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BPA Grand Bargain on Residential Exchange is Legal, Court Says by Ted Sickinger The Oregonian, October 29, 2013

The 9th Circuit Court of Appeals has let stand a hard-fought deal between the Bonneville Power Administration, its public utility customers and customers of investor-owned utilities over how to divide the benefits of the federal hydro system between ratepayers in the region.

The court declined to review the settlement of the so-called residential exchange, a system of cash payments that provides customers of private utilities such as PGE and PacifiCorp with a share of the low-cost electricity that BPA sells to its public utility customers.

The exchange has been the subject of controversy and litgation for decades. Its settlement provides a much needed victory for BPA, which has seen a string of court losses in recent years and is currently mired in a hiring scandal.

A group of industrial customers that buys power from BPA's public utility customers challenged the grand bargain that Bonneville put in place last year. The settlement set the benefits that will be paid to investor-owned utilities for the next 17 years, which have a present value of $2 billion, according to the power marketing agency. It also provides for refunds to customers who were overcharged by the last settlement of the exchange in 2000.