A three-judge panel from the 9th U.S. Circuit Court of Appeals on Monday rejected a lawsuit from the Idaho Conservation League alleging Bonneville Power Administration is underfunding fish conservation efforts.

The Northwest Power Act (NWPA) requires BPA to protect fish and wildlife from the impacts of its dams. The conservation league and its allies argued a decision to lower rates would place the federal power administration in violation of that law.

While BPA is under the Department of Energy, it is self-funded based on revenues from its sales of electricity and the transmission of electricity, which means it must set its rates high enough to cover costs. By statute, that must be balanced with the requirement that BPA sell power at the lowest possible rates.

The administration’s rates are set through rate cases that resemble agency rulemakings, which include numerous chances for the public and interested parties to comment, including with written briefs. BPA estimates its anticipated spending through a process called Integrated Program Review, which also offers a chance for public input.

In neither process does BPA set specific funding levels for different programs, nor does it decide which costs to incur.

One of the concerns BPA was dealing with in 2022-23 rates at issue in the case was its latest strategic plan, which required a response to concerns over growing costs, centered on cutting costs and improving its financial health.

BPA must recover the costs associated with fish and wildlife measures by developing a realistic projection of those costs that reflect the best information at the time rates are set.

The NWPA set up the Pacific Northwest Electric Power and Conservation Planning Council, which is made up of representatives from the state governments of Idaho, Montana, Oregon and Washington. While BPA and the council operate independently, the power administration must adhere to its “program” laying out measures to protect, mitigate and enhance the fish and wildlife affected by its dams and reservoirs.

BPA expected to earn an extra $100 million from wholesale power sales and initially was split between lowering rates 4.5% to provide short-term rate relief or holding rates flat while investing the surplus in financial reserves — the option it preferred.

Stakeholders were split on the issue, and BPA eventually reached a settlement that split the difference: cutting rates by 2.5% and taking measures to improve its finances. While most parties supported it, the conservation groups opposed it because they believed the lower rates would mean underfunding fish and wildlife protections.

“Essentially, petitioners want BPA to use some of its surplus in favor of greater fish and wildlife mitigation measures,” the court said.

FERC approved the rates BPA came up with and the Idaho Conservation League challenged them before the commission. FERC’s order determined compliance with fish and wildlife protection obligations was outside of that proceeding, so the conservation groups took the issue to court.

A big part of the case was devoted to whether the conservation groups had standing, with two of the judges agreeing they did and the third filing a dissent saying they would have thrown out the decision because of that issue.

BPA must provide equitable treatment for fish and wildlife while considering the conservation planning council’s program to the fullest extent practicable. The conservation groups argued that meant BPA had to set aside more funds for fish and wildlife, while BPA said those requirements do not apply to ratemaking at all.

BPA argued it must take those provisions into account when it manages and operates its dams, but the court did not go that far. The judges concluded the fish and wildlife mitigation laws do not extend to ratemaking.

The relevant language in the NWPA does not mention ratemaking, which does come up in another part of that law with technical requirements focused on the ratemaking process. Congress did not even acknowledge the fish and wildlife provisions of the law in NWPA’s ratemaking sections.

“In this case, the NWPA simply does not ‘mandate the comprehensive, detailed mechanism that petitioners seek BPA’ to implement, and ‘we cannot impose this procedural requirement ourselves,’” the court said, quoting a 2003 precedent on BPA.

If Congress wanted to apply the fish and wildlife conservation requirements to ratemaking and budget projections (a significant legal obligation), it would have drafted the statute to say that, the court said.