, and California utilities own the lines

south of Oregon (Pet. App. A4). The lines were approved

by Congress primarily to improve BPA’s ability to meet its

obligation to repay the United States Treasury for loans

made to BPA in order to construct Northwest hydroelec-

tric facilities (id. at B18, E93-E94). BPA is currently

obligated to repay the Treasury on a timely basis more

than $8 billion of federal investments in the Federal Co-

lumbia River Power System. BPA has more than a con-

tractual obligation to repay those investments: Congress

has made repayment one of BPA’s statutory duties (see 16

U.S.C. 832f, 838g(3), 839e(a)(1)).

2. In 1969, very shortly after the Intertie became

operational, BPA entered into a contract with several

Northwest utilities known as the “Exportable Agreement”

(Pet. App. M1-M28). The Exportable Agreement takes ef-

fect under certain conditions in which Northwest utilities

have more power available to sell than the available Inter-

tie capacity. It allocates the capacity of the Intertie pro

rata among BPA and the Northwest utility signatories.

Others, such as Canadian utilities, are not allowed access

to the Intertie under the Exportable Agreement. No one

has ever before challenged the Exportable Agreement on

the ground that its pro rata allocation mechanism unlaw-

fully restricts competition among Northwest utilities or

that BPA has a statutory obligation to allow Canadian

sellers access to the Intertie.

For most of the life of the Intertie, BPA has allowed ac-

cess to the Intertie on a first-come, first-served basis when

the Exportable Agreement has not been in effect.

Although petitioner California Energy Resources Conser-

vation and Development Commission (CEC) maintains

that this generous access policy represented BPA’s view of

its statutory obligations (CEC Pet. 7), CEC cites nothing

iia ii i i

4

whatsoever to support that contention, and BPA has never

expressed the view that CEC attributes to it. To the con-

trary, BPA granted access on a first-come, first-served

basis not because it believed it had any statutory obliga-

tion to do so but because BPA’s ability to meet its

Treasury payment obligation had not yet been put in

jeopardy by various power supply and other factors. See

generally Pet. App. D7-D8, E4-E5, E88-E100.

Conditions had changed dramatically by the early

1980s. The Northwest suffered an economic recession in

the midst of sharply rising electric power rates, thus

decreasing the amount of energy that BPA (and others)

could sell in the Northwest. Combined with higher than

average water years and surplus generating resources,

these conditions created a large surplus of power in the

Northwest, and on BPA’s system in particular. The exist-

ence of a power surplus created competing demands for

BPA’s Intertie capacity among Northwest suppliers. In ad-

dition, BPA in particular experienced serious revenue

shortfalls when its direct service aluminum industrial

customers, the source of one-third of its power revenues,

initiated significant cutbacks in response to world alumi-

num prices. Some plants were shut down. Pet. App.

B9-B10.

In addition to the Northwest power surplus, other fac-

tors necessitated action by BPA. Unlike the northern por-

tion of the Intertie, which is predominantly under federal

control, the southern portion of the Intertie (within Cali-

fornia) is controlled almost exclusively by three huge Cali-

fornia utilities and the City of Los Angeles. These com-

panies comprise an entity called the California Power

Pool, which maintains tight control over access to the

southern portion of the Intertie through a complicated

contract called the Pacific Intertie Agreement. Through

5

that agreement, the utilities have prevented other utilities

in California and the Southwest from gaining access to the

Intertie and have agreed not to share excess Intertie

capacity among themselves. These practices limit competi-

tion for Northwest power and depress prices for North-

west suppliers. See Pacific Gas & Elec. Co., 26 F.E.R.C.

q{ 63,048 (1984); Pet. App. A18-A20, E51, E67-E69,

E73-E74, E76-E77, E82, H11-H13.

In light of all of these circumstances, BPA’s ability to

comply with its statutory obligation to repay the Treasury

for federal expenditures was in jeopardy. BPA thus de-

termined in the early 1980s that it had become necessary to

promulgate formal policies governing access to the Inter-

tie.

3. To allocate the limited transmission capacity of the

federal portion of the Intertie among utilities, BPA has

adopted Intertie access policies on three occasions. On

September 7, 1984, BPA promulgated an interim Near

Term Intertie Access Policy (NTIAP). See 49 Fed. Reg.

44232 (Pet. App. D1-D33). The Los Angeles Department

of Water and Power challenged that policy in the Ninth

Circuit, contending that its adoption was an abuse of dis-

cretion and beyond BPA’s statutory authority. In 1985,

the court of appeals rejected those contentions and upheld

the interim NTIAP. See Department of Water & Power of

the City of Los Angeles v. Bonneville Power Administra-

tion, 759 F.2d 684 (9th Cir. 1985) (LADWP) (Pet. App.

B1-B26).

Also in 1985, the California Public Utilities Commis-

sion (CPUC), along with several California investor-

owned utilities, filed a petition with the Federal Energy

Regulatory Commission (FERC), contending that BPA’s

adoption of the interim NTIAP was a rate action requiring

ratemaking proceedings and approval by FERC. Both ini-

ae

6

tially and in response to requests for rehearing, FERC held

that the NTIAP was not a rate, and it denied the petition.

See Public Utilities Comm’n of California v. United States

Dep’t of Energy, 33 F.E.R.C. 461,235 (1985), reh’g

denied, 39 F.E.R.C. ¢ 61,088 (1987).

On June 1, 1985, BPA adopted a revised NTIAP, which

was substantially identical to the interim NTIAP (see Pet.

App. A6). 50 Fed. Reg. 26827 (Pet. App. G1-G31). That

policy, along with the interim NTIAP, was challenged in

the Ninth Circuit by petitioners in this case. The court of

appeals upheld the revised NTIAP as well (id. at Al-A27).

On May 17, 1988, BPA finalized its Long-Term Intertie

Access Policy (LTIAP).? The final LTIAP has superseded

the interim and revised NTIAPs.?

3. The interim and revised NTIAPs are the subject of

these petitions. Under the NTIAP, firm transmission was

provided for firm power sales between Pacific Northwest

utilities and California purchasers. This was a new service

provided by BPA to nonfederal utilities. Assured service

for transmission of firm power generated by utilities out-

side the Pacific Northwest (extraregional utilities), in-

cluding Canadian utilities, was not available. Pet. App.

G10, G21.

2 We are lodging with the Clerk a copy of the LTIAP, with attached

Executive Summary [hereinafter LTIAP Executive Summary], and a

copy of the accompanying Administrator’s Decision [hereinafter

LTIAP Administrator’s Decision].

3 One aspect of the LTIAP has not yet taken effect. Section 5(d) of

the LTIAP provides for an 18-month experiment in which, under cer-

tain conditions, no specific utility other than BPA will be given a pro

rata allocation of the Intertie capacity, but rather Northwest utilities

(and, in certain circumstances, other utilities) will compete among

themselves to arrange transactions using the Intertie. That experiment

requires considerable advance planning (see LTIAP Administrator’s

Decision 66-69; LTIAP Executive Summary 7-9) and has not yet

begun.

7

The NTIAP established three different allocation

scenarios for the transmission of nonfirm power. Under

Condition | — generally when streamflows throughout the

Northwest are so high that water not used for hydro-

electric generation will spill over the dams and thus be

wasted —Intertie capacity was allocated according to the

terms of the Exportable Agreement, i.e., on a pro rata

basis among BPA and Northwest generating utilities for

transmission of surplus nonfirm energy to California. Pet.

App. G21. The allocation was made on the basis of daily

and hourly declarations of available surplus power that

Northwest utilities are willing to sell at BPA’s applicable

rate. This was because, under the Exportable Agreement,

the utilities generally sell their allocations to BPA, which

then markets it at the federal rate to California utilities as

federal surplus.

Condition 2 denominated the situation in which BPA

and Northwest utilities had enough surplus nonfirm

energy to fill BPA’s Intertie capacity, but only if higher

priced surplus was included in the declarations. Intertie ac-

cess was divided among BPA and Northwest utilities on a

pro rata basis. Each utility made its own sales arrange-

ments with California buyers. Under Condition 2, extra-

regional utilities had no access to the Intertie. Canadian

utilities could obtain access, however, if they agreed to

greater coordination of their hydrosystem with that of the

Pacific Northwest or agreed to provide other appropriate

consideration. Pet. App. G20, G21.

Under Condition 3, when BPA and Northwest utilities

did not have enough surplus nonfirm energy to fill Intertie .

capacity, the available Intertie capacity was allocated first

to meet their needs. Thereafter, extraregional utilities in-

cluding Canadian utilities had access to remaining Intertie

capacity (Pet. App. G21).

eee aa

8

4. Petitioners brought these suits, pursuant to 16

U.S.C. 839f(e)(5), in the United States Court of Appeals

for the Ninth Circuit. Petitioners contended that the

NTIAP constituted ratemaking and was thus subject to

FERC review and approval (Pet. App. A7). Petitioners

further contended that the NTIAP was not factually justi-

fied and was therefore arbitrary, capricious, and an abuse

of discretion (id. at Al3). Also, petitioners contended that

the NTIAP discriminated against extraregional utilities in

violation of 16 U.S.C. 837e and 838d (Pet. App. Al4). In

addition, petitioners contended that the NTIAP failed to

conform to the maximum extent possible to federal anti-

trust laws and policies (id. at Al5). Finally, petitioners

contended that the NTIAP discriminated against new

generating sources in violation of 16 U.S.C. 837e and

839f(d) (Pet. App. A20). |

5. The court of appeals rejected each of petitioners’

claims. The court of appeals held that the NTIAP did not

constitute ratemaking because it did not establish or

change the charges assessed by BPA for sales of its power

or transmission services (Pet. App. A10-Al11). As the

court of appeals recognized, the NTIAP “at most” af-

fected nonfederal power prices, and FERC review is re-

quired only for BPA’s rates for federal power sales and

transmission of nonfederal power (ibid.).

With regard to petitioners’ claim that the NTIAP was

not factually justified, the court of appeals recalled its pre-

vious holding in LADWP that the interim NTIAP was de-

signed by BPA to mitigate projected revenue shortfalls

and allow it to meet its Treasury payments and, thus,

“ ‘the policy is not only statutorily authorized but statu-

torily mandated’ ” (Pet. App. Al4 (quoting id. at B20)).

Noting that petitioners had conceded that the interim

NTIAP was identical to the revised NTIAP and had

i

9

pointed to nothing in the record of the revised NTIAP that

would require reexamination of the justification identified

in LADWP, the court of appeals held that it was bound by

its earlier determination in LADWP that the interim

NTIAP was factually justified (id. at Al4). E

Similarly, the court of appeals held that its previous -

determination in LADWP that “ ‘BPA is required to allo-

cate use of federally-owned transmission facilities in a

manner which accords preference first to transmission of

federal power and then to transmission of other North-

west-generated power’ ” foreclosed petitioners’ claim that

the NTIAP unlawfully discriminated against extraregional

utilities (Pet. App. Al4-A15 (quoting id. at B25)).

In rejecting petitioner’s antitrust claims, the court of ap-

peals held that, though BPA is exempt from the antitrust

laws, it is obligated “to consider the interests of preserving

competition” (Pet. App. A15-A16). The court stated,

however, that this obligation does not override BPA’s

statutory obligation to be fiscally self-supporting (id. at

A16). Further, the court noted that petitioners’ proposal

for allocation of Intertie capacity under Conditions 1 and

2 was not raised in the administrative proceedings leading

to the NTIAP, and therefore BPA had not had an oppor-

tunity to consider petitioners’ alternative (id. at Al17).* The

court observed, however, that BPA had evaluated two

other alternatives closely related to petitioners’ alternative

(id. at A17-A18). Reviewing the administrative record, the

court of appeals held that BPA had reasonably balanced

antitrust concerns with its other statutory obligations (id.

at A!7-A20).°5

+ Petitioners’ proposal is being tested in the LTIAP. See note 6, in-

Sra.

5 Finally, the court of appeals rejected petitioners’ claim that the

NTIAP unlawfully discriminated against new generating sources,

Ce

10

ARGUMENT )

1. We discuss below the reasons why petitioners’ hy

challenges to the decision of the court of appeals are

without merit. We note first, however, that there are

reasons apart from the merits why this Court should not

review that decision.

First, there is a conceded “absence of a conflict in the

circuits” (CEC Pet. 18). Although the exclusive jurisdic-

tion granted to the Ninth Circuit by 16 U.S.C. 839f(e)(5)

makes this an area of the law in which such conflicts in-

herently do not develop, that does not by itself make the

absence of any such conflict “irrelevant” (ibid.). Rather, it

means that petitioners must shoulder the burden of show-

ing some other reason why this case is so important, and

the decision below of such dubious correctness, that

review by this Court is warranted. We submit that they

have not met that burden.

Second, the access policies that petitioners challenge

were superseded by the LTIAP on May 17, 1988, and any

challenge to those policies is, in most respects, now moot.°®

holding that in this respect BPA had reasonably acted to fulfill its

statutory obligation to protect fish and wildlife in the Columbia River

basin (Pet. App. A21-A23). The court of appeals also noted that the

exclusion was only temporary, as BPA would be considering the issue

anew in developing the LTIAP (id. at A25). Petitioners have not asked

this Court to review this issue.

6 The NTIAP’s pro rata allocation under Conditions 2 and 3 re-

mains temporarily in effect while BPA and affected utilities work out

the details of implementation of Section 5(d) of the LTIAP, which (as

an experiment) will accept petitioners’ proposal to let market forces

rather than pro rata allocations determine nonfederal Northwest (and, . ‘\

under Condition 3, Canadian) utilities’ access to the Intertie. See

generally LTIAP Administrator’s Decision 48-71. Thus, although Ay

petitioners’ challenge to the NTIAP is not yet moot in this respect, it

soon will be, and a grant of certiorari to review an aspect of the

11

Although the LTIAP does retain some of the features that

petitioners find objectionable, the proper course is for

them to raise whatever objections they still have in a new

proceeding in the Ninth Circuit, not to seek an advisory

opinion from this Court on the validity of a now-

superseded policy as a means to attack the policy that is

now in effect.’

For these prudential reasons, the Court should deny cer-

tiorari. As we now show, the decision below also is cor-

rect.

2. a. Petitioner CPUC, but not petitioner CEC,

argues that the NTIAP is a “rate[ ] or rate schedule[ ]”

within the meaning of 16 U.S.C. 839e(k) and that BPA

therefore could not implement it without first obtaining

approval from FERC (CPUC Pet. 8-11). CPUC argues

that the amount of money that California ratepayers ex-

pend for energy will be affected by the NTIAP and infers

from that argument that FERC approval is required.

Noticeably lacking from CPUC’s discussion, however, is

any statutory language, legislative history, or relevant case

law to support CPUC’s contention. ®

NTIAP that has been very significantly altered in the LTIAP would be

most inappropriate. Additionally, the LTIAP maintains the distinc-

tion between Northwest utilities and extraregional utilities, although it

will treat Canadian utilities equally with U.S. extraregional utilities if

the United States-Canadian Free Trade Agreement is ratified by both

countries.

7 On July 19, 1988, CEC in fact filed a petition for review of the

LTIAP in the Ninth Circuit.

® CPUC cites several Ninth Circuit cases, but the court below had

no difficulty distinguishing those same cases (Pet. App. A7-A13). In

any event, if there were an intracircuit conflict between the cases that

CPUC cites and the decision below, it would be one for the Ninth Cir-

cuit, not this Court, to resolve. Wisniewski v. United States, 353 U.S.

901, 902 (1957).

12

CPUC’s claim that the NTIAP constituted ratemaking

has had multiple reviews, twice by FERC, the administra-

tive body charged with review of BPA’s ratemaking ac-

tions, and once by the court of appeals (Pet. App.

A7-A13; Public Utilities Comm’n of California v. United

States Dep’t of Energy, 33 F.E.R.C. ¢ 61,235 (1985), reh’g

denied, 39 F.E.R.C. 4 61,088 (1987)). On all occasions,

the conclusion was that the adoption of the NTIAP did

not constitute ratemaking. As the court of appeals

recognized, the adoption of the NTIAP did not impose

any charges for power, define any formula for computing

charges, or authorize BPA to alter its own charges for

power and, consequently, was not ratemaking (Pet. App.

A10-A13). Similarly, FERC concluded that “[o]ther BPA

actions, although they may arguably have an impact on

the revenues that BPA receives from sales of power and

energy, are beyond the scope of the Commission’s authori-

ty over BPA” (33 F.E.R.C. at 61,489). CPUC’s claim here,

that neither the court of appeals nor FERC itself

understood the scope of FERC’s jurisdiction, is without

basis.

b. Both petitioners contend that BPA has a statutory

obligation to grant Canadian generating utilities access to

the Intertie on the same terms as Northwest utilities; and

that BPA has a statutory obligation to require generating

utilities that wish to make sales to California to compete

for Intertie access, so that BPA may not instead make pro

rata allocations of Intertie capacity to such utilities under

any conditions (CPUC Pet. 11-13; CEC Pet. 18-23). The

statutory provisions alleged to create those immutable

duties are 16 U.S.C. 837e, enacted in 1964, which requires

BPA to “ma[k]Je available” excess Intertie capacity “as a

carrier for transmission of other electric energy,” and 16

U.S.C. 838d, enacted in 1974, which requires BPA to

a A Ll Bao ae

13

“make available to all utilities on a fair and nondiscrimina-

tory basis, any capacity in the federal transmission system

which [the Administrator of BPA] determines to be in ex-

cess of the capacity required to transmit electric power

generated or acquired by the United States.”

Petitioners’ reading of these statutes should prevail, of

course, only if BPA’s contrary view is an unreasonable

one; to the extent that a statute can reasonably be con-

strued in more than one way this Court’s consistent prac-

tice is to defer to the interpretation adopted by the agency

charged with administering the statute. See, e.g., Alumi-

num Co. of America v. Central Lincoln Peoples’ Utils.

Dist., 467 U.S. 380, 389-390 (1984) (deference to inter-

pretation of Northwest Power Act by Administrator of

BPA); Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 865

(1984) (deference to administrative interpretation because

multiple public and private interests were involved in de-

veloping the proposed legislation but were not addressed

in detail by the legislation); K mart Corp. v. Cartier, Inc.,

No. 86-495 (May 31, 1988), slip op. 8; EEOC v. Commer-

cial Office Prods. Co., No. 86-1696 (May 16, 1988), slip:

op. 7; Lukhard v. Reed, No. 85-1358 (Apr. 22, 1987), slip

op. | (Blackmun, J., concurring in the judgment) (“In a

statutory area as complicated as this one, the administra-

tive authorities are far more able than this Court to deter-

mine congressional intent in the light of experience in the

field.”); United States v. City of Fulton, 475 U.S. 657, 667

(1986); United States v. Riverside Bayview Homes, Inc.,

474 U.S. 121, 131 (1985); Connecticut Dep’t of Income

Maintenance v. Heckler, 471 U.S. 524, 532 & n.21 (1985).

® BPA’s construction of its statutory authority, as upheld by the

Ninth Circuit in LADWP and subsequenily in the present case, is en-

titled to even greater deference than that usually paid to administra-

tive constructions because Congress has, since LADWP, twice passed

14

With that principle in mind, there is no doubt that the

Ninth Circuit properly upheld BPA’s construction of the

statutes at issue.

Section 837e, passed in 1964 as part of the Regional

Preference Act, does not support petitioners’ position.

The statutory language simply requires BPA to make ex-

cess Intertie capacity available as a carrier. In the NTIAP,

BPA certainly makes available excess Intertie capacity as a

carrier for transmission of energy between the Pacific

Northwest and California as well as between Canada and

California; the whole point of the access policy is to state

the conditions on which BPA will do just that. Petitioners

can make no plausible showing that anything in the

language of Section 837e constrains BPA’s choice of con-

ditions for nonfederal access to excess Intertie capacity or

requires it to transmit Canadian power on the same terms

as Northwest power. See Pet. App. E13-E16; see also 16

U.S.C. 838(a) (describing purpose of Regional Preference

Act as “the marketing of electric power from hydroelectric

projects in the Pacific Northwest”).

Nor does the legislative history of the Regional Prefer-

ence Act, read as a whole, support a reading of Section

837e that would require BPA to transmit Canadian power

on the same terms as Northwest power. The House report

legislation on closely related matters and has specifically declined to

overturn BPA’s and the Ninth Circuit’s statutory interpretations. See

LTIAP Administrator’s Decision 47 (quoting Pub. L. No. 99-88, 99

Stat. 293; 132 Cong. Rec. S 15388 (daily ed. Oct. 6, 1986)). “It is well

established that when Congress revisits a statute giving rise to a

longstanding administrative interpretation without pertinent change,

the ‘congressional failure to revise or repeal the agency’s interpretation

is persuasive evidence that the interpretation is the one intended by

Congress.’ ”" CFTC v. Schor, 478 U.S. 833, 846 (1986) (quoting NLRB

v. Bell Aerospace Co., 416 U.S. 267, 274-275 (1974) (footnotes

omitted)).

15

states that the Administrator “may” — not “must” — “enter

into agreements for the wheeling of energy generated in

Canada.” H.R. Rep. 590, 88th Cong., Ist Sess. 9 (1963).'°

And Congress was well aware when it passed the Act that

the Executive Branch officials responsible for its im-

plementation understood the Act to require transmission

of Pacific Northwest energy, not Canadian energy, over

available Intertie capacity and to permit pro rata allo-

cation.

The Department of the Interior (within which BPA was

then located) reported to Congress that “BPA has assured

the public and private utilities of its service area access

over [BPA’s] lines to California, Nevada, and Arizona

markets, proportionate to the respective surpluses of the

various utilities.” U.S. Dep’t of the Interior, Report to the

Appropriations Committees of the Congress of the United

States Recommending a Plan of Construction and Owner-

ship of EHV Electric Interties Between the Pacific North-

west.and Pacific Southwest 27 (Comm. Print 1964) (em-

phasis added) [hereinafter /nterior Department Report].

The conference committee endorsed that report in recom-

'© The same sentence proceeds to say that “such energy stands on

the same basis as any other non-Federal energy.” As the next sentence

makes clear, however, the point of that statement is to clarify that

Canadian energy, other than so-called “Canadian Treaty energy”

given special rights by treaty and by statute (16 U.S.C. 837h), lacks

priority rights to use of the Intertie. See H.R. Rep. 590, supra, at 9 (“It

{Canadian non-Treaty energy] does not have the priority granted to

Federal energy and Canada’s entitlement to downstream power

benefits under the proposed treaty.”). The statement that Canadian

energy “stands on the same basis as any other non-Federal energy”

cannot fairly be read, in context, as supporting the proposition that

Canadian energy must be afforded rights as great as those afforded to

Northwest energy. Otherwise, BPA would have no incentive to pro-

vide any service to Canada if, when it did provide service, it had to be

on the same terms as that provided to Northwest utilities.

16

mending .passage of the Act. H.R. Conf. Rep. 1822, 88th

Cong., 2d Sess. 3-4 (1964); see also id. at 5 (emphasis

added) (reprinting letter from Secretary of the Interior

stating that “the regional interties betweeh the Pacific

Northwest and the Pacific Southwest, as proposed by the

Department of the Interior, * * * would link all major

electric systems—public, private, and Federal—in both

regions”). And BPA’s earliest implementation of the

legislation, in the Exportable Agreement, demonstrates

BPA’s longstanding view, never disturbed by the courts or

by Congress,'' that BPA has the authority to arrange pro

rata allocations of Intertie capacity and to exclude Cana-

dian energy.'?

't On January 17, 1969, the Secretary of the Interior transmitted to

the House Committee on Public Works Appropriations copies of the

Exportable Agreement and other Intertie agreements for review, as re-

quired by congressional committees that approved appropriations for

Intertie construction (H.R. Conf. Rep. 1794, 88th Cong., 2d Sess. 42

(1964); see S. Rep. 1326, 88th Cong., 2d Sess. 37 (1964)). We are lodg-

ing a copy of the Secretary’s letter with the Clerk. Significantly, the

parties to those agreements were limited to Northwest and Southwest

utilities and did not include any Canadian utility. The Secretary stated.

that the “ ‘fair share’ or ‘equitable sharing’ of excess energy markets in

California and the Northwest by all utilities desiring to use the Intertie

for sale of excess energy” had been stressed by the Department to Con-

gress. He concluded that “[t}he enclosed agreements have been

negotiated with the intent to satisfy these prior commitments contrac-

tually.” As the court below stated (Pet. App. B14-B15, quoting Udall

v. Tallman, 380 U.S. 1, 16 (1965)):

Congress has, for nearly half a century, monitored BPA per-

formance in electricity regulation and allocation. Statutory inter-

pretations offered by BPA represent “contemporaneous con-

struction of a statute by [those] charged with the responsibility of

setting its machinery in motion, of making the parts work effi-

ciently and smoothly while they are as yet untried and new.”

'? Furthermore, throughout the legislative history all who described

the benefits that would accrue from an Intertie system discussed

~ Pe es

17

Petitioners place greater emphasis on the requirement of

“fair and nondiscriminatory” availability of Intertie

capacity in 16 U.S.C. 838d, added by the Transmission

System Act in 1974, but that language also will not bear

the weight petitioners place on it. The legislative history

shows that the sole purpose of Section 838d was to make

clear BPA’s obligation to treat publicly owned utilities and

investor-owned utilities alike in granting access to its

transmission system. See H.R. Rep. 93-1375, 93d Cong.,

2d Sess. 5 (1974) (“Section 6 [16 U.S.C. 838d] provides

that the Administrator of BPA shall not discriminate be-

tween public and private power entities in contracting for

use of transmission line capacity which is surplus to the

Administrator’s requirements for transmitting Federal

power.”).'3 It would be a serious misreading of Section

838d to construe the statute as a roving mandate for courts

to require “equal” treatment of any two utilities that a

court might regard as similarly situated.'*

benefits accruing to the Pacific Northwest and the Pacific Southwest.

See H.R. Conf. Rep. 1822, supra, at 7 (reprinting letter from

Secretary of the Interior); H.R. Rep. 590, supra, at 2; Interior Depart-

ment Report 32. No mention was made of Canada, either in relation

to the benefits flowing to Canada or in relation to California benefits

as being dependent on the flow of non-Treaty Canadian power. In-

deed, even Canadian Treaty power was power generated in the North-

west and owned by entities in the Northwest after a power sales trans-

action that was closely tied to the ratification of the Treaty by Canada

(/nterior Department Report 33).

'3 This statutory provision thus stands in contrast to BPA’s obliga-

tion as a Seller (rather than transmitter) of power “at all times * * *

[to] give preference and priority to public bodies and cooperatives” (16

U.S.C. 832c(a)).

'4 It would be an even more radical departure from congressional

intention to read Section 838d as an open-ended invitation for courts

to determine what constitutes “fair[ness}” and “discriminat{ion]}” in

the relative treatment of the Pacific Northwest and California. That

iii |

18

In particular, it would be directly contrary to Congress’s

intention if the statute were read to mandate identical

treatment of generating utilities in Canada and the Pacific

Northwest.. See H.R. Rep. 93-1375, supra, at 5 (“The

Committee further expressly points out that Section 6 is

not intended to represent a policy having application other

than in the Pacific Northwest * * *.”); S. Rep. 93-1030,

93d Cong., 2d Sess. 10 (1974) (same); id. at 9 (emphasis

added) (describing overall purpose of Transmission

System Act as “carry[ing] out the directives and policies

contained in previous legislation relating to the production

and distribution of electrical power in and from the

Pacific Northwest’).

novel statutory construction, first adopted by Judge Norris in dissent

below (Pet. App. A25-A26 & n.1) and now echoed by petitioner CEC,

finds no support in any legislative history or any judicial intepretation

of similar phrases, and it would send the courts on a wholly uncharted

journey. For example, whereas petitioners can decry perceived

discrimination and unfairness in BPA’s failure to let market forces

operate on the northern portion of the Intertie, Northwest utilities and

consumers could just as easily decry perceived discrimination and un-

fairness if BPA failed to take steps to counteract the monopsony

power of the owners of the southern portion of the Intertie. Likewise,

while petitioners insist that BPA should be judicially required to raise

its rates to Northwest customers rather than recovering costs from

California customers (CEC Pet. 25-26), a FERC administrative law

judge has criticized BPA for “grossly undercharg[ing]” nonfirm

customers (which were principally in California and the Southwest),

resulting in unfair treatment of BPA’s firm customers, which are in

the Northwest. U.S. Department of Energy, Bonneville Power Ad-

ministration, 29 F.E.R.C. { 63,039, at 65,122 (1984). In any event,

BPA has studied the relevant benefits that the Intertie would provide

to each region with and without the adoption of an access policy and

has determined that an access policy does in fact distribute the benefits

to each region more equally than would market forces operating in the

absence of such a policy, which would allow California a dispropor-

tionate share of the benefits (Pet. App. E37-E39; LTIAP Ad-

ministrator’s Decision 168-171).

4

19

In sum, there is no statute that can fairly be construed to

impose on BPA an obligation to give identical treatment

to Pacific Northwest energy and extraregional energy in

allocating access to the Intertie, nor can any statute even

remotely be read to forbid BPA’s adoption of a pro rata

allocation system among those to whom Intertie access is

granted.'°

c. Contrary to petitioners’ assertion, the decision of

the court of appeals regarding antitrust considerations

does not conflict with any decision of this Court.'® Peti-

'S In addition, construing Section 837e or Section 838d to require

BPA to afford “equal access” to extraregional utilities would create

serious anomalies in the overall statutory scheme. To take one exam-

ple, the Regional Preference Act places significant restrictions on

BPA and Northwest utilities with respect to the transactions they

make with California utilities in order to preserve for Northwest use

the region’s significant hydroelectric potential. BPA cannot sell

surplus energy without a contractual right to terminate the sale on 60

days’ notice if the energy is needed in the Northwest (16 U.S.C.

837b(a)). Nonfederal Northwest utilities cannot sell firm hydroelectric

surplus energy to California without suffering a decrement in their

ability to rely on BPA for firm power (16 U.S.C. 837b(d)). No such

statutory limitations have ever been placed on Canadian or other ex-

traregional utilities. To argue that Congress intended extraregional

utilities to be treated equally to Northwest utilities is to argue that

Congress intended Northwest utilities to compete at a disadvantage

with extraregional utilities. See Pet. App. E184-E190.

'6 The decision, however, is the first in which a nonregulatory

federal agency’s obligation to consider the effect of its policies on

competition has been decided. The cases that petitioners cite involve

only regulatory agencies implementing their own unique statutory

directives. See generally Northern Natural Gas Co. v. FPC, 399 F.2d

953, 959 (D.C. Cir. 1968). Though federal agencies are not governed

by the antitrust laws (Jet Courier Serv. v. Federal Reserve Bank, 713

F.2d 1221 (6th Cir. 1983); Sea-Land Serv., Inc. v. Alaska R.R., 659

F.2d 243 (D.C. Cir. 1981), cert. denied, 455 U.S. 919 (1982);

Champaign-Urbana News v. J.L. Cummins, 632 F.2d 680 (7th Cir.

1980)), BPA itself undertook a consideration of the NTIAP’s effects

20

tioners, relying on Gulf States Utils. Co. v. FPC, 411 U.S.

747, 763 (1973), contend that the court of appeals did not

“closely scrutinize” BPA’s adoption of the NTIAP in light

of antitrust concerns (CPUC Pet. 14). Petitioners misread

Gulf States and its application to the present case.

In Gulf States, the Court recognized that the Federal

Power Commission had an obligation, under its Federal

Power Act directive to protect the “public interest” (16

U.S.C. 824c(a)), to “consider anticompetitive aspects” of

its actions, but the Court also recognized that the Com-

mission had discretion in the manner in which it did so

(411 U.S. at 762-763). Only if the Commission had sum-

marily disposed of antitrust concerns, or failed to consider

such concerns at all, was the reviewing court’s “close

scrutiny” of the Commission’s exercise of its discretion

triggered (id. at 763). See also Maryland People’s Counsel

v. FERC, 761 F.2d 780, 785-786 (D.C. Cir. 1985).

In the present case, as the court of appeals recognized,

BPA considered anticompetitive aspects of the NTIAP

(Pet. App. A1l8-A19). Unlike the Federal Power Commis-

sion in Gulf States, BPA neither failed to consider anti-

competitive aspects nor summarily disposed of such con-

cerns. Accordingly, the court of appeals was correct in re-

Stricting its review of BPA’s adoption of the NTIAP to

determining whether BPA had struck a reasonable balance

on competition during the development of the NTIAP. Pet. App.

E63-E84, F1-F4, FS, GS, H2, H10-H17, H21-H31, H71-H76. Conse-

quently, if there is any real issue here, it is whether BPA’s duty to con-

sider such effects is /ess stringent than that of regulatory agencies with

jurisdiction over private behavior in the marketplace. Compare the

“public interest” standard of the Gulf States case (discussed below)

with the precautionary standard in Section 9(i)(3) of the Northwest

Power Act, 16 U.S.C. 839f(i)(3), that access should be granted to

BPA’s transmission facilities only if such services can be furnished

“without substantial interference with [the Administrator’s] power

marketing program.”

21

between antitrust concerns and BPA’s statutory obligation

to be fiscally self-supporting (Pet. App. A15-A20).

Petitioners also contend that BPA is obligated to “main-

tain{[ ] competition to the maximum extent possible con-

sistent with the public interest” (CPUC Pet. 14, citing Or-

ter Tail Power Co. v. United States, 410 U.S. 366, 374

(1973)), and to conform its conduct, “to the maximum

feasible extent,” to antitrust policies (CEC Pet. 24, citing

Latin America/Pacific Coast Steamship Conf. v. Federal

Maritime Comm’n, 465 F.2d 542, 547 (D.C. Cir.), cert.

denied, 409 U.S. 967 (1972), and Northern Natural Gas

Co. v. FPC, 399 F.2d 953, 961 (D.C. Cir. 1968)). Ap-

parently, petitioners would have BPA take extraordinary

steps, at the expense of all other considerations, to accom-

modate antitrust concerns. Neither the decisions of this

Court nor those of any court of appeals impose such a re-

quirement.

In Otter Tail, contrary to petitioners’ implication, the

issue before the Court was not whether a regulatory agen-

cy must maintain competition to the maximum extent

possible. Rather, it was whether Congress intended to ex-

empt electric utilities from antitrust liability in court when

it provided the Federal Power Commission with the regu-

latory responsibilities contained in the Federal Power Act,

16 U.S.C. 79la et seq. Because “the history of Part II of

the Federal Power Act indicates an overriding policy of

maintaining competition to the maximum extent possible

consistent with the public interest” (410 U.S. at 374), the

Court held that it could not assume that Congress in-

tended such an exemption. The Court’s opinion in Gulf

States, issued less than three months after Otter Tail,

underscores the point. In Gulf States, the Court merely

held that the Federal Power Commission had a “respon-

sibility to consider, in appropriate circumstances, the an-

ticompetitive effects of regulated aspects of interstate util-

22

ity operations” (411 U.S. at 758-759). The Court did not

hold that the Commission had to maintain competition to

the maximum extent possible. Similarly, the court of ap-

peals in the present case held that BPA has an obligation

to consider “the interests of preserving competition” (Pet.

App. A15-A16). Thus, the balancing approach recognized

by the court of appeals in the present case is precisely the

approach taken by this Court in prior cases.

Nor do the other cases on which petitioners rely support

their contention that BPA is required to take extra-

ordinary steps to accommodate antitrust concerns. In

Latin America/Pacific Coast Steamship, the D.C. Circuit

recognized that an agency’s statutory obligations may

override antitrust concerns (465 F.2d at 547). It was also

interpreting a different statute, the Shipping Act, 1916, 46

‘ U.S.C. 801 et seqg., the history of which led the court to

conclude that Congress “ ‘intended to tolerate only the

minimum anticompetitive behavior * * * in the maritime

industry’ ” (465 F.2d at 551-552 (emphasis omitted),

quoting Seatrain Lines, Inc. v. Federal Maritime Comm'n,

460 F.2d 932, 940 (D.C. Cir. 1972)). Similarly, in North-

ern Natural Gas, the D.C. Circuit expressly recognized the

balancing approach set forth in Gulf States and followed

by the court of appeals in the present case (399 F.2d at

961). Thus, there is no merit to petitioners’ contention that

the court of appeals’ decision in the present case conflicts

with any decision of this Court or any other court of ap-

peals.

Furthermore, to whatever extent BPA may be said to

have a nonstatutory yet judicially enforceable duty to pro-

mote competition, the pro rata allocation of Intertie access

among BPA and other Northwest utilities furthers rather

than hinders the goal of most closely approximating com-

petitive conditions. As the Administrator has recently em-

phasized, “{p]ro-rata allocations under various Intertie

23

access policies have always been intended to mirror and

offset pro-rata allocations in the Southwest. California

commenters argue that pro-rata allocations under the

LTIAP tend to stabilize prices at levels higher than where

sellers may increase their total sales by reducing prices. It

is equally logical to conclude that pro-rata allocations of

California Intertie capacity suppress prices below levels

that would prevail in a market where more buyers bid in-

dependently.” LTIAP Administrator’s Decision 61-62

(footnote omitted); see also Pet. App. A18-A20.

Although petitioners insist that BPA cannot take such

considerations into account because it “is not a regulatory

agency” (CEC Pet. 27 (footnote omitted)), petitioners can-

not have it both ways. If BPA, because it is a federal agen-

cy, is to be assigned the responsibility to weigh competitive

considerations in its decisionmaking, then there is no

reason why BPA must close its eyes to the competitive

consequences of all actions but its own.'’? BPA properly

'7 In arguing that “BPA ignored the well-settled rule that those who

commit antitrust violations may not justify such conduct on the

ground that it was undertaken to compensate for or retaliate against

antitrust violations by their adversaries” (CEC Pet. 27), petitioners err

by treating BPA as if it were an entity that could “commit antitrust

violations.” BPA is a federal agency and is thus exempt from the an-

titrust laws; any bearing that antitrust considerations have on BPA’s

decisionmaking derives simply from the obligation every federal agen-

cy has to consider relevant factors in making decisions. See, e.g.,

McLean Trucking Co. v. United States, 321 U.S. 67 (1944). Factors

that may not justify a private actor’s conduct may nevertheless be ap-

propriate considerations for a federal agency. Moreover, petitioners

err in their implicit assumption that it would necessarily violate the an-

titrust laws for a private utility that owned a transmission line to

allocate its sales of transmission services on a pro rata basis. Although

the joint owners of a “bottleneck monopoly” facility may be required

to give their competitors nondiscriminatory access to that facility

(United States v. Terminal R.R. Ass’n, 224 U.S. 383, 410-411 (1912)),

24

considered the relative market power of the southern In-

tertie owners and Northwest utilities in formulating its In-

tertie access policies.'®

CONCLUSION

The petitions for a writ of certiorari should be denied.

Respectfully submitted.

CHARLES FRIED

Solicitor General

JOHN R. BOLTON

Assistant Attorney General

DENNIS G. LINDER

WM. ROBERT IRVIN

Attorneys

HARVARD P. SPIGAL

General Counsel

Bonneville Power Administration

AUGUST 1988

and the sole owner of such a facility may in some circumstances be

forbidden to exclude its competitors from access to that facility (Otter

Tail Power Co. v. United States, supra), we are unaware of any an-

titrust case that goes so far as to require the owner of such a facility to

let market forces rather than a pro rata allocation system dictate ac-

cess to the facility.

'8 Petitioners are also in error in suggesting (CEC Pet. 25) that BPA

does not enhance its own ability to collect revenues, and thus to meet

its obligation to be self-financing, by aiding the market power of

Northwest utilities. The Administrator has explained in the recent

decision supporting the LTIAP the indirect revenue effects on BPA of

increasing or decreasing the revenues of Northwest utilities (LTIAP

Administrator’s Decision 50-51, 61 n.18).

sr U.S. GOVERNMENT PRINTING OFFICE: 1988—202-037/60581