<br />
<br />1'/S21
<br />
<br />ROOYER DAM ENERGY
<br />
<br />929
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<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.
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<br />HISTORY OF THE BCPA
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<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
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<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). "
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