Los Angeles.

All.

All.

All

The State of Nevada thereafter exercised its draw-back privilege and contracted for various quantities of energy within its 18-percent allotment.15 Arizona did not enter into a contract until 1945, and gave its first notice of withdrawal of energy in 1948.

It will be noted that if these "draw-backs" should be fully exercised, 36 percent of the firm energy would be taken by States, 55 percent by other public agencies, and 9 percent by private power companies. References to subsequent amendments appear in the margin.16

D. Compliance With Conditions Precedent to Appropriations

In June 1930, Secretary Wilbur reported to the congressional appropriations committees as follows, in support of a budget estimate of $10,660,000:

17

THE SECRETARY OF THE INTERIOR,
Washington, D. C., June 16, 1930.

The CHAIRMAN, COMMITTEE ON APPROPRIATIONS,

United States Senate.

MY DEAR MR. CHAIRMAN: Estimates for construction work on the dam and incidental works authorized by the Boulder Canyon Project Act (45 Stat. 1057) for the fiscal year commencing July 1, 1930, have been submitted to Congress and referred to your committee. The amount asked is $10,660,000. I recommend the appropriation of that amount and will, if it is appropriated, direct the early commencement of construction.

15 Power contracts were made by the United States with the Nevada Colorado River Commission under the 1930 regulations as follows (references are to symbol numbers): I2R-6052, May 6, 1936; I2R-6052, Supplement No. 1, April 23, 1938; 12R-6052, Supplement No. 2, December 7, 1939; I2R-6052, Supplement No. 3, December 19, 1940; I2R-6392, August 10, 1936.

16 In 1938 the Department of Water and Power of the City of Los Angeles entered into a contract with the Secretary of the Interior ("third circuit” contract, July 6, 1938), under which it agreed to construct a third transmission circuit, bringing to 390,000 kilowatts the effective capacity of its Hoover Dam transmission lines, and to take stipulated quantities of secondary energy on which the regulations of 1930 gave it an option. In consideration of these undertakings, the United States agreed (1) to maintain the existing ratio between rates for secondary energy and firm energy on any subsequent rate adjustments; (2) to extend the amortization period on generating equipment to the full period (50 years) of the city's lease; (3) grant an absorption period with respect to the allocation made originally to the Los Angeles Gas & Electric Corp., which the city had acquired in purchasing the properties of that company.

Concurrently, the Metropolitan Water District of Southern California entered into a contract with the United States (July 13, 1938), providing for the deferment of the district's obligation to take energy in excess of its pumping requirements, but obligating it to pay interest upon the amounts deferred.

The 1938 contracts are omitted from this volume, as they were superseded by the agreements made under the Boulder Canyon Project Adjustment Act, infra, which incorporated these provisions in modified form.

17 Appendix 42, first edition.

All conditions required by the Boulder Canyon Project Act to be performed prior to appropriation for such construction have been fulfilled. There are four such conditions, as follows:

(1) As required by section 4 (a) of the Boulder Canyon Project Act, six of the States of Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming, including the State of California, ratified the Colorado River compact, mentioned in section 13 of the act, and consented to waive the provisions of the first paragraph of article XI of the compact, which makes the same binding and obligatory only when approved by each of the seven States signatory thereto, and approved the compact without conditions, save that of such six-State approval. Copies of the statutes of the six States of California, Colorado, Nevada, New Mexico, Utah, and Wyoming, effecting such ratification are handed to this committee, herewith.

(2) As provided by section 4 (a) of the act, the President, by public proclamation dated June 25, 1929, has declared the approval of the compact by six States, including California.

True copy of the proclamation is handed the committee herewith.

(3) As required by section 4 (a) of the act, the State of California, in the statute, copy of which has been handed you, has agreed irrevocably and unconditionally with the United States and for the benefit of the States of Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming, that the aggregate annual consumptive use of water of and from the Colorado River shall not exceed 4,400,000 acre-feet of the waters apportioned to the lower-basin States by paragraph A of article III of the Colorado River compact, plus not more than one-half of any excess or surplus waters unapportioned by the compact, such uses always to be subject to the terms of the compact.

(4) As required by section 4 (b) of the Boulder Canyon Project Act, I have made provision for revenues by contract in accordance with the provisions of the act, adequate, in my judgment to insure payment of all expenses of operation and maintenance of the dam and power plant incurred by the United States, and the repayment within 50 years from the date of the completion of said works of all amounts advanced to the Colorado River Dam fund under subdivision (b) of section 2 of the Project Act for such works, together with interest thereon made reimbursable under that act.

These contracts are two in number: (1) A contract for lease of power privilege executed severally by the city of Los Angeles and the Southern California Edison Co. (Ltd.), and (2) a contract for electrical energy executed by the Metropolitan Water District of Southern California. In addition, under authority of section 5 of the act, I have executed with the Metropolitan Water District of Southern California a contract for the delivery of water to be stored in the Boulder Canyon Reservoir.

True copies of the two power contracts required by section 4 (b) of the act, and of the contract for delivery of water, are submitted to the committee herewith. With particular reference to the power contracts, I wish to advise you that—

(a) The power contracts between the United States and the Metropolitan Water District of Southern California, the City of Los Angeles, and the Southern California Edison Co. (Ltd.) are adequate in my judgment to insure payment of all expenses of operation and maintenance of the dam and power plant incurred by the United States and the repayment within 50 years from the date of the completion of said works of all amounts advanced to the Colorado River Dam fund under subdivision (b) of section 2 of the Project Act for such works, together with interest thereon reimbursable under that act. This finding applies to the contracts both as originally drawn, and amended as suggested before the House Committee on Appropriations. 77831- 48-7

(b) The finding stated above is reported to you regardless of whether the City of Los Angeles, or only its Department of Water and Power, or both the city and the department, as separate entities, are thereby obligated.

(c) The finding stated in paragraph (a) would be reported to you regardless of whether or not the Metropolitan Water District of Southern California was thereby obligated.

As required by Senate Joint Resolution 164, Seventieth Congress, approved May 29, 1928 (45 Stat. 1011), the Secretary of the Interior, with the sanction and approval of the President, appointed a board of five eminent engineers and geologists, one of whom is an engineer officer of the Army on the retired list, who examined the proposed site of the dam to be constructed under the Boulder Canyon Project Act, reviewed the plans and estimates made therefor, advised the Secretary as to matters affecting the safety, the economic and engineering feasibility, and adequacy of the proposed structure and incidental works, and approved the plans for construction to date. Plans are proceeding satisfactorily, and construction can start as soon as this appropriation is available.

Report of this board (commonly known as the Sibert board) was submitted to the Secretary, November 24, 1928, and transmitted by him to the Speaker of the House on December 3, 1928. The Boulder Canyon Project Act thereafter became law. A supplemental report of the board was submitted to the Secretary on April 16, 1930.

True copies of both reports are handed to this committee herewith. Annexed to this report, as a part of it, are two memoranda on the following subjects:

I. Financial operation of the project.

II. Analysis of the power contracts.

Submitted separately are the following memoranda:

Engineering:

1. Present status of Boulder Dam designs.

2. Hydrology of Boulder Canyon Reservoir.

3. Basis of the rates for power.

4. Charts on financial operation.

Legal:

1. Opinion of the Attorney General on authority of the contractors and minimum obligations of the contracts.

2. Opinion of the Attorney General on funds required by the act to be repaid.

3. Opinion by the Solicitor of the Interior Department on 16 questions involving construction of the act.

Economic:

1. Audit of the Los Angeles Bureau of Power and Light, 1929.

2. Annual Report of the Southern California Edison Co., 1929.
Very truly yours,

RAY LYMAN WILBUR.

(For enclosure see appendixes 43 and 44 to the first edition.) A supplemental report, June 17, 1930, gave the following back