568 BONNEVILLE PROJECT An act to authorize the completion, maintenance, and operation of Bonneville project for navigation, and for other purposes. (Act of August 20, 1937, ch. 720, 50 Stat. 731) [Sec. 1. Completion of dam by Secretary of War-Surplus power to be disposed of by Power Administrator.]-For the purpose of improving navigation on the Columbia River, and for other purposes incidental thereto, the dam, locks, power plant, and appurtenant works now under construction at Bonneville, Oregon and North Bonneville, Washington (hereinafter called Bonneville project), shall be completed, maintained, and operated under the direction of the Secretary of War and the supervision of the Chief of Engineers, subject to the provisions of this Act relating to the powers and duties of the Bonneville power administrator provided for in section 2(a) (hereinafter called the administrator) respecting the transmission and sale of electric energy generated at said project. The Secretary of War shall provide, construct, operate, maintain, and improve at Bonneville project such machinery, equipment, and facilities for the generation of electric energy as the administrator may deem necessary to develop such electric energy as rapidly as markets may be found therefor. The electric energy thus generated and not required for the operation of the dam and locks at such project and the navigation facilities employed in connection therewith shall be delivered to the administrator, for disposition as provided in this Act. (50 Stat. 731; 16 U.S.C. § 832) Sec. 2. [Administrator appointed by Secretary of the Interior-Advisory Board of representatives of War, Interior, Federal Power Commission, and Agriculture departments-Office of Administrator to be an officer of the Department of the Interior Secretary of War to install necessary machinery— Powers and duties of Administrator.]—(a) The electric energy generated in the operation of the said Bonneville project shall be disposed of by the said administrator as hereinafter provided. The administrator shall be appointed by the Secretary of the Interior; shall be responsible to said Secretary of the Interior; and shall maintain his principal office at a place selected by him in the vicinity of the Bonneville project. The administrator shall, as hereinafter provided, make all arrangements for the sale and disposition of electric energy generated at Bonneville project not required for the operation of the dam and locks at such project and the navigation facilities employed in connection therewith. The form of administration herein established for the Bonneville project is intended to be provisional pending the establishment of a permanent administration for Bonneville and other projects in the Columbia River Basin. The Secretary of War shall install and maintain additional machinery, equipment, and facilities for the generation of electric energy at the Bonneville project when in the judgment of the administrator such additional generating facilities are desirable to meet actual or potential market requirements for such electric energy. The Secretary of War shall schedule the operations of the several electrical generating units and appurtenant equipment of the Bonneville project in accordance BONNEVILLE PROJECT 569 with the requirements of the administrator. The Secretary of War shall provide and maintain for the use of the administrator at said Bonneville project adequate station space and equipment, including such switches, switchboards, instruments, and dispatching facilities as may be required by the administrator for proper reception, handling, and dispatching of the electric energy produced at the said project, together with transformers and other equipment required by the administrator for the transmission of such energy from that place at suitable voltage to the markets which the administrator desires to serve. The office of the Administrator of the Bonneville project is hereby constituted an office in the Department of the Interior and shall be under the jurisdiction and control of the Secretary of the Interior. All functions vested in the Administrator of the Bonneville project under this Act may be exercised by the Secretary of the Interior and, subject to his supervision and direction, by the Administrator and other personnel of the project. (b) In order to encourage the widest possible use of all electric energy that can be generated and marketed and to provide reasonable outlets therefor, and to prevent the monopolization thereof by limited groups, the administrator is authorized and directed to provide, construct, operate, maintain, and improve such electric transmission lines and substations, and facilities and structures appurtenant thereto, as he finds necessary, desirable, or appropriate for the purpose of transmitting electric energy, available for sale, from the Bonneville project to existing and potential markets, and, for the purpose of interchange of electric energy, to interconnect the Bonneville project with other Federal projects and publicly owned power systems now or hereafter constructed. (c) The administrator is authorized, in the name of the United States, to acquire, by purchase, lease, condemnation, or donation, such real and personal property, or any interest therein, including lands, easements, rights-of-way, franchises, electric transmission lines, substations, and facilities and structures appurtenant thereto, as the administrator finds necessary or appropriate to carry out the purposes of this Act. Title to all property and property rights acquired by the administrator shall be taken in the name of the United States. (d) The administrator shall have power to acquire any property or property rights, including patent rights, which in his opinion are necessary to carry out the purposes of this Act, by the exercise of the right of eminent domain and to institute condemnation proceedings therefor in the same manner as is provided by law for the condemnation of real estate. (e) The administrator is authorized, in the name of the United States, to sell, lease, or otherwise dispose of such personal property as in his judgment is not required for the purposes of this Act and such real property and interests in land acquired in connection with construction or operation of electric transmission lines or substations as in his judgment are not required for the purposes of this Act: Provided, however. That before the sale, lease, or disposition of real property or transmission lines, as herein provided, the administrator shall secure the approval of the President of the United States. (f) Subject only to the provisions of this Act, the Administrator is authorized to enter into such contracts, agreements, and arrangements, including the amend 267-067-72-vol. I-39 570 BONNEVILLE PROJECT ment, modification, adjustment, or cancellation thereof and the compromise or final settlement of any claim arising thereunder, and to make such expenditures, upon such terms and conditions and in such manner as he may deem necessary. (50 Stat. 732; Act of March 6, 1940, 54 Stat. 47; Act of October 23, 1945, 59 Stat. 546; 16 U.S.C. § 832a) EXPLANATORY NOTES 1945 Amendment. The Act of October 23, 1945, 59 Stat. 546, amended subsection 2(f) to read as it appears above. Before amendment, the subsection authorized the Administrator "to negotiate and enter into such contracts, agreements, and arrangements as he shall find necessary or appropriate to carry out the purposes of this Act." 1940 Amendments. The Act of March 6, 1940, 54 Stat. 47, amended subsection 2(a) by adding to it its last sentence concerning the jurisdiction of the Secretary of the Interior. The 1940 Act also provided authority for the Secretary to appoint an Assistant Administrator, chief engineer and general counsel, who would serve under fixed salary limitations. This provision was repealed by the Act of October 23, 1945, 59 Stat. 546, which act, however, also amended section 10 of the 1937 Act and, as amended, section 10 includes a provision similar to the one repealed. Advisory Board Abolished. The Bonneville Power Advisory Board authorized in section 2 to be composed of representatives of the Secretaries of the Army, Interior, and Agriculture and the Federal Power Commission was abolished by Reorganization Plan No. 4 of 1965, effective July 27, 1965, and its function transferred to the Secretary of the Interior. NOTES OF OPINIONS The legislative history of section 2(f) of the Bonneville Project Act as amended on October 23, 1945 (59 Stat. 546, 16 U.S.C. §832a (f)), expresses an intent on the part of Congress to authorize the Bonneville Power Administrator to conduct his affairs in a manner which equates his authority with that of private business enterprises. Solicitor Barry Opinion, 71 I.D. 315, 326 (1964), in re Canadian Entitlement Exchange Agreements. In view of the express legislative intent of section 2(f) of the Bonneville Project Act to vest discretion in the Administrator of the Bonneville Power Administration as to the terms and conditions of contracts made to carry out the purposes of that Act, and assuming that Congress authorizes Atomic Energy Commission participation in the plan to sell steam from the New Production Reactor at Hanford, Washington, the contingent liability provision in a proposed agreement that BPA would reimburse the Washington Public Power Supply System for expenses incurred in the event construction of the reactor should be discontinued, will not be questioned, notwithstanding the general provision of sections 3679 and 3732, Revised Statutes (31 U.S.C. § 665 and 41 U.S.C. § 11). Dec. Comp. Gen. B-149016, B-149083 (letter of Assistant Comptroller General Weitzel to Chairman Holifield, Joint Committee on Atomic Energy, July 16, 1962). The legislative history of section 2(f) of the Bonneville Project Act indicates a purpose to enable the Administrator to conduct the business of the project with a freedom similar to that conferred on public corporations carrying on comparable activities. Dec. Comp. Gen. B-105397 (September 21, 1951). Under the broad authority of section 2(f) of the Bonneville Project Act the Administrator is authorized to enter into contracts and expend appropriated funds to increase precipitation in the watershed above Grand Coulee Dam through artificial nucleation and cloud modification if he determines that such services are necessary for the proper administration of the act. Dec. Comp. Gen. B-105397 (September 21, 1951). 2. Weather modification Under his general authority to dispose of electric energy, establish rates, and enter contracts, the Bonneville Power Administrator may enter into a contract and expend appropriated funds for a survey to determine the feasibility of providing additional firm power by increasing precipitation through artificial nucleation and cloud modification. Dec. Comp. Gen. B-104463 (July 23, 1951). 3. Intertie BONNEVILLE PROJECT The Secretary of the Interior has authority under subsection 2(b), 2(f), 5(a), 5(b) and 9(b) of the Bonneville Project Act; section 5 of the Flood Control Act of 1944; sections 9(c) and 14 of the Reclamation 571 Project Act of 1939; and section 2 of the Act of August 30, 1935, 49 Stat. 1039, reauthorizing the Grand Coulee Dam project, to construct transmission lines between the Pacific Northwest and the Pacific Southwest. Solicitor Barry Opinion, 70 I.D. 237 (1963). Sec. 3. [Definition of "public body or bodies."]-As employed in this Act, the term "public body", or "public bodies", means States, public power districts, counties, and municipalities, including agencies or subdivisions of any thereof. As employed in this Act, the term "cooperative", or "cooperatives", means any form of non-profit-making organization or organizations of citizens supplying, or which may be created to supply, members with any kind of goods, commodities, or services, as nearly as possible at cost. (50 Stat. 733; 16 U.S.C. § 832b) Sec. 4. [Preference to public bodies and cooperatives.]—(a) In order to insure that the facilities for the generation of electric energy at the Bonneville project shall be operated for the benefit of the general public, and particularly of domestic and rural consumers, the administrator shall at all times, in disposing of electric energy generated at said project, give preference and priority to public bodies and cooperatives. (b) To preserve and protect the preferential rights and priorities of public bodies and cooperatives as provided in section (a) and to effectuate the intent and purpose of this Act at all times up to January 1, 1942, there shall be available for sale to public bodies and cooperatives not less than 50 per centum of the electric energy produced at the Bonneville project, it shall be the duty of the administrator in making contracts for the sale of such energy to so arrange such contracts as to make such 50 per centum of such energy available to said public bodies and cooperatives until January 1, 1942: Provided, That the electric energy so reserved for but not actually purchased by and delivered to such public bodies and cooperatives prior to January 1, 1942, may be disposed of temporarily so long as such temporary disposition will not interfere with the purchase by and delivery to such public bodies and cooperatives at any time prior to January 1, 1942: Provided further, That nothing herein contained shall be construed to limit or impair the preferential and priority rights of such public bodies or cooperatives after January 1, 1942; and in the event that after such date there shall be conflicting or competing applications for an allocation of electric energy between any public body or cooperative on the one hand and a private agency of any character on the other, the application of such public body or cooperative shall be granted. (c) An application by any public body or cooperative for an allocation of electric energy shall not be denied, or another application competing or in conflict therewith be granted, to any private corporation, company, agency, or person, on the ground that any proposed bond or other security issue of any such public body or cooperative, the sale of which is necessary to enable such prospective purchaser to enter into the public business of selling and distributing the electric energy proposed to be purchased, has not been authorized or marketed, until after a reasonable time, to be determined by the administrator, has been afforded 572 BONNEVILLE PROJECT such public body or cooperative to have such bond or other security issue authorized or marketed. (d) It is declared to be the policy of the Congress, as expressed in this Act, to preserve the said preferential status of the public bodies and cooperatives herein referred to, and to give to the people of the States within economic transmission distance of the Bonneville project reasonable opportunity and time to hold any election or elections or take any action necessary to create such public bodies and cooperatives as the laws of such States authorize and permit, and to afford such public bodies or cooperatives reasonable time and opportunity to take any action necessary to authorize the issuance of bonds or to arrange other financing necessary to construct or acquire necessary and desirable electric distribution facilities, and in all other respects legally to become qualified purchasers and distributors of electric energy available under this Act. (50 Stat. 733; Act of March 6, 1940, 54 Stat. 47; 16 U.S.C. § 832c) EXPLANATORY NOTE 1940 Amendment. The Act of March 6, 1940, 54 Stat. 47, amended subsection 4(b) by striking out “January 1, 1941" wherever 1. Preference provision it occurred and inserting in lieu thereof "January 1, 1942". NOTES OF OPINIONS The preference provisions of section 5 of the Flood Control Act of 1944 must be read in pari materia with the preference provisions of section 5(c) of the Boulder Canyon Project Act (43 U.S.C. § 617d(c)), the Tennessee Valley Authority Act (16 U.S.C. § 831k), and Section 4 of the Bonneville Project Act (16 U.S.C. § 832c(d)). 41 Op. Atty Gen. 236, 245 (1955), in re disposition of power from Clark Hill reservoir project. If the marketing area of the Columbia River system were extended to California, the preference provisions of the Bonneville Project Act would extend thereto. Consequently, legislation would be required to modify the preference provision in order to assure that power sold to California applicants, both preference and non-preference, could subsequently be withdrawn and disposed of in the Pacific Northwest if that power were required in that area. Opinion of Portland Regional Solicitor, Coulter, November 4, 1959, reprinted in Study of a High Voltage Electrical Interconnection between the Pacific Northwest and California, submitted to the Senate Committee on Interior and Insular Affairs by Secretary Seaton, February 1960, at 53-57. Sec. 5. [Federal Power Commission to approve rate schedules-Administrator to contract for sale of electric energy.]—(a) Subject to the provisions of this Act and to such rate schedules as the Federal Power Commission may approve, as hereinafter provided, the administrator shall negotiate and enter into contracts for the sale at wholesale of electric energy, either for resale or direct consumption, to public bodies and cooperatives and to private agencies and persons and for the disposition of electric energy to Federal agencies. Contracts for the sale of electric energy to any private person or agency other than a privately owned public utility engaged in selling electric energy to the general public, shall contain a provision forbidding such private purchaser to resell any of such electric energy so purchased to any private utility or agency engaged in the sale of electric energy to the general public, and requiring the immediate canceling of such contract of sale in the event of violation of such provision. Contracts entered into under this subsection shall be binding in accordance with the terms |