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<br />1982)
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<br />HOOVER DAM ENERGY
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<br />935
<br />
<br />, ence clause appears to operate as a "tie-breaker" by ensuring that, when
<br />twO applications are found to be equally in the public interest, the Secre-
<br />tary will award the contract to a state or municipality over a private power
<br />, customer. 57 This provision operates in much the same way as the prefer-
<br />'ence clauses in other federal power and reclamation projects,58-with one
<br />significant change. Instead of placing all preference customers on an equal
<br />footing, as do the other federal acts,59 the BCPA gives states contracting
<br />for Hoover power for use within the state priority over other preference
<br />customers.60
<br />The policy underlying the use of preference clauses favoring the sale
<br />of power to public entities is simply to ensure the widest possible distribu-
<br />tion of the' benefits of low-cost electric energy produced at public expense,
<br />, rather than to permit the monopolization of the power by private utili-
<br />ties.61 Preference clauses encourage widespread distribution of federal
<br />power by fostering sale to states, municipalities, and other public agencies
<br />and requiring the sale of power at the lowest possible rates consistent with
<br />the public interest and sound business principles.62 Consideration of these
<br />factors tends to make the sale of power to preference entities subject to
<br />administrative discretion.63 It has been held consistently that the Secretary
<br />has broad discretion, in accordance with his duty to preserve project effi-
<br />ciency, in deciding whether and on what terms power will be sold to pref-
<br />erence customers.64
<br />[ If the preference clause does act as a tie-breaker,65 the Secretary's
<br />I finding that the conflicting applications are equally in the public interest66
<br />
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<br />r 57. See it/. This is the interpretation given the clause by WAPA, which asserts that the pref-'
<br />, m:nce clause is a "tie-breaker" applicable only when the Secretary's discretion finds two con1lict-
<br />I iIIg applications equally well adapted to serve the public interest. WAPA Staff Discussion Paper,
<br />i sup,a note 10, at 5-6.
<br />! 58. See, e.g., Federal Power Act, 16 U.S.C. 6 800(a) (1976); Flood Control Act of 1944, 16
<br />; uS.C. fi 825 (1976); Reclamation Project Act of 1939, 43 U.S.C. 6 485h(c) (1976); Colorado River
<br />: B3Sin Proje<..'t Act, 43 U.S.C. 6 1554 (1976) (incorporating 43 U.S.C. 6485h(c)).
<br />I 59. See supra note 58.
<br />r 60. See 43 U.S.C. fi 617d(c) (1976). This modification probably was engendered by the no-
<br />: lion that, since Arizona and Nevada owned the bed of the Colorado River, a navigable stream
<br />:IArizona v. California, 283 U.S. 423, 437 (1931)) upon which the dam was built, these states were
<br />: ClItitled to a "preferred right" to the energy generated at the dam: Hearings on H.R. .5773 Before
<br />:lItt House Comm. on Irrigation and Reclamation, 70th Cong., 1st Sess. 28 (1928). Nevada and
<br />. A'!zona partially rest their claim to one-third of the Hoove~ power on this notion. See Nevada
<br />,i1nef, mpra note 8, at 67; infra notes 81-85 and accompanymg text,
<br />: 61. See City of Santa Clara v. Andrus, S72 F.2d 660, 667-68 (9th Cir. 1978) (interpreting
<br />~atiOll Act of 1939); Disposition of Surplus Power Generated at Clark HiD Reservoir Pro-
<br />'jett, 41 Op. Att'y Gen. 236, 246-48 (1955) (interpreting Flood Control Act of 1944).
<br />62. See Santa Clara v. Andrus, S72 F.2d 660, 667 (9th Cir. 1978); Disposition of Power Gen-
<br />erated at Clark HiD Reservoir Project, 41 Op. Att) Gen. 236, 239 (1955).
<br />.63. To a certain extent the Secretary's allocation of power under a preference clause is not
<br />~bJea to judicial review. See City of Santa Clara v. Andrus, S72 F.2d 660, 666-68 (9th Cir. 1978);
<br />;,po notes 285-90 and accompanying text.
<br />64. See City of Santa Clara v. Andrus, 572 F.2d 660, 667 (9th Cir. 1978); Arizona Power
<br />Auth. v. Monon, 549 F.2d 1231, 1241 (9th Cir. 1977); Arizona Power Pooling Ass'n v. Monon, 527
<br />F ld 721, 727 (9th Cir. 1975).
<br />65. See supro note S7 and accompanying text.
<br />66. See 43 U.S.C. 6 617d(c) (1976); Interpretations of Certain Provisions of the Boulder Can-
<br />tOn Project Act," 53 Int. Dec. I, 7-8 (1930) [hereinafter cited as Interpretations of BCP AI; WAF A
<br />5taJr Discussion Paper, supra note 10, at 5-6; supra notes 52-60 and accompanying text.
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