Appendix — Udall v. FPC

Supreme Court brief1967

Ask Donna

What actually matters in this document.

Text

INDEX

Cases AND OPINIONS: “i Page.

Washington Public Power Supply System v. F.P. ses

358. F. 2d 840 (D. C. Cir., 1966); Appendix A.. 2a

Opinion and Order Granting License, Pacific Northwest

Power Co., Project No. 2243, and Washington Pub-

lic Power Supply System, Project No. 2273;

Opinion No. 418, February 5, 1964, 31 FPC 247 ;

ee: ROUTE TB iv ccscccsecoccccs ene e eee ee eee eeees 17a

Chairman Swidler dissenting ......... seees 100a -

- Commissioner Black dissenting ............ 128a

Opinion and Order on Rehearing and Denying Motions

-for Stay and to Strike, ‘Pacific Northwest Power ..

Co., Project No. 2243, and Washington Public

Power Supply System, Project No. 2273; Opinion

No. 418-A, April 30, 1964, 31 FPC 1051; Appen-

GR ©. és ncees SSSESbOSER EES ONpScecrccces sesso 129a

Commissioner Black dissenting seaneee ‘soe 1488

Notice of Application for Preliminary Permit, Pacific

Northwest Power Co., Project No. 2173, December

16, 1954; Appendix eR RERE yE 152a

Order Issuing Preliminary Permit, Pacific Northwest:

Power Co., Project No. 2173; April 18, 1955, 14 -

. FPC 644; "Appendix My ahebsasecuccccccncencusé :153a

Terms and Conditions of Preliminary Permit, Form

P-1, Articles 1 —— 8, 16 FPC 1303 (1956); —

‘Appendix F SOS asecdancgacscece bette eee e eee ees 159a

| STATUTES anp REGULATIONS:

Relevant Sections of the Federal Water Power Act,

Approved June 10, 1920 (41 Stat. 1063, as amended,

16 U.S.C. §§ 791-823) ; Appendix G@ ....... bins 1640

Regulations Under the Federal Power Act (Title 18,

Code of Federal Regulations) 2 as of May 24, 1966;

ve Pe CaPiASAbN ea seecelecccesasenebennce 1698

’

. * bl

e-;

. > : :

. =.

ies

2 are .

’ . See

= os e

i * >

. if *

Shere

. - . , §

. .

‘

= oa: .

‘

~, . ’

. . .

. }

e a an i

. ,

é ‘

. ‘

__ ‘

A s

> as ;

. ;

o Mm

iar , -\

> ’

. ee

2 .

m % ae

< -

, e

- . o

m *

‘ ‘ . .

> .

. > =

* 7. /

Se BE tery

-IN THE

~ Sapam Court of the Hnited States

Ocroszr TzRM, 1966

| WASHINGTON Pustic Power Surety SysTeM, & Municipal

; Corporation, Petitioner

_ We

*FeperaL Power Commission; Respondent

APPENDIX

TO PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

2 oe .

Washington Public Power Supply System . —

? | Hee

BY ™ i °

7 :

H ; *

Se ee eet h ee ee ene

CASES AND OPINIONS.

. APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 18,728 } .

WasHINGTON Pustic Power Suppty SysreM, PETITIONER, -

. n v. :

FeperaL Power ComMisston, RESPONDENT,

Paciric Norrawest Power CoMPAny,

»ipano Wuao.ire FEperation,

Ipstto Pusiic Uriuirms Commission,

Ipano. Fish anp Game ComMMISSION,

Wasuincton State SportsMEN’s Councu, Inc., et al.,

| os Srare or Orgcon, et al,

INTERVENORS,

No. 18,729

-DePARTMENT OF ConsERVATION,

. STaTE oF WASHINGTON, PETITIONER,

; v, ; | - oe 3 | e

-Feperat Power CoMMISsION, RESPONDENT, | '

Pacrric NortHwest Power Company,

Ipano Wipuire FEDERATION, =— > ree

Ipano Pusiic Urns Commission, |

. Ipano Fuisn anp Game Commission, ai

-WasHincTon State SportsMEN’s Councn, Ixc., et al.,

. Srare or Orecon, et al.,

| INTERVENORS.

UAE EON EF Se

No. 18,731 |

Uniren Sraves or Awznica On rH Rutiaon oF

Stewart L. Upax, Secretary of the as ae

‘ PETITIONER,

FEDERAL Power Comission, RESPONDENT,

Paciric NortHwest Power Compaxy,

a IpaHo ‘Wnpure FEDERATION,

IpaHo Pusuic UTILITIES Commission, ° j

[pao Pisa AND Game Commission, .

Wasuincron State SPorTsMEN’s Councn, Inc., et al.,

-°_ §rare-or Onzaow, ot al,

INTERVENORS.

4 7

“

9 “Petitions to Review Orders of the

Federal Power Commission

ee ‘ >

: . ts e i

Decided Maich 24, 1966+

4 e .e e $0: ,

~ [Appearances omitted.]

* e "2. @ s :

Before Wasw K.~Muuer, Senior Cirguit Judge, and

DaNAHER and — Circuit Judges.

‘

{358 F.2d 840 (D.C. Cir, 1966). st

. ‘

es ‘ a ae

Wusure K. Muuer, Senior Circuit Judge:

a, Nos, 18,728 and 18,729

On June 26, 1964; Washington Public Power Supply

System’ and the Department of$Conservation of the State

of Washington filed with us separate petitions for review

' of an order of the Federal Power Commission dated Feb-

ruary 5; 1964, and an amendatory order dated April 30,

1964. For reasons set forth in’ the Commission’s opinions,

these orders, taken together, granted to Pacific Northwest

_ Power Company, a privately owned corporation,. and denied -

to the Power Supply System,*a license to construct a

hydroelectric project at the High Mountain Sheep dam has

site on‘the Snake River between Oregon and Idaho.

Both petitioners contended before the Commission, and

contend here, that the Power-Supply System, a munici-_

—-pality which-on—April -24, 1961, had applied for a license °

~~ for a High Mountain, Sheep project at the same site as

_ that previously proposed by Pacific Northwest, was entitled

..to preference over Pacific Northwest under Section :7(a)

‘of the Act, 16 U.S.C. § 800(a), which is in pertinent part

as follows:

ae issuing ... licenses where no preliminary _— * :

has beert issued . . . the Commission shall give prefer-

ence to applications therefor by States and municipali-

ties, provided the plans for the same are deemed by

the Commission equally well adapted, or shall” within

a reasonable time to be fixed by the Commission ‘be

_-7 made equally” well adapted, to.conserve and utilize

in the ies interest the: water resources of the

region. .

The Nobis is a joint operating agency composed of sixteen

public utility districts of, the State of Washington, organized to. .

construct, acquire and operate facilities for the generation and

. transmission of electricity. It is a municipality within the mean-

ing of Sections 3(7) and 7(a) of the Federal Power Act, 41 Star.

106%, 1067, 16 U.S.C. §§-796(7) and 800(a).

This statutory provision undoubtedly gave the Public

‘Power System preference over Pacific Northwest (pro-

vided .its application met all requirements) if no prelim-

inary permit had been issued. :

Pacific Northwest insists that a preliminary permit head |

been issued te it, and was extant when it-applied for the ¢

High Mountain Sheep license. On the other hand, the

petitioners argue that Pacific Northwest’s preliminary

permit was limited to the Mountain. "Sheep and Pleasant

Valley dam sites described in it and did not cover the

‘High Mountain Sheep site. They further assert that

Pacific Northwest’s preliminary permit was terminated

when the Commission declined to issue a license covering

. the sites therein described. Thus, the controlling question

before us is whether, in fact and in law, a preliminary

_ permit covering the High Mountain Sheep site had been

issued and was still, valid when the Power Supply System _

applied for a license covering the same site. In other

words, does the priority afforded by a preliminary permit

apply only to a project for waterway development on the

exact site described in the permit, or does it include a .

“project: on a different site for developing essentially the

_ same portion of the waterway, which is determined to be

best. adapted to ee caine development val that —

e proceedings began on November 9, 1954, when °

Pacific Northwest filed with the Commission an applica-

tion for a preliminary permit for a Mountain Sheep-.

Pleasant Valley project. on the Snaké River, which. it

described as two low dams on sites above the point where

the Imnaha River empties*into the Snake. .The sites were

21 miles apart, the lower being only 3.7 miles above the

High Mountain Sheep site now in controversy. The Com-

‘mission issued a preliminary permit to Pacific Northwest

April 8, 1955, to expire March 31, 1958. It designated the

project. as No. 2173 and. described. it as it had been

described: in the application. ; |

’

; s~y

Pe ea eT

6a |

On September i. 1955, Pacific Northwest applied to the

Commission for a license on the Mountain Sheep-Pleasant

‘Valley project No. 2173, describing it in the terms used

in the permit application and .the preliminary permit.

After a hearing, the Commission denied the application

- on January 28, 1958, on the ground that the plan proposed:

was not that best adapted to the development of the middle .

Snake. River. It said:

\ “Tt is readily aeanedd from the studies presented.

in House Document 531, in Senate Document No. 51,

- and from those prepared by the Staff for the Middle

Snake Basin that any combination of projects which

--ineludes Nez Perce is consistently superior to any

combination of projects which does not include Nez

_ Perce.’’

On March 31, 1958, the last day of its preliminary permit,

Pacific Northwest filed an application for a license for the

High Mountain Sheep project, which was docketed as

No. 2243. The project was described as a single high dam

_ at the High Mountain Sheep site instead of the two low .

dams originally contemplated at the Mountain Sheep and _

Pleasant Valley sites. Nearly two years later, on March

15, 1960, the Power Supply System applied to the Commis-

sion for a Nez Perce project, designated as No. 2273. That -

site-is below the mouth of the Salmon River and about .

three miles downstream from the High Mountain Sheep

site.

We here reproduce a sketch of the 1 reach of the Snake i

River involved in these cases, showing its tribptaries and

the various dam sites mentioned i in this opinion.

* ‘The Commission consolidatett. the application of Pacific

Northwest for the High Mountain Sheep site with that of

the Power Supply System for the Nez Perce location and ~

a hearing on the two applications was conducted by an

8a,

examiner.’ Before a détermination had been made by him,

the Power Supply ‘System on April 24, 1961, moved to

amend its Nez Perce license application and proposed as

an alternative that, if.the Commission no longer regarded

the Nes Perce site as best adapted to comprehensive de-

velopment of the Snake River, it should be licensed to con-

struct a High Mountain Sheep project on the site. proposed

by Pacific Northwest more than three years before.

On February 5, 1964, the Commission departed from its

earlier dictum about the Nez Perce site and found that the

_ High Mountain Sheep site was best adapted to a compre-

hensive plan for developing the Snake and Salmon Rivers

‘because its location above the mouth of the Salmon elimi-

nated the adverse effect on runs-of anadromous fish in

the Salmon River which probably would be caused by a

Nez Perce dam helow the Salmon’s mouth. As to the con-

flicting applications, the Commission sustained its exam-

iner’s holding that the Power Supply System’s applica-

tion for a license for the High Mountain Sheep site was

not entitled to preference, under Section 7(a) of the Act,

over the earlier application of Pacific Northwest because

the preference applies only where no preliminary permit

has been issued.®

The legal question whether Pacific Northwest’ S social

nary permit was limited to the particular sites proposed

_ in its application therefor, or was broad enough to cover

the project on another site which was found hy the Com-

. mission to be best adapted to a comprehensive develop-

ment of that reach of the Snake River, was answered by

the Commission in its opinion. It refused to adopt the

2 The Secretary of the Interior intervened and asserted, inter

alia, that a dam at the Nez Perce site, which is downstream from

the mouth of the Salmon River, would intentions unduly with runs

of anadromous fish up that stream. :

—8It held that the preliminary permit issued to Pacific North-

west for Project 2173 entitled that company to preference under

Section 5 of the Act, 16 U.S.C. § 798, with respect to the High

Mountain Sheep site.

narrow conception of a preliminary permit contended for ~

by our petitioners, and, as we have said, held that Pacific

Northwest's permit gave it priority with respect to the

High Mountain Sheep site.

In doing so, the Commission said, in ete

' “A preliminary permit is issued under Section 4(f)

‘ ofthe Act to enable an applicant for a license to make ©

studies and gather data and at the. same time under

Section 5 to maintain its priority of application. -Sec-

tion 4(f} specifically states that the permits are to —

enable applicants to secure the data and perform the

acts required by Section 9. The latter requires that

each applicant submit to the Commission ‘maps, plans,

specifications and estimates of cost as may be required

for a full understanding of the proposeti project.’

Section 5 refers to the permit-as being for the sole

purpose of maintaining priority for a period, not

exceeding three years, ‘for making examinations and

surveys, for preparing maps, plans, specifications, and

estimates, and for. making financial arrangements.’

. The statute limits the purpose of the permit to priority

to avoid any interpretation that it represents permis-

sion to begin construction. The statute does not pre-

vent but clearly contemplates that proposals and plans

made at the time the permit was issued may be changed

as a result of investigations made by ‘the permittee.

At the same time the permittee is. protected by the

permit from rival applicants while incurring expenses

in the investigation of a project intended and required

| by Section 10(a), to be best adapted to a comprehen-

_ sive development of the reach of the river involved.

‘‘We consider it evident that the statutory intent

of these provisions is to give a permittee the first ,

rights to develop that reach of a river to which the

permit relates. Any other interpretation would make

the permit -meaningless, for if another party could

obtain a permit or apply for a license for a nearby

10a

project that would develop substantially the same head

as the one described in the original permit, there

- would be no protection to the first permittee... .”’

The Commission also said in discussing the question: -

‘*To interpret the priority afforded by a permit as —

limited to a single project would also be contrary to.

the two most significant objectives of the Act, namely,

to encourage the development of our nation’s water

resources, arid to insure. that such development would

be best adapted to the fullest use of the river, con-

sidering all uses. * Who would be willing to undertake

substantial and expensive investigations looking to-

ward development of a river if a permit were good

only in the event—the unlikely event—that the results

of the investigations coincided precisely with the per-

mittee’s guesstimate at the time the permit applica-

tion was filed? In this connection, it is the experi-

ence of the Commission that a project is rarely con-"

~ structed at the same exact site and in the same fashion

as originally contemplated. Indeed, we are unaware

of a single instance where: this is ‘true. .. .’’

Where an administrative agency must and does initially

determine the specific application of a statutory provision,

as the Commission has done. in these cases, the reviewing

court’s function is limited to deciding whether the admin-

istrative interpretation has “ ‘warrant in the record and

a reasonable basis in law.’’. Labor Board v. Hearst Publi-

cations, 322 U.S. 111, 131 (1944); California Company v.

Udall, 111 US. App. D. C. 262, 296 F. (2d) 384 (1961).

~ See also in 1.C.C. v. J-T Transport, 368 U.S. 81 (1961),

Mr. Justice Frankfurter’s dissent, which was joined by Mr..

- Justice Harlan and Mr. Justice Stewart. In the dissent,

at page 127, it was said:

‘‘ Administrative agencies are not only vested with

discretion in sifting evidence and in making findings

' but may also draw on their specializea competence for

ie } ° lla

ascertaining the reach and meaning of statutory lan-

guage. Compare Social Security Board v. Nierotko,

327 U.S. 358, 368-371, with Labor Board v. Hearst Pub-

lications, 399 U.S. 111, 128-131. The factors to be con-

sidered on judicial review of such an administrative

determination include the precision of the statutory

language, the technical complexity of the relevant

issues, the need for certainty as against experimenta-

tion, and the likelihood that Congress foresaw the pre-

cise question at issue and desired to express a foreclos-

ing judgment on it.

This was not contradicted by the madectier opinion, and

we regard it as an apt, and because of its source a cogent,

statement of the principle contained in it.

We hold that, measured by the guidelines of these cases,

the Commission had the authority and.the duty to interpret

the priority provision inthe first instance, and its inter-

pretation should be affirmed unless it. is unreasonable as

. a matter of law or clearly contrary to congressional policy.

That the Commission’s priority determination does not

offend in these respects is apparent, we think, from an

examination of saben provisions of the Federal Power

Act.

Section 4(e) of the Act, 16 U.S.C.: § 797(e), authorizes

and empowers the Commission to issue licénses

. . for the purpose of constructing, operating,

and maintaining dams, water conduits, reservoirs,

power houses, transmission lines, or other project

works necessary or convenient for the development:

and improvement of navigation and for the develop-

ment, transmission and utilization of powef_ across,

along, from or in any of the streams or other bodies

_ of water ovet which Congress has jurisdiction under

its authority to regulate commerce with foreign nations

and among the séveral States... .”

Pha

Realizing that in many instances applications for such

licenses cannot be prepared in final form without prior in-

vestigation of available sites, which may be and often is

costly and time-consuming, Congress also authorized and

empowered the Commission in Section 4(f) of the Act, 16

U.S.C. § 797(f), to issue preliminary permits for the pur- -

pose of enabling applicants to secure the data and perform

“the acts required by Section 9, 16 U.S.C. § 802: such maps,

plans, specifications and estimates of cost as may be re- |

quired for a full understand! ng of the proposed project;

and satisfactory evidence of compliance with the a.

laws of any state involved,

Section 5 of the Act, 16 U.S.C. s — —_ that each .

such preliminary permit

- **.. . shall be for the sole purpose of walntaining”

ps priority of application for a license under the terms ©

of this Act for such period or periods, not.exceeding a

~ total of three years, as in the discretion of the Com- | -.

- mission may be necessary {gr making examinations

and surveys, for preparing maps, plans, specifications,

and estimates, and for making financial arrangements.,

Each such permit shall set forth the conditions under

which priority shall be maintained. Such permits shall

not be: transferable, and may be canceled by order of

the Commission upon failure of permittees to comply -

- with the conditions thereof or for other good cause

shown after notice and opportunity for hearing.”’

Section 10(a) of the Act, 16 U.S.C. § 803(a), requires

’ that all licenses shall be on condition

‘‘Ttjhat' the project adopted, including the maps,

plans, and specifications, shall be such as in the judg-

ment of the Commission will be best adapted to a.

- * gomprehensive plan for improving or developing a

_waterwag or. waterways for the use or’ benefit of

interestate [sic] or foreign commerce, for the improve-

ment and utilization of water-power development, and

for other beneficial public uses, including recreational

13a

wae

’

purposes ; and if necessary in order to-secure such plan

the Commission shall have authority to require the

modification of any project and of the plans and specifi-

cations of the project works before approval.”’

Obviously, the purpose of Sections 4(b) and 5 is to afford

protection to the entrepreneur willing to invest his time and

money in determining exactly where and in what form to

-propose construction of a project which will be best adapted

to a comprehensive plan for improving or developing a

waterway and the improvément and utilization of water-

power development. It would be manifestly unfair to one

who has expended large sums of money-over a long period,

of time in the necessary investigation if, upon completion

and subsequent application for a license, a state or munici-

pality could step in and reap the fruit of his labors by ob-

‘ taining a license for the site so laboriously determined

upon, merely because of the preference granted by Section :

7(a). It was to prevent such unfairness that Congress

provided for preliminary permits which would maintain

‘priority, and also provjded that the preference granted to

‘ public bodies by Sectiof 7(a)-should not prevail over them. *

The petitioners’ primary position that Pacific North-

west’s preliminary permit which described.two low dams

in the Mountain Sheep-Pleasant Valley project was limited

to exactly that project is. almost tantamount to a conten-

tion that a preliminary permit is substantially equivalent .

to a license, that is to say; that a license can. be ‘granted

only for the project described in the permit. In so con-

tending; the petitioners ignore the.command of Section,

10(a) that the project as finally approved and adopted

“shall be such as in the judgment of the Commission will

- be best adapted to a comprehensive plan for improving or

developing a waterway ... [and] for the improvement and

utilization of water-power development... .” (Emphasis

added.) Obviously, the Commission is charged with imple-

menting the policies of the Act. It is entitled to such.

flexibility as will conform to the statutory objectives. The -

.¢ .

a .

| Ade |

Supreme Court has pointed out as much in Civil Aero. Bd.

v. State Airlines, 338 U.S. 572, 577-578 (1950). See also

Federal Com. Comm’n-y, a Co., 309 US: 134,

142-143 (1940).

It is further contended by the Niece that the Com-

-mission’s denial of Pacific Northwest’s application for a

* license for the Mountain Shéep-Pleasant Valley dam sites

_terminated its preliminary permit as of the date of the

denial January 28, 1958. We reject the contention. Under

Section 5 of the Act, the Commission may cancel a pre-

liminary permit ‘‘upon failure of permittees to comply

with the conditions thereof or for other good eause shown

after notice and opportunity for hearing,.”’ (Emphasis

added.) The Commission did not order cancellation of

Pacific Northwest’s preliminary permit when ‘the Mountain

Sheep-Pleasant Valley license application was denied but,

as its subsequent actions showed, regarded the cia as

thereafter. in full vigor.

+ Moreover, te ’ ‘finality of the project detain in the

preliminary permit, which is the nub of petitioners’ argu-

ment} is negated not: ‘oply by the fact that the Commission’s

_ primary concern is in the development of waterways and

water-power, as Congress directed in Section 10(a), but

‘also by that section’s concluding clause, which shows that

the projects to achieve that development are not confined

to those first suggested by an applicant:

‘¢. . . [A]nd if necessary in order to secure such

plan the Commission shall have authority ‘to require

the modification of any project and of the plans and

specifications of the project works before approval.’’

_ We hold therefore that the Commission’s action here is

~ not unreasonable as a matter of law and not clearly con-

trary to congressional policy but, on the contrary, was

authorized by its governing statute. The orders-under re-

view will be upheld.

~..

Affirmed.

— Ba’.

No. 18,731 :

The Secretary of the Interior’s.petition for review of |

the same two orders of the Federal Power Commission

challenges the action of the Commission in refusing to:

recommend that the High Mountain Sheep project be con-

structed and operated by the United States.

He asserts (a) that Congress has preempted the High

Mountain Sheep site ‘‘in its comprehensive plan for regu-

_ lating the flow of the waters of the Columbia River sys-

tem;’’ and (b) ‘that the Federal Power Act forbids the

Commission to license for private development a project

that will.affect existing or planned federal development of

water resources. The Secretary of the Interior also asserts

independent staff study and to permit the ee. to

offer evidence respecting federal development. ™

With respect to the Secretary’s assertion (a), referred

to in the preceding paragraph of this opinion, we need do

no more than cite the Roanoke Rapids case,‘ in which the

Supreme Court rejected.a similar argument. Section 7(b)

of the Act, 16 U.S.C... $:800(b) commits solely to the Com-

mission the task of deciding whether the development of

any water resources for public purposes should be under-

taken by the United States itself. Unless the Commission’s

action is arbitrary—without basis in the:record—we have

no power to disturb it. We think in this case the Commis-

sion was amply justified i in refusing to recommend federal

development and i in issuing a license for private construc-

~tion. .

The Secretary’s broad assertion : (b), ontinnd iii can-

not be sustained. It would, if literally accepted, mean that

the existence of one federal dam in a waterway would fe- .

quire that any future dams therein be federally constructed.

4 United States ez rel. Chapman v. Federal Power Comm’n, 345

U.S. 153 (1953).

16a |

'Manifestly, there is no such requirement: the Snake. River

itself is already developed by a mixture of federal and non-

federal projects. If the Commission had found that pri-

vate development of the project would have ‘a significant

adverse effect on existing or planned federal projects, it

might justifiably have recommended, under Section 7(b),°

that federal construction be undertaken, even though Con-

- gress has not pre- -empted the site. There is no such finding

here, however, and we find nothing in the record to justify

that conclusion.

_ The Secretary’s assertion (c), summarized .above, is re-

~_ jected. Suffice it to say that his long delay in opposing the

_ grant to Pacific Northwest—the hearing had been concluded

. for over a year and the examiner’s-decision had already

been rendered when the Secretary finally moved to inter-

vene—was sufficient ta warrant denial of his motion.®

Nevertheless, the Commission permitted intervention

limited tothe filing of exceptions to the examiner’s decision

and participaéion in oral argument before it. Various com-

munications from the Secretary were admitted in evidence.

In these circumstances, we think the Secretary has no cause

to complain that he was not permitted to introduce evidence

which he has not proffered or described.

rs Affirmed.

5 16 U.S.C.-§ 800(b) ;-

**(b) Whenever, in the judgment of the Commission, the

development of any water resources for. public purposes should

be undertaken by the United States itself, the Commission shall

not approve any application for any project affecting such

development, but shall cause*to be made such examinations,

surveys, reports, plans, and estimates of the cost of the pro-

posed development as it may find necessary, and shall submit

its findings to Congress with such recommendations as it may

’ find appropriate concerning such development.’’

¢ The Secretary of the Interior was more than once specifically

invited to participate in the proceedings, but for a period of about

two years did nothing. :

nee

Se Sn Be Pe ee ees

Cie RR RD PRET mR mS eine tattle Lin ae in IS

APPENDIX B

FEDERAL POWER COMMISSION

Opinion No. 418+

Pactric NortHwest Power Company, Prosect No. 2243;

Wasuincton Puslic PowEE SuPPLy ereaene, Prosecr

No. 2273

Opinion and Order Granting License

(Issued February 5, 1964)*

red . * * * *

[Syllabus and Appearances omitted.]

* . * * «

Before Commissioners: Joseph C. Swidler, Chairman;

*L. J. O’Connor, Jr., Charles R. Ross, Harold C. emeeane,

and David 8S. Black.

Ross, Commissioner:

This is a proceeding under Part I of the Federal Power

Act involving applications by Pacific’ Northwest Power

’ Company (PNPC) and the Washington Public Power Sup-

ply System (WPPSS) for a license to build a hydroelectric

project on the Snake River at the confluence of the Salmon

River on the Idaho-Oregon border. PNPC proposes to

build a project at the High Mountain Sheep (HMS) dam

site above the Salmon, and WPPSS proposes to build a

+31 FPC 247 (1964). This opinion is also printed at II Joint

Appendix, p. 609, Washington Public Power Supply ba ae v.

FPC, 358 P. “2a ‘840 (D.C. Cir. 1966).

* Initial decision appears on p. 305. - Rehearing for purposes

of reconsideration granted April 3, 1964, 31 FPC 773. Modified;

- rehearing and stay denied by Opinion No. 418-A, issued April:

80, 1964, 31 FPC 1051. [The initial decision referred to is the

examiner’s decision. It is not printed herein. The opinion on

rehearing is printed in Appendix C, p. 129a, infra]

18a .

project at the Nez Perce dam site just below the Salmon,

_and alternatively, an HMS project. The Secretary of the

Interior, Intervener, urges that both applications be denied

and federal construction be recommended. The proceed-.

ing is before the Commission upon exceptions? to the exam-

iner’s decision issued October 8, 1962, recommending a

. license to PNPC for the HMS project.:

PNPC is an Oregon corporation qualified to do business

in Oregon, Idaho, Washington, and Montana. It is a wholly

owned subsidiary of four sponsoring companies, The Mon-

tana Power Company, Pacific Power and Light Company,

Portland General Electric Company, and the Washington

Water Power Company and was formed in April of 1954

for the purpose of providing a supplemental source of

power to meet the future requirements of these companies.

It does not itself own or operate any electric facilities.

WPPSS was created, as a joint operating agen¢éy, com-

posed of 16 public utility districts ofthe State of Washing-

ton, pursuant to an order of the Department .of Conserva-

tion and Development 6f the State of Washington dated

J anuary 31, 1957, and, under the laws of the State of Wash-

_ ington, is a municipal corporation. It was established for

the purpose of acquiring, constructing, and operating -elec-

tric generating and transmission facilities. it does not own.

or operate any electric facilities, :

The history of: these proceedings began April 8, 1955,

when PNPC was granted a preliminary permit ‘effective

April 1, 1955, for a period of three years for Project No.

2173 consisting of the Mountain: Sheep Development at °

1See Map, Appendix A. [The map referred to in this footnote,

printed in the Commission’s Appendix A, is omitted. It is identical

to the map used by the Court of Appeals in its decision, except

that the Commission did not‘locate the sites of the Low Mountain

Sheep and Pleasant Valley Dams. See mdp in Court of Appeals

decision, p. 7a, supra.]

2 Filed by Idaho Fish and Game Commission, Oregon State Game

Commission and Fish Commission of Oregon, WPPSS, PNPC, staff

of this Commission, and the Secretary of the Interior. ~

.’ v

19a

river mile 192.6 and the Pleasant Valley Development at.

river mile 213.2 both on the Snake River above the con-

fluence of the Salmon and the Imnaha thereby limiting to

the greatest extent possible impact on the Columbia River

salmon runs (14 FPC 644). PNPC filed an application for

a license for this project on September 7, 1955, but the li-. .

cense was denied by the Commission on the ground that any

combination of projects which included Nez Perce was con-

-sistently superior to any combination of projects which did

not include Nez Perce (19 FP@ 127, 131).

Thereafter PNPC filed an application for rehearing and

stay of the Commission’s order in which it asked for time

and opportunity to determine what modifications of the

project would accord to the determination of the Commis-

sion as the best comprehensive development of -the re-

sources involved. On March 20, 1958, just prior to the

expiration of the three-year permit on March 30, the Com-

mission issued an order denying rehearing and stay with

the notation that an opinion and order Would be issued

later. It was in this situation that PNPC filed its applica-.

tion for a license for the High Mountain Sheep Develop-

ment, identified as Project No. 2243, located between the

-confluences of the Salmon and the Imnaha at river mile

189.2 on the Snake. The filing was thus made within the

three-year period specified in the permit. It was not until

April 11, 1958 (19 FPC 353) that the Commission issued

its opinion and order on rehearing in which it generally

reaffirmed its decision on the superiority of Nez Perce over:

the applicant’s Mountain Sheep-Pleasant Valley project.

On June 27, 1958, PNPC filed a petition requesting a dec-

laratory judgment that the preliminary permit issued April

8, 1955, continued in force and effect, that the application

for license in Project No. 2243. was filed in accordance with

the preliminary permit, and that the preliminary permit

. Maintained priority: of application. This petition was with-

drawn on September 28, 1959, with the explanation that

the purpose for which the petition was filed was moot.

ee ee ee ee et ”

On March 15, 1960, WPPSS filed its application for the

Nez Perce Project at river mile 186.2. Hearings were held

in Washington and at Portland, Oregon from November 4,

1968, intermittently to September 12, 1961. On April 24,

1961, WPPSS filed a motion for leave to file an aménd-

ment to its Nez Perce application to construct an alternate

HMS.project. This motion was denied by the examiner, . —

who was affirmed by the Commission on the ground that

no good reason had been shown for the amendment at that

stage (25 FPC 1004; 26 FPC 174). WPPSS, however, did

- introduce evidence on an alternative HMS -project on re-

buttal and at the end of the hearing moved to amend its

application to include HMS. After the filing of voluminous

briefs the examiner issued his decision October 8, 1962.

He denied WPPSS’s motion to amend and granted a li-

cense for PNPC’s HMS project. Exceptions were filed to

the examiner’s decision as noted above including those by

the Secretary of the Interior, who by order of December

14, 1962, was permitted to intervene out-of-time.

Evidence was submitted by the parties with respect to

the three principal projects proposed: PNPC’s proposal

for the HMS site and WPPSS’s proposals for both Nez

Perce and HMS. All three projects would involve large

concrete arched dams, reservoirs extending up the Snake

River, and also up the Salmon River in the case -of Nez .

Perce, and powerhouses containing turbines and generators.

_ The evidence included detailed data on these proposals with

a number of variations. Evidence was also submitted

setting forth plans for a comprehensive development of ©

the Snake River including these projects. For instance,

plans of comprehensive development involving HMS also

include a dam known as the Lower Canyon Project, on the

Salmon River. Further details of the proposed projects

and proposed plans of development will be discussed below.

There is also evidence submitted on the need for additional

power resources by the Pacific Northwest area and by the

‘respective applicants. The evidence of regional resources

8; = tlend Dicadeutiined dite —

2la

took into account not only facilities in operation at the

time the record was made, but also the effect of certain

- projects t be installed in the future including those to

be built under the proposed treaty’ with Canada. We are

-also taking notice that since the close of the record addi-

tional projects have been scheduled including the Hanford

atomic: reactor which will supply power to WPPSS ‘and. —

private companies. On the basis of the evidence and the

discussion. below, we find that the HMS project is best

adapted within the meaning of Section 10(a) of the Federal

Power. Act to a comprehensive plan for improving and

developing a waterway, that PNPC should be given a li--

cense for the HMS project and that federal development

should not be recommended. | :

THE PROPOSED PROJECTS AND PLANS OF DEVELOPMENT

An important preliminary question is whether a license

should be granted for a project at the Nez Perce site .or at

the HMS site. This involves a consideration of the poten-

tialities of each, including its adaptebility to a compre-

hensive plan for improving the Snake and Salmon Rivers.

While both PNPC and WPPSS submitted proposals for

building a project at the HMS site, the physical differences |

between their proposals, as will be developed, are not so

great as to make any appreciable difference in choosing.

‘between Nez Perce and HMS.

For the reasons set-out below, we find that the HMS

project and plan is preferable to the Nez Perce project and

plan. The decisive difference between the two projects

and their related plans is in their effect on the fish prob-

lem. The Nez Perce project would adversely affect the

' fish runs on the upper Snake, the Salmon and the Imnaha

Rivers while the HMS project would not affect in any

manner the fish runs on the Salmon River and -its only

considered impact would be on the fish runs on the Upper

Snake where these runs are already impaired. In addi-

tion, the HMS project would undoubtedly have some impact

on the smaller run on the Imnaha River. However, a canal

‘proposed by PNPC as part of the HMS project would:

appear to have a substantial chance of continuing the exist-

ing fish runs. “

The Nez Perce and HMS Snake River dam sites repre-

sent two of the most important remaining sites on the ©

Columbia River system. As the attached map (App. A)+

shows, the Snake at the dam sites flows in a northwesterly '

direction between the states of Oregon and Idaho; the

Salmon flows in from Idaho on the east side of the Snake.

The Nez Perce site is at river mile 186.2 about 2.5 miles

‘below the mouth of the Salmon, while the HMS site is at

river mile 189.2 about eight-tenths of a mile upstream from

the Salmon, but below the mouth of the Imnaha, which

flows into the Snake from the west or Oregon side. |

A. Comparison of the Proposed HMS and,

Nez Perce Projects — >

As proposed by PNPC the HMS project would consist

of a concrete arch dam approximately 670 feet high from

the river bed and. would create a reservoir extending

approximately 58 miles upstream on the Snake to the Hells

Canyon dam site tailwater and 10 miles upstream on the

Imnaha. - The reservoir would have a gross .storage of

3,600,000 acre-feet, of which 2,250,000 acre-feet would be

usable with a normal drawdown. Two outdoor-type power

’ houses would be located one on each side of the river near

the base of the dam. Each turbine would be connevted to -

a generator rated 175,000 kw. There would be -five units

initially with a total installed capacity of 875,000 kw.

Ultimately there would be ten units with a, total installed

capacity of : 1,750,000 kw. Initial mem would be

® Seven units were assumed for the purpose of company ‘plans

of comprehensive development.

t The Commission’s Appendix A is omitted. See map in Court

of —— decision, p. 7a, supra.

1,000,000 kilowatts, and ultimate capability would” “be

2,000,000 kw.

The HMS project proposed by WPPSS would also ton-

sist of an arch dam at the same site and a reservoir with

the same capacity. In a number of respects, not necessary:

to relate here in full, engineering details of construction

would differ from the project proposed by PNPC. .For

instance, an indoor-type powerhouse would be located on

the Idaho side of the river near the base of the dam with

- an initial installation of six generating units, each rated

200,000.kw. Provision would be made to house four similar’ ©

units in a future underground powerhouse on the Oregon.

side. Maximum initial capacity would be 1,200,000 kw and

ultimate capacity would be 2,000,000 kw.

As proposed by WPPSS in its application as amended in

later testimony the Nez Perce project would consist of a

concrete arch dam approximately 715 feet high. It would

create a reservoir extending approximately 63 miles up-

stream on the Salmon, 61 miles upstream on the Snake to

the*Hells Canyon site tailwater and 10 miles upstream on

the Imnaha. The reservoir would have a gross storage

capacity of 6,600,000 acre-feet and usable storage of

3,130,000 acre-feet with a.normal draw down: An under-

ground powerhouse requiring an excavation. would be

located on the Oregon side of the river and would house

the ten initial generating units rated 200,000 kw each or

2,000,000 kw in all. WPPSS plans another underground

powerhouse for the Idaho side of the river, which would

have six more units, so that: the total generating mtd

+ of the project would be 3,200,000 kw.

(1) Safety and stability of the dam sites and structures—

The parties have raised an issue as to the adequacy of the °

proposed sites for both of the proposed dams (as well as

thé Lower Canyon dam which is eventually to be part of

‘an HMS plan, see pp. 9-10, infra.), but particularly with

respect to Nez Perce. The difficulty is geological. The

rocks of the area consist of: the Columbia River basalts

overlying what is known as the Seven Devils formation,

consisting of strong metamorphosed volcanic amd sedi-

mentary rocks. As the, Snake River cut down through

these rocks, it permitted lateral stresses to cause com-

plicated fracturing of the rocks. At the Nez Perce site,

according to the evidence, the possibility exists that on the

left side of the site’*looking downstream large blocks of .

rock might slide along a sloping fault plane, but there is

also evidence indicating that this would probably not occur

because of certain other blocks of rock standing in the way

and because the apparent faults might actually be welded

by metamorphism.‘ Evidence also indicates doubt about

the Lower Canyon site at mile 3.7 on the Salmon River, and

the evidence is not sufficient to remove all doubt with

respect to-the HMS site.. What is needed before con-

struction can be authorized.at any of these sites is a com-

~ plete geological study carried out by a more elaborate

program of borings. It,will be necessary to provide, as

recommended by our staff, that the licensee of any of the

_ above projects shall engage qualified independent experts

to report on the dam site and the proposed design of the

dam before we approve the design drawings for the dam’

structure. But we do not believe that the evidence supports

a finding that any of the sites are inherently unsafe or

which would warrant a preference hetween Nez Perce

and HMS on this basis. Specifically we agree with the .

examiner that the project structures proposed by PNPC

_ and WPPSS for the HMS project. can, subjgct to approval

of final plans, be made safe and ‘stable, but final design

should be subject to further tests and to our _— as

ordered below.

(2) Costs and power benefite—AMhough the retord is

burdened with mecier ne of costs for the HMS

* The eas ik eel ne result of heat, pressure .

or water.

; .

and Nez Perce projects on various assumptions, it is clear ©

enough as noted by the examiner, that both the HMS

project, as proposed for construction by either PNPC or

WPPSS, and the Nez Perce project proposed by WPPSS

are economically feasible, Furthermore the record makes

clear that Nez Perce, which is the most costly project and,

at the same time, produces the most power, shows the .

greatest excess of annual power values over cost.

WPPSS shows a project cost of $391,080,000 for Nez

Perce and $213,000,000 for HMS; PNPC shows a project

cost of $185,700,000 for HMS;; the.staff shows $369,120,000

for Nez Perce, $229,743,000 for WPPSS’s version of HMS

and $200,231,000 for PNPC’s version of HMS.* In each

case there is an excess of power value over cost—$23,410,000

and $17,482,000 for the WPPSS and FPC analyses of Nez

Perce using a cost of money of 4.75 percent and 4.5 per-

~. cent respectively; $16,792,000 and $12,209,000 for the

\ . WPPSS and FPC analyses of HMS using WPPSS financ-

| ing with a 4.5 percent cost of money; and $5,788,000 and

$4,267,000. using the PNPC and FPC anagyses of HMS

using PNPC financing with a cost of money of 6 percent.

Relying on the same project cost comparison evidence,

the unit costs of energy to be generated by Nez Perce or

the HMS project are not very different when approximately

equivalent financing is used. . Thus the cost per kwh is 2.7

and 2.5 mills for energy generated at Nez Perce and HMS

using WPPSS figures and WPPSS financing, while the

cost. is 3.4 mills for either project using the staff figures

and WPPSS financing. However, when the PNPC 6 per-

-eent cost of money is employed the unit cost per kwh for

HMS rises to 3.5 mills under the PNPC analysis and to

5 These oun sine and those to follow relating to the cost of the —

respective projects reflect WPPSS’s revision of figures used by

the examiner, for we agree with WPPSS that'all cost comparisons

i should be uniformly computed on the basis for cost and: value at

site as had been stipulated on the record with respect to compara- .

tive plans. - - °* ae .

“

4.2 mills under the staff analysis. The record does not

diréctly show what the unit costs would be for Nez Perce

power using PNPC’s 6 percent financing.

We conclude from the cost comparison of the projects

that Nez Perce is the project with the larger. absolute

excess of value over cost. However, assuming a common

cost of money, the difference between the two projects with

respect to the unit cost of the energy generated is not very

great, even assuming WPPSS estimates, and non-existent

assuming the staff’s. PNPC’s dnancing- compared to

WPPSS’s proposed financing: discussed further at Page 33

below, however, would significantly increase the cost of the

power sold to the buyer. This is because PNPC_ would

receive a return that would cover its cost of debt and

provide an allowance on its equity capitalization. In addi-

tion PNPC would incur Federal income taxes. (1 the

ofher hand assuming WPPSS could finance with 4.75 or~

45 percent debt it would be paying less for its capital and.

would pay no Federal income tax. This, of course, does

not mean that Nez Perce is for this reason the better pro-

ject, but merely that if there were no questions of priority

and preference (which, of course, there are) this might be

a factor favoring a WPPSS application for Nez Perce over

a PNPC application fér HMS, even if on the basis of com-

. “parable ‘financing HMS was as good or better than Nez |

Perce. If, however, this kind of advantage were con-

trolling as against a valid priority, we would in almost

every case be required to grant the license to a municipal

rather than a private applicant for a license. If this were

go, the preference provisions in favor of states and muni-

Gipalities in Seetion 7(a) of the Act would hardly be.

necessary, and the priority provisions of Sections 4 and 5

would be meaningless.® °

® As we understand it, one of the major reasons for the priority

and preference provisions of thexAct was to remove from Com- .

mission dis¢fetion the controversiaPissues as to whether competing

_ public or private applicants could best serve the public. |

(8) Other benefits—One of the benefits' of either HMS

or Nez Perce is the ability to store water and so lessen

-floods on the Columbia River. The initial flood control goal

“of the United States Corps of Engineers is to limit the

flood flow. on the Columbia at The Dalles to 800,000° cfs. .

This would require’ 17.3 million acre feet’ of. storage while 4

the ultimate goal of a peak flow of 600,000 cfs at The ~

Dalles would require 32.5 million acre feet of storage. The

Corps report shows 8.3 million acre-feet existing or under

construction. While the construction of Canadian storage®

would add 8.45 million acre-feet and the Libby Project

would add 5'million acre-feet to available storage, thus

there still is an authorized use for further storage from a

project on the Snake where flood flows, with the Salmon,

amount to 6.2 million acre-feet.

The usable storage for flood control at HMS would

amount to only 2,250,000 acre-feet compared with 5,015,000

acre-feet at Nez Perce, so that considered only as project

* versus project the latter would clearly be preferable on

this point. As noted below, however, this preference is

somewhat*diminished in value by the fact that the HMS

plan of development would eventually also include 3,265,000

acre-feet of storage for the Lower Canyon development on

the Salmon,’ so thatfhe HMS plan of development would

provide usable storage of 5,515,000 acre-feet. The record \

indicates that either of the rival projects can be operated |

satisfactorily for flood control.

_ ™Corps of Engineers Report, March 31, 1961, p. 5.

8 Canadian storage would be available upon the construction of

certain projects on the Columbia River in Canada. The treaty

between the United States and Canada providing for such storage

was ratified by Congress in 1961, but not by the Canadian Par-

liament. A somewhat different arrangement for sharing the power

benefits is now being negotiated. .

® Assuming this development at mile 3.7 with a reservoir eleva-

tion of 1595 feet. "

28a

The applicants have az on the annual values to be

_given their-storage potentials. As of 1968 the value of

the HMS storage is $1,840,000 compared to $5,300,000 for

Nez Perce, but the Lower Canyon Project would add the

value of $3,500,000 to the HMS plan. If Canadian storage

- becomes available, the value of HMS, Lower Canyon and

Nez Perce storage would decrease to only $240,000, $370,000,

and $560,000, respectively.

_The record indicates that some of the recreational

potentialities of the double Nez Perce reservoir are greater —

-than for—HMS (or even for HMS with Lower Canyon).

The large. body of water created by the. Nez Perce dam

would provide greater opportunity for boating, gamping,

fishing, hunting and sightseeing than the HMS reservoir or

the Lower Canyon reservoir, ‘or both. Hower these

advantages are offset by the fact that the Nez Perce project

*“Svould threaten recreational values of fishing for salmon

and steelhead trout not only at the site of the reservoir

but wherever fish originating on the Salmon River water-

shed may be caught from the headwaters to the ocean.

The record indicates that downstream navigation benefits

achieved by controlled release of water would be of equal

value with Nez Perce or HMS. The double reservoir, of

Nez. Perce would permit greater scope for boating above

the dam, but there is nothing to show that there is any |

_ importance in- such navigation apart from eae ob

B. Comparison of the Proposed Plans of Development

In determining whether to license HMS, Nez Perce, or

“neither, the Commission must make the required findings

under Section 10(a) of the Federal Power Act providing

in part as follows: : |

That. the project adopted * * * shall be such as in the

judgment of the Commission will. be best adapted to

_ a comprehensive plan for improving or developing a

se act aie Ne in Js ete cma Rae beuae — ee 4a ental -"

29a

waterway or waterways for the use or benefit of inter-

’ state or foreign commerce, for the improvement and

utilization of water-power development, and for other

beneficial uses, including recreational purposes; * * "

To meet the requirements of the statute plans’ were sub-

mitted by WPPSS, PNPC and our staff for the ‘“‘common

reach’? of the river,’ and these parties submitted costs and

other data with respect to the plans and variations of them.

The evidence shows two major plans with variations,

and they are mutually exclusive. One plan involves the

-HMS and related projects and the other plan involves

Nez Perce, as well as additional projects. While these

plans show the potentialities of development of either Nez

Perce or HMS, the cost ‘estimates of the parties respecting

the same plan differ widely. Furthermore, as already

indicated, more exploration is needed at the project sites

so that final plans may differ from the estimates submitted

herein. For this reason we do not find that the data sub-

mitted respecting these plans precisely represents the

ultimate development of either plan, but we are satisfied —

_ that such estimates are approximately correct and do pro-

vide a satisfactory, basis for comparing the two plans. We

also. note, as did the examiner, that there is no immediate

_ proposal for the construction of projects incident to either

plan other than the HMS and Nez Perce projects. Under

these circumstances we think-that the best way of exercising

our responsibilities under Section 10(a) is to determine

_ whether a grant of either the Nez Perce or HMS. projects

‘at this time would, the important time factor considered,

preclude a superior development of the rivers involved.

10 Defined at the prehearing conference as extending from the

tailwater of the China Gardens project at Snake River mile 172.5,

elevation 845 to the normal pool elevation of the Hells Canyon

project on the Snake River, elevation 1683 feet m.s1., and to the

normal pool elevation of the future Freedom project on the

Salmon River, elevation 1780 feet m.s.1.

30a

- The HMS plan consists of the HMS development on the

‘Snake above the mouth of the Salmon, the Lower Canyon .

development utilizing an even larger head on the Salmon

' (either at mile 0.5 or 3.7), later possibly the Freedom

project at mile 69.2 on the Salmon, and the small China

Gardens development on the Snake some sixteen miles

- below the mouth of the Salmon. The Nez Perce plan con-

sists of the large Nez Perce development on the Snake just ©

below the mouth of the Salmon and the China Gardens

development further down the river, either with or with-

out the Freedom development and the Whitebird develop-

ment, a combination fish trap and generating facility at the

_ head of the Nez Perce reservoir on the Salmon River."

_ and an arch dam at Lower Canyon, mile /3.7. PNPC also

introduced evidence on a Nez Perce-plan. It excludes

the cost of fish facilities from its plans as impossible to

estimate and excludes the Whitebird and Freedom develop-

ments as uneconomic until development of the Crevice

project further upstream on the Salmon. However, it did

include evidence of Whitebird costs. WPPSS.presents a

Nez Perce plan with an arch dam at Nez Perce with the

Whitebird development and; eventually, the Freedom

development included. Its HMS plan employs a rock filled

dam at Lower Canyon at mile 0.5 on the Salmon and in-

cludes the Freedom project for future development. ,

(. .

PNPv proposes an HMS plan with il dam at HMS

The staff originally presented comparative plans similar

to those of PNPC, but on rebuttal proposed plans based ~

upon an arch dam (the more economical type) at HMS,

Nez Perce and Lower Canyon (mile 3.7), but did not

include the relatively minor Freedom project or its costs.’

11 No Whitebird development: was proposed in connection with

the HMS plan, for the Lower Canyon dam utilizes _— head

and would flood the Whitebird site.

12 Presumably since Freedom power and costs would be exuslly

applicable to both plans and thus represents a ‘‘wash’’ item.

31a

We aye of the opinion that the staff rebuttal presentation

provides the most valid comparison between the two plans

of development. However, the data presented by PNPC

and .WPPSS on power and costs are shown in the following

table for informative purposes. “ah”

(1) Power Production under the Proposed .Plans—The

record shows that under most of the estimates, including

the staff’s revised comparison which we are adopting as

most reasonable, the installed capacity would be slightly

greater under the HMS plan than under the Nez Perce

plan as shown in the tables below: ee

< Installed capacity

(MW)

Staff

PNPC =‘WPPSS: revised’? _

~ HMS plaf# (HMS, Lower Canyon,

Chins Gardens) ........-..+. 2,180 2.315 ° 2,347

HMS$ plan (with Freedom and

Crevice in operation) ........ 2,700 2,315

Nez Perce plan (Nez Perce, China

Gardens, Whitebird) ........ 2,062 2,235 2,268

Nez Perce plan (With Freedom

- and Crevice in operation) .... 2,626 © 2,240

The- record also shows that under most conditions and

stages of development of the Snake and Salmon, with

~ and without Canadian storage, the HMS plan would exceed

the Nez Perce plan with respect to nominal prime energy

- (energy during the critical winter storage control period),

average annual generation and plant peak capability. This

- power differential in favor of the HMS plan results from

one intrinsic advantage. That is the reservoir elevation

at Nez Perce (or HMS) must be limited to approximately

1510 feet so as not to interfere with the Hells Canyon site

upstream, but the Lower Canyon dam_ can be built to —

produce a higher reservoir and greater. power.

18 Tower Canyon installed capacity of 910 MW and reservoir

at elevation 1595. ;

a a ta ¥

32a

(2) Costs compared with power benefits under the rival

plans—Cost estimates for all projects were presented by

PNPC, WPPSS, the Department of Conservation of the

State of Washington and.our staff. There were different

original estimates and modifications of them leading to wide.

variations in cost resulting from different overall project

layouts. A summary of some of the cost presentations

is shown in the following table. The Freedom project,

which would not change the difference in costs as between

the two plans, is omitted from the figures. The figures

reflect the HMS plan, as composed of HMS, Lower Canyon

and China Gardens, and the Nez Perce plan, as-composed

of Nez Perce, China Gardens and Whitebird, shown on the

aac table. —

Summary of Construction Costs ($1000) Comparative

Plans ~ ee of Middle Snake River

plan plan

Without fish facilities :

Staff (revised)* ........... $443,089 > $393,473

PNPC (direct) ......... .- » 405,673 © 403,098

WPPSS (rebuttal) .......- 460,289 > 367,253

With fish facilities :* a

Staff (revised) ee aeéxe 500,022 °*471,963

WPPSS (rebuttal) ........ 522,000 * 429,000

*In making its revised presentation the staff actually used two

different project layouts—in one a Harza design with all power

plants located ‘across the river, in the other a more economical

design with power plants located parallel to the river. We are

adopting this second comparison assuming also that the Lower

Canyon Dam will have installed capacity of 910 MW and a reser-

voir elevation of 1595 feet.

> Whitebird costs omitted because part ( of these costs were charged

tq Nez Perce fish facilities.

' Includes Whitebird costs.

* PNPC did not present evidence of the cost of fish facilities.

‘In each case the Nez Perce plan is the least expensive.

Using the PNPC figures this difference is only $2,575,000

(excluding Whitebird and fish facilities. in each plan), but

using the WPPSS figure the difference is $93,036,000.

As the examiner points out, the difference in cost be-

tween the HMS plan and the Nez Perce plan on the basis.

of the staff comparison ($49,616,000 without fish facilities)

is about midway between the difference between the two

plans using the PNPC figures and the difference between

the two plans using the WPPSS figures. Because the staff’s

study alone compares the two plans on similar’ bases, in _

our opinion it reflects the approximate difference in cost

between the two plans. 7

Annual costs vary roughly with the construction costs,

and these are shown ithe following table.

Annual Costs ($1,000)*

HMS Nez Perce

| plan plan

Without fish facilities: ;

Staff (revised) ........... $28,337. $24,992.

. PNPC (direct) ........... 26,103 © 25,298

WPPSS (rebuttal) ........ 29,030 > 23,377 |

With fish facilities : _ |

Staff (revised) ........... 32,554 @ 30,600

WPPSS (rebuttal) ...... ~. 33,373 * 27,865

* Using stipulated operations and maintenance and administra- |

tive and general expenses.

. > Whitebird costs omitted because part of these costs were

charged to Nez Perce fish facilities. -

4 Includes Whitebird costs. :

As‘the data reflect, the greatest excess of the HMS plan

costs over the Nez Perce plan costs are shown by WPPSS

~~.

a nS eee or

34a

and the least excess by PNPC without the. Whitebird

development. In fact, PNPC shows an excess of the Nez

Perce plan costs over the HMS plan costs counting in the

Whitebird development. The staff revised estimates,

which. we adopt, fall in between. .

As shown i in the joint exhibit filed ww the satin with

Canadian storage available, the annual power benefits of.

the HM®& plan (HMS, China Gardens, Lower Canyon) are

$56,649,000. By computation using’ the power values

prescribed in the joint exhibit the power benefits of the

Nez Perce plan (Nez Perce, China Gardens, Whitebird)

also with Canadian storage amount to $54,367,000 per year.

These figures and figures for other stages of river devel-

opment both with and without Canadian storage show

that the HMS plan produces greater power Qenefits than

. the Nez Perce plan. In any case annual power benefits

exceed annual costs by substantial amounts for each plan,

and we find they are each economically feasible. _

v The staff and the examiner compared the difference be-

tween the two plans as to annual costs and as to annual

values and derived a net difference. between annual cost

and value for the two plans. The examiner found that

using the staff’s revised comparison the\HMS plan is

superior to the Nez Perce plan i in a somewhat vaguely de-

fined initial period, assuming the completion of Lower

Canyon, but the Néz Perce plan is superior to the HMS

plan in subsequent periods. - '

-WPPSS | objects to the propriety of th¢ exaniiner’s com-’

parison arguing that the Lower Canyen project will not

be in operation at the time the HMS project goes into

service, that the China Gardens project’ will be delayed

beyond the time either the HMS project or the Nez Perce

project is completed} and that there is a premature assump-

tion of seven units at HMS although the license application

provides for five units. It is true that omission of the

Lower. Canyon ~project. would show large net benefits in

35a -

favor_of the Nez Perce plan, the China Gardens develop- ~

ment utilizes more head under the HMS plan and so favors

that plan, and the nore units at HMS, of course, the greater

_ the benefits. ‘Further, there is no question but that these

developments may be delayed. However (apart from the

fish problem) there is no reason to believe that Lower

Canyon would not: be built in due time since the evidence.

shows that Lower Canyon is economic of itself, and if the

Lower Canyon project had-to be delayed or totally pre-

cluded on account of the fish problem so would Nez Perce. —

In our view. of these and other circumstance the only

significant comparative analysis of the two plans is on the

basis of the eventual results when all projects which appear

to be feasible aré built and fully developed.. On this basis,

ns the examiner found, the NezyPerce plan is somewhat

‘superior to HMS. But taking into consideration the present

_ values of an early start on some of the major projects

of a plan, we conclude that this superiority is not. so great.

as to preclude a grant for HMS if, as we shall explain

below, other considerations exist which make feasible the

commencement of HMS construction now, but which would

necessitate an indefinite delay in any Nez Perce construc-

tion. Thus the HMS plan has the advantage of permittmg

an immediate start on major facilities which can bring addi-

tional power to the area while the fish questions which are

‘common to Nez Perce and Lower Canyon receive further ~

study.* Specifically, in the terms of the statute, we find

that despite the somewhat greater advantages which might -

eventually result from adoption of a plan including Nez

Perce over one including HMS, adoption for present grant °

of the HMS project rather than the Nez Perce project will,

14 While the record is not ‘complete on the point, there are indica-

tions that the fish problem with respect to a Lower Canyon dam

will present somewhat lesser difficulties than those involved at

Nez Perce, since the problems created by the intermingling of

waters from two different rivers will not be present.

36a : Se #

' for the reasons detailed below, ‘be best adapted to a com-

prehensive plan for developing the revelant portions of

the Snake and Salmon Rivers. - ‘

(3) Other bases of comparison between the plans—Flood

control, navigation and recreation have already been dis-

cussed in connection with the Nez Perce and HMS projects.

In general the differences between the two plans are not

significant. Both plans will provide about the same navi-

gation benefits, and substantial recreational benefits. The

- HMS plan produces a little more storage because the Lower

Canyon dam can be built higher than Nez Perce, but the

value of storage is reduced enormously in any case with the. -

advent of the Canadian projects. ae

C. The Fish Problem in Connection with the Projects

- . ° -and Plans of Development

One of the most controversial issues in this proceeding

concerns the ability of the applicants to provide for the

movement of anadromous: fish by their proposed projects.

These fish, salmon and trout, as fingerlings, migrate down

the rivers to the ocean and several years later as adults -

migrate up the rivers to’their natal headwaters to spawn.

' The problem here is to determine whether the upstream

migrants, whith normally . progress by swimming and

jumping, and the downstream migrants, which are ordi-

narily carried by the current, can be guided or carried

over high dams and through reservoirs such as HMS, Nez

Perce or Lower Canyon. Our responsibility for this

problem arises from Section 10(a) providing that the pro-

ject adopted by us will be ‘‘best adapted’’ for improving

or developing a waterway for, among other things, ‘‘bene-

ficial public uses, including recreational purposes.’’ While

the proposed projects and plans are largely designed to

produce power, under the.#tatute we are required to con-

sider whether the power use is consistent with recreational

and other beneficial public uses including the use of the

Se ne NR a ee es ne ene seey

37a ; e

river for fishing a" the epee of fish for both i

and commercial purpdses.

According to the record the Columbia River ‘is the

greatest producer of Pacific salmon and steelhead trout

in the United States. The most abundant species is. the

_ chinook salmon, but blueback, silver salmon and steelhead

trout are also important. There are three races of chinook

salmon, the spring, summer and fall chinook. Of these,

the spring chinook, whose ‘most significant source is the

‘Salmon River, are said to. be the tastiest and bring the

highest prices. : , (

Columbia River salmon have been important in the

development of the Pacific Northwest for almost a century.

They are caught not only from the river and its tribu- |

taries, but also from the Pacific Ocean along the coast. The |

- commercial catch of Columbia River salmon is estimated

to be worth $12,000,000 annually and the sport fishing —

- attributable to the Salmon River alone, while no exact

estimate can be made, may be worth as much as $8 million .

a year. The latter figure is based on the amount fisher- -

men spend for the privilege of taking the fish. The value _

of the fish, of céurse, cannot be measured alone by the

amount spent to take them or the value of the fish as food.

Nor ean the value be measured by the economic growth

stimulated by sport and commercial fishermen. The record —

and the contentions of the fisheries’ interests make it clear

that .conservation of the. fish is an important’ public end,

and we so find.*

While the estimating methods employed are subject to

inaccuracies, the re:ord shows that a much larger number

15 We note in this connection that parts of the Salmon River <

are included in a wilderness area by the Secretary of Agriculture, —

which is the subject of the Wilderness Bill, S. 4, the purpose of

which is to preserve wilderness areas for the good of the whole

people. Hearings before the Senate Committee on Interior and

Tnsular Affairs on S. 4, 88th Cong., Ist Sess., pp. 275-276 -

of fish would-be adversely affected by the Nez Perce dam |

than by the HMS dam. The witness for the Idaho Depart-

ment of Fish and Game prepared a study based on a count

of the fish passing the McNary dam on the Columbia River

‘and an allocation of the fish to the various tributaries. The

allocation was based on recovery of a certain number of |

tagged fish after death.in. the headwaters and on a com-

parison of sports catches at various points. --The highest

year’s count for each species was used in arriving at.

total fish, The study shows 619,750 spring and summer

chinook, fall chinook, blheback and steelhead counted .at

MeNary of which 264,200 are estimated to reach the Nez

Perce dam site. Of this number 152,700 are spring and

‘ summer chinook, of which all but 10.9 percent turn into:

the Salmon River.. All of the 9,000 bluebacks also use

ethe Salmon River, as well as 74.1 percent of the steelheads.

On the other hand 85.7 percent of the 35,000 fall chinook

continue up the:Snake. Thus out of the total 264,200 reach-

ing Nez Perce 75.7 percent are estimated to migrate up the

_ Salmon and the 24.3 percent up the Snake, including 5.7

percent up the Imnaha.

- WPPSS criticizes the derivation of these figures arguing |

that they are not accurate enough on which to base a

decision. While no actual counts were made of the fish

passing the Nez Perce.and HMS sites and the estimates

were based‘on gmall samples of tagged fish and question-

naires sent to a fraction’ of the sports fishermen, the

estimates are accurate enough to be of significance because ~

based on data systematically compiled and reasonable in-

ferences. According tothe record an actual count. on the

Snake or Salmon would be inordinately expensive. In our

opinion the study referred to above in comparison with the

record is sufficient to show that the Salmon River has been

and still is of great importance for migrating fish, but that

the Snake is now of.much less importance.

The applicants have not been unaware of this fish problem

_ and have designed their projects in an attempt to solve

39a

it. At Nez Perce WPPSS plans facilities for upstream

_ passage including a picketed barrier below the dam Jead-

ing to a fish ladder 273 feet high, which in turn would lead

to lock chambers where the fish would be. “subjected

gradually to increasing water pressures and would be

discharged into the reservoir 363 feet below the surface.

The downstream migrants would be caught in traps in the

form of V-shaped louver structures at the Whitebird barrier

‘ on the Salmon River and the Imnaha barrier on the Imnaha .

River, and would then be transported to Nez Perce hy

barge. A floating skimmer device would also be provided

in the forebay of the dam. WPPSS would provide similar

facilities at HMS.

The facilities planned by PNPC for sales migrants

at HMS include two fish ladders. One ladder would reach

a canal extending 17 miles up the Imnaha River. The

other would extend to a point on the dam from. which

hoppers would carry the fish over the dam and into the

reservoir. Downstream Snake migrants would be delivered .

at the proposed Hells Canyon loading station for transfer

‘by barge to the dam. Downstream Imnaha migrants would

be guided by the Imnaha fish. barrier to the Imnaha canal

~ and discharged below the dam. |

The fish facilities proposed for both upstream and down-

stream migrants offer a number of hazards. For upstream

migrants there are uncertainties as to the operation of

WPPSS’s proposed barrier below its dam and its proposed

fish: lock particularly as to the effect of pressure on the

fish and whether they will leave the lock. However, the

Imnaha canal proposed by PNPC would appear to have a

substantial chance of success. The canal would carry only

Imnaha water and the fish ladders leading to it would

carry principally Imnaha water (except for the introduc-

tion of Snake River water at one point on the ladder to

attract any stray Snake River upstream migrants). The

canal is proposed on-the theory that the water from each

40a .

stream has a distinetive chemical quality that is rosegialend

by the fish spawned in that-stream. There seems a good

chance that the Imnaha canal will effect a segregation of

the Imnaha fish in a natural manner compared with the

confused situation discussed below that would develop in

the reservoir above the Nez Perce dam. .

As for the downstream migrants the louver barriers pro-

posed by WPPSS are particularly suspect. These are

based on the theory that a fingerling fish will follow along

the louver in preference to passing with the water between

the louver bars. This depends on the behavior of the

fish and a lack of water turbulence in the approaches to

the louver barriers. WPPSS has presented evidence

and contends that its louver barrier at Whitebird will

not be rendered ineffective by water turbulence and trash,

including floating logs, because of the log barrier to be

employed and methods for cleaning the trash racks. Never-

theless the record leaves us in considerable doubt whether

the louver device will operate successfully on the Salmon

where the current will be swifter and the depth greater

than at previous installations. The method of collecting

the fish in pipes, a secondary louver and tanks also raises |

‘grave questions as to whether the inevitable changes in

the quality of the water surrounding the fingerlings will

not disturb their instinct for returning to their natal head-

waters to spawn. .

The record shows that the most important hazard to

upstream migrants or downstream migrants passing the

louvers ‘is the reservoir created by the dam. As may be-

' recalled the HMS reservoir would extend 58 miles up. the

Snake River while the Nez Perce reservoir would extend

in two branches, one 61 miles up the Snake River and

one 63 miles up to the Whitebird fish*barrier on the Salmon

River. The difficulty arises because the chinook are

basically river fish and do not appear to adapt to the

different conditions presented by a reservoir.

St oo a de ak tet lee nigetna it AMA Lente = dint tncasinn anes minal tine thai is SREY

4la

A reservoir exhibits a peculiar thermal structure.

During the winter it is homogeneous with regard to tem- -

- perature, but as the season advances a horizontal stratifica-

tion results with the colder water sinking lower. Since

Salmon River water is colder than Snake River water, it is

possible, if not probable, that in the Nez Perce reservoir the

water from the two rivers would be found in separate

layers and be drawn off at different times. Presumably

the upstream migrants reaching fish ladders might at one

time be presented with water from one river and at another

time water from the other river. If water quality is im-

portant in attracting the upstream migrants to their proper

streams, as many experts believe, this stratification would

be a source of confusion and delay. Also a source of con-

fusion to the upstream migrants would be the predicted

tendency shown by the record for water from the Salmon

River arm of the Nez Perce reservoir to flow up the Snake

River arm and vice versa. Again the fish are faced with

a complicated problem in finding their way.

The velocity .of flow in the Nez Perce or HMS reservoir

’ would be very low compared with the free flowing stream

or even compared to the flow in the” reservoir of the

McNary dam on the Columbia. Since the upstream

migrants follow water flow and downstream migrants are

carried by current, such low velocities offer a- further

obstacle to the passage of anadromous fish.

The record also shows that during the summer months

the oxygen content of the water in the reservoir at the

lower levels will fall to amounts which are dangerously

insufficient for salmon. The decrease ith , oxygen content

appears to be due to decomposed sinking ;dead organisms

(plankton) from the upper layers of water. The record |

indicates that salmon require an oxygen content of approx-

imately five parts per million, yet the oxygen content at the

250-350 foot level would fall 1 in aaa to less than three

parts per million.

. a:

Another phenomenon of importance is ‘‘residualism,’’

a term used to describe the failure of anadromous fish to

- pass through the reservoir to the ocean. If loss of water

velocity or accumulation of dissolved salts can cause t e

donwstream migrants to remain in the reservoir, they are

lost as perpetuators of the species, since residual fish do

not spawn successfully. |

WPPSS tries to rebut the evidence with respect to-

reservoirs. It eites testimony to thé effect that it is not

known how a salmon finds its way back to its home stream,

that Salmon River water will not appear in the Snake

River arm of the reservoir and that the salmon will be able

to follow the cool lower strata of water to the upper end

of the reservoir. As to the oxygen content issue, which

would of course affect this cool lower water, WPPSS argues

that the fishery witnesses’ testimony did not take into

account that the Salmon River contains pure, soft water

which would not be conducive to high plankton production,

the most important factor in oxygen consumption, and has

exaggerated the time that water is retained in the reservoir.

These are matters which, in the present state of the knowl-

edge of fish habits are highly controversial, and are not in

our opinion clearly resolved in the record. There is

abundant evidence, however, that a reservoir, such as the

one that would be formed by the Nez Perce dam (or HMS) |

would provide many risks to the upstream migrants. Alter- —

native methods of handling the problem suggested by

WPPSS do not obviate these severe risks. Thus trans-

porting. adult fish in tanks involves the danger of injury

and disease. Establishment-of hatcheries would not neces-

sarily be effective. While the propagation of fall chinook

in hatcheries has been successful, the same is not true of

spring and summer chinook although WPPSS argues that

it eould be done.

As a result of our consideration of the evidence raised in

this copious record we agree with the contentions made -

P 43a .

by the fishery interveners and the staff that high dams and.

reservoirs present major obstacles to anadromous fish. In

the present state of the art it is not possible to build

facilities for fish passage with any assurance that they will

be effective. The Nez Perce project affects both the Snake

‘and Salmon Rivers and would endanger the fish runs on .

the Salmon; the HMS project affects only the Snake River

where the fish runs are already impaired.

The Snake River fish runs are already subject to the

constructed Brownlee and Oxbow developments and the

Hells Canyon development, now under construction, of the

Idaho Power Company (Project No. 1971, 14 FPC 55). In

this connection we take notice that the Idaho Power Com-

pany seeks to abandon as ineffective the facilities for down-

stream migrants required by us at the Brownlee Project

(see our order in Project No. 1971 of March 22, 1963).

While the eventual effect. of the present Snake River proj-

ects on the fish runs is not shown in the present record,

another project on the Snake would obviously not consti-

- tute the threat to the Columbia River fish runs. in any way

comparable to a project on the untouched Salmon River.

This appears to be also the view of the Corps of Engineers

expressed in a report to the Secretary of the Army dated

March 31, 1961, where it was stated that ‘‘at least 15 to:

20 years might be necessary to resolve the problem that

would bé created by the Nez Perce project’’ while ‘‘The

High Mountain Sheep project could be constructed now

without being a serious hazard to the anadromous fishery.”?

Likewise the Secretary of the Interior, whose department

is largely responsible for the preservation of wildlife, stated

‘in a letter of June 28, 1962, that a ‘‘caleulated risk’’ at Nez

Perce ‘‘would not be -warrarited’’ but that ‘‘The Mountain

Sheep project represents less hazard to the seins J resource

than the Nez Perce project.’’

We are well aware, that in reaching this conclusion we

are departing from the optimism as to the efficacy of fish

| 44a _

passage facilities on high dams which was reflected in the

decision approving the application of the Idaho-Power

Company for its three developments on the Snake River

(Project No. 1971)'* as well as in the original decision on

_ PNPC’s application for the Mountain Sheep and Pleasant

Valley projects. We can only state that nothing in this

record made in the light of subsequent knowledge or which

has come to our attention in the course of our day-to-day

dealing with the problem in the past two years would justify

-gontinuing such optimism. We can hope for the best and.

we will coninue to insist that any licensee building a high

dam at a site which presumably involves major fish runs

do everything possible within the ‘limits of reasonable ex-

pense to preserve the fish runs.. But as of now we under-

standably must assume that the best efforts will be only

partly successful and that real damage may. and probably

will be done to any such fish runs. |

‘WPPSS alleges it was denied due process as a en

of the examiner’s handling of the fish issue at the hearing.

It complains that the rights of the parties were subordi-

nated to considerations of speed and counsel was cut short

in efforts to cross-examine the witness for the Idaho Com-

mission. WPPSS also argues that PNPC was given first

chance to ¢ross-examine although PNPC’s cross-examina-

tion was friendly rather than hostile, so that the witness

was able to expand his testimony.. -When counsel for

WPPSS attempted cross-examination, it says, objections

were sustained .on the ground that the subject matter had

already been covered: We are of the opinion the WPPSS’s

allegations are not sustained by the record and that, in any

case, the rulings made by the examiner were not prejudicial.

- Although counsel for PNPC was allowed to ¢ross-examine

the witness for the Idaho Commission first and may have

enabled the witness to amplify his testimony, this does not

1614 FPC 55.

”

45a. —

, constitute error even if it could be argued that it lengthened

the record unnecessarily. Counsel for WPPSS was per-

-mitted lengthy cross-examination of this witness; his ex-

amination, covered some 150 pages in the transcript.

WPPSS has set forth thirty-eight instances in which it

“alleges that the right to cross examine was improperly

denied by the examiner. Upon consideration of the ques-

tions asked we think that the examiner was not in error in

sustaining objections to the questions. In each instance

it could reasonably be said that the questions were defective

'—irrelevant, argumentative, repetitious, or outside the com-

petency of the witness—and we do not think the examiner

erred. In several instances counsel for WPPSS secured an

answer by a differently phrased question.

Even assuming that some few of the examiner’s rulings

may have been legally erroneous they are not, we believe,

prejudicial. The questions concerned a wide variety of

subjects such as possible bias of the. witness, fish counts .

and allocation of fish among river tributaries, angling ac-

tivity, computation of .numbers of down-stream migrants

on the basis of eggs layed, differences between the Brown. |

lee dam and the proposed Nez Perce dam, comparison of

the ‘louver .device at Whitebird with one on ancther river,

the effect of water pressure on spawning, and the necessary

size of fish ladders. These subjects are for the most part

relevant, but none of the questions or their possible ‘an-

swers would cast doubts.on the essential basis of our de-

cision here that there are undeniably large numbers of sal-

mon that make use of the Salmon River, that a high dam

and ‘reservoir represents a major danger to the fish runs .

despite WPPSS’s best efforts to surmount the“ problem,

and that the Salmon River runs will not be damaged by a

dam at HMS. | , ry | |

In order to assure a sufficient flow of water to maintain .

fish life below the HMS dam the Idaho and Oregon Com-

missions have recommended. amendment of the examiner’

46a

ordering paragraphs relating. to flood control and naviga-

tion. While sympathetic with these Commissions’ objec-

tives, the record fails to justify adoption of this recom-

mendation. The two commissions have also asked that

conditions be inserted in the license providing for the re-

' placement of fish and wildlife habitat affected by the license.

We think this is too broad a requirement and will use the

paragraphs relating to fish and wildlife which we are now

employing in other licenses. These appear .as Articles

16 and 53 in the conditions.

D. Conclusion on the River Projects and -

Plans of Development

As between the proposed HMS and Nez Perce projects

- we find that HMS itself is a smaller project with a lesser

ability to generate power and a significantly lesser ability

to store food waters (a matter of importance only until the

advent of Canadian storage). However, as a plan of river

development the HMS plan, although somewhat more costly

and possibly producing power at a higher unit cost, pro-

duces more benefits than the plan involving Nez Perce.

While the estimates are contradictory, it does not appear

that the net benefits of either plan are very much greater

than the other. The HMS plan, however, has one decisive

advantage i the Nez Perce plan. It permits postpone-

ment of a .on the Salmon River until the fish passage

problem is more clearly solved. On this. basis we believe

the HMS site rather than the Nez Perce site shauld be

developed. 9

-WPPSS argues that permitting the fishery issues to be

a dominant consideration was inconsistent with past Com-

mission actions.. It is true that -we have approved projects

where some damage to fish appéared likely (see City of

Tacoma, 10 FPC 424) in order to avoid denying the project.

‘But this does not and cannot mean that the fishery resource

must inevitably yield to power considerations. A balancing

47a

of equities, in Ms light df the relative imPortance of the

two claims on our natural resources in the particular case

must be determinative. Here the fishery resource is a

major one. Insofar as a further dam on the Snake is

concerned, we believe that the power factors outweigh

the possible loss,.even assuming that the best efforts at

HMS will further diminish the already impaired fish

_ runs there. | ;

PROPOSED DEVELOPERS OF THE PROJECTS

Having narrowed the problem to the proposed HMS

project and ‘plan of development, we have before us

» PNPC’s application for a license for this project, WPPSS’s .

amendment of its Ne% Perce application to include HMS,

‘and the request of the Secretary of the Interior not to

grant any license but to‘recommend Federal development.

We do not think differences in construction features or

differences in cost as between the two applicants for the

HMS project are decisive because the plans are not final

and can be modified and undesirable features eliminated: .

As between the applicants, the initial question is a legal

one, i.e., whether PNPC has a priority under its prelimi- — :

nary permit: If so, as we believe is the case here, the li-

cense should be issued to PNPC provided that it conforms

to the requirements of the Act in other respects. For in-

stance, in order that its project, HMS, be ‘‘best adapted’’

within the meaning of: Section 10(a), there should be a

sufficient market for its power. If PNPC has a priority

under its preliminary permit, it will not be necessary to

consider whether WPPSS would otherwise have a pref-

erence under Section 7(a), for that Section only applies<

“‘where no preliminary} pérmit has been issued.’? Further,

it is not necessary to resolve other questions relating to

WPPSS such as its legal capacity to undertake a project

outside of its own state. |

Finally, we have before us the issues raised by the Seere-

etary of the Interior in his request that federal construc-

we oe na ne tee oe — = sab acts

—

sues is whether a non-federal licensee can effectively co-

ordinate the operation of a Snake River project with the

federal projects downstream and whether a probable de-

lay as a result) of federal construction would prevent the’

region and PNPC from obtaining needed power resources.

A, PNPC’8 Priority Under its Preliminary Permit

This legal question is twofold: did the preliminary per-

mit granted PNPC on April 8, 1955 expire before its stated

term of three years in the absence of any order terminating

the permit; and was the permit limited to the site described

in the application for a preliminary permit or did the

permit extend to that project which was best adapted to:

, es ; 3 “7 .

tion be recommended. The most. important of these is- |

’ a. comprehensive development of that reach of the river? .

A preliminary permit is issued under Section 4(f)'" of

the Act to enable an applicant for a license to make studies

and, gather data and at the same time under Section 5"* to

maintain its priority of application. ‘ Section 4(f) speci-

fically states that the permits are to enable applicants to

secure the data and perform the acts required by Section

$ | e 4

17 Sec. 4. The Commission is hereby authorized and empowered—

(f) To issue prelimingry permits for the purpose of enabling ap-

plicants for a license /hereunder to secure the data and to perform .

the acts required by Section 9 hereof: * * *

18 Sec,5. Each preliminary permit issued — this.Part shall .

be for the sole purpose of maintaining priority of application for

a license under the terms of this Act for such period or periods,

not exceeding a Yotal of three years, as in the discretion of the

Commission may be necessary for making examinations and sur-

veys; for prepdring maps, plans, specifications, and estimates,

and for making finangial arrangements. Each such permit shall

set forth the conditions under which priority may be maintained.

Such permits shall not be transferable, and may be cancelled by

order of the Commission upon failure of permittees to comply

with the conditions hereof or for other good cause shown after

notice and opportunity for hearing. ;

49a

9. The latter requires that each applicant submit to the

Commission ‘‘maps, plans, specifications and estimates of

cost as may be required for a full understanding of the

proposed project.”’ Section 5 refers to the permit as being

‘‘for the sole purpose-of maintaining priority for a period,

not exceeding three years, for making examinations and

surveys, for preparing maps, plans, specifications, and

estimates, and for making finaricial arrangements.’’ The

statute, limits the purpose of the permit to priority to avoid

any interpretation that it represents permission to begin

construction. The statute does not prevent but clearly

contemplates that proposals and plans made at ‘the time

the permit was issued may be changed as a result of investi-

gations made by the permittee. At the same time the per-

mittee is protected by the permit. from rival applicants"

while incurring expenses in the investigation of a project

‘intended and required by Section 10(a)," to be best adapted

to a comprehensive development of the reach of the river

involved. =i

We consider it evident that the statutory intent of these |

provisions is to give a permittee the first right to develop

that reach of a river to which the permit relates. Any

other interpretation wotild-make fhe permit meaningless,

for if another party could obtain a permit or apply for a

license for a nearby project that would develop substan-

tially the same head as the one describéd in the original

_ permit, there would be no protection to the first permittee.

_ 1*8ec. 10(a). That the project adopted, including the maps, -

plans and specifications, shall be such as in the judgment of the

_ Commission will be best adapted to a comprehensive plan for im-

proving or developing a waterway or waterways for the use or

benefit of interstate or foreign commerce, for the improvement and

utilization of water-power development, and for other beneficial

public uses, including recreational purposes; and if necessary in

order to secure such plan the Commission shall have authority -to

require the modification of any project and of the plans and

specifications of the project works before approval. — ;

‘

50a

Likewise, if another project affecting essentially the same

reach of the river were not considered within the original

permit, the original permittee could apply for a separate

three-year permit for such ‘project. and could thus. tie up

the development of the river for a period of time sub- -

stantially in. excess of that contemplated in the statute.

Thus, to construe these statutory priority provisions nar- .

rowly would be, in effect, to write them out of the Act.

To interpret the priority afforded by a permit as limited

to a single project would also be contrary to the two most

significant objectives of the Act, namely, to encourage the

development of our nation’s water resources, and to in-

sure that such development would be best adapted to the

fullest use of the river, considering all uses. Who would

be willing to undertake substantial and expensive investiga-

tions looking toward development of a river if a permit

were good only in the event—the unlikely: event—that

the results of the investigations coincided precisely with the

permittee’s guesstimate at the time the permit applica-

tion was filed? In this connection, it is the experience of

the Commission that a project is rarely constructed at the

same exact site and in the same fashion as originally

contemplated. ‘Indeed, we are unaware of a single instance

where this is true. For example, in the Alabama Power

case” the permit listed specifically five developments on

the Coosa River in Alabama. The license also provided

for five developments covering approximately the same

reaches of the Coosa River but with three of them in dif- —

ferent locations." In the Grant County case™ the permit

2 Alabama Power Co., 13 FPC: 1235, 18 FPC 265.

21 The permit described. projects at river. miles 13.5, 67.5, 105.7, .

148.5 and 227.0, while the license described projects which are -

located at river miles 12, 51, 98,147, and 227.0.

22 Public Utility District No. 2 of Grant County, 13 FPC 1462,

14 FPC 1067.

5la

described one dam, Priest Rapids, at river mile 397 on the

Columbia River, but the license described two dams for

'. the same reach of the river, Priest Rapids at river mile

397 and Wanapum af river mile 415. a |

If priority ‘extended only fo that project described in a. ©

permit, the pressure would be great upon the permittee not

to explore fully alternative -projects which might be su-

perior. Clearly, if such investigations were conducted and

_an alternative devejopment were considered preferable, the

first permittee would be in danger of losing its opportunity

to develop needed generating capacity as a result of its

‘ own actions. Thus, a narrow interpretation of the priority

provisions would serve to undermine the objectives of

Section 10(a) of the Act which is designed to insure the

optimum development of our water resources. As a unani-

mous Commission recently held: :

It [preliminary permit] is granted in a situation where

the feasibility of a project in a particular stretch of a

river has not as yet been demonstrated. It gives the

_ permittee a priority over other non-Federal parties in

order to encourage the investigations of projects which

otherwise might never be investigated or built.

In view of the incongruity of a narrow interpretation

of the priority afforded by a permit with the fundamental

objectives of the Act, as well as the specific provisions on

priority itself, it would require a compelling showing to

_ convince us that PNPC’s preliminary permit is of no effect

respecting PNPC’s HMS license application. To the con-.

trary, we view the numerous terms of PNPO’s permit as

describing that type of permit contemplated by the Act.

There are six specific articles in the permit which re-

- quired PNPC to cooperate with various federal, state

_ 8 Georgia Power Company, Project No. 2308, ‘‘Order Denying

Application for Preliminary. Permit’’, issued April 2, 1962.

52a

and other interested agencies for the purpose of evolving

the best development of the Snake, irrespective of the de- .

tailed description of the project as tentatively proposed.

Article 10 required PNPC to-cooperate with the U.S. For-

est Service to develop a plan for alleviating damage to and

achieving maximum utilization of National Forest re-

sources: In Articles 11 and 12, the permittee was obliged

to negotiate. and cooperate with the U.S. Fish and Wild-

life Service and various commissions of the states of Idaho

and Oregon in formulating measures in the interest of fish

and wildlife conservation. Article 13 required PNPC to

cooperate with enumerated State departments and com-

missions and with the U. S. Forest Service regarding the

recreational phases of the project. .PNPC was required by

Article 14 to cooperate with the Bureau of Mines con-

cerning mineral resource possibilities. Most importantly,

Article 15 required PNPC to cooperate with the Corps of

Engineers and the Bureau of Reclamation ‘‘* * * with the

object of determining a plan of development for the two

sites best adapted to a comprehensive plan of develop-

ment of the water resources of the Snake River.’’ To adopt

a narrow interpretation of the permit would be anomalous

in that PNPC would be required to develop the best plan

of development when it would thereby lose its priority to .

carry out the development.:

WPPSS emphasizes that language in paragraph (A) of

PNPC’s permit, ie., ‘‘This preliminary permit is issued

* * * for the sole purpose of maintaining priority of ap-

plication for a license for Project No. 2173 * * *.’”? How-

. ever, the specificity in applications for permits required

by our regulations arose from the necessity -of limiting un-

necessary reservations of land for power purposes to the

detriment of the public. The legislative history of the Water

Power Act evidences a grave concern with undue reser-

2 —_— sr wn A es 2 mas HB

53a

vations of public lands for such purposes. It was for

this reason that our regulations were designed to provide

a detailed description of the lands occupied by the project.

While it is not possible to achieve these desired results

in every case, as here, we do not view those situations as.

adequate justification for abandoning our attempts ‘to in-

sure a sensible program of land withdrawals. Thus, as

stated above, our regulations governing the filing of appli-

cations for preliminary permits require the specification

_ and the location not only of the lands to be used but also es

_of the major project works. Any application for a permit —

failing to contain the required specificity would be rejected |

under our Rules. Section 4.81 of our regulations under the i

Federal Power Act which specifically deals with the filing :

of applications for preliminary permits, as well as Section .

1.14(a) of our Rules of Practice and Procedure, specifically

provide for such rejection.

While the detailed description of site in both the applica-

tion and in the resulting permit enables a sensible program

of land withdrawals, we do not believe that this aspect

. 4 Hearings, House Committee on Public Lands, 63rd: Cong., 2d

Sess. on H.R. 14893, May 5, 1914, p. 195, 357-359; Cong. Ree.

July 20, 1914, vol. 51, .pp. 14061-14062, debate on H.R. 16673.

Hearings, Senate Committee on Public Lands, 68rd Cong., 3rd

Sess.“on H.R. 16673, Dec. 17, 1914, pp. 351-355; H.R. No. 16,

64th Cong., Ist Sess. 1916, Report of Committee on Public Lands

to Accompany H.R. 408; Cong. Ree. Jan. 5, 1916, vol. 53, p. 527,

debate on H.R. 408; Hearings, House Committee on Water Power,

' 65th Cong., 2d Sess. May 13, 1918, p. 623-624; Cong. Rec. Sept. -

5, 1918, vol. 56, p. 10035, debate on S. 1419; Cong. Ree. July 1, -

1919, vol. 58, pp. 2243, debate on H.R. 3184.

Oe ee eS Te

. 54a

should be or is controlling with respect to the scope .of a

permit.” .

Moreover, we view the} language in peragynh (A) of

the Commission’s order above cited as emphasizing the

fact that no. construction authority: was being granted,

but only: a priority to conduct investigations. In several .

early proceedings, various parties appeared in opposition

to preliminary permits when the opposition related to the

project itself, and not to the priority aspects of a project.”

In these cases, the Commission emphasized that only a

priority was involved and that the merits of the project

ultimately sought was the subject matter of license ap-

plication.

The scope of a preliminary permit onieiainal language .

identical to that. in PNPC’s permit was specifically con-

2% After carefully selecting and citing the general requirements

of the regulations, the minority assert that it can find no unyield-

ing requirements of specificity. If the minority had gone further

and considered Exhibits E, F, H and I prescribed by Section

4.82(k), the specificity we referred to would have been _—_

Exhibit H, for example, requires:

Exhibit H. A general map showing the nature of the pro-

posed project, its principal features and their location, and

*the location of the project as a whole with reference to some

well-known town or stream.’ On this -map shall be placed a line

indicating the. approximate project boundary of the area to

be oceupied by the principal project works, such as, dams,

reservoirs, forebays, waterways, and. powerhouses, but exclud-

ing transmission lines, and whefe necessary in order to deter-

mine the location of such structures on the ground, there shall .

be shown on the map their relative positions with respect to

permanent monuments or objects that can be readily recog-

-nized from. descriptions thereof noted on the map. (See

specifications for drawings, § 4.42.) [Emphasis added.]

26 E.g., Linoma Power Co., 8 FPC 999 (1949).

5da

sidered in the Montana case.” Montana was the permittee

for proposed Project No. 2164 (at mile 36.4) and 2163

(at mile 60.7) on the Flathead River. Previously, Montana

had been issued a permit for Project No.,2135 at mile 68.6.

Project No, 2163, if constructed would have inundated:

,, Project. No. 2135. Subsequently, Montana filed for a fourth

‘permit, identified as Project No. 2223. If constructed, this

project would develop the same reach of the river as Proj- £

ects Nos. 2163 and 2164. On January 8, 1957; the Confeder- *

ated Salish and Kootenai Tribes filed an appearance in op- 3

position to Montana’s application for a permit for Project |

2223. They characterized that application as an attempt to

secure an unlawful priority to apply for a license.* The -

Secretary of the Commission had previously requested ad- +

ditional support for the grant of the permit since it ap- - ~~. ¢

peared that Montana’s existing permits enabled it to con- - |

duct the necessary studies regarding Project 2223. In.re- /

sponse, Montana agreed that the same reach of the river E

was involved in its existing permits as was covered by Proj-. ¥

ect 2223. Nevertheless, it pointed out that proposed Project

2293 was substantially different from the projects contem-

_ plated under permits 2135, 2163 and 2164 and went on to de-

scribe some of these major differences. . Nevertheless, the °

Commission denied the application fora permit for Project E

2223 as unnecessary. That order carefully explains that the

amendment was denied because the examinations, surveys |

and other acts, the performance of which is contemplated

under a preliminary permit could be made awith respect to:

Project 2223 under the outstanding preliminary permits for

Projects 2163 and 2164. The Commission made this finding

* The Montana Power Co., 17 FPC 834. Actually this language

is found in virtually every preliminary-permit granted by the

Commission. In fact, we are not aware of any permit containing

broader language. pee

28 Subsequently, these tribes filed an application for a prelim- |

inary permit for Project No. 2285 which involves the same reach

of the Flathead River. 7

S6a

notwithstanding the different identification numbers as-

‘signed to.the two proposals. The holding in this contested

‘proceeding ‘cannot be recenetied with the minority’s

position.” -~ |

Both Staff and WPPSS, argué, in effect, that the priority

granted by a permit, irrespective of the scope thereof,

ceases to have independent efficacy upon the filing of a li-

cense application. We disagree. Section 5 provides for

priority ‘‘for such period or périods, not exceeding a total

of three years * * *.”’ |It does not state that a permit ex-

pires when a license application is filed nor does it state

that a permit somehow ‘‘merges’’ into a license application.

Moreover, Article 3 of PNPC’s permit specifies certain

conditions under which the priority granted by the permit _

will be lost. None of these conditions is present in this

ease. Staff and WPPSS place substantial weight upon an

opinion of the FPC General Counsel given in 1923. This

- obscure opinion is not mentioned in any: Commission de-

termination of which we are aware. Moreover, the basic

issue discussed in that opinion is whether. priority extends

beyond the term specified in a permit in situations where .

a permittee filed a license’ application within the duration -

of the permit. On this point, there is no dispute. But that

is quite a different question from the one involved here, i.e.,

whether : a permit terminates upon the filing of license ap-

. 2 The minority allege the requested amendment in that case.

specified a project ‘‘at precisely the same site the applicant was

already exploring under an existing .permit for a smaller dam.’’

A careful review of the Montana record does not support this

allegation. But even if it‘were true, the scope of a project and

its effect on adjacent lands, waters and other potential projects —

are affected not only by ‘the site of a project but also by several

other features, such as: its height. The minority further point

- to the Appalachian case (17 FPC 8, 19 FPC 169) in which an

amendment was allowed. That case involved a request for a

completely new project—l4 miles away—in addition sa that

ated the subject of a permit.

Lo mt estas tampa te

57a

plication. As the minority correctly recognize in one place,

the instant case represents the benchmark decision on the

latter issue.

PNPC’s original license application for a two-dam

Mountain Sheep Pleasant,Valley development places the

dams at a slightly different location than the permit de-

scribed. And PNPC actually made investigations under

the permit of no fewer than three different one-dam High

Mountain Sheep developments.” This was consistent with

the Resohition of PNPC’s Board of Directors, embodied"

in its application for a permit, which authorized its officers

“to apply * * * for a Preliminary Permit * * * to

make studies, surveys, and investigations of the feasi-

bility of hydroelectric power developments in the vicin-

ity of the Mountain Sheep and Pleasant Valley Hydro-

electric sites on the Snake River, in the States of ‘Idaho

and Oregon, for the purpose of enabling the company

to secure the data and perform the acts required by

law for filing an Application or Applications for the

issuance of a license or licenses ;’’ [Emphasis supplied ;

Exhibit B, application for preliminary permit.]

After the Mountain Sheep-Pleasant Valley application was

denied, PNPC was fully aware of the fact that the term

of its permit soon would expire. -In its application for

_ rehearing of the Commission’s Opinion and Order denying

the license, PNPC requested the Commission to protect its

priority in addition to its argument for the licensing of

Mountain Sheep-Pleasant Valley. It asked that the matter

- be set down for rehearing to consider such modification

of its project as would represent the most comprehensive

development of the resources. Article 3 of its permit spe-

cifically provided for the Commission’s modification of

the plans submitted by the permitteé as, in the judgment —

_ Tp, 1474.5, Project No. 2173. .

of the Commission, would be best adapted toa iaciaiillai

sive plan of development. PNPC pointed out particularly

‘that an HMS dam between the Salmon and Imnaha had not.

been considered by the Commission. Nevertheless, on March

20, 1958 (19 FPC 353) the Commission issued an order

denying rehearing stating that an \ ane would be issued

later.

PNPC was faced with a cuions groblen. Its three-year

- permit would expire April 1, 1958. It might have obtained

an amended permit specifying Nez Perce, but this was most

doubtful in view ,of the Montana case, supra. More im-

portantly, PNPC adhered to its position that any project

which blocked the fish runs on the Salmon was not the

best development. While its application for rehearing was

denied, there was no opinion, and PNPC could not know

whether its priority would be: preserved by Commission ac-

tion under Article 3 of its permit. In‘the meantime, addi-.

tional studies indicated the probable gedlogical feasibility

of the HMS site, and PNPC filed a licetise application for

a project for this site, a site 3.4 miles below the initially

proyosed Mountain Sheep development.** Subsequent to the

filing of thié license application, the Commission released its

opinion on rehearing declaring its view that any combina-

tion of projects which includes Nez Perce is consistently

superior to any combination which does not include Nez

StIna footnote, WPPSS makes the argument in cursory fashion

that PNPC’s HMS license application was incomplete when it was

initially filed, and was not completed until after the term of the

and 1.14(a) of our Rules of Practice referred to’ above provide for

rejection of applications tendered to the Commission which do

not.contain the requisite information. PNPC’s HMS license ap-

plication was not rejected but was accepted for filing by the Com-

mission. The fact that additional data was requested here, as in

most cases, and submitted does not change our view regarding the

‘ adequacy of the filing’ or the correctness of its acceptance.

_ WPPSS'’s contention is untimely and seamen

‘iso punerneemepree

- preliminary permit had expired. Section 4.81 of our regulations .

. 59a \ ‘

Perce. Interestingly, the Commission did not make the re-

quested finding that a Nez Perce project represented the

most comprehensive development of the Snake, considering .

all uses. Thus, while the dream of Nez Perce was con-

sidered adequate justification for a denial of an alterna-

.. . tive development, it is anomalous that the Commission ap-

_ parently lacked the necessary conviction to'make or direct

appropriate modification of: PNPC’s plans under Article 3

of the permit to specify Nez Perce.

As a matter of fact, PNPC is to be commended for stick- :

ing with its concept regarding the proper. development of

the Snake. With the issuance of the Commission’s opinion

on January 20, 1958, indicating its conclusion” that Nez

Perce represented the best development of this reach of

the Snake, it.would have ‘been an easy matter for PNPC

to have promptly filed a license application specifying this

site. This it did not do. Rather, it insisted that any pro-

posal which would block the Salmén River was not best

adapted to comprehensive development. While equitable

<onsiderations are not relevant to d&étermining the scope

of a preliminary permit, we are nevertheless constrained ~

to observe the irony inyolved in rejecting PNPC’s pro-

‘posal to develop the Snake when its HMS application would

promptly have been granted had the Commission properly

analyzed the relative merits of a.Nez Perce project.

. Our dissenting colleagues also recognize the need for

flexibility and attempt to avoid any interpretation of a-

permit which would impose the ‘‘impossible demands?’ of

requiring parties to guess in advance of exploratory studies ,__

conducted under a permit. The minority’s solution, i.e.,

filing of amendments to permits, is incomplete becanse the _

all important question remains: Does a party having a per? — ’

mit have a right to an amendment to permit for a

. project concerning the same stretch of the river? The

minority carefully fails to answer this critical point. If-

thay answer negatively, their solution is frustrating and

oan

Wide gerne

a. ae

fens

° °

. : 60a an?

. fatuous since it would encourage parties to perform use-

less activities. If they answer affirmatively, they are sim-

ply imposing additional filing requirements of no substance

since, in efféct, a party obtains priority to.a given stretch of _

the river under the orginal permit.

The dilemma of the minority may be attributable, at least

- in part, to its misunderstandings on ‘two important points.

‘First, our decision will not result in tying up our nation’s

waterways for extensive periods to the exclusion of appli-

cants accorded preference by Congress. Private parties

do fot have exclusive rights to permit§.’ Preference par- .

ties not only have an equal chance to obtain a permit but,

in addition, have a preference for a permit guaranteed by

_ Section 7(a). A second major misconception i is that our e- |

cision would somehow fail to give adequate notice to pref-

erence parties of the developments contemplated under

-a permit. Once a party, preference or otherwise, has a

permit describing a project which would develop a specific

stretch of river, everyone is on notice that the permittee

has priority. to construct at least the project described in |

the permit. Quite clearly, this would foreclose any develop-

ment on that stretch of the river contemplated by any other

party. It is therefore inconsequential, as far as notice is

concerned; if the construction plans are altered as long as

the same reach of the-river is. involved.

We therefore conclude that PNPC is entitled to priority

for its application to develop the HMS site. Accordingly,.

the preference prowisions of Section 7(a) are not appli-

‘cable with respect to WPPSS. Section 7(a) states. that, .

_ _as‘a matter of law, preference rights to state and munici-

pal bodies apply only in those situations where no pre-

liminary permit has been granted,. regardless of our indi-

vidual predilections. Even the minority ultimately reveals

its doncurrence with this limitation, although -this conces-

' sion is nearly lost in its extended discussion of the legis

See

6la.

lative history of preference, a discussion, incidentally, with

' which we agree.

In the event our decision on priority is adjudged. to be

erroneous, it would be necessary, under. Section 7(a), to

give WPPSS a reasonable opportunity to.make its plans

_ equally well adaptet to those of PNPC and to evaluate -

such plans following a hearing thereon. An important ele-

ment to be developed at the hearing would be WPPSS’s

need for HMS power. As stated below, the present record

is sorely deficient respecting the existing generating ca-

pacity of the entities comprising WPPSS.. This informa-

tion would be essential in any determination of the en,

titlements of WPPSS to a preference under Section 7 (a).

This as well as additional data would also be required

regarding the financial feasibility of the WPPSS pro-

posal. As pointed out below, we would not grant a license

_ to WPPSS in the absence i far better showing of its abil-

ity to finance HMS construction.

Following the hearing. on this issue, we would then de-

termine if preference properly accrues to WPPSS, and the

“effect of such a preference, if any, in the light of all the

other factors relevant to a'Wisposition of these applications.

We cannkt make such a determination at this’ time, nor-

is there any reason so to do itt view of our finding that

‘ PNPC has priority.. For the same reason, it-is unnecessary

to resolve the serious question respecting the legal status

of WPPSS outside the State of Washington. Section 9(b)}

of the Federal Power Act expressly requires from license

applicants: ,

(b) Satisfactory evidence ‘that the porns has

complied with “the requirements of the laws of the

State or States within which the proposed project is

to be located with respect to bed:and banks and to the

appropriation, diversion, and use. of. water for power

purposes and with respect to the right to engage in

the business of developing, transmitting, and -distrib-

62a a

_uting power, and in any other business necessary to

effect the purposes of a license under this Act. )

- Taaho has a statute governing this situation. Section 61-

327 of.the Idaho Code states:

No title to or interest in any property located in this.

tate which is used in the generation, transmission, dis-

tribution or supply of electric power and energy to the

public or. any portion thereof, shall be transferred or | .

“by any. means or device whatsoever, any government

- or municipal corporation, quasi-municipal corporation

or governmental or political unit, subdivision or cor-

poration organized or existing under the taws\ of any

other state; * * * “

Both the Idaho and ‘sii Utility Commissions object to.

the licensing of WPPSS ‘on the basis of WPPSS’s failure

_ to comply with state laws. Moreover, a U.S, District Court

has found:'that WPPSS lacks authority from its own state

of Washington to develop hydroelectric projects outside the

state. °

Without deciding this issue, nevertheless the very exist-

ence of these atts, however controversial, belies the minor-

‘ity’s easy assurance that WPPSS is so qualified. The

First Iowa case which they-cite expressly frécognizes a dual

system of control by,the states and the federal authority :

In the Federal Power Act there is a separation of those

subjects which remain under the jurisdiction of the

states from those subjects which the Constitution dele-

gates to the United States. and over which Congress

vests the Federal Power Commission with authority

to act. To the extent of this separation, the Act es-

tablishes a dual ca of control. The duality of con-

= WPPSS v. PNPC, 217 F. Supp. 481 —

trol consists merely of the division of the common en-

- terprise between two co-operating agencies of the

Government, each with final authority in its own juris-

diction. [328 U.S. 152,167, emphasis added.]

B. Power Resources and Requirements

Evidence was presented by PNPC, WPPSS, and staff

on the load. requirements of the Pacific Northwest and on

resources to meet these requirements by both PNPC and

WPPSS. The figures submitted by the parties differ

somewhat because, among other things, PNPC used a

different area and did not include old steam capacity in the

resources. Staff used.lower growth figures since population

and industrial growth did not measure up to earlier esti-

mates. The figures are extensive and based on é8timates as

to future loads and resources. They take into account pro-

: posed projects such as Monumental, Boundary and Libby,~

and also the effect of storage under the proposed treaty

with Canada, ratification of which was assumed in 1961.

The figures, however, do not take into account demand and

additional resources that may be available from the pro-

posed inter-tie with California. The effect of the evidence,

assuming a further three-year deferral of the ‘Canadian

treaty ratification, is to. show a substantial deficiency in

both capacity and in average energy during the critical

storage ‘control period (usually the winter months) at least ,

by 1970-71 in an amount that is substantially greater than

the power that would be available from the HMS project...

The Secretary of the Interior &rgues that the future

power deficiency will be removed by the construction of

additional projects on the Snake and Columbia and by the

- Hanford nuclear project. In fact, he says, that by 1967-68

the area will be faced with substantial’ surplus resources.

PNPC itself admits that since the.record was closed nine

‘ projects have been scheduled in addition to those included ~

in PNPC’ s evidence. It is natural, of course, that as ‘time

s /

‘ pers Bite ars + . ——

: 64a

passes other projects will be authorized by Congress and |

scheduled. Otherwise, large deficiencies would-develop that

would have to be met by more expensive steam generation.

_ We will take notice that such projects are scheduled, includ-

ing the Hanford atomic reactar, but it appears that at least

part of the capacity of HMS could be used on a regional

basis by the year 1970-71 assuming ratification of the

Canadian treaty this year. The record shows that Canadian

storage postpones the regional. need for power a year or

so. Because of the need of further investigation of the site,

‘preparation of final plans and construction, the HMS

project will riot be in service in any case until around 1970.

Of more significance in our opinion than the regional

power situation are the load and ‘resources of the PNPC

companies themselves. The evidence shows, taking. into

account deferral of the Canadian storage,that the -PNPC

companies can use the power from the HMS project as

soon as 1964-65, and that by 1970-71 the deficiency would

be substantially greater than the power that would be

available from the HMS project.

We are aware that the four companies have acquired

further resources since the preparation of the figures;

namely, ‘a share in the Hanford and Wells projects. This

is material outside of the record, but it would not appear

that these additional resources would meet the load

deficiencies in 1967-68 and later, even with HMS. ~,

The Secretary and WPPSS argue that PNPC can obtain

its requirements elsewhere; that is, from the Northwesp_

Power Pool, including BPA. The Secretary says that the ~

possibility is extremely remote that he’ will ‘‘pull back’’

power now sold to private companies. This action could

be taken pursuant to the Bonneville Act,®** which provides

that the administration shall ‘‘give preference and priority

_.to public bodies and cooperatives’? — 4(a)) and .

8 16 U.S.C. § 407.

Sacchi win air Rate N ie as an inate Ec acelin Nad ahah gnandichidinsinweds

etna Meek enn Ne te I a OS ee ee eee Lita Risch tnd telat bites initia in ht oe

that ‘‘in the case of a contract with any purchaser engaged

in the business of selling electric energy to the public, the

contract shall prowde that the administrator may cancel

such contract upon 5-year notice in writing if in the judg-

ment of the administrator any part of the electric energy

‘ purchased under such contract is likley to be needed to

satisfy the requirements of the said public bodies or cooper- .

atives referred to in this Act’’ (Section 5(a)). Actually,

the ‘‘pull-back’’ provision in providing for a declining

, schedule of deliveries (none in 1966-67 and none after 1970).

In view of these statutory provisions, it is our opinion that

PNPC is not able to rely on any power supply that BPA

- may have.available, and the company can reasonably claim

a need for its own supply. In fact, we think it owes a-duty

ito its customers. to obtain. power. that is not itso to

In contrast to PNPC we find that WPPSS and its mem-

bers and the public power agencies that would participate

in Nez Perce do not have the same need for generating ca-

~ pacity as PNPC. According to the record, WPPSS’s loads

will be met by the generating resources.of its own members,

and by BPA until 1970. While WPPSS argues that it has

no assurance that BPA will be able to supply power to it

after 1970, and that in any case the price will go up,

WPPSS has a preference for BPA power while PNPC does

- not. Thus WPPSS is in a far better position to include”

BPA power as a resource in its planning than is PNPC.

WPPSS has failed to show on the record the amonnt of -

power resources owned by its members and participating

agencies, but we take notice-that they are considerable and

that WPPSS has failed to take them into account in making

its presentation of a need for power. The sketchy evidence

in the record on this point shows that the WPPSS member

organizations operate. generating plants and will operate

a plant on the main ‘stem of the Columbia, and that the

Cowlitz ane PUD operates a steam i and the Grays

66a

Harbor PUD another steam plant. In fact, by the year

1970-71: WPPSS would have available assured resources

including power from BPA now available. and that with-

drawable from others in the amount of 1,907-mw or 144

percent of the estimated load.

To add the resources of HMS to those of WPPSS would

be adding a surplus to-the resources available to WPPSS.

The record shows that WPPSS and its members contem-

plate disposing of this surplus power to other public

agencies, then to industries and private utility companies

under contractural provisions that permit the drawback

of the power when it is needed by the WPPSS participants.

‘It is relying for the disposition of its power on 46 public

agencies which in reply to a letter from WPPSS had signed

commitments for the power. While we would not require

firm contracts for the power these commitments were on

the apandedtlin that the power to be purchased would

be at a cost which Would make it attractive compared to

other long-range alternatives and on mutually satisfactory

‘ terms. Whether or not WPPSS and its participants prefer _

- to take HMS power and let the BPA power go to the private

_ utilities, or prefer to hold on to the BPA power and sell

the HMS power does not change the result: WPPSS has

available power, not set forth in the record, and also BPA

power for which it “has a preference, while the PNPC

companies do not have any preference for BPA power and

can use the entire output of HMS as soon as it can be

expected to come into operation.. The record indicates

that a- project will not be needed to meet the loads of

public agencies in the Pacific Northwest, including those of

WPPSS, until some indefinite time after 1970. This is

consistent with the statement of the Secretary of the

‘Interior th tht BPA is suffering a reduction in revenues,

because of a lack of market for its power, at

In summary as to the need for power, we conclude that Js

.the PNPC sponsoring companies will be able to use HMS

67a

power as soon as it is available. On the other hand WPPSS

has failed to demonstrate any need for such power now or

in the foreseeable future. We emphasize, however, that if it

were not for our determination that PNPC has priority

under the permit we would give WPPSS further opportu-

nity to show its need for power and its ability to finance,

so that it might show that its project was ‘‘equally well

adapted’’ within the meaning of Section 7(a).

‘ On financing, briefly PNPC would. raise the necessary

funds by selling equity for 15 percent of the capitalization

to the organizing companies and floating-a public bond issue

for the Fethaining 85 percent of the capitalization. While

the high debt ratio has been questioned, a higher ratio has

been employed for other power generating projects.“ The

combined capital-ratio of PNPC and its sponsor companies |

using their capitalization as of December 31, 1960, would be

65.48 percent for long-term debt, 4.35 percent for preferred

stock, 26.86 percent for common equity, and 3.31 percent

for deferred Federal income taxes. The record supports

the saleability of PNPC’s bonds, and no question has been |

raised as to the ability of the sponsor companies to finan

their participation in the proposed project. We agree, how-

ever, with the recommendation of the staff that any PNPC

license be conditioned so as to require submission of a com-

_: plete plan of financing prior.to the beginning of construc-

tion. WPPSS on its part would finance its project through

bonds. 7

C. Restraint of Trade | ‘

WPPSS argues that PNPC is a combination in restraint

of trade citing Section 10(h) of the Power Act which pro-

vides as follows:

That combinations, ‘agreements, arrangements or

understandings, express or implied, to limit the output

% Ohio Valley Electric Corporation, et al., 36 S.E.C. 304; see

South Carolina Generating Co., 16 FPC 52, 61.

68a

_ of electrical energy, to restrain trade, or to fix; main-

tain, or increase prices. for electrical energy or _—

are hereby prohibited. =

WPPSS argues that PNPC is a combination of utilities

to monopolize for themselves the largest remaining power

site on the Snake River, and‘to deprive all other competing

public utilities of access to the power, and this would lead

- to control over the entire economy of the Pacific Northwest.

It also says that the four PNPC companies will fix prices

for power, on the theory that they are guaranteed a 6 per-_

cent dividend on their capital contributions, and this will

put a floor under the prices of [sic] PNPC must«charge.

WPPSS also sees a violation of Sections 1 and 2 of the Sher-

man Act® in the allocation of fixed portions of the power

generated to each of the four organizing companies. How- .

ever, we agree with the examiner that there is no-support in

the record that PNPC or the four companies will be in

violation of Section 10(h) or the anti-trust laws.

PNPC’s proposal is based upon a normal business need

to obtain a supply of power, and this will be accomplished

by the issuance of a license by a governmental body. It is

true PNPC and its component utility companies are not ex- —

empt from the anti-trust laws. Immunity from the anti-

trust laws is not lightly implied. California v. F.P.C., 369

U.S. 482, 485. However, the anti-trust laws do apply dif-

- ferently to regulated companies. See F.C:C. v. RCA Com-

munications, Inc., 346 U.S. 86, 93. Utilities are necessarily

menopolies’ within their areas whether they be telephone

companies, power companies or gas pipelines, but there

is nothing to show that PNPC is trying to monopolize the

sources of power in the Pacific Northwest. Of ccurse, it

seeks to gain control over the HMS site, but this type of

control is inherent in licenses issued under the Act and

was clearly intended by Congress.

$345 U.S.C. §§ 1 and 2.

69a

There is here no price fixing combination, for wach com-

pany will fix its own prices subject to regulatory control.

The four companies have entered into an arrangement to

pay the costs of their supply affiliate, PNPC, and to receive

a dividend on their capital contributions. Such an arrange-

ment is, of course, subject to our regulafory control under

the Federal Power Act. Pennsylvania Water Power Co. y.

F.P.C.,-343 U.S. 414; Safe Harbor Water Power Corpora-

tion v. F. P.C.179 F. Od 179 (CA38) certiorari denied 339 U:S.

957. These companies are not competitors in the industrial

sense, and in our view this method of obtaining a supply —

of power was reasonable particularly-in view of the enor- .

mous costs involved. There is no ‘‘public policy that for-

bids, per se, an expansion of facilities of an existing com-

pany to meet the needs of new markets * * *.’? United

States v. Columbia Steel Co., 334 U:S. 495, 526. |

Likewise, the division of the power between the four com-

panies is not in violation of Section 10(h) or the anti-trust

laws, This is a joint venture to obtain a supply of electric

energy. We have here a business requirement and no at-.

tempt to monopolize (United States v. Columbia Steel Co.,

supra at p. 527), although, of course, PNPC is seeking con- .

‘trol of the HMS site in accordance with the Power Act.

D. Federal Development

Whether ..we should? recommend federal development

rather than development by PNPC is an important issue.

We think this issue. must be resolved against federal de-

‘velopment contrary to the arguments of the Secretary of

the Interior. The applicable Section 7(b) of. the Power.

Act provides as follows : |

Whenever, in the judgment of the Commission, the

development of any water resources for public pur-

poses should be undertaken by the United States itself,

- the Commission shall not approve any application for

any project affecting such development, but shall cause

—

‘should consider the past hi

~ Ta

to be fade such examinations, surveys, reports, plans, .

and estimates of the cost of the proposed development

ds it may find necessary, and shall submit its findings

‘to Congress with such recémmendations as it may find

appropriate concerning such development. [41 Stat.

1067; 49 Stat. 842; 16 U.S.C. 800]

We agree with our staff and the exaimner that the record

supports no reason why federal development should be

superior to development by PNPC, and we see no reason

. Why we should withhold a license and recommend that the

‘United States build the project.

While we have extensive material before us on the posi-

tion of the Secretary of the Interior, there is no evidence

in the record presented by him to support his position. The

Secretary contends initially that ‘we are in effect bound’to

a decision in favor of federal development, because Con-

gress has made a determination that the water resource

(i.e., the Columbia and Snake Rivers) should be federally

developed to the extent of nine-run-of-river dams down-

stream and that the development of the large storage at

- HMS affects this federal development. We agree, of course,

that in meeting our responsibilities under Section 7(b) we

2 river basin as it sheds

light on the future: While it is true that there are nine

' federal projects, authorized or constructed on the Snake

and Columbia Rivers downstream from the projects here

proposed,® it is also relevant that we have previously au-

thorizéd major non-government projects on the main stem

of the Columbia above the confluence with the Snake® and

on the Snake above the HMS site.** <

8¢ Bonneville, The Dalles, John Day, MeNary, Ice Harbor, Lower

' Monumental, Little Goose, Lower Granite, and Asotin.

* See €.9., Prieat Rapids, Wanapum, Rock Isfahnd, Rocky Reach,

Wells.

%8 The Brownlee, Oxbow and Hells Canyon a ey of the

| Idaho Power Company.

/ .

/ 4

}

i “4

‘-

Tla

The fact that the Congress from time to time has au-

‘thorized considerable federal development within this ex-

pansive river basin does not compel a determination that

federal development is. appropriate with respect to all

projects on the river. Our decision must rest upon an

evaluation of all the factors relevant to the development on

this reach of the Snake at this time.

The factors argued by the Seeretery- in support of fed-

eral development are that federal development offers lower -

costs, that flood. control can be -better effected by flexible

federal operation than by limitations written into the li-

cense, that the Interior Department can better prevent

. damage to fish than provisions in the license and inade-

quate supervision ‘by*us, that: federal development can —

better provide recreational facilities for an expanding popu- -

lation, and that full co-ordination of the Northwest Power

Pool is. possible only if the United States constructs and

operates the project. He adds that immediate construction

ofthe project would produce an excess of power ig the

Pacific Northwest which would cause large ‘stags to BPA

and severe harm to the economy of the region. .

Cost savings to consumers at the expens> of the taxpay-

ers of the country at large may, of course, follow from. fed-

eral development as a result of low cost financing aud

absence of tax obligations. If this possibility were the

criterion, it would be our duty to recommend federal de-

velopment i in almost all cases. Obviously the Federal Power

Act does not contemplate any such result.

While flood control (in the event of Canadian eis

and navigation are objectives of lesser significance relative

to the proposed projects, provisions in a license with re-

spect to these matters were recommended by the Chief of

Engineers, United States Army, were included by the ex-

aminer in his recommended decision and will be included

substantially.here. The proposed project will provide sub-

stantial recreational opportunities. In accordance with

Bo atti ieee os ven

72a

vemminiaibeibiaid made y..the ‘Assistant Secretary of Agri-

culture we_ shall provid as did the examiner, that the*

licensee shall co-operate with local, state and federal

agencies in the stuly and preparation of a recreation public

use plan and that such a plan be filed for approval by the

Commission. In addition, Artiele 17 places an affirmative

obligation upon the licensee to construct and operate such

recreational facilities as may be necessary and desirable.

As for the fish problem we shall provide, as did the ox-

aminer, that the licensee shall construct protective devices —

and modify the project works and operations as we may

prescribe hereafter upon our own motion or upon the .

-recommendation of the Secretary of the Interior or the

state conservation agencies. Wé shall also provide that

should the United States desire to construct fish handl-

ing facilities, the litensee shall permit the. 5x 1 States

to use its property free of cost. We see nothing‘to lead us

to believe that the Federal Government could do more. |

- Specifically, there is nothing in. this reeord to indicate. that

- the purposes described above will not be served as ade-

quately under the license conditions as would be the case

under federal development.

The Secretary of the Interior puts considerable stress on _

the factor of coordination arguing that a federal project

would be better co-ordinated with other federal projects

downstream. We agree that the Secretary (or any single

operator) normally ies have a superior ability: to co-_

ordinate the operations gf HMS with the other affected

we can determine the scope or the seriousness of this mat- -

ter in the. context of a river system which already has a

* number of different project. operators and an existing co-

ordination system, i. 2. the Northwest Power Pool. The

This Pool is a ‘lenin arrangement among utilities, both.

public and private in the Pacifie Northwest area,.including BPA

for the op-erdination and operation of their affected systems.

)

a’

. «this result or that prope

- Ta

é parties comprising PNPC are among those having projects

on the river. They are members of the Pool and their

record of “cooperation is good. PNPC has designed its .

project to be operated and co-ordinated with the Northwest

Power Pool in order to benefit all members. To implement

this co-ordination and operation we shall use a provision

substantially as found in the Wells Project license* as re-

quested by both PNP€ and: the staff, to provide that the

licensee shall: operate the project in complete co-ordination

with the Northwest Power Pool. We have continuing juris-"_

diction and will insist ger be done.. The record does —

not show that federal ownership is necessary to achieve

0-ordination would not be

achieved in the absence of federal development.

In short, on the basis of the record’ here, plus such in-

_ formation of which we can take official notice, there is little

ff anything which would persuade us that federal develop-

. ment of HMS was inherently superior to -licensing it to

PNPC even assuming that the actual choice we had before

us was-between federal construction now and non-federal

construction now, But these are not the true alternatives.

The Department of Interior has frankly admitted it has

no present intention of seeking authorization ta.gommence

construction or planning to construct an HMS project.

Under these circumstances, federal construction ofan HMS

project is not foreseeable even assuming Congress would be

willing to authorize a federal project where PNPC is will-

ing and eager to construct it under the terms, conditions

and provisions of the Federal Power Act.

One of the principal reasons for the Department’s oppo-

sition to non-federal construction appears to be its concern .__

over a decline in BPA revenues which it feels might be

accelerated if HMS power were made available directly or

_ indirectly to some of its existing customers.. As indicated

Public Utility District No. 2 of Douglas Co , Washington,

Project No, 2149; 28 FPC 128, 133. .

. T4a

| above, however, we are convinced that PNPC. specifically

will haye a need for the additional power which could be

made available by early construction. of HMS, and the Pa-

cific and the West Coast areas, in general, will have a need

for the power at the time HMS will be completed. In sum-

close power coming on the line at a time when it will be

required. This disadvantage outweighs those benefits

which Interior contends would result from federal construc-

tion_(i.e., superior co-ordination and non-power benefits

discussed above), assuming arguendo, that such benefits

s would be realized.

To conclude, Section 7(b) of the Act provides for federal

construction where, in our judgment, there is sqme good

reason showing that the development of any water re-

source for public purposes should be undegtaken by the

United States. HMS is principally a power project.

Neither the record nor our general knowledge of the Co-

lumbia River System discloses any major benefits which

would result. from federal construction over that by PNPC.

In the.event PNPC is adjudged not to have priority, it

_ posal. This would be particularly appropriate respecting

WPPSS since its fortunes are so inextricably.intertwined

with _— of the Interior Department. ie,

RECENT DEVELOPMENTS

On January 22, 1964, it was announced that, President.

Johnson and Prime Minister Pearson signed ary ‘agreement

- under the Canadian Treaty herein referred to. ‘This agree-

ment provides:

1A schedule for sisi of the Canadian serene

projects as follows: Duncan Lake, April 1, 1968; Arrow

_ Lakes, April 1, 1969; and Mica, April 1, 1973.

2° The U.S. will use its best efforts to arrange a sale to a

single U.S. purchaser of the downstream power benefits for

a 30 year period after completion of each project. —

75a

3.°The total downstream benefits are initially 2,800,000

kws of dependable capacity and about 4 billion kw hours of

energy annually. ,

4..These power benefits will have declined to about

660,000 kw annual dependable capacity and about 4 billion

kw hours of energy annually at the end of 30 ‘years.

5. The U.S.*! and Canada will share equally in the power

benefits described above. | | ‘S

6. It is contemplated that the purchaser of the Canadian

entitlement wl ‘be a non-profit organization now being

formed in the W.S. by certain public and ‘private utilities in

the Pacifie Northwest. |

‘Implementation of this agreement will significantly re-

_ duce the superiority of Nez Perce over HMS for flood con-'

trol purposes as described here in pages 7, 14, and 20 supra.

In addition, this agreement will substantially add to the

power resources of the Pacific Northwest. Nevertheless,

there is nothing which presently indicates that this new _

supply of power obviates the feasibility of*licensing the

HMS project to PNPC at this time: Accordingly, the Com-

mission has decided -that a license should be issued,. as

previously determined.

The Commission further finds:

(1) The Snake River is a navigable water of the United

- States at least as far upstream as the upper limits of the

reservoir of either the High Mountain Sheep or the Nez

Perce Projects (in re Idaho Power Company, Project No.

19{1, Opinion No. 283, 14 FPC 55, 72). The respective

project works will be located on lands of the United States,

and the reservoir will inundate lands’ of the United States.

*! Under the treaty BPA will have about 70 percent of the U.S.

share and the owners of the non-federal base system projects will

have the balance._

eee ee eA ee a ee ae

a eee eee ‘a le 7 ?

“

« ° 76a

(2) Pacific Northwest Power Company is a private cor-

poration organized under the laws of the State of Oregon

as a wholly-owned subsidiary of four sponsoring companies,

namely, The Montana Power Company, Pacific Power &

Light Company, Portland General Electric Company, and

Washington Water Power Company. : :

(3) Washington Public Power Supply System is a mu-

nicipal corporation organized and operating under and by

virtue of the laws of the State of Washington, for the pur- ..

pose of acquiring, constructing, and operating electrical

generating and transmission facili = 7

(4) Pacific Northwest Power~Company, on March 31,

1958, filed an application under the Federal Power Act for

the proposed High Mountain Sheep Project (No. 2243),

also referred to as the Middle Snake River Project, to be

located at river mile 189.2 on the Snake River just above

the confluence of that river and the Salmon River.

(5) Washington Public Power Supply System, on March

15, 1960, filed an application under the Federal Power Act

for the proposed Nez Perce Project (No. 2273) to be located

at river mile 186.2 on the Snake River just below the con-

fluence of that river and the Salmon River.

(6). Publie riotice of these proceedings has been siven 3 as

required, by the. Act.

. (7) Either the High Mountain Sheep or the Nez Perce »

Project, whichever may be constructed, would be located in

or along a havigable water of the United States-and would

otherwise affect the interests of interstate or — com-

merce.

(8) The Department of the Interior has requested that

the Commission recommend to Congress that the High

Mountain Sheep Dam should be built by the United States.

(9) Subject to the terms and conditions hereafter speci-

fred, the HMS project is best adapted to a comprehensive

77a

plan ‘for- improving or developing a waterway or water-

ways for the use or benefit of interstate or foreign com-

merce, for the improvement and utilization of water-power

development, and for other beneficial public uses, including

recreational purposes. /

(10) PNPC has a statutory priority for its application

for the High Mountain Sheep Project (No. 2243) by virtue

of a preliminary permit issued by the Commission on April

8, 1955 and WPPSS is not entitled to a. preference under

Section 7(a) of the Federal Power Act. :

(11) Subject to the terms and conditions set forth below,

the plans. of PNPC to develop the HMS site. are best

‘adapted to conserve and utilize in the public interest the

water resources of the region, and’ PNPC is able to carry

' out such plans. | :

(12) The-development of the HMS project should not be

undertaken by’ the United States itself.

(13) The installed horsepower capacity for the HMS

project here authorized is 1,166,700 horsepower for the pur-

pose of computing the administrative annual charge.

(14)’ The amount of the annual charge to be paid under

‘the license for the HMS Project for the purpose of reim-’

bursing the United States for the cast of the administra-

tion of Part I of the Act is reasonable as hereinafter

specified. ,

(15) It is desirable to reserve for future determination

the amount of annual charges to be paid under a license for

the purpose of recompensing the United States for the use,

occupancy and enjoyment of its lands.

The Commission orders:

(A) A license is hereby issued to PNPC (hereinafter

referred-to as Licensee) under Section 4(e) of the Federal

Power Act for a period of 50 years, effective as of the first

—

}

78a

day of the month in which acknowledgment of acceptance

thereof is filed with the Commission by PNPC for the con-

struction, operation and maintenance of Project No. 2243,

to be known as the High Mountain Sheep project of the

_ Snake River and its tributaries, Idaho and. Oregon, affect-

‘ing navigable waters of the United States and the interest

of interstate or foreign commerce and lands of the United

States within and outside of ‘Wallowa, Nez Perce and

Payette National Forests,.subject to the terms and condi-

tions of the Act which is incorporated herein by reference

as a part of this license, and subject to such rules and regu-

lations as the Commission has issued or prescribed under |

the provisions of the Act.

(i) The proposed project consists of: All lands ‘consti-

tuting the project area and enclosed by the project boundary

or the limits or which are otherwise defined, and/or interest

in such lands necessary or appropriate for the purposes

of the project, whether such lands or interest therein are

. owned or held by the applicant or by the United States; the

general location of such project area being shown and de-

scribed by certain exhibits which formed part of the appli-

cation for license, or amendment thereof and which are

designated and described as follows:

Exhibit ~ FPC No. ‘ Showing

JT nccccccce eecccces BRED] -. wc rcccccccnecs General map of project area.

- K (as amended) ..:. 2243-2 through 4 6 Project area (tentative).

through 20 and 43

(amended and -re-

vised).

(ii) All project works consisting of a concrete arch dam

approximately 670 feet high, creating a reservoir extending

about 58 miles upstream to Hells Canyon tailwater (Project

No. 1971) on the Snake River and about 10 miles upstream

on the Imnaha River with normal water surface area of

about 17,300 acres and gross storage capacity of 3,600,000

acre-feet at normal water surface elevation 1510, of which

79a

2,250,000 acre-feet would be usable with a draw down of 173

feet; a chute-type radial-gate controlled spillway located -

at the right abutment; low level intakes ; two outdoor type

powerhouses, one on each side of the ri®er immediately

downstream of the dam, having an initial installation of

five ‘units with each turbine rated 285,000 horsepower at

550-foot head and each generator rated 175,000 kw (184,000

kva at 0.95 -powerfactor) ; three on the (left bank) Oregon

side and two units on the (right bank) Idaho side, with

provisions in the plans for the addition of five similar units,

two on the left bank and three on the right bank; and

’ appurtenant electrical and mechanical facilities; the loca-—

tion, nature, and character of which are more specifically

Shown and described by the exhibits hereinbefore cited and.

by other exhibits which also formed a part of the application

for license as amended and which are designed and de-*

scribed as follows: .

Exhibit FPC No. Showing

_ L Sheet 30, amended and révised .... 2243-44 Genéral plan...

L Sheet 31, amended and revised |... 2243-45 Profile and sections,

L Sheet 32, amended ............... 2243-37 Powerhouse plans.

. L Sheet 33, amended and revised .... 2243-46 Powerhouse cross-sections.

L Sheet 34, amended sud revised .... 2243-47 Intake and spillway sections. .

L Sheet 35, amended and revised .... 2243-48 Arch dam.

M: ‘‘General Description and Specifications of Equipment’? regarding High

_ Mountain Sheet project. :

(iii) All other structures, fixtures, eQuipment or facilities

used or useful in the maintenance and operation of the

project and located on the project area, including such

portable property as may be used or useful, in connection

with the project or any part thereof, whether located in or

off the project area, if and to the extent that the inclusion

of such property as part of the project is approved or

acquiesced in by the Commission ; also, all riparian or other

rights, the use or possession of which is neta or appro-

priate in the maintenance or operation of the roject.

(B) This license is also subject to the terms and ‘condi-

tions set forth in revised Form L—6, November 1, 1963,

entitled ‘‘Terms and Conditions of License for Uncon-

structed Major Project Affecting Navigable Waters and

Lands of the United States’’ which terms and conditions

designated as Articles 1 through 37, are attached hereto —

and made a part hereof, except for Articles 7, 8, 9 and 15.

thereof ; and subject to the following special conditions set

forth herein as additional. articles:

Article 38, “The Licensee shall commence construction of

the High Mountain Sheep project within two years of the

effective date of this license, shal] thereafter in good faith

and with due diligence prosecute such construction and shall

complete the project and place it in operation within seven

years from the effective date of this license.

Article 39. The Licensee shall engage at least three quali-

and reporting on the exploration program of th dam site,

‘the excavation plan for the dam foundation treatment and

the design of the arch dam and other major hydraulic

structures. The report of the consulting engineers shall

be submitted for Commission consideration not later than

the date upon which design drawings (Exhibit L) for the

dam structure are filed pursuant to Articles 40, 41, and 42. .

Article 40. The final design of the arch dam shall be

verified: by an acceptable method of analysis (such as the

trial load method) and reviewed ed the use « structural

. models,

Article 41. The final design of the spillway — be based

on hydraulic model tests.

Article 42. The Licensee shall submit, in accordance with

the Commission’s-rules and regulations, revised Exhibit L

drawings for the project structures and Licensee shall not

begin construction of the project works until the Commis-

sion approves the exhibit. . .

8la

Article 43. The Commission reserves the right to deter-

mine at a later date what transmission facilities shall be

included in this license as part of the project works.

Article 44, The Licensee shall consult with the Forest

Service in determination of the centerline location of trans-

mission lines on or affecting national forest lands and shall

secure concurrence of the Forest Service to the specific

location of those lines occupying lands administered by the

Forest Service. > %

Article 45. The Licensee shall not make any claim under

the authority of this license against the United States or

any water users’ organization claiming through the United

States for any damage resulting from-any future depletion

in-the flow of the waters of the Snake River and its tribu-

_ taries for the irrigatior of lands and ‘other beneficial con-

sumptive uses, - :

MM rticle 46. The Licensee shall make available to the

aho State College, upon further order of the Commission

at the request of the Idaho State College, reasonable sums

of money not to exceed $7,500 for the purpose of under-

taking an archeological survey and salvage excavations

prior to construction and flooding.

Article 47, The Licensee shall, in order to secure maxi- - -

- mum recreational benefits, make every reasonable effort to

maintain the water surface of the High Mountain Sheep

reservoir at the highest level practicable from June 15 to

September 15, of each year, as is\ consistent with the

- primary purposes of the reservoir to provide pondage for

Licensee’s daily, weekly, monthly or seasonal power re-

quirements; requirements of downstream releases; and

flood control.

Article 48. The Licensee shall within one year from the ~—

date of issuance of the license, file with the Commission -

for approval its proposed recreational use plan for the

‘ project. The plan shall be prepared after consultation

82a -

with appropriate Federal, State and local agencies, .and

shall include recreational improvements which may be

- provided by others in addition to ‘the improvements the

‘* Licensee plans to provide.

Article 49.. The road or roads senshrented, owned \or

controlled by the Licensee for the project developments,

shall. be made available without charge to the Forest Serv-

ice, its timber operators, permittees, and other users, for

the orderly administration, development, and protection of

the national forests involved, and for operations necessary

and incident to project development, provided that. such .

use may be limited by reasonable safety and traffic control

requirements. In appropriate circumstances and as agreed

td by the Forest Service, the Licensee may. require payment

of the user to cover a fair share of the road maintenance

costs.

Article 50. “The Licensee shall, prior to impounding.

water, clear all lands in the bottom and margins of the reser-

- voir between a plane five feet below ultimate low-water |

’ elevation (El. 1337) of the reservoir and the plarfe at normal

pool elevation of the reservoir, and shall cut all brush and

trees below the lower plane so that none protrude above

elevation 1332. The Licensee shall clear and keep clear to

an adequate width lands of the United States along open —

conduits ; and-shall dispose of all temporary structurés, un-

* sused timber, brush, refuse, or inflammable material. result-

ing from the clearing of the lands or from the construction. .

and maintenance of the project works. In addition, all trees.

along the margin of ‘the reservoir whi

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.