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001530 934 ARIZONA LAW REVIEW [VoL 24, Although mandatory on its far.e, the right of contract renewal may be ,subject to the Secretary's discretion. Section 617d(b) provides that renew_ als shall be granted upon "such terms and conditions as may be authorized or required under the then existing laws and regulations."49 Section 617d requires the Secretary to prescribe "general and uniform regulations. . . for renewals" granted under section 617d(b).5o Therefore, renewals of power contracts may be subject to secretarial discretion as expressed in the regulations. In prescribing those regulations, the Secretary may well have the option of reducing the amount of power available under the contracts being renewed.Sl Section 617d(c) of the BCPA is the preference clause that has CODle into conflict with the renewal clause because of the original power alloca- tion.52 That section, which Nevada and Arizona construe as granting each state an absolute right to one-third of the Hoover power,53 provides that the Secretary shall resolve conflicting applications in accordance with the public interest and with the policy expressed in the Federal Power Act It grants, however, a special preference to the states of Arizona, ,California. and Nevada, awarding them a right over all other applicants to purchase electric energy for use in the state. 54 The clause operates to grant states and municipalities a priority in the contracting process by its reference to the Federal Power ACt.55 Because of this incorporation of the Federal Power Act's policy, the BCP A provides that in the case of conflicting appli- cations deemed equally well-adapted to conserve and utilize the project resources in the public interest, the contract shall be awarded to the public entity applying for the power.56 On its face, therefore, the BCPA prefer- 100.000 firm horsepower under a contract must permit another agency receiving less than 25,000 firm horsepower to use its transmission lines, , _ 49. 43 U.S.C. ti 617d(b) (1976). 50. Id ti 617d. 51. See Yuma-Mesa Irrig. &'Drainage Disl. v. Udall, 253 F. Supp. 909, 912 (D.D,C. 1965) (Secretary had statutory authority to reduce amount of water available to an irrigation district holding a water contract during a time of drought). 52. See supra notes 22-35 and accompanying text 53. See Nevada Brief, supra note 8, at 71; infra notes 70-94 and accompanying texL 54. 43 U.S.C. ti 617d(c) (1976) provides that: In case of conflicting applications, if any, such Conflicts shall be resolved by the said Secretary, after hearing. with due regard to the public interest, and in conformity with the policy expressed in the Federal Power Act as to conflicting applications for permits and licenses, ~xcept that preference to applicants for the use of water and appurtenant works and privileges necessary for the generation and distribution of hydroelectric en- ergy, or for delivery at the switchboard of a hydroelectric plant, shall be given, first, to a State for the generation or purchase of electric energy for use in the State, and the States of Arizona, California, and Nevada shall be given equal opportunity as such applicants. 55. See 16 U.S.C. ~ 800(a) (1976) which provides: ' In issuing preliminary permits hereunder or licenses where no preliminary permit has been issued and in issuing licenses to new licensees under section 808 of this title the Commission shall give preference to applications 'therefor by States and municipalities, 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 made equally well adapted, to conserve and utilize in the public interest the water resources of the region; and as between other applicants, the Commission may give preference to the applicant the plans of which it finds and determines are best adapted to develop, conserve, and utilize in the public interest the water resources of the region, if it be'satisfied as to the ability of the applicant to carry out such plans. 56. See 43 U.S.C. ~ 617d(c) (1976).