Northern California Power Agency, City of Redding v. United States, No. 19-1010 (Fed. Cir. 2019)
Annotate this CaseThe Northern California Power Agency and three California cities, Redding, Roseville, and Santa Clara (plaintiffs) purchase hydroelectric power that is generated by power plants under the jurisdiction of the U.S. Bureau of Reclamation. The plaintiffs sought to recover payments that they claim were unlawfully assessed and collected by the Bureau in violation of the Central Valley Project (CVP) Improvement Act, 106 Stat. 4706, 4706–31. Section 3407(d) of the CVPIA requires that “Mitigation and Restoration” (M&R) payments made by recipients of power and water from the project be assessed in the same proportion, to the greatest degree practicable, as other charges assessed against recipients of water and power from the project. Although the power customers’ allocated share of the CVP repayment costs has been only about 25 percent of the total repayment costs, the Bureau in recent years has charged the customers nearly half of the total M&R payments. The Claims Court concluded that the Bureau’s interpretation of the statute was correct and dismissed the complaint. The Federal Circuit reversed. The proportionality requirement is a true “limitation” and takes priority over the $50 million collection target. The Bureau failed to take measures necessary to achieve the goal of proportionality “to the greatest degree practicable.”
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