Acquisition of Energy Resources Under The Pacific Northwest Electric Power Planning and Conservation Act: A Look At The Future

Acquisition of Energy Resources Under the Pacific Northwest Electric Power Planning and Conservation Act: A Look at the Future* James 0. Luce** Janet W. McLennan*** I. INTRODUCTION The Bonneville Power Administration (BPA)' is a separate and distinct entity within the Department of Energy,' serving as the marketing agency' for hydroelectric power generated at thirty of the largest power dams in the Columbia River Basin.4 * The opinions presented here are solely those of the authors and do not necessarily represent the views of the Bonneville Power Administration or the United States Department of Energy. ** B.A. Washington State University (1968); J.D. University of Oregon, (1973); Member, Washington State Bar; Attorney-Adviser, Office of General Counsel, Bonneville Power Administration, United States Department of Energy. *** B.A. University of Oregon (1948); J.D. Northwestern School of Law of Lewis and Clark College, (1972); Member, Oregon State Bar; Attorney, Chief of Staff Program Coordination Staff, Office of Power Management, Bonneville Power Administration, United States Department of Energy. 1. Congress created the Bonneville Power Administration (BPA) in 1937. Bonneville Project Act of 1937, Pub. L. No. 75-329, 50 Stat. 731 (codified at 16 U.S.C. § 832 (1977 & Supp. III 1979)). The Bonneville administrator's function is to market the power generated by the Bonneville project. 16 U.S.C. § 832 (1977 & Supp. III 1979). 2. Congress created the Department of Energy in 1977. Department of Energy Organization Act, Pub. L. No. 95-91, 91 Stat. 565 (1977) (codified at 42 U.S.C. § 7152 (Supp. III 1979)). The Department of Energy Organization Act transferred the functions of the Bonneville Power Administration from the Department of Interior to the Department of Energy. 42 U.S.C. § 7152(a)(1)(D) (Supp. III 1980). The Secretary of Energy performs these functions, acting by and through the Bonneville Administrator. Id. § 7152(a)(2). 3. The Bonneville Project Act provides that the Administrator shall "make all arrangements for the sale and distribution of electric energy generated at the Bonneville Project not required for the operation of the dam and locks .... " 16 U.S.C. § 832a(a)(1977). The Federal Columbia River Transmission System Act designates the Administrator as "the marketing agent for all electric power generated by Federal generating plants in the Pacific Northwest,. . . except electric power from the Green Springs project of the Bureau of Reclamation." Id. § 838f. 4. For a list of Pacific Northwest federal and nonfederal projects, see U.S. DEI'T OF ENERGY, BONNEVILLE POWER ADMINISTRATION, MuLTPPu~uosE DAMS OF THE PACIFIC NORTHWEST (1978). This publication includes a map of major hydroelectric projects, photographs of most, the purposes of each, and the name of each project's operators. 62 University of Puget Sound Law Review [Vol. 5:61 The 1961 Columbia River Treaty with Canada 5 significantly enhanced the capacity 6 of these dams as well as the twenty-five nonfederal projects. The BPA also markets a limited amount of thermal power7 and has net billing contracts to acquire more.8 5. Columbia River Basin Treaty, Jan. 17, 1961, United States-Canada, 15 U.S.T. 1555, T.I.A.S. No. 5638. Under the Columbia River Basin Treaty, Canada built three large storage dams on the upper reaches of the river and the United States built Libby Dam in Montana. The three Canadian dams store up to 15.5 million acre-feet for power production in the United States and for flood control. This storage arrangement permitted downstream United States plants to produce 2.8 million kilowatts of additional power in 1975. The United States and Canada share this power equally. See U.S. DEP'T OF ENERGY, BONNEVILLE POWER ADMINISTRATION, BPA DEFINITIONS 10 (1979) (hereinafter cited as DEFINITIONS]. In 1964, federal and nonfederal dam operators on the Columbia River signed an agreement to coordinate operation of their projects to fulfill the United States' responsibilities to Canada under the Columbia River Basin Treaty. See Agreement for Coordination of Power Systems Operations, Sept. 15, 1964, United States-Canada; DEFINITIONS, supra, at 17. 6. "Capacity" means "[t]he maximum load that a machine station or system can carry under existing service conditions. Equivalent terms; peak capability, peak generation, firm peakload, carrying capability. In transmission, the maximum load a transmission line is capable of carrying." DEINImONs, supra note 5, at 11. "Load" means "[tihe amount of electric power or energy delivered or required at any specified point or points on a system. Load originates primarily at the energy-consuming equipment of the customers." Id. at 40. "Energy" means "[t]he capability of doing work. In electrical systems energy is expressed in kilowatthours." Id. at 25. "Power" means "[t]he time rate of transferring or transforming energy. Electrically, power is expressed in watts, which is the product of applied voltage and resulting in-phase current. Power is the rate of energy production or transfer." Id. at 51. The Pacific Northwest Electric Power Planning and Conservation Act defines "electric power" as "electric peaking capacity, or electric energy, or both." 16 U.S.C.A. § 839a(9) (West 1980 Laws Special Pamphlet). 7. Thermal power is electric power produced by generating heat and converting the heat into electricity. See DEFINITIONS, supra note 5, at 71. Most Pacific Northwest thermal plants use coal or nuclear fuel to generate the heat. Bonneville presently acquires and markets power from the Handford Nuclear Thermal-Electric Plant (NPR). The NPR is a dual-purpose reactor producing waste steam as a by-product of plutonium manufacture. The Washington Public Power Supply System (WPPSS) operates the generating plant using the excess steam and sells the output, which amounts to up to four and one-half million megawatt hours per year, to Bonneville. Bonneville also has acquired the City of Eugene's 30% share of the Trojan Nuclear Thermal-Electric Project (Trojan) near Rainier, Oregon. BONNEVILLE POWER ADMINISTRATION, U.S. DEP'T OF INTEIOR, THE ROLE OF THE BONNEVILLE POWER ADMINISTRATION IN THE PACIFIC NORTHWEST POWER SUPPLY SYSTEM, app. A, at 1-26 (1977) (Draft Environmental Impact Statement) [hereinafter cited as REIS]. 8. Bonneville has agreed to purchase additional thermal generation from the WPPSS Nuclear Projects 1, 2, and 3 and Portland General Electric's Pebble Springs Nuclear Project Number 1 through net-billing agreements. REIS, supra note 7, at app. A, at 1-20 to 1-24, 1-37 to 1-39. When these projects are completed, they will add an additional 3,007 megawatts to regional power resources. Id. Net-billing is a system of offsetting payments due to one party against another party under various contracts between those parties. Bonneville acquires preference customers' 1981] Acquisition of Energy Resources Overall, the BPA controls and wholesales approximately half of (...truncated)