WSP12582

• File Number: 8220.200.05
• Description: Colorado River - Water Projects - Other Supply Projects - Hoover Dam-Lake Meade-Boulder Canyon
• State: CO
• Basin: Colorado Mainstem
• Water Division: 5
• Date: 1/1/1982
• Author: Keith W Kroese
• Title: Legal Aspects of the Upcoming Reallocation of Hoover Dam Energy - The Conflict Between Arizona-California and Nevada - Keith W Kroese - Arizona Law Review-Volume 24 - 01-01-82
• Water Supply Pro - Doc Type: Report/Study

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HOOVER .DAM ENERGY

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received the greatest share ofthe energy in the original allocation. Neither
Arizona nor Nevada, the two other states in the region the BCPA was
intended to benefit,25 was in a position to contract for the use of any power
"ithin its borders, although Nevada attempted to do SO.26
Accordingly, after negotiations were held among the Secretary, Ne-
vada, California, and the California power interests, the Secretary allotted
one hundred percent of the firm energy27 produced at Hoover Dam to Cal-
ifornia customers. Of that, thirty-seven percent of the power was allotted
10 the City of Los Angeles, thirty-six percent to the Metropolitan Water
District, a municipal corporation formed to transport Colorado River
water to California, and twenty-seven percent to Southern California
Edison.28 Significantly, the revenue from the sixty-four percent of the firm
energy that was allotted to Southern California Edison and the City of Los
Angeles, the only two interests with a sufficient need for, and ability to pay
for, that amount of power at the time,29 was alone enough to amortize the
entire estimated cost of the dam within the required fifty years.30 The al-
lotment of the remaining thirty-six percent of available firm energy to the
Metropolitan Water District, for use in pumping water to southern Cali-
fornia through the aqueduct authorized in the project, reflects the BCP A's
emphasis on water aspects of the project.]l
The allotments to Los Angeles and Southern California Edison, how-
ever, were made subject to withdrawals of power by Arizona and Nevada
and by several smaller California municipalities.32 Citing the need to se-

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25. See Arizonav. California, 373 U.S. 546, 552-560 (1963); Proposed Marketing Criteria,
supra note 4, at 46,867. The current marketing area for Boulder Canyon Project (BCP) power is
southern California, southern Nevada. most of Arizona, and a small part of New Mexico. Id
26, See CONTRACTS, supra note 4, at 18.
27. Firm energy is dependable energy calculated on the basis of anticipated stream flow.
Arizona Power Auth. v. Morton, 549 F.2d 1231, 1236 n.20 (9th Cir. 1977).
28. Letter from Secretary of the Interior R.L. Wilbur to the Senate Committee on Appropria-
tions(June 17, 1930), in CONTRACTS, supra note 4, at 601-02.
29. Id Southern California Edison and the City of Los Angeles. also agreed to lease and
operate the power-generating facilities at the dam, although permanent title to Ihe power plant
Icmains in the United States. Id at 594-95. 43 U.S.C. 6 617e (1976 & Supp. IV 1980) authorizes
the Secretary to lease the dam's power units, in his discretion, or in the alternative, to lease the use
of water for generation of power. The lease requires Southern California Edison and the City of
Los Angeles to generate power at cost for all other allotttes. CONTRACTS, supra note 4, at 594.
30. CONTRACTS, supra note 4, at 593. The power was sold at the rate of 1.63 mills per kilo-
wall-hour for firm energy and 0.5 mills per kilowatt-hour for secondary energy. Id
31. Id at 602. Metropolitan also was allocated all secondary power, the surplus power fluc-
tuating with wet and dry season cycles, generated at the dam. Id Since Metropolitan had not yet
Ibanced its aqueduct and would not be able to take or use power until the dam and aqueduct
wefe built, however, this allotment was not considered in the amortization calculations. Id The
64% required to be paid for by the City of Los Angeles and Southern California Edison until the
stales began taking and paying for their allotments was itself sufficient to ensure amortization. Id
at 601; see supra text accompanying note 30. The allotment of power to Metropolitan was in
excess of that needed to pump the water. Consequently, Metropolitan later contracted with the
~tary, the City of Los Angeles, Southern California Edison, and a smaller power user to resell
Its unused firm energy to the City of Los Angeles and Southern California Edison for the duration
of the 50-year allotment. See DoCUMENTS, supra note 4, at A455.
. 32. Letter of Secretary of the Interior R,L. Wilbur to the Senate Committee on Appropria-
tions (June 17, 1930), in CONTRACTS, supra note 4, at 601. The California municipalities of
Pasadena, Burbank. and Glendale were allotted a total of approltimately six percent of the avail-
able Hoover firm power, to be taken from the Los Angeles and Southern California Edison allot-
ments. Id

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