# Appendix — Udall v. FPC > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386412_0024%3A06 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1967 - **Citation:** 387 U.S. 428 ## 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 . ’ © . . 2 . * bl e-; . > : : . . i . =. ies 2 are . 7 ’ . See = os e i * > = . if * iy . Shere . - . , § . . : ‘ = oa: . ‘ ~, . ’ i . . . . } . . e a an i . . , i é ‘ . ‘ R ? . __ ‘ . be . A s > as ; . ; o Mm iar , -\ > ’ . ee 2 . m % ae . . . > = Y * 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 : e H ; * Se ee eet h ee ee ene . CASES AND OPINIONS. Se . 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 a No. 18,731 | Uniren Sraves or Awznica On rH Rutiaon oF Stewart L. Upax, Secretary of the as ae ‘ PETITIONER, . . v. 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 $0: , ~ [Appearances omitted.] * e "2. @ s : Before Wasw K.~Muuer, Senior Cirguit Judge, and DaNAHER and — Circuit Judges. ‘ ‘ {358 F.2d 840 (D.C. Cir, 1966). st . ‘ es ‘ a ae ae Wusure K. Muuer, Senior Circuit Judge: a, Nos, 18,728 and 18,729 On June 26, 1964; Washington Public Power Supply System’ and the Department of$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 — ee 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 S i 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. 9a 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 2 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 - .¢ . oe 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. ~.. a 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 (c) that ‘‘the Commission erred in failing to require an 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. ~ ay .’ 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 . s “ 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.® ° o, ® 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. | 2 (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 $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. © Without Whitebird costs amounting to $38,592. ' 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. - © Without Whitebird costs amounting to $2,266. 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 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 a 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. ra 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 a 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 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 7 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 projects on the river. But there is no evidence upon which © 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- mary, the delay inherent i in federal construction would fore- © 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 might then be.necessary to re-evaluate the Secretary’s pro- © _ 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. ty *! 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 ? ai 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- fied independent consultants for the purpose of reviewing © 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 which.may die due to _ operation of the reservoir shall be removed. The clearing _ -of the lands and the disposal of the material shall be done ‘with due diligence and to the satisfaction of the authorized ~ representative of the Commission. - Article 51. In the interests of flood control downstream - from the project, the, Licensee shall operate the project ir ' accordance with an agreement to.be entered .into by the 83a «Licensee and the United States Corps of Engineers for the “purpose of determining detailed operating procedures for use during flood periods, in accordance with the following principles: 7 a. The total live storage space of about 2,250,000 acre- feet between elevation 1337 and elevation 1510 mean sea level will be made available for flood control use if and as — required. ae | b. The reservoir level will be no higher than elevation 1475 by 1 March each year to provide about 600,000 acre- feet of storage space for flood contro] use at that time each year. .Additional storage space will be made available ~ between 1 March and. the beginning of the flood period to . insure the availability on 4 May of the total capacity needed for flood control as estimated by the Corps of Engineers, _@ The space made available as set forth above. will be retained until capture of food flows is requested by the _ Corps of Engineers, subject to involuntary storage as may be required due to excess of inflows over outlet capacity, or | until refilling is authorized) by the Corps of Engineers, In the event of involuntary storage during flood control opera- tions, full storage capability will be regained as soon as possible, . d. During the flood. storage period controlled outflows will be as warranted by the flood control requirements as deter- mined by the Corps of Engineers with’ due regard to the requirements for the optimum multiple purpose operations of the project. When the Columbia River discharge at The "Dalles is 600,000 cfs or higher the daily outflow may be reduced to a minimum of 10,000 acre-feet ; except that dur- ing years of severe flood conditions the daily outflow may be reduced to a minimum of 4,000 acre-feet; below 600,000 . cfs discharge at The Dalles, the outflow will be determined with due consideration given to all purposes of the project. e. A discharge capacity of 365,000 cfs at minimum pool elevation 1382 is to be provided by the Licensee. This dis- charge capacity is based on ‘the gated outlet capacity plus one half of the ultimate turbine hydraulic capacity. — The agreement will be subject to review from time.to time as requested by the Licensee or the Corps of Engineers. Article 52. In the interest of navigation the project shall be pperated i in accordance with the following requirements : a. Minimum flow of not less than 13,000 cfs will be main- tained at Lime Point, Idaho, during annual storage refill season when determined to be required by the Corps of Engineers in tie interest of navigation. Flows of up to 16,500 cfs may be-required at other times when determined - by the Corps of Engineers to be necessary in the interest of navigation. pb. River fluctuations i in the reach iinet Lewiston and Lime Point resulting from project operation shall not ex- ceed a rate of one and a half feet per hour on the rising stage, and one foot per hour on the falling stage unless otherwise approved by the Corps of Engineers. Article 53. The Licensee shall, for the’conservation, and _ . development of fish and wildlife resources, construct, main- tain, and operate, or arrange for the construction, main- tenance and operation of such facilities and comply with * such reasonable modifications of the project structures and - operation as may be ordered by the Commission upon its own motion or upon the recommendation of the Secretary - of the Interior, the Oregon State Game Commission, the Fish aan of. Oregon, or the Idaho Department of Fish and’Game, after notice and opportunity for hearing -and upon findings based on substantial evidence that such facilities and modifications are necessary, and desirable, reasonably consistent with the primary purpos® of the - project, and consistent with the provisions of the Act. Article 54. The Licensee shall prior to ‘beginning of operation of the Low Hells Canyon development of Project _ No. 1971, enter into an agreement with the Idaho Power. Company, Licensee for Project No. 1971, to compensate that Company for backwater effect on the Low Hells Can- - yon development of Project No. 1971 constructed in ac- ‘cordance with plans approved by the Commission, result- ing from the operation of the High Mountain Sheep project with maximum normal pool at elevation 1510 feet at the High Mountain Sheep dam. In the event no satisfactory agreement is concluded by such time, then upon the appli- cation of the Idaho Power Company, the Commission shall fix and determine the compensation to be made by Licensee for such encroachment after notice and opportunity for hearing. -- ' Article $s. ‘The Licensee shall, after notice and oppor- ’ tunity for hearing, coordinate the operation of its upstream and downstream fish passage. and handling facilities with those for Project No. 1971 of Idaho Power Company, as the.Commission may direct upon recommendation of the Secretary of fhe Interior, the Oregon State Game Commis- sion, the Fish Commission bf Oregon, or the Idaho Depart- . ment of Fish and Game. Article 56. The Licensed shall pay to the United States the following annual charges: a.. For the purpose of reimbursing the United States - for the costs of administration of Part I of the Act, a- reasonable annual charge in acéordance with the provisions of Part 11 of the Commission’s regulations.. The authorized installed capacity for such purposes is 1,166,700 horse- power; “b. For the’ purpose of recompensing the United States for the use, occupancy and enjoyment of its lands exclusive of those used for transmission-line purposes an amount to. be fixed hereafter by the Commission; and ; * 7 * P eee ad oh FAA Dy ieee he hy AAG A reel EN rll Waa hi anh er itd, BM ee ale ee Or ode Bonet 6 BAER Dice en oa the eS ANA al All anes 8 ° P a Po Senta ee ees ~ 86a c. For the purpose of recompensing the United States for the use, occupancy and enjoyment of its lands for trans- | mission-line purposes an amount to be fixed hereafter by the Commission. (C) The exhibits described | in paragraph (A) above are approved as part of the license for the project. (D) The Licensee shall within ore year from the effective date of the license, file with the Commission a plan of financ- ing for Commission approval, and the Commission reserves the right to require such additional information as it may deem necessary befére taking final action on the plan | of financing. The Licensee shall not commence construc- tion prior.to Commission approval of a plan for financing the project. (BE) ‘This order shall become final 30 dite from the aie of its issuance unless application for rehearing shall be . filed as provided in Section 313(a) of the Federal Power Act, and failure to file such an application shall constitute acceptance of this license. In acknowledgment of the ac- ceptance of this license, it shall be signed for the Licensee. ‘and returned to the Commission within 60 days from the ‘date of ‘issuance of this order. - (F) The motion filed by WPPSS on September 12, 1961, for leave to conform its rem: to the evidence is — granted. (G) The application of WPPSS for license for Project No. 2273 is. hereby denied. (H) The request of the Secretary of the Interior that Federal development be recommended is hereby denied. (I) The examiner’s opinion and. findings are hereby adopted as part hereof to the extent not inconsistent, here- ~ with. (J) Exceptions not granted are hereby denied: 87a CHamMaN Swier dissenting filed a separate statement appended hereto, at page 291.; ComMIssIONER Buiack dissenting filed a separate statement ° appended hereto, at page 305.* | Form L-6 (Revised November 1, 1963) TERMS AND CONDITIONS OF LICENSE FOR UNUONSTRUCTED MAJOR PROJECT AFFECTING NAVIGABLE WATERS AND -¥-~. ‘ °* LANDS OF THE UNITED STATES / \ \ ” . . . a ~Atticle 1. The entire project, as described in the order he Commission, shall be subject to all the provisions, terms, and conditions of the license. Article 2. No substantial change shall be made. in the - maps, plans, specifications, and statements described and designated as exhibits and approved by the Commission ‘ in its order asa part of the license until such- change Shall have been approved by the Commission: Provided, however, that if the Licensee or the Commission deems it necessary or desirable that said approved exhibits, or any of thei, be changed, there shall be submitted to the Com- mission for approval amended, supplemental, or additional . exhibit: or exhibits covering the proposed changes which, upon approval by the Commission, shall become a part of the license and shall supersede, in whole or in part, such exhibit or exhibits theretofore made a part of the license as may be specified by the Commission. Article 3. Said project works shall be constructed in substantial conformity with the approved exhibits referred to in Article 2 herein or as charged in accordance with the provisions of said article. Except when emergency shall require for the protection of navigation, life, health; or property, no substantial alteration or addition not in- conformity with the approved plans shall be made to any dam or other project works under the license without the prior approval: of the Commission; and any, emergency t [Page referengg is to official opinion. See p. 100a, infra.] * [Page reference is to official opinion. See p. 128a, infra.] - i Py RE Sr eS 6 Re ae re ERS EP Ren ee aT RL OR EL DIA aS lite 88a alteration or addition so made shall thereafter be subject | to such modification and change as the Commission may direct. Minor changes in the project works or divergence .from such approved exhibits may be made if such changes. will not result in decrease in efficiency, in material increase in cost, or in impairment of the general scheme of develop- ment; but any of such minor changes made without the prior approval of the Commission, which in its judgment — have produced or will produce any of such results, shall be subject to such alteration as the Commission may direct. ° The Licensee shall comply with such rules and regulations of general or special applicability as the Commission may from time to time prescribe for the protection of life, health, or property. Article 4. The constructton, operation, and maintenance of the project and any work incident to additions or altera- tions, whether or not conducted upon lands of the United States, shall be. subject to the inspection and supervision of the Regional Engineer, Federal Power Commission, in the region wherein the project is located, or of such other officer or agent as |the Commission may~.designate, who shall be the authorized representative of the Commission for such purpose The Licensee shall furnish to said rep- resentative such’ poe as he may require concerning the construction, operation, and maintenance of the proj- ect, and of any alteration thereof, and shall notify him of the date upon which work will bg and as far in advance thereof as said representative may reasonably specify, and shall notify him promptly in writi of work for a period of more than one week, ‘and of. its resumption and completion. The Licensee shall allow him and other officers or employees of the United States, show- ing proper, credentials, free and unrestricted access to, through, and across the project:lands and project works in the performance of their official duties: Article 5. Insofar as any material is dredged or exca- vated in the prosecution of any work authorized under the ——— 89a license, or in the maintenance of the project, such material shall be removed and deposited so it will not interfere with navigation, and will be to the satisfaction of the District Engineer, Department of the Army, in charge of the locality. . Article 6.. The United States specifically retains and safeguards the right to use water in such amount, to be determined by the Secretary of the Army, as may be necessary for the purposes of navigation on the navigable waterway affected; and the operations of the Licensee, so far as they affect the use, storage and discharge from storage of water affected by the license, Shall at all times be controlled by such reasonable rules and regulations as the Secretary of the Army may prescribe in the interest of navigation, and as the Commission may prescribe for the protection of life, health, and property, and in the _interest of the fullest practicable conservation and utiliza- tion of such waters for power purposes and for other bene: ficial public uses, including recreational purposes; and the Licensee shall release water from. the project reservoir . at such rate in cubic feet per second, or such volume in acre-feet per specified period of time, as the Secretary of the Army may prescribe in the interest of navigation, or as the Commission may prescribe for the other purposes hereinbefore mentioned. ae : ' Article 7, Whenever the United States ‘shall desire to construct, complete, or improve navigation facilities in con- nection with the project, the Licensee ‘shall convey to the . United States, free-of cost, such of its lands and its rights- of-way and such right of passage through its dams or other structures, and permit such control of pools as may be required to complete and maintain such navigation . facilities. Article 8. The Licensee shall furnish free of cost to the © United States power for the operation and maintenance of navigation facilities at the voltage and frequency required rr \ ae 90a- by such facilities and at a point adjacent thereto whether said facilities are constructed by the Licensee or bad the — United States. Article 9. The operstion of any navigation facilities which. may be constructed as a part of or in connection withany dam or diversion structure constituting a part of the project works shall at all times be controlled by such reasonable rules and regulations in the interest of navigation, including the control of the level of the pool caused by such dam or diversion structure, as may be made from time to time by the Secretary of the Army. Article 10. The Licensee shall for the protection of navigation, construct, maintain and operate at its own expense such lights and other signals on fixed structures in or over navigable waters of the United States as may be directed by the: Secretary of the sie avenues in which the Coast Guard is operating. Article 11. The actual legitimate original cost ‘of the ’ original project, and of any addition thereto or betterment thereof, shall be determined by the Commission in accord- ance with the Act and the Comeaqeien 8 rules and regula- tions thereunder. Article 12. After the first twenty (20) years of operation of the project under the license, six (6) percent per annum. shall be the specified rate of return on the net investment in the project for determining surplus earnings of the project for the establishment and maintenance of amortiza- tion reserves, pursuant to Section 10(d) of the Act; one- half of the project surplus earnings, if any, accumulated after the first twenty. years of operation under the license, in excess of six (6) percent per annum on the nef invest- ment, shall be set aside in a project amortization reserve account as of the end of each fiscal year, provided that, if and to the extent that there is a deficiency of project | earnings below six (6) percent per annum for any fiscal 9la - year or years after the first twenty years of operation under the license, the amount of:such deficiency shall be deducted from the amount of any surplus earnings ac- cumulated thereafter until absorbed, and one-half of the © remaining surplus earnings, if any, thus cumulatively com- puted, shall be set aside in the project amortization reserve account; and the amounts thus established in the project amortization reserve account shall be maintained therein . until further order of the Commission. Article 13. The Licensee shall install additional capacity or make other changes in the project as directed by the Commission, to the extent that it is economically sound and in the public interest to do so, after notice and oppor- tunity for hearing. _ Article 14. The Licensee shall, after notice and op r- tunity for hearing; coordinate the operation, of the project. electrically and hydraulically, with such other power sys- - .tems ‘and in such manner as the Commission may direct in the interest of power and other beneficial public. uses of water resources, and on such conditions concerning the equitable sharing of benefits by the Licensee as the Com- _ Inission may order. Article 15. The Licensee shall, for the conservation, and development of fish and wildlife resources, construct, main- tain, and operaté, or arrange for the construction, main- _ tenance and operation of such facilities,and comply with such reasonable modifications of the project structures and : operation as may be ordered by the Comniission upon its own motion or upor the recommendation of the Secretary of the Interior or the fish and wildlife agency or agencies of any State in which the project or a part thereof is lo- cated, after notice and opportunity‘for hearing and upon findings based on substantial evidence that such facilities and modifications are necessary and desirable, reasonably consistent with the primary purpose of the project, and consistent with the provisions of the Act. ts ——— én > 92a Article 16. Whenever the United States shall desire, in connection with the project, to construct fish and wildlife facilities or to. improve the existing fish and wildlife facil- ' ities at its own expense, the Licensee shall permit the Uftited States or its designated agency to use, free of cost, such of Licensee’s lands and interest in lands, reser- . voirs, waterways and project. works as may be reasonably required to complete such facilities or stch improvements thereof. In addition, after notice and opportunity for hearing, the Licensee shall modify the project operation as may be prescribed by the Commission, reasonably con- sistent with the primary purpose of the project, in order to permit the maintenance and operation of the fish and wildlife facilities constructed or improved by the United States under the provisions.of this article. This article | ‘ shall not be interpreted to place any obligation on the United States to construc: or improve fish and wildlife facilities or to relieve the Licensee of any obligation under this license. _ Article 17. The Licensee shall construct, maintain and operate or shall arrange for the construction, maintenance and operation of such recreational facilities including modi- fications thereto, such as access roads, wharves, launching © ramps, beaches, picnic and camping areas, sanitary facilities and utilities, as may be prescribed hereafter by the Commis- sion during the term of this license upon‘its own motion or upon the recommendation of the Secretary of the Interior or other interested Federal and State agencies, after no- tice and opportunity for hearing and upon findings based upon substantial evidence that such facilitiés-are necessary and desirable, and reasonably ‘consistent with the primary purpose of the project. Article 18. So far as is consistent with proper opera- tion of the project, the Licensee shall allow the public free access, fo a reasonable extent, to project waters and ‘adjacent project lands pwned by the Licensee for the pur- \ ™ 93a 4 pose” of full public utilization of such lands and waters for navigation and recreational purposes, including fish and hunting, and shall allow to a reasonable extent for such ° purposes the construction of access roads, wharves, land- ings, and other facilities on its lands the occupancy of which may in appropriate circumstances be subject to pay- ment of rent to the Licensee in a reasonable amount: - Pro- vided, that the Licensee may reserve from public access, - Such portions of the project waters, adjacent lands, and - project facilities as may be necessary for the protection of life, health, and property and Provided further, that) the _ Licensee’s consent to the construction. of access roads, wharves, landings, and other facilities shall not, without . its express agreement, place upon the Licensee any obliga- tion to construct or maintain such facilities. These facil- @ies are in addition to the facilities that the Licensee may construct, and maintain as required by the ligense. - Article 19. The Licensee shall be responsible for and shall minimize soil erosion and siltation on lands adjacent to the stream resulting from construction ‘and operation of the project. The Commission upon request, or upon its own motion, may order the Licensee to construct and. maintain such preventive works to accomplish this purpose and to revegetate exposed soil surface as the- Commission may find to be necessary after notice and opportunity for hearing. _ Article 20. No lease of the project or any part thereof whereby the lessee is granted the occupancy, possession, or . use of-the project, or any part thereof, shall be made - without prior written approval of the Commission; and the Commission may, if in its judgment the situation warrants, require that all the conditions of the license, of the Act, and of the rules and regulations of the Commission, shall be applicable to such property so leased to the same extent as if the lessee were the Licensee: Provided, that the pro- visions of this article shall not apply to leases of land or _ Sigel | XN @ buildings or other oe while not required to achieve the " purposes of the license. Article 21.. Upon the completion of the project, or at such other time as the Commission may direct, the Licensee shall submit to, the Commission for approval revised maps, plans, spetifications, and statements insofar as necessary to show any divergence from or variations in the project area and project boundary as finally located or in the’ project works as. actually constructed when compared with the area and boundary. shown and the works described in the license or in the maps, ‘plans, specifications, and state- ments approved by the Commission, together with a state- ment in writing. setting forth the reasons which in the opinion of the Licensee necessitated or justified variations in or divergence from the approved maps, plans, specifica- tions, and statements. Such revised maps, plans, specify cations, and ‘statement shall, if and when approved by the Commission, be made a part of the license under the pro-_ ‘visions of Article 2 hereof. Article 22. In the construction and maintenance of the .project, the location and standards of roads and trails, and other land uses, including the location and condition of quarries, borrow pits, spoil disposal areas,’and sanitary facilities, shall be subject to the approval of the depart- ment or agency of the United States having supervision over the lands involved. Article 23. In the construction and maintenance of the project works, the Licensee shall place and maintain suit-- able: structures and devices to reduce-to a reasonable de- gree the liability of contact between its transmission lines, and telegraph, telephone, and other signal wires or power transmission lines eonstructed prior to its transmission lines and not 6wned by the Licensee, and shall also plaée and maintain suitable structures and devices to reduce to a reasonable degree the liability of any structures or wires falling and obstructing traffic and endangering life - Sa pone sree on highways, streets, or railroads. None of the prowsions of this article is intended to relieve the Licensee from any~ responsibility or requirement which may be imposéd 1 by . the other lawful authority for avoiding or éliminating . inductive interference. af ~ Article 24. The Licensee shall make provision, or shall . bear the reasonable cost, as determined by the agency of the United States affected, of making provision for avoid-. ing inductive interference between any project transmis- Sion line or other project facility constructed, operated, or _ ‘Maintained under the license, and any radio installation, telephone line, or other’ communication facility installed br-constructed before or after construction of such project transmission line or other project facility and owned, op- erated, or used by such agency of the Unitéd States in _ administering the lands under its jurisdiction. a Article 25. The Licensee shall clear such portions of transmission line rights-of-way across lands of the United States as are designated by the officer of the United States ; in charge of the lands; shall keep the areas so designated clear of new growth, all refuse, and inflammable material to the satisfaction of such officer; shall trim all branches . of trees in contact with or liable to contact the transmission _ line; shall cut and remove all dead or leaning trees which might fall in contact with the transmission line; and shall. ‘take such other precautions against fire as: may be required by such officer. No fires for the burning of waste material shall be set except with the prior written consent of the officer: of the United States in charge: of ‘the lands as to. time and place. ; Article 26. Timber on lands of the United States cut, used, or destroyed in the construction and maintenance of the project works or in the clearing of said lands shall be paid for in accordance with the requirements of and at " the current stumpage rates applicable to the sale of similar timber by the agency of the United States having jurisdic- _ 96a tion over said lands; and all.slash and debris resulting from the cutting or destruction of such timber ‘shall be disposed.of as the officer of such agency may direct. _ Article 27.:The Licensee shall do everything reasonably _within its .power and shall require its employees, con- tractors, and employees of contractors to do everything reasonably within their power, both independently and upon request of officers of the agency of the United States concerned, to prevent, make advanced. preparations for sup- pression, and — fires on lands occupied under a | license. , Article 28. The Licensee shall iaiienei no objection to, “and shall in no way prevent, the use by the agency of the United States having jurisdiction over the lands of the United States affected; or by persons or corporations oc- cupying lands of the United States under permit, of water ’.for fire suppression from any stream, conduit or body of water, natural or artificial, used by the Licensee in the opération of the project works covered by the license, or to the use by, said parties of water for sanitary and domestic purposes from any stream or body of water, natural or artificial, used by the Licensee in the operation - of the project works covered -by the license. Article 29. The Licensee shall be liable for injury to, or destruction of, any buildings, bridges, roads, trails, lands, or other property of the United States, occasioned by the construction, maintenance, or operation of the project works or of the works appurtenant or accessory thereto under the license. Arrangements to meet ‘such liability, either by compensation for such injury. or destruction, or by recon- struction or repair of damaged. property, or otherwise, shall be made with the appropriate department or agency of the United States. Article 30. The Licensee shall allow any agency of thé United States, without charge, to construct or permit to be > / ~~ Stic PS ee 97a ae ; : : : constructed on, through and across the project lands, con- .° duits, chutes, ditches, railroads, roads, trails, telephone and power lines, and other means of transportation and communications not inconsistent with the enjoyment of said lands by the Licensee for the purposes stated in the li- cense. This article shall not be construed as conferring upon the Licénsee any right of use, occupancy, or enjoy- ment of the lands of the United States other than for the construction, operation, and maintenance: of the project as stated in the license. Article 32. There i is reserved to the Sonuuiiine depari- ment or agency Of the United States, or of the State or county involved, the right to take over, maintain, and super- vise the use of any project road as a public road after construction of the project works is completed. Article 32. The Licensee, its successors and assigns shall, during the period of the license, retain the possession of all project property covered by the license as issued or as later amended, including the project area, the project works, and all franchises, easements, water rights, and rights of occupancy and use; and none of such properties necessary or useful to the project and to the development, transmission, and distribution of power therefrom will be voluntarily sold, transferred, abandoned, or otherwise dis- posed of without ‘the approval of the ‘Commission : Pro- vided, that a mortgage or trust deed or judicial sales made ~ thereunder, or tax sales, shall not be deemed voluntary transfers within the meaning of this article. In the event the project is taken over by the Unitéd States upon the ter- mination of the license, as provided in Section 14 of the Act, or is transferred to a new licensee under the provisions. of Section 15 of the Act, the Licensee, its successors and as- signs will be responsible for and will make good any defect of title to or of right of user in any of such project. property - which is necessary or appropriate or valuable and service- - able in the maintenance and operation of the project, and will pay and\ discharge, or will assume responsibility for ee eee ee tere 98a | ; a payment and discharge, of all liens or encumbrances upon ” the project or project property created by the Licensee or created: or incurred after the issuance of the license: Provided, that the provisions of this article are not: in- tended- to ‘prevent the abandonment or the retirement . from service of structures, equipment, or other project works in connection with replacements thereof when they become obsolete, inadequate, or inefficient for further. serv- ice due to wear and tear, or to require the Licensee, for the purpose of transferring the project to the United States or to a new Licensee, to acquire any different title to or right of user in any of.such project property than was necessary to acquire for its own purposes as Licensee. Article 33. For the purpose of determining the stage and - flow of the stream-or streams from which water is diverted for the operation of the project works, the amount of water held in and withdrawn from storage, and the effective head on the turbines, the Licensee shall install and there- after maintain such gages and stream-gaging stations as © the Commission may deem necessary and best adapted to the requirements; and shall provide for the required read- ings of such gages and for the adequate rating of such stations. The Licensee shall also install and maintain standard meters adequate for the determination of the amount of electric energy generated by said project works. The number, character, and location of gages, meters, or other measuring devices, and the method of operation — - . thereof, shall at all times be satisfactory to the Commis- sion and may be altered from time to time if necessary to secure adequate determinations, but such alteration shall not be made except with the approval of the Commission or upon the specific direction of the Commission. The installation of gages, the ratings of said stream or streams, ‘and the determination of the flow thereof, shall be under the supervision of, or in cooperation with, the District Engineer of the United States Geological Survey having. .charge of stream-gaging [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386412_0024%3A06. Public record. Not legal advice.