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<br /> <br />6 <br /> <br />CQLORADO RIVER STORAGE PROJECT <br /> <br /> <br />them subject to whatever considerations, if any, appeared desirable <br />after havmg afforded the Hoover power al10ttees an opportunity to <br />present their views on the additional regulation No.1 which was made <br />a part of the revised general principles and criteria. <br />You, in turn, made my memorandum of June 13, 1961, together <br />with its attached revised general principles and criteria, available to <br />lower and upper basin interests for reVIeW and comment. We have <br />now received the ;results of that review and have had extensive dis- <br />cussions thereon with Assistant SecretllJ'Y Holum. Most of the sub. <br />stantive suggestions for further revision of the general principles had <br />already been thorpughly considered previously by the Bureau, and we <br />find no convincinl> reasons to make aUy fundamental changes in the <br />revised general prmciples and operating criteria submitted to you with <br />my memorandum of June 13, 1961. Several suggestions for changes <br />of minor import were received, however, which appear desirable and <br />llJ'e acceptable to us. <br />The general principles and operating criteria transmitted herewith <br />reflect the Bureau's recommendations taking into account the long <br />history of negotiations, discussions, and views received to date, This <br />memorandum, together with my memorandums of January 18, 1960, <br />and Jnne 13, 1961, and the tabular forms for computing Hoover basic <br />firm and the dhJ)inution in power generation under the formula of <br />principle 5 as included in my memorandum of June 13, 1961, comprises <br />a formal record, i explanation, and background for these recommen. <br />dations ' <br />Weare aware that no set of general principles and operating criteria <br />could possibly fully satisfy all of the diverse interests affected, Before <br />proceeding with .a discussion of the most recent comments and sug. <br />gestions received, therefore, I believe it important to reiterate from <br />my June 13, 19~1, memorandum that we have proceeded on the <br />basis-; , <br />lie * * of securing a! practical approach to the problems of filling, as distinguished <br />from what might b~ considered a legalistic approach involving an attempt on our <br />part to establish pr~nciplea and operating criteria on the basis of conclusions as to <br />the perimeters of lej?:al rights and obligations, with the consequent hazards which <br />would attend such fLU approach. Consequently, our feeling is that irrespective of <br />what might or might not be conceived by any party as the outer measure of its <br />rights or obligations, and with no attempt to establish those limits as a basis for <br />these principles and criteria, we propose action purely within a reasonable exercise <br />of Secretarial discretion. <br />The most substantive of comments On my June 13, 1961, memo- <br />randum go to principle 5, which deals with the proposal to make an <br />allowance for a, portion of the diminution in power generation at <br />Hoover Dam, 'Y'th provision for future reimbursement of moneys <br />expended from 'the Upper Oolorado River Basin Fund utilized in <br />accomplishing s)lCh allowance, For pUl'poses of this presentation, <br />however, I will qliscuss the comments and suggestions received on my <br />June 13, 1961, memorandum in the order of the principle which they <br />concern. <br />Principle 1,-;Question has been raised as to whether acquiescence <br />by a Hoover powsr allottee in the exercise by the Secretary of "reason- <br />able discretion" in the operation of ths Fsderal projects involved would <br />invoke a legal liability on that power allottee in respect to power which <br />it has contracted to supply from its share of Hoover power, We believe <br />that the contrabtua1 relationships between a Hoover power allottee <br />