[ITEM 70]

BOULDER CANYON PROJECT

AGREEMENT UPON THE TERMINATION OF LEASE AND THE TAKING EFFECT OF THE ADJUSTMENT ACT

THE CITY OF LOS ANGELES

AND

THE CITY OF PASADENA

MAY 27, 1941

1. THIS CONTRACT, made this 27th day of May, 1941, between THE CITY OF LOS ANGELES, a municipal corporation, and its Department of Water AND POWER (said Department acting herein in the name of the City, but as principal in its own behalf as well as in behalf of the City, the term "City" as used herein being deemed to include both The City of Los Angeles and its said Department of Water and Power), and the CITY OF PASADENA, a municipal corporation, hereinafter styled the "Municipality," each of said corporations being organized and existing under the laws of the State of California; WITNESSETH THAT:

EXPLANATORY RECITALS

2. WHEREAS, pursuant to the provisions of the Act of Congress approved June 17, 1902 (32 Stat. 388), and acts amendatory thereof or supplementary thereto, all of which acts are commonly known and referred to as the Reclamation Law, and particularly pursuant to the Act of Congress approved December 21, 1928 (45 Stat. 1057), designated the Boulder Canyon Project Act, hereinafter referred to as the "Project Act," THE UNITED STATES of America, hereinafter referred to as the "United States," entered into a certain contract designated "Contract for Lease of Power Privilege," dated April 26, 1930, with, severally, the City and SOUTHERN CALIFORNIA EDISON COMPANY LTD.,

a private corporation, hereinafter referred to as "Edison Company," which contract was thereafter amended by two certain contracts between the same parties, dated May 28, 1930, and September 23, 1931, which said Contract for lease of Power Privilege, dated April 26, 1930, together with said amendatory contracts, are hereinafter collectively referred to as the "Lease," which Lease provided for the generation, transmission and delivery of energy contracted for by the Municipality; and

3. WHEREAS, the City thereafter entered into a contract designated "Contract for Generation and Transmission of Power," dated September 24, 1931, with the Municipality, by the terms whereof the City agreed to generate, in accordance with the provisions of said Lease, the energy contracted for by said Municipality by the contract hereinafter designated as the "Existing Pasadena Energy Contract," and to transmit and deliver the same to said Municipality, which Contract for Generation and Transmission of Power was thereafter amended by three contracts, one dated June 18, 1935, a second dated April 12, 1938, and a third dated January 30, 1940, between the same parties, which said Contract for Generation and Transmission of Power, together with said amendatory contracts, are hereinafter collectively referred to as the "Transmission Contract”; and

4. WHEREAS, pursuant to the Acts of Congress hereinbefore mentioned, the Municipality entered into a contract designated "Contract for Electrical Energy," dated September 29, 1931, with the United States, providing among other things for the purchase by the Municipality of electrical energy to be generated at Boulder Dam Power Plant under the provisions of the Project Act, which said Contract for Electrical Energy was thereafter amended by a certain contract between the same parties, dated October 30, 1934, both of which said contracts are hereinafter referred to as the "Existing Pasadena Energy Contract;" and

5. WHEREAS, pursuant to the Acts of Congress hereinbefore mentioned, and pursuant to the Act of Congress approved July 19, 1940, (54 Stat. 774), designated the Boulder Canyon Project Adjustment Act, hereinafter referred to as the "Adjustment Act," the Secretary of the Interior has caused to be prepared and to be submitted to the City and the Edison Company for execution, a contract, hereinafter referred to as the "Agency Contract," to which reference is hereby made, providing, among other things, that the Lease shall thereupon terminate, and that, in lieu of the operation of the Boulder Power Plant by the City and Edison Company, as lessees, the same shall be operated by the United States through the City and Edison Company as its operating agents; and

6. WHEREAS, the Secretary of the Interior has caused to be prepared and to be submitted to said Municipality for execution, a contract, hereinafter referred to as "Proposed Pasadena Energy Contract," providing among other

things for the purchase by the Municipality of electrical energy to be generated at Boulder Dam Power Plant under the provisions of the Project Act and pursuant to the Adjustment Act; and

7. WHEREAS, the Secretary of the Interior has caused to be prepared and to be submitted to said City for execution, a contract, hereinafter referred to as "Proposed City Energy Contract," providing among other things for the purchase of electrical energy to be generated at Boulder Dam Power Plant and for the transmission to said Municipality of energy contracted for by it, under the provisions of the Project Act and pursuant to the Adjustment Act; and

8. WHEREAS, it is mutually beneficial to the City and the Municipality that said Lease be terminated and that appropriate contracts be entered into pursuant to the terms of the Adjustment Act, in order that the same may become fully effective; and

9. WHEREAS, under date of May 20, 1941, the Secretary of the Interior approved and promulgated "General Regulations for Generation and Sale of Power in Accordance With the Boulder Canyon Project Adjustment Act," to which reference is hereby made, and which includes provision that unless otherwise agreed to by the allottees affected, apportionment of generating charges, as defined in said regulations, for a section or sections of machinery and equipment used jointly will be on the basis of energy taken, both firm and secondary, with the minimum annual obligation of each allottee as the minimum considered, that for the purpose of apportioning charges under Article 18 (b), (c), and (d) of said Regulations, Section G-1 and G-3 shall be considered as one section, and that agreements between allottees regarding said apportionment of generating charges shall be in writing and shall be filed with the said Secretary; and

10. WHEREAS, the main generating facilities comprising Section G-1 and the transforming and switching facilities comprising Section T-1-A were designed and installed primarily for service jointly to the City, the City of Glendale, the City of Burbank and the Municipality, and at all times since June 1, 1937, have jointly served, and it is the desire of the parties that said sections. shall continue to jointly serve, the City, the City of Glendale, the City of Burbank, and the Municipality to and including May 31, 1987;

11. Now, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows, to-wit:

(a) That upon the termination of the Lease and the taking effect of the Adjustment Act for all purposes any and all provisions and agreements to the effect that generation of energy at Boulder Power Plant for the Municipality by the City shall be in accordance with the Lease thenceforth shall be of no further force or effect, and that, in lieu of the generation of such energy by the City as lessee in accordance with the terms of the Lease such generation thenceforth

shall be effected in accordance with said Agency Contract so long as said Agency Contract shall remain in effect, and said Municipality does hereby release the City from any and all obligations to generate energy in accordance with the terms of said Lease, after said Lease shall have been terminated.

Except as herein expressly modified, the said Transmission Contract shall remain in full force and effect until and including May 31, 1987, all references therein to the Lease being understood as references to the Agency Contract, or to the Proposed City Energy Contract, as may be appropriate, and all references to the Existing Pasadena Energy Contract being understood as references to the Proposed Pasadena Energy Contract, it being the intention of the parties that the contract rights of the parties with respect to the subject matter shall remain unchanged, except as said Contract rights are modified by (1) the express terms of this agreement, (2) the substitution of the Agency Contract and the Proposed City Energy Contract for the Lease and (3) the substitution of the Proposed Pasadena Energy Contract for the Existing Pasadena Energy Contract.

(b) That, subject to the taking effect of the Adjustment Act for all purposes, and in lieu of the apportionment of generating charges as provided in Article 18 (b), (c), and (d), of the Regulations, the apportionment of generating charges, effective on and after June 1, 1937, for Section G-1, Section T-1-A, and Section G-3, as defined in said Regulations, shall be as follows:

(i) The Municipality shall bear and be charged that portion (herein expressed in percentage) of the total generating charges for said Section G-1 and said Section T-1-A for each year of operation, which bears the same proportion to such total charges as 68,617,510 (being the undiminished annual allocation of kilowatt-hours of firm energy allocated to the Municipality), bears to the total of 1,773,282,220 (being the total undiminished annual allocation of kilowatthours of firm energy allocated to the City, the City of Glendale, the City of Burbank, and the Municipality, including the City's undiminished obligation to take the States' unused firm energy), which said percentage of the Municipality is 3.869 per centum of such total generating charges;

(ii) That the percentage to be borne by the Municipality shall not be affected by any use made of said Section G-1, Section T-1-A, or Section G-3 for the generation of energy other than for said Municipality; and

(iii) That the portion of the total generating charges for Section G-1, Section T-1-A, and Section G-3, not chargeable to any allottee or taker, other than the City, pursuant to said Regulations or to any agreement made thereunder, shall be charged to and borne by the City; and

(iv) The fact that energy generated by means of Section G-3 may reach said Municipality, shall not affect the foregoing percentages, it being the intent that for all purposes pertaining to the apportionment of generating charges, service to the Municipalities shall be deemed to have been solely from Section G-1.