BONNEVILLE PROJECT 573 thereof and shall be effective for such period or periods, including renewals or extensions, as may be provided therein, not exceeding in the aggregate twenty years from the respective dates of the making of such contracts. Contracts entered into under this subsection shall contain (1) such provisions as the administrator and purchaser agree upon for the equitable adjustment of rates at appropriate intervals, not less frequently than once in every five years, and (2) in the case of a contract with any purchaser engaged in the business of selling electric energy to the general public, the contract shall provide that the administrator may cancel such contract upon five years' notice in writing if in the judgment of the administrator any part of the electric energy purchased under such contract is likely to be needed to satisfy the requirements of the said public bodies or cooperatives referred to in this Act, and that such cancellation may be with respect to all or any part of the electric energy so purchased under said contract to the end that the preferential rights and priorities accorded public bodies and cooperatives under this Act shall at all times be preserved. Contracts entered into with any utility engaged in the sale of electric energy to the general public shall contain such terms and conditions, including among other things stipulations concerning resale and resale rates by any such utility, as the administrator may deem necessary, desirable or appropriate to effectuate the purposes of this Act and to insure that resale by such utility to the ultimate consumer shall be at rates which are reasonable and nondiscriminatory. Such contract shall also require such utility to keep on file in the office of the administrator a schedule of all its rates and charges to the public for electric energy and such alterations and charges therein as may be put into effect by such utility. (b) The administrator is authorized to enter into contracts with public or private power systems for the mutual exchange of unused excess power upon suitable exchange terms for the purpose of economical operation or of providing emergency or break-down relief. (50 Stat. 734; Act of October 23, 1945, 59 Stat. 546; 16 U.S.C. § 832d) EXPLANATORY NOTE 1945 Amendment. The Act of October 23, 1945, 59 Stat. 546, amended subsection 5(a) by inserting before the period of its 1. Exchange agreements first sentence the words "and for the disposition of electric energy to Federal agencies." NOTES OF OPINIONS The advantages at federal hydroelectric projects to be realized from implementing the "Treaty between Canada and the United States of America Relating to Cooperative Development of the Water Resources of the Columbia River Basin" through the execution of exchange agreements, support, as a matter of law, the Bonneville Power Administrator's determination of "economical operation" as required by section 14 of the Reclamation Project Act of 1939 (53 Stat. 1197, 43 U.S.C. § 389) and section 5(b) of the Bonneville Project Act (50 Stat. 734, 16 U.S.C. § 832d (b)), Solicitor Barry Opinion, 71 I.D. 315, 326-28 (1964). Agreements providing for the delivery to the Bonneville Power Administrator of a quantity of power which cannot, with certainty, be determined but which constitutes a valuable power resource, in return for the delivery by the Administrator of stated amounts of power over the same period, constitute power-for-power exchange agreements which the Administrator is authorized to enter into under section 14 of the Reclamation Project Act of 1939 (53 Stat. 1197, 43 U.S.C. § 389) and section 5(b) of the Bonneville Project Act (50 Stat. 734, 574 BONNEVILLE PROJECT 16 U.S.C. § 832d (b)). Solicitor Barry Opinion, 71 I.D. 315 (1964), in re Canadian Entitlement Exchange agreements. A proposed agreement whereby the Washington Public Power Supply System would furnish to the Bonneville Power Administration the total electric power generated from steam to be purchased from the Atomic Energy Commission's New Production Reactor at Hanford, Washington, and would receive in exchange therefor firm power from BPA, is clearly a contract for the exchange of power and comes within the general authority granted by section 5(b) of the Bonneville Project Act and section 14 of the Reclamation Project Act of 1939, which governs the operation of the Columbia Basin project as provided by section 1 of the Columbia Basin Project Act. Dec. Comp. Gen. B-149016, B-149083 (letter of Assistant Comptroller General Weitzel to Chairman Holifield, Joint Committee on Atomic Energy, July 16, 1962). As a prerequisite to the execution of a proposed agreement with the Washington Public Power System to furnish firm power in exchange for the total electric power generated at the Atomic Energy Commission's New Production Reactor at Hanford, Washington, the Bonneville Power Administration must make a determination that the agreement is in the interest of economical operation, as required by section 14 of the Reclamation Project Act of 1939 and section 5(b) of the Bonneville Project Act Dec. Comp. Gen. B-149016, B-149083 (letter to Chairman Holifield, July 16, 1962). The provisions of the Bonneville Act with respect to pullback of power from private utilities on five years' notice if power is needed by preference customers and relative to a maximum contract term of 20 years relate only to contracts for the sale of power under section 5(a) of the Bonneville Project Act. Neither of these provisions is applicable to a contract for the exchange of power under section 5(b) of the Bonneville Project Act. Memorandum of Associate Solicitor Weinberg to Administrator, Bonneville Power Administration, July 12, 1962. Sec. 6. [Schedules of rates and charges for electric energy.]-Schedules of rates and charges for electric energy produced at the Bonneville project and sold to purchasers as in this Act provided shall be prepared by the administrator and become effective upon confirmation and approval thereof by the Federal Power Commission; and such rates and charges shall also be applicable to dispositions of electric energy to Federal agencies. Subject to confirmation and approval by the Federal Power Commission, such rate schedules may be modified from time to time by the administrator, and shall be fixed and established with a view to encouraging the widest possible diversified use of electric energy. The said rate schedules may provide for uniform rates or rates uniform throughout prescribed transmission areas in order to extend the benefits of an integrated transmission system and encourage the equitable distribution of the electric energy developed at the Bonneville project. (50 Stat. 735; Act of October 23, 1945, 59 Stat. 546; 16 U.S.C. § 832e) BONNEVILLE PROJECT courage the most widespread use thereof at the lowest possible rates to consumers consistent with sound business principles," applies also to power marketed from reclamation projects under reclamation law. Letter 575 of Secretary Udall to Representative Aspinall, May 15, 1965, in re basis for establishing power rates for the Colorado River Storage Project. Sec. 7. [Rate schedules to be based on cost of production of energy-Computation of costs.]—It is the intent of Congress that rate schedules for the sale of electric energy which is or may be generated at the Bonneville project in excess of the amount required for operating the dam, locks, and appurtenant works at said project shall be determined with due regard to and predicated upon the fact that such electric energy is developed from water power created as an incident to the construction of the dam in the Columbia River at the Bonneville project for the purposes set forth in section 1 of this Act. Rate schedules shall be drawn having regard to the recovery (upon the basis of the application of such rate schedules to the capacity of the electric facilities of Bonneville project) of the cost of producing and transmitting such electric energy, including the amortization of the capital investment over a reasonable period of years. Rate schedules shall be based upon an allocation of costs made by the Federal Power Commission. In computing the cost of electric energy developed from water power created as an incident to and a byproduct of the construction of the Bonneville project, the Federal Power Commission may allocate to the costs of electric facilities such a share of the cost of facilities having joint value for the production of electric energy and other purposes as the power development may fairly bear as compared with such other purposes. (50 Stat. 735; 16 U.S.C. § 832f) Allocation of costs 2 1. Repayment NOTES OF OPINIONS Neither the Hayden-O'Mahoney amendment nor the power marketing statutes involved in the power operations of the Bonneville Power Administration (section 7 of the Bonneville Project Act, section 9(c) of the Reclamation Project Act of 1939, and section 5 of the Flood Control Act of 1944) require that the costs of each project to be met from power revenues have to be amortized on the basis of a fixed annual obligation. The legal requirements are satisfied if such costs are returned within a reasonable period of years whatever accounting procedure is applied. Statement furnished by Assistant Secretary Holum in regard to statutory authority for revised procedure for presenting Bonneville Power Administration rate and repayment data on a consolidated system basis, printed in Hearings on H.R. 2337, to Provide for the Construction of the Lower Teton Division, Teton Basin Federal Reclamation Project, Before the Irrigation and Reclamation Subcommittee of the House Committee on Interior and Insular Affairs, 88th Cong., 2d Sess. 36-38 (1964). 2. Allocation of costs In allocating costs for the McNary Project, the Federal Power Commission should allocate part of the joint facility costs to recreation, both because recreation is authorized as a part of the project under the general authority of section 4 of the Flood Control Act of 1944, and because section 7 of the Bonneville Project Act specifically directs the Commission to take into account the use of the project for recreation. Memorandum of Solicitor Barry, July 22, 1965, in re authority of FPC under Section 7 of Bonneville Project Act to allocate part of joint facility costs to recreation at McNary Dam. Sec. 8. [Advertising required on contracts for supplies or services.]—Notwithstanding any other provision of law, all purchases and contracts made by the administrator or the Secretary of War for supplies or for services except for 576 BONNEVILLE PROJECT personal services, shall be made after advertising, in such manner and at such times, sufficiently in advance of opening bids, as the administrator or Secretary of War, as the case may be, shall determine to be adequate to insure notice and opportunity for competition. Such advertisement shall not be required, however, when (1) an emergency requires immediate delivery of the supplies or performance of the services; or (2) repair parts, accessories, supplemental equip ment, or services are required for supplies or services previously furnished or contracted for; or (3) the aggregate amount involved in any purchase of supplies or procurement of services does not exceed $500; in which cases such purchases of supplies or procurement of services may be made in the open market in the manner common among businessmen. In comparing bids and in making awards, the administrator or the Secretary of War, as the case may be, may consider such factors as relative quality and adaptability of supplies or services, the bidder's financial responsibility, skill, experience, record of integrity in dealing, and ability to furnish repairs and maintenance services, the time of delivery or performance offered, and whether the bidder has complied with the specifications. (50 Stat. 735; 16 U.S.C. § 832g) Sec. 9. [Accounts to be maintained-Independent commercial audit required Expenditure of funds.]—(a) The administrator, subject to the requirements of the Federal Water Power Act, shall keep complete and accurate accounts of operations, including all funds expended and received in connection with transmission and sale of electric energy generated at the Bonneville project, and in the maintenance of such accounts, appropriate obligations shall be established for annual and sick leave of absence as earned. The Administrator shall, after the close of each fiscal year, obtain an independent commercial-type audit of such accounts. The forms, systems, and procedures prescribed by the Comptroller General for the Administrator's appropriation and fund accounting shall be in accordance with the requirements of the Federal Water Power Act with respect to accounts of electric operations of public utilities and the regulations of the Federal Power Commission pursuant thereto. (b) The administrator may make such expenditures for offices, vehicles, furnishings, equipment, supplies, and books; for attendance at meetings; and for such other facilities and services as he may find necessary for the proper administration of this Act. (50 Stat. 736; Act of October 23, 1945, 59 Stat. 547; 16 U.S.C. § 832h) (c) [Annual report to Congress.]—Repealed. EXPLANATORY NOTES Provision Repealed. The Act of June 14, 1966, 80 Stat. 200, repealed subsection (c) of section (9) which read as follows: "In December of each year, the administrator shall file with the Congress, through the Secretary of the Interior, a financial statement and a complete report as to the transmission and sale of electric energy generated at the Bonneville project during the preceding governmental fiscal year." The 1966 Act appears herein in chronological order. 1945 Amendment. The Act of October 23, 1945, 59 Stat. 546, amended subsection 9(a) by adding to it all that follows the words "Bonneville project" in the subsection. BONNEVILLE PROJECT 577 Sec. 10. [Appointment of officers and employees-Voluntary and uncompensated services.]—(a) The Secretary of the Interior shall appoint, without regard to the civil-service laws, an Assistant Administrator, chief engineer, and general counsel and shall fix the compensation of each in accordance with the Classification Act of 1949, as amended. The Assistant Administrator shall perform the duties and exercise the powers of the Administrator, in the event of the absence or sickness of the Administrator until such absence or sickness shall cease and in the event of a vacancy in the office of Administrator until a successor is appointed. (b) The Administrator, the Secretary of War, and the Federal Power Commission, respectively, are authorized to appoint, subject to the civil-service laws, such officers and employees as may be necessary to carry out the purposes of this Act, the appointment of whom is not otherwise provided for, and to fix their compensation in accordance with the Classification Act of 1949, as amended. The Administrator may employ laborers, mechanics, and workmen in connection with construction work or the operation and maintenance of electrical facilities (hereinafter called 'laborers, mechanics, and workmen'), subject to the civil-service laws, and fix their compensation without regard to the Classification Act of 1949, as amended, and any other laws, rules, or regulations relating to the payment of employees of the United States except the Act of May 29, 1930 (46 Stat. 468), as amended, to the extent that it otherwise is applicable. The Administrator is further authorized to employ physicians, under agreement and without regard to civil-service laws or regulations, to make physical examinations of employees or prospective employees who are or may become laborers, mechanics, and workmen. The Administrator, the Secretary of War, and the Federal Power Commission, respectively, are also authorized to appoint, without regard to the civil-service laws, such experts as may be necessary for carrying out the functions entrusted to them under this Act. (c) The Administrator may accept and utilize such voluntary and uncompensated services and with the consent of the agency concerned may utilize such officers, employees, or equipment of any agency of the Federal, State, or local governments which he finds helpful in carrying out the purposes of this Act; in connection with the utilization of such services, reasonable payments may be allowed for necessary travel and other expenses. (50 Stat. 736; Act of October 23, 1945, 59 Stat. 547; Act of October 28, 1949, 63 Stat. 972; 16 U.S.C. § 832i) EXPLANATORY NOTES 1949 Amendment. The Act of October 28, 1949, substituted the "Classification Act of 1949" for the "Classification Act of 1923" in the text, and by its operation eliminated the provision at the end of subsection "(b)" which read: "and to fix the compensation of each such expert without regard to the Classification Act of 1923, as amended, but at not to exceed $7,500 per annum. 1945 Amendment. The Act of October 23, 1945, 59 Stat. 547, amended section 10 in its entirety. Before amendment, the section read as follows: "Sec. 10. The administrator, the Secretary of War, and the Federal Power Commission, respectively, shall appoint such attorneys, engineers, and other experts as may be necessary for carrying out the func tions entrusted to them under this Act, without regard to the provisions of the civilservice laws and shall fix the compensation |