TOWN SITES AND POWER DEVELOPMENT Effect of later acts 2 1. Individual contracts NOTES OF OPINIONS Application for water rights under the reclamation act by individual lot owners for lands which have been subdivided into town lots will not be allowed hereafter; but water may be supplied to towns from reclamation projects by delivery to some convenient point, to be handled and distributed to the inhabitants of the town by the municipal authorities in accordance with the provisions of this act. Instructions, 39 L.D. 591 (1911). It is within the discretion of the Secretary of the Interior to contract with towns in the manner provided by this section, or contract directly with water users upon town lots or tracts within the corporate limits of town sites regardless of the size of such lots 111 or tracts. Opinion Chief Counsel, Reclamation Service, February 22, 1916, Commission Minutes 147, Docket 658. 2. Effect of later acts Section 4 of the Act of April 16, 1906, authorizes the furnishing of project water to a town in the immediate vicinity of the project which has a pre-existing water right in the same source of water as the project source. The authority to furnish water in such a case under the 1906 Act is neither repealed by, nor subject to the conditions of, the Act of February 25, 1920, 41 Stat. 451, or section 9(c) of the Reclamation Project Act of 1939. Memorandum of Acting Commissioner Lineweaver to Regional Director, Boise, September 26, 1950, in re contracts with cities of Culver and Metolius, Deschutes Project, Oregon. Sec. 5. [Development and lease of surplus power-Proceeds-Impairment of projects prohibited-Longer lease permitted on Rio Grande project.]— Whenever a development of power is necessary for the irrigation of lands, under any project undertaken under the said reclamation act, or an opportunity is afforded for the development of power under any such project, the Secretary of the Interior is authorized to lease for a period not exceeding ten years, giving preference to municipal purposes, any surplus power or power privilege, and the money derived from such leases shall be covered into the reclamation fund and be placed to the credit of the project from which such power is derived: Provided, That no lease shall be made of such surplus power or power privileges as will impair the efficiency of the irrigation project: Provided further, That the Secretary of the Interior is authorized, in his discretion, to make such a lease in connection with Rio Grande project in Texas and New Mexico for a longer period not exceeding fifty years, with the approval of the water users' association. or associations under any such project, organized in conformity with the rules. and regulations prescribed by the Secretary of the Interior in pursuance of section six of the reclamation act approved June seventeenth, nineteen hundred and two. (34 Stat. 117; Act of February 24, 1911, 36 Stat. 930; 43 U.S.C. § 522) EXPLANATORY NOTES 1911 Amendment. The Act of February 24, 1911, added the second proviso authorizing a 50-year lease in connection with the Rio Grande project. The Act appears herein in chronological order. Cross Reference, General. Section 9 (c) of the Reclamation Project Act of 1939, 53 Stat. 1194, authorizes the sale of electric power or lease of power privileges for periods not to exceed 40 years. The Act appears herein in chronological order. Cross References, Application of Power Revenues, General. General provisions re lating to the application of power revenues for the benefit of water users are found in subsection I, section 4, of the Act of December 5, 1924, 43 Stat. 703, and in the Act of July 1, 1946, 60 Stat. 366. The socalled Hayden-O'Mahoney amendment in the Act of May 9, 1938, 52 Stat. 322, provides generally that power revenues from reclamation projects shall be covered into the reclamation fund until power costs are repaid. The relevant provisions from the 1924, 1946 and 1938 Acts appear herein in chronological order. 112 TOWN SITES AND POWER DEVELOPMENT Cross References, Special Acts. See index for references to special acts dealing with the development of power and disposition of power revenues. Generally 1 Legislative History. S. 87, Public Law 103 in the 59th Congress. S. Rept. No. 648. H.R. Rept. No. 2113. NOTES OF OPINIONS Revenues, application of 3 1. Generally The development and sale of surplus power not required for pumping or other uses of irrigation is authorized by this section only as an incidental phase of reclamation, not as a primary or independent end in itself. Consequently, those who benefit from the net profits of the commercial power operation of a project are not entitled as a matter of right to have water released for power production rather than held for irrigation use, nor are they entitled to receive credit for the profits attributable to the sale of replacement power acquired from another source. Burley Irr. Dist. v. Ickes, 116 F. 2d 529 (D.C. Cir. 1940), cert. denied, 312 U.S. 687 (1941). The limitations in the power leasing act do not apply to the lease of a power privilege to a Warren Act contractor for the purpose of generating power for irrigation pumping. Solicitor Margold Opinion, M-28725 (October 6, 1936), in re use of power site at C canal drop, Klamath project. 2. Utility companies, contracts with By the terms of a contract between the United States and the Pacific Gas & Electric Co. in connection with the construction, operation, and maintenance of the Salt River Project, the company surrendered and conveyed all of its rights within the physical limits of the project, and in lieu thereof the United States agreed to furnish the company in the city of Phoenix, Ariz., a specified amount of electrical energy generated at its works at the Roosevelt Reservoir at a stipulated sum of money and for a term not exceeding 10 years, and the United States further agreed that while serving power to the company under the terms of the contract, it would refrain from entering into a general retailing of power to customers in the city of Phoenix and from furnishing power to anyone in said city to be again sold or retailed. This contract neither violates the provisions of the antitrust law of July 2, 1890, 26 Stat. 209, nor the provision of the Act of April 16, 1906 (34 Stat. 116), which, in authorizing the Secretary of the Interior to lease surplus power derived from reclamation projects, provides that preference be given to municipal usage. 30 Op. Atty. Gen. 197 (1913). 3. Revenues, application of The receipts arising from the sale or leasing of water rights to towns or others, and from the leases of power to towns or others, should be classed as repayments. Comp. Dec., December 6, 1906. (Reclamation B58.) Returns from the sale of power and power privileges are to be credited as a refund on account of the construction cost of the project. Departmental decision, December 28, 1916. The Hayden-O'Mahoney amendment of 1938 amends section 5 of the Act of April 16, 1906, by providing that after net power revenues have repaid project construction costs allocated to be repaid by such revenues, they shall then be covered into the General Treasury as miscellaneous receipts. Solicitor Harper Opinion, M-33504 (September 26, 1944), in re disposition of power revenues from Grand Valley project. The practice of using power revenues to assist in the payment of irrigation costs and in determining whether a project will probably return its cost to the United States originated with section 5 of the Act of April 16, 1906, 34 Stat. 116, 117, 43 U.S.C. § 522; was followed in a number of subsequent enactments, including section 9 of the Reclamation Project Act of 1939, 53 Stat. 1187, 1193, 43 U.S.C. § 485h; and has repeatedly been recognized and accepted by Congress. Letter from Acting Commissioner Markwell to Rep. Leroy Johnson, April 2, 1948. The availability of power revenues to aid irrigation has, in one form or another, been a part of general reclamation law almost since its beginning. This is evident from section 5 of the Act of April 16, 1906, 34 Stat. 116, 117, 43 U.S.C. § 522; the Act of February 24, 1911, 36 Stat. 930, 43 U.S.C. § 522; and subsection I, section 4, of the Act of December 5, 1924, 43 Stat. 703, 43 U.S.C. § 501. This general trend has been reinforced by the HaydenO'Mahoney amendment to the Interior Department Appropriation Act, 1939, 52 Stat. 322, 43 U.S.C. § 392a, and a provision in TOWN SITES AND POWER DEVELOPMENT the Interior Department Appropriation Act, 1947, 60 Stat. 366, as well as section 9 of the Reclamation Project Act of 1939, 53 Stat. 1193, 43 U.S.C. § 485h. Memo 113 randum of Chief Counsel Fisher, September 12, 1952, in re procedure on use of surplus power revenues for assistance in financing irrigation distribution systems. 114 CONVENTION WITH MEXICO FOR THE UPPER RIO GRANDE Convention providing for the equitable distribution of the waters of the Rio Grande for irrigation purposes. (Signed at Washington, May 21, 1906; ratification advised by the Senate, June 26, 1906; ratified by the President, December 26, 1906; ratified by Mexico, January 5, 1907; ratifications exchanged at Washington, January 16, 1907; proclaimed, January 16, 1907; 34 Stat. 2953) The United States of America and the United States of Mexico being desirous to provide for the equitable distribution of the waters of the Rio Grande for irrigation purposes, and to remove all causes of controversy between them in respect thereto, and being moved by considerations of international comity, have resolved to conclude a convention for these purposes and have named as their plenipotentiaries: The President of the United States of America, Elihu Root, Secretary of State of the United States; and The President of the United States of Mexico, His Excellancy Senor Don Joaquin D. Casasus, ambassador extraordinary and plenipotentiary of the United States of Mexico at Washington. Who, after having exhibited their respective full powers, which were found to be in good and due form, have agreed upon the following articles: ARTICLE I After the completion of the proposed storage dam near Engle, New Mexico, and the distributing system auxiliary thereto, and as soon as water shall be available in said system for the purpose, the United States shall deliver to Mexico a total of 60,000 acre-feet of water annually, in the bed of the Rio Grande at the point where the head works of the Acequia Madre, known as the Old Mexican Canal now exist above the city of Juarez, Mexico. ARTICLE II The delivery of the said amount of water shall be assured by the United States and shall be distributed through the year in the same proportions as the water supply proposed to be furnished from the said irrigation system to lands in the United States in the vicinity of El Paso, Texas, according to the following schedule, as nearly as may be possible: In case, however, of extraordinary drought or serious accident to the irrigation system in the United States, the amount delivered to the Mexican Canal shall be diminished in the same proportion as the water delivered to lands under said irrigation system in the United States. ARTICLE III The said delivery shall be made without cost to Mexico, and the United States agrees to pay the whole cost of storing the said quantity of water to be delivered to Mexico, of conveying the same to the international line, of measuring the said water, and of delivering it in the river bed above the head of the Mexican Canal. It is understood that the United States assumes no obligation beyond the delivering of the water in the bed of the river above the head of the Mexican Canal. ARTICLE IV The delivery of water as herein provided is not to be construed as a recognition by the United States of any claim on the part of Mexico to the said waters; and it is agreed that in consideration of such delivery of water Mexico waives any and all claims to the waters of the Rio Grande for any purpose whatever between |