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"APPLICATION OF PROFITS FROM POWER DEVELOPMENT MID arHER OPERATIONS "38. (a) Power Development. Either the United States, or the association, with the approval of the Secretary, may develop the power possibilities of the project, provided such development does not impair the yield of water from the project nor interfere with the operations thereof for the primary purpose of utilizing the developed water supplY of the project for irrigation, municipal, domestic and industrial purposes other than power. *** (b) Application of profits from power develo ment and other 0 erations. Net income from the sale of surplus power being power not utilized for proj~ ect purposes) ** shall, upon collection, be remitted to the United States for application on construction charges due or to become due *** until all obligations of the Association to the United States shall have been liquida- ted. After all payments have been made as above provided, the net power revenues shall: "(1) belong to the Association in case the Associa- tion develops the power possibilities at its own expense, or "(2) be disposed of as Congress shall direct, in case the power possibilities are developed by the United states, or with funds advanced by the United states. " Deer Creek dam and reservoir was completed by the United States under this contract early in 1942, with power house penstocks and foundations. The original estimated cost was $7,600,000, but on December 20, 1946, .the con~ tract was amended to provide for expenditure and rep~ent of $11,400,000, and on February 2, 1949, a supplemental contract was entered into providing for expenditure and repayment of such additional amounts as might be necessary to completion. It is now estimated the total cost will be $18,000,000. In the meantime, and though the subject had been o1'ten referred to it by the Association, the Bureau of Reclamation did nothing toward development of the power possibilities) asserting instead that they did not admit of profi table development unless and until construction of parts 01' the proposed Central Utah Project. But officers and directors of the Association did not accept this ipsi dixit; they made independent investigation, and formulated a plan under which power development would be undertaken 1'Ol' it by private enterprise, - the Utah Power & Light Company. '!his plan involves no financial outlay by the Association and no expenditure of public funds; it guarantees a minim1llll annual return of $40:>000 to the Association for payment to the United States on the greatly increased cost of the dam and reservoir, which the Association is required to repay. Ultimate ownership of the power plant by the Association is assured. The Association guarantees nothing, the Power Company assuming all expense and hazards. ~21~