Federal Appeals Court Affirms Sequestration Decision Against Public Power

The U.S. Court of Appeals for the Federal Circuit recently affirmed a July 2021 decision by the U.S. Court of Federal Claims blocking public power utilities from recovering direct payment bond refunds cut by sequestration.

“Having considered all of Appellants’ arguments, we find no basis to overturn the decision,” the Appeals Court found in its decision. The American Public Power Association expressed disappointment with the decision.

Based on Office of Management and Budget reports, APPA estimates that sequestration has cut $2.4 billion in direct payment bond refunds, with $221 million to public power issuers alone.

APPA said that Congress fully intended refunds to issuers of direct payment bonds to be exempt from budget sequestration and that OMB appears to have the authority to exempt these refunds from sequestration.

APPA said it will continue to work to advance legislation that would end sequestration.