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Northern Cal. Power Agency v. Morton

Citation: 5 ELR 20719
No. No. 74-617, 396 F. Supp. 1187/(D.D.C., 02/14/1975)

A group of non-profit power users challenges on both procedural and substantive grounds a substantial rate increase promulgated by the Department of the Interior on sales of electric power derived from the Bureau of Reclamation's Central Valley Project in California. In 1973, for the first time in 30 years, the Bureau commenced rate proceedings; it used informal, ad hoc procedures, including press releases, telephonic, oral, and letter responses to customer requests for information, and eventually held an informal, off-the-record hearing. The Bureau's failure to publish in advance a description of the procedures it followed violated the Administrative Procedure Act (APA), which requires federal agencies to publish in the Federal Register a statement of the general course of their operations and their rules of procedure. As a product of unpublished proceedings, the rate increase cannot stand against plaintiffs who cannot be said to have had the "actual and timely notice" of the proceedings as required by the APA, in light of the rules' vagueness and frequent changes, the Bureau's occasional failure to follow its announced rules, the many parties to the proceeding, and the large sums of money involved. Despite plaintiffs' persuasive arguments in favor of applying the Wunderlich Act to this case, the court is bound by contrary decisions in this circuit. Although this matter falls within the "public property" exception to the procedural requirements of the APA, procedural due process demands, at a minimum, limited on-the-record questioning of proponents of the rate increase and a detailed statement of reasons in support of the final decision; neither of these requirements was met here. The rate increase is ordered set aside in view of the gross defects in the process which led to its promulgation, and the pendency of a second rate proceeding which will raise the same issues. Defendants are enjoined from continuing said increase in effect. Summary judgment is granted to plaintiffs. [The case is currently on appeal to the D.C. Circuit. — Ed.]

Counsel for Plaintiffs
George Spiegel
Daniel Davidson
Spiegel & McDiarmid
2600 Virginia Avenue, N.W.
Washington, D.C. 20037

Counsel for Defendants
John Broadley
Department of Justice
Washington, D.C. 20530