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<br /> <br />1'/S21 <br /> <br />ROOYER DAM ENERGY <br /> <br />929 <br /> <br />This Note will examine the major legal issue in the upcoming rea))o- <br />CJtion of Hoover power under the BCPA: whether the statutory prefer- <br />ence for public entities can be applied in the reallocation process to enable, <br />Arizona and Nevada to obtain a greater share of power despite Califor- <br />~ia's asserted absolute right of renewal. In an attempt to resolve this issue, <br />tbis Note will examine the history of the BCPA, focusing particularly on <br />the factors leading to the original allocation of the energy and on the <br />sources of the conflict in the BCP A itself. Then, the legal positions of the <br />5lates and WAPA will be outlined, with an emphasis on how they view the <br />BCPA, its legislative history, and the relationship between the preference <br />and renewal clauses. Next, the operation of preference clauses in other <br />(ederal reclamation acts and the permissible extent of administrative dis- <br />cretion in the allocation of federal power to public and private customers <br />will be examined. Finally, this Note will suggest an argument that would <br />permit WAPAto exercise its discretion to grant Arizona and Nevada a <br />greater share of the Hoover power in accordance with well-established <br />principles of federal reclamation law. <br /> <br />I <br />I <br />I <br />i <br />! '. <br />i L <br /> <br />I' [.' ' <br /> <br />,. I <br />~' , <br />. , <br />[', 1. <br />ti . <br />I:,;:: ;', <br />10" <br />k\ <br />id. <br />r i J <br />~,:' j., <br />I.' <br />ir-; ~ <br />~~. -. <br />! ':' " ' <br /> <br />ti::;' : 1 ~;:,! ~~:i <br />I!,' 1.,1 ~ l. i <br />i:: ' <br /> <br />HISTORY OF THE BCPA <br /> <br />The unequal original allocation of Hoover Dam power among Ari- <br />7.00a, California, and Nevada, the states of the lower Colorado River divi- <br />sion,12 resulted from the purposes for which the BCP A was enacted, the <br />economic condit: cons prevailing in the three states at the time, and the <br />overwhelming need to ensure repayment of the federal investment in the <br />dam, power plant, and appurtenant structures. 13 The BCP A was intended <br />primarily as a flood control, irrigation, and reclamation project rather than <br />as a power project. 14 The major objective of the project was to provide for <br />Ihe construction of Hoover Dam in order to alleviate the frequent and <br />destructive floods caused by the ,Colorado River in southern Arizona and <br />!be Imperial Valley of Califor;nia, to regulate the flow of the river and <br />make water available for irrigation by storing it in the reservoir, and to <br /> <br />I;';' <br />~; <br /> <br />;ii. ' <br />f' <br />t:, <br />H-; <br />'1./_: <br />:>1: <br />[, <br />t:~; : <br />i <br />~( .,t <br />h. <br />(J': <br />Ii>,' ' <br />Hi:: <br />~r:; : <br />H:; <br />ii;i, <br /> <br />f:-, I <br />k . <br />Ii: <br />![1o: , <br /> <br />to, ; <br />11 ; <br />II' <br />E.; <br />~n-' <br /> <br />12. The Colo{ado River Compact of 1922, adopted as part of the BCPA, 43 U.S.C. ! 617/ <br />(1976), divided the states having an interest in Colorado River water into an upper division and a <br />l.lwer division. Arizona, California and Nevada are the states of the Lower Division. See The <br />Colorado River Compact of 1922, art. II, in DOCUMENTS, supra note 4, at A 18. The Boulder City <br />Area marketing area includes most of the Lower Colorado Basin, which is the area in Arizona, <br />California, Nevada, New Mexico, and Utah where waters drain into the Colorado River below <br />Lee's Ferry. DOCUMENTS, supra note 4, at A18; Revised Marketing Criteria, SUpra note 2. at <br />l6,95 I. <br />13. See CONTRACTS, supra note 4, at 18. 43 U.S.C. ! 617c(b) (1976) requires that the Secre- <br />tary provide for revenues by contract "sufficient to insure payment" within SO years of all federal <br />tlpenses for operation and maintenance of the dam and power plant and repayment of all <br />,',~ ~ounts advanced to the Colorado River Fund, through which appropriations for tbe construe- <br />;,! lion of the project were channeled pursuant to id. ~ 617a(b). This unique feature of the BCPA <br />,'~ prOvided that all expenses of building, operating and maintaining the dari1, power plant, and otber <br />,,'d ISpects of the project-except for its flood control features, which were to be repaid through excess <br />"';:e',cnues--would be repaid within SO years by revenue derived from the sale of Hoover Dam <br />",). .1iOwcr and, to a lesser extent, Colorado River water. .Id. ~ 617c(b). This provision was, in part, <br />~,;..,' 0' ; ~ss.itated by the immense cost of the project. See DocUMENTS, supra note 4, at 45-47. The Act <br />r" ! lIIade the obtaining of firtn contracts adequate to ensure repayment within 50 years a condition <br />~;" ,/lfecedent to the appropriation of any money for tbe project. 43 U.S.C. ! 617c(b) (1976). <br />~,1 14. See 43 U.S.C. ~ 617a(b), c(b) & d (1976). " <br />tg' f <br />~, / <br />F' <br />t,o, 1 <br /> <br />~> .-! <br /> <br />!: <br />a:.. <br />F <br /> <br />j": ' <br />~. . . <br />~ 's <br />?!:, ! <br /> <br />:;i,,~n <br /> <br />:-;- L i <br />. ,:!~; iJ' <br /> <br />"~~-'- . <br /> <br />, j <br />-. ~ <br /> <br />: t <br /> <br />I <br />! <br />I <br /> <br />! ., <br />, '- <br />. \ <br />I <br />1 ! <br />I <br /> <br />o <br />" <br /> <br />'! <br />.~ ~ <br /> <br />.1: <br />I' <br />" <br /> <br />t ~ <br /> <br />, <br />'I <br />