---
kind: "section"
citation: "16 U.S.C. § 839c"
title: "16"
title_heading: "Conservation"
number: "839c"
heading: "Sale of power"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/16/839c"
units:
  - "Chapter 12H — Pacific Northwest Electric Power Planning and Conservation"
---

# §839c. Sale of power

- (a) **Preferences and priorities—** All power sales under this chapter shall be subject at all times to the preference and priority provisions of the Bonneville Project Act of 1937 ([16 U.S.C. 832](/usc/16/832.md) and following) and, in particular, sections [4](/usc/16/4.md) and [5](/usc/16/5.md) thereof [[16 U.S.C. 832c](/usc/16/832c.md) and 832d]. Such sales shall be at rates established pursuant to [section 839e of this title](/usc/16/839e.md).
- (b) **Sales to public bodies, cooperatives, and Federal agency customers—**
  - (1) Whenever requested, the [Administrator](/usc/16/839a.md?p=2) shall offer to sell to each requesting public body and cooperative entitled to preference and priority under the Bonneville Project Act of 1937 [[16 U.S.C. 832](/usc/16/832.md) et seq.] and to each requesting investor-owned utility [electric power](/usc/16/839a.md?p=9) to meet the firm power load of such public body, cooperative or investor-owned utility in the Region to the extent that such firm power load exceeds—
    - (A) the capability of such entity’s firm peaking and energy [resources](/usc/16/839a.md?p=19) used in the year prior to December 5, 1980, to serve its firm load in the region, and
    - (B) such other [resources](/usc/16/839a.md?p=19) as such entity determines, pursuant to contracts under this chapter, will be used to serve its firm load in the region.

    In determining the [resources](/usc/16/839a.md?p=19) which are used to serve a firm load, for purposes of subparagraphs [(A)](#b-1-A) and [(B)](#b-1-B), any [resources](/usc/16/839a.md?p=19) used to serve a firm load under such subparagraphs shall be treated as continuing to be so used, unless such use is discontinued with the consent of the [Administrator](/usc/16/839a.md?p=2), or unless such use is discontinued because of obsolescence, retirement, loss of [resource](/usc/16/839a.md?p=19), or loss of contract rights.

  - (2) Contracts with investor-owned utilities shall provide that the [Administrator](/usc/16/839a.md?p=2) may reduce his obligations under such contracts in accordance with section 5(a) of the Bonneville Project Act of 1937 [[16 U.S.C. 832d(a)](/usc/16/832d.md?p=a)].
  - (3) In [addition](/usc/16/410r–5.md?p=c-2) to his authorities to sell [electric power](/usc/16/839a.md?p=9) under [paragraph (1)](#b-1), the [Administrator](/usc/16/839a.md?p=2) is also authorized to sell [electric power](/usc/16/839a.md?p=9) to Federal agencies in the region.
  - (4) Sales under this subsection shall be made only if the public body, cooperative, Federal agency or investor-owned utility complies with the [Administrator](/usc/16/839a.md?p=2)’s standards for service in effect on December 5, 1980, or as subsequently revised.
  - (5) The [Administrator](/usc/16/839a.md?p=2) shall include in contracts executed in accordance with this subsection provisions that enable the [Administrator](/usc/16/839a.md?p=2) to restrict his contractual obligations to meet the loads referred to in this subsection in the future if the [Administrator](/usc/16/839a.md?p=2) determines, after a reasonable period of experience under this chapter, that the [Administrator](/usc/16/839a.md?p=2) cannot be assured on a planning basis of acquiring sufficient [resources](/usc/16/839a.md?p=19) to meet such loads during a specified period of insufficiency. Any such contract with a public body, cooperative, or Federal agency shall specify a reasonable minimum period between a notice of restriction and the earliest date such restriction may be imposed.
  - (6) Contracts executed in accordance with this subsection with public body, cooperative, and Federal agency [customers](/usc/16/839a.md?p=7) shall—
    - (A) provide that the restriction referred to in [paragraph (5)](#b-5) shall not be applicable to any such [customers](/usc/16/839a.md?p=7) until the operating year in which the total of such [customers](/usc/16/839a.md?p=7)’ firm loads to be served by the [Administrator](/usc/16/839a.md?p=2) equals or exceeds the firm capability of the [Federal base system resources](/usc/16/839a.md?p=10);
    - (B) not permit restrictions which would reduce the total contractual entitlement of such [customers](/usc/16/839a.md?p=7) to an amount less than the firm capability of the [Federal base system resources](/usc/16/839a.md?p=10); and
    - (C) contain a formula for determining annually, on a uniform basis, each such [customer](/usc/16/839a.md?p=7)’s contractual entitlement to firm power during such a period of restriction, which formula shall not consider [customer](/usc/16/839a.md?p=7) [resources](/usc/16/839a.md?p=19) other than those the [customer](/usc/16/839a.md?p=7) has determined, as of December 5, 1980, to be used to serve its own firm loads.

    The formula referred to in [subparagraph (C)](#b-6-C) shall obligate the [Administrator](/usc/16/839a.md?p=2) to provide on an annual basis only firm power needed to serve the portion of such [customer](/usc/16/839a.md?p=7)’s firm load in excess of the capability of such [customer](/usc/16/839a.md?p=7)’s own firm [resources](/usc/16/839a.md?p=19) determined by such [customer](/usc/16/839a.md?p=7) under paragraph (1) of this subsection to be used to serve its firm load.

  - (7) **Required sale.—**
    - (A) **Definition of a joint operating entity.—** In this section, the term “joint operating entity” means an entity that is lawfully organized under [State](/usc/16/590q.md?p=a) law as a public body or cooperative prior to September 22, 2000, and is formed by and whose members or participants are two or more public bodies or cooperatives, each of which was a [customer](/usc/16/839a.md?p=7) of the Bonneville Power Administration on or before January 1, 1999.
    - (B) **Sale.—** Pursuant to [paragraph (1)](#b-1), the [Administrator](/usc/16/839a.md?p=2) shall sell, at wholesale to a joint operating entity, [electric power](/usc/16/839a.md?p=9) solely for the purpose of meeting the regional firm power [consumer](/usc/16/839a.md?p=5) loads of regional public bodies and cooperatives that are members of or participants in the joint operating entity.
    - (C) **No resale.—** A public body or cooperative to which a joint operating entity sells [electric power](/usc/16/839a.md?p=9) under [subparagraph (B)](#b-7-B) shall not resell that power except to retail [customers](/usc/16/839a.md?p=7) of the public body or cooperative or to another regional member or participant of the same joint operating entity, or except as otherwise permitted by law.
- (c) **Purchase and exchange sales—**
  - (1) Whenever a Pacific Northwest electric utility offers to sell [electric power](/usc/16/839a.md?p=9) to the [Administrator](/usc/16/839a.md?p=2) at the average [system cost](/usc/16/839a.md?p=4-B) of that utility’s [resources](/usc/16/839a.md?p=19) in each year, the [Administrator](/usc/16/839a.md?p=2) shall [acquire](/usc/16/620e.md?p=1) by purchase such power and shall offer, in exchange, to sell an equivalent amount of [electric power](/usc/16/839a.md?p=9) to such utility for resale to that utility’s residential users within the region.
  - (2) The purchase and exchange sale referred to in paragraph (1) of this subsection with any electric utility shall be limited to an amount not in excess of 50 per centum of such utility’s Regional residential load in the year beginning July 1, 1980, such 50 per centum limit increasing in equal annual increments to 100 per centum of such load in the year beginning July 1, 1985, and each year thereafter.
  - (3) The cost benefits, as specified in contracts with the [Administrator](/usc/16/839a.md?p=2), of any purchase and exchange sale referred to in paragraph (1) of this subsection which are attributable to any electric utility’s residential load within a [State](/usc/16/590q.md?p=a) shall be passed through directly to such utility’s residential loads within such [State](/usc/16/590q.md?p=a), except that a [State](/usc/16/590q.md?p=a) which lies partially within and partially without the region may require that such cost benefits be distributed among all of the utility’s residential loads in that [State](/usc/16/590q.md?p=a).
  - (4) An electric utility may terminate, upon reasonable terms and conditions agreed to by the [Administrator](/usc/16/839a.md?p=2) and such utility prior to such termination, its purchase and sale under this subsection if the supplemental rate charge provided for in [section 839e(b)(3) of this title](/usc/16/839e.md?p=b-3) is applied and the cost of [electric power](/usc/16/839a.md?p=9) sold to such utility under this subsection exceeds, after application of such rate charge, the average [system cost](/usc/16/839a.md?p=4-B) of power sold by such utility to the [Administrator](/usc/16/839a.md?p=2) under this subsection.
  - (5) Subject to the provisions of sections [839b](/usc/16/839b.md) and [839d](/usc/16/839d.md) of this title, in lieu of purchasing any amount of [electric power](/usc/16/839a.md?p=9) offered by a utility under paragraph (1) of this subsection, the [Administrator](/usc/16/839a.md?p=2) may [acquire](/usc/16/620e.md?p=1) an equivalent amount of [electric power](/usc/16/839a.md?p=9) from other sources to replace power sold to such utility as part of an exchange sale if the cost of such [acquisition](/usc/16/620e.md?p=1) is less than the cost of purchasing the [electric power](/usc/16/839a.md?p=9) offered by such utility.
  - (6) Exchange sales to a utility pursuant to this subsection shall not be restricted below the amounts of [electric power](/usc/16/839a.md?p=9) acquired by the [Administrator](/usc/16/839a.md?p=2) from, or on behalf of, such utility pursuant to this subsection.
  - (7) The “average [system cost](/usc/16/839a.md?p=4-B)” for [electric power](/usc/16/839a.md?p=9) sold to the [Administrator](/usc/16/839a.md?p=2) under this subsection shall be determined by the [Administrator](/usc/16/839a.md?p=2) on the basis of a methodology developed for this purpose in consultation with the [Council](/usc/16/839a.md?p=6), the [Administrator](/usc/16/839a.md?p=2)’s [customers](/usc/16/839a.md?p=7), and appropriate [State](/usc/16/590q.md?p=a) regulatory bodies in the region. Such methodology shall be subject to review and approval by the Federal Energy Regulatory [Commission](/usc/16/544.md?p=c). Such average [system cost](/usc/16/839a.md?p=4-B) shall not include—
    - (A) the cost of additional [resources](/usc/16/839a.md?p=19) in an amount sufficient to serve any [new large single load](/usc/16/839a.md?p=13) of the utility;
    - (B) the cost of additional [resources](/usc/16/839a.md?p=19) in an amount sufficient to meet any additional load outside the region occurring after December 5, 1980; and
    - (C) any costs of any generating facility which is terminated prior to initial commercial operation.
- (d) **Sales to existing direct service industrial customers—**
  - (1)
    - (A) The [Administrator](/usc/16/839a.md?p=2) is authorized to sell in accordance with this subsection [electric power](/usc/16/839a.md?p=9) to existing [direct service industrial customers](/usc/16/839a.md?p=8). Such sales shall provide a portion of the [Administrator](/usc/16/839a.md?p=2)’s [reserves](/usc/16/839a.md?p=17) for firm power loads within the region.
    - (B) After December 5, 1980, the [Administrator](/usc/16/839a.md?p=2) shall offer in accordance with [subsection (g)](#g) of this section to each existing [direct service industrial customer](/usc/16/839a.md?p=8) an initial long term contract that provides such [customer](/usc/16/839a.md?p=7) an amount of power equivalent to that to which such [customer](/usc/16/839a.md?p=7) is entitled under its contract dated January or April 1975 providing for the sale of “industrial firm power.”
  - (2) The [Administrator](/usc/16/839a.md?p=2) shall not sell [electric power](/usc/16/839a.md?p=9), including [reserves](/usc/16/839a.md?p=17), directly to new [direct service industrial customers](/usc/16/839a.md?p=8).
  - (3) The [Administrator](/usc/16/839a.md?p=2) shall not sell amounts of [electric power](/usc/16/839a.md?p=9), including [reserves](/usc/16/839a.md?p=17), to existing [direct service industrial customers](/usc/16/839a.md?p=8) in excess of the amount permitted under [paragraph (1)](#d-1) unless the [Administrator](/usc/16/839a.md?p=2) determines, after a plan has been adopted pursuant to [section 839b of this title](/usc/16/839b.md), that such proposed sale is consistent with the plan and that—
    - (A) additional power system [reserves](/usc/16/839a.md?p=17) are required for the region’s firm loads,
    - (B) the proposed sale would provide a cost-effective method of supplying such [reserves](/usc/16/839a.md?p=17),
    - (C) such loads or loads of similar character cannot provide equivalent operating or planning benefits to the region if served by an electric utility under contractual arrangements providing [reserves](/usc/16/839a.md?p=17), and
    - (D) the [Administrator](/usc/16/839a.md?p=2) has or can [acquire](/usc/16/620e.md?p=1) sufficient [electric power](/usc/16/839a.md?p=9) to serve such loads, and

    unless the [Council](/usc/16/839a.md?p=6) has determined such sale is consistent with the plan. After such determination by the [Administrator](/usc/16/839a.md?p=2) and by the [Council](/usc/16/839a.md?p=6), the [Administrator](/usc/16/839a.md?p=2) is authorized to offer to existing [direct service industrial customers](/usc/16/839a.md?p=8) power in such amounts in excess of the amount permitted under paragraph (1) of this subsection as the [Administrator](/usc/16/839a.md?p=2) determines to be necessary to provide additional power system [reserves](/usc/16/839a.md?p=17) to meet the region’s firm loads.

  - (4)
    - (A) As used in this section, the term “existing [direct service industrial customer](/usc/16/839a.md?p=8)” means any [direct service industrial customer](/usc/16/839a.md?p=8) of the [Administrator](/usc/16/839a.md?p=2) which has a contract for the purchase of [electric power](/usc/16/839a.md?p=9) from the [Administrator](/usc/16/839a.md?p=2) on December 5, 1980.
    - (B) The term “new [direct service industrial customer](/usc/16/839a.md?p=8)” means any industrial entity other than an existing [direct service industrial customer](/usc/16/839a.md?p=8).
    - (C)
      - (i) Where a new contract is offered in accordance with [subsection (g)](#g) to any existing [direct service industrial customer](/usc/16/839a.md?p=8) which has not received [electric power](/usc/16/839a.md?p=9) prior to December 5, 1980, from the [Administrator](/usc/16/839a.md?p=2) pursuant to a contract with the [Administrator](/usc/16/839a.md?p=2) existing on December 5, 1980, [electric power](/usc/16/839a.md?p=9) delivered under such new contract shall be conditioned on the [Administrator](/usc/16/839a.md?p=2) reasonably acquiring, in accordance with this chapter and within such estimated period of time (as specified in the contract) as he deems reasonable, sufficient [resources](/usc/16/839a.md?p=19) to meet, on a planning basis, the load requirement of such [customer](/usc/16/839a.md?p=7). Such contract shall also provide that the obligation of the [Administrator](/usc/16/839a.md?p=2) to [acquire](/usc/16/620e.md?p=1) such [resources](/usc/16/839a.md?p=19) to meet such load requirement shall, except as provided in clause (ii) of this subparagraph, apply only to such [customer](/usc/16/839a.md?p=7) and shall not be sold or exchanged by such [customer](/usc/16/839a.md?p=7) to any other [person](/usc/16/450rr–1.md?p=b).
      - (ii) Rights under a contract described in clause (i) of this subparagraph may be transferred by an existing [direct service industrial customer](/usc/16/839a.md?p=8) referred to in [clause (i)](#d-4-C-i) to a successor in interest in connection with a reorganization or other transfer of all major assets of such [customer](/usc/16/839a.md?p=7). Following such a transfer, such successor in interest (or any other subsequent successor in interest) may also transfer rights under such a contract only in connection with a reorganization or other transfer of all assets of such successor in interest.
      - (iii) The limitations of clause (i) of this subparagraph shall not apply to any [customer](/usc/16/839a.md?p=7) referred to in [clause (i)](#d-4-C-i) whenever the [Administrator](/usc/16/839a.md?p=2) determines that such [customer](/usc/16/839a.md?p=7) is receiving [electric power](/usc/16/839a.md?p=9) pursuant to a contract referred to in such [clause (ii)](#d-4-C-ii).
- (e) **Contractual entitlements to firm power—**
  - (1) The contractual entitlement to firm power of any [customer](/usc/16/839a.md?p=7) from whom, or on whose behalf, the [Administrator](/usc/16/839a.md?p=2) has acquired [electric power](/usc/16/839a.md?p=9) pursuant to [section 839d of this title](/usc/16/839d.md) may not be restricted below the amount of [electric power](/usc/16/839a.md?p=9) so acquired from, or on behalf of, such [customer](/usc/16/839a.md?p=7). If in any year such [customer](/usc/16/839a.md?p=7)’s requirements are less than such entitlement, any excess of such entitlement shall be first made available to increase the entitlement of other [customers](/usc/16/839a.md?p=7) of the same class before being available for the entitlement of other [customers](/usc/16/839a.md?p=7). For purposes of this paragraph, the following entities shall each constitute a class:
    - (A) public bodies and cooperatives;
    - (B) Federal agencies;
    - (C) direct service industrial; and
    - (D) investor owned utilities.
  - (2) Any contractual entitlement to firm power which is based on [electric power](/usc/16/839a.md?p=9) acquired from, or on behalf of, a [customer](/usc/16/839a.md?p=7) pursuant to [section 839d of this title](/usc/16/839d.md) shall be in [addition](/usc/16/410r–5.md?p=c-2) to any other contractual entitlement to firm power not subject to restriction that such [customer](/usc/16/839a.md?p=7) may have under this section. For the purposes of this subsection, references to amounts of power acquired by the [Administrator](/usc/16/839a.md?p=2) pursuant to [section 839d of this title](/usc/16/839d.md) shall be deemed to mean the amounts specified in the [resource](/usc/16/839a.md?p=19) [acquisition](/usc/16/620e.md?p=1) contracts exclusive of any amounts recognized in such contracts as replacement for [Federal base system resources](/usc/16/839a.md?p=10).
  - (3) The [Administrator](/usc/16/839a.md?p=2) shall, consistent with the provisions of this chapter, insure that any restrictions upon any particular [customer](/usc/16/839a.md?p=7) class made pursuant to this subsection and [subsection (b)](#b) of this section are distributed equitably throughout the region.
- (f) **Surplus power—** The [Administrator](/usc/16/839a.md?p=2) is authorized to sell, or otherwise dispose of, [electric power](/usc/16/839a.md?p=9), including power acquired pursuant to this and other Acts, that is surplus to his obligations incurred pursuant to subsections [(b)](#b), [(c)](#c), and [(d)](#d) of this section in accordance with this and other Acts applicable to the [Administrator](/usc/16/839a.md?p=2), including the Bonneville Project Act of 1937 ([16 U.S.C. 832](/usc/16/832.md) and following), the Federal Columbia River Transmission System Act ([16 U.S.C. 838](/usc/16/838.md) and following), and the Act of August 31, 1964 ([16 U.S.C. 837–837h](https://uscode.house.gov/view.xhtml?req=(/us/usc/t16/s837–837h))).
- (g) **Long-term contracts—**
  - (1) As soon as practicable within nine months after December 5, 1980, the [Administrator](/usc/16/839a.md?p=2) shall commence necessary negotiations for, and offer, initial long-term contracts (within the limitations of the third sentence of section 5(a) of the Bonneville Project Act [[16 U.S.C. 832d(a)](/usc/16/832d.md?p=a)]) simultaneously to—
    - (A) existing public body and cooperative [customers](/usc/16/839a.md?p=7) and investor-owned utility [customers](/usc/16/839a.md?p=7) under [subsection (b)](#b) of this section;
    - (B) Federal agency [customers](/usc/16/839a.md?p=7) under [subsection (b)](#b) of this section;
    - (C) electric utility [customers](/usc/16/839a.md?p=7) under [subsection (c)](#c) of this section; and
    - (D) [direct service industrial customers](/usc/16/839a.md?p=8) under [subsection (d)(1)](#d-1).
  - (2) Each [customer](/usc/16/839a.md?p=7) offered a contract pursuant to this subsection shall have one year from the date of such offer to accept such contract. Such contract shall be effective as provided in this subsection.
  - (3) An initial contract with a public body, cooperative or investor-owned electric utility [customer](/usc/16/839a.md?p=7) or a Federal agency [customer](/usc/16/839a.md?p=7) pursuant to [subsection (b)](#b) of this section shall be effective on the date executed by such [customer](/usc/16/839a.md?p=7), unless another effective date is otherwise agreed to by the [Administrator](/usc/16/839a.md?p=2) and the [customer](/usc/16/839a.md?p=7).
  - (4) An initial contract with an electric utility [customer](/usc/16/839a.md?p=7) pursuant to [subsection (c)](#c) of this section shall be effective on the date executed by such [customer](/usc/16/839a.md?p=7), but no earlier than the first day of the tenth month after December 5, 1980.
  - (5) An initial contract with a [direct service industrial customer](/usc/16/839a.md?p=8) pursuant to [subsection (d)(1)](#d-1), shall be effective on the date agreed upon by the [Administrator](/usc/16/839a.md?p=2) and such [customer](/usc/16/839a.md?p=7), but no later than the first day of the tenth month after December 5, 1980. When such contract is executed, it may for rate purposes be given retroactive effect to such first day.
  - (6) Initial contracts offered public body, cooperative and Federal agency [customers](/usc/16/839a.md?p=7) in accordance with this subsection shall provide that during a period of insufficiency declared in accordance with [subsection (b)](#b) of this section each [customer](/usc/16/839a.md?p=7)’s contractual entitlement shall, to the extent of its requirements on the [Administrator](/usc/16/839a.md?p=2), be no less than the amount of firm power received from the [Administrator](/usc/16/839a.md?p=2) in the year immediately preceding the period of insufficiency.
  - (7) The [Administrator](/usc/16/839a.md?p=2) shall be deemed to have sufficient [resources](/usc/16/839a.md?p=19) for the purpose of entering into the initial contracts specified in paragraph [(1)(A)](#g-1-A) through (D).

## Source credit

(Pub. L. 96–501, § 5, Dec. 5, 1980, 94 Stat. 2712; Pub. L. 106–273, § 1, Sept. 22, 2000, 114 Stat. 802.)

## Notes

### Editorial Notes

### References in Text

The Bonneville Project Act of 1937, referred to in subsecs. (a), (b)(1), and (f), is act Aug. 20, 1937, ch. 720, 50 Stat. 731, which is classified generally to chapter 12B (§ 832 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 832 of this title and Tables.

The Federal Columbia River Transmission System Act, referred to in subsec. (f), is Pub. L. 93–454, Oct. 18, 1974, 88 Stat. 1376, which is classified generally to chapter 12G (§ 838 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 838 of this title and Tables.

Act of August 31, 1964, referred to in subsec. (f), is Pub. L. 88–552, Aug. 31, 1964, 78 Stat. 756, which is classified generally to chapter 12F (§ 837 et seq.) of this title. For complete classification of this Act to the Code, see Tables.

### Amendments

2000—Subsec. (b)(7). Pub. L. 106–273 added par. (7).