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[ITEM 84]

BOULDER CANYON PROJECT

AGREEMENT ARRANGING POWER SUPPLY FOR DEFENSE PLANT CORPORATION

DEFENSE PLANT CORPORATION

AND SEVERALLY

THE UNITED STATES

THE CITY OF LOS ANGELES

SOUTHERN CALIFORNIA EDISON COMPANY LTD.

THE CALIFORNIA ELECTRIC POWER COMPANY

THE METROPOLITAN WATER DISTRICT

OF SOUTHERN CALIFORNIA

STATE OF NEVADA

May 9, 1942

(I1r-1387)

1. THIS AGREEMENT, made this 9th day of May, 1942, between DEFENSE PLANT CORPORATION (hereinafter referred to as "Defense Plant"), a corporation created by Reconstruction Finance Corporation pursuant to Section 5d of the Reconstruction Finance Corporation Act, as amended, to aid the Government of the United States in its National Defense Program; and, severally, THE UNITED STATES OF AMERICA, hereinafter referred to as the "United States," acting for this purpose by Abe Fortas Acting Secretary of the Interior, 933

833942-50-60

hereinafter referred to as the "Secretary;" THE CITY OF LOS ANGELES, a municipal corporation of the State of California, 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); SOUTHERN CALIFORNIA EDISON COMPANY LTD., a private corporation organized and existing under the laws of the State of California (hereinatfer referred to as "Edison Company"); The California Electric Power Company, a private corporation organized and existing under the laws of the State of Delaware (hereinafter referred to as "California-Electric"); THE METROPOLITAN WATER DISTRICT of Southern CALIFORNIA, a public corporation organized and existing under the laws of the State of California (hereinafter referred to as the "District"); and the STATE OF NEVADA, a body politic and corporate, and its Colorado RIVER COMMISSION (said Commission acting in the name of the State, but as principal in its own behalf as well as in behalf of the State; the term "Nevada,” as used in this contract, being deemed to be both the State of Nevada and its Colorado River Commission) acting in pursuance of an Act of the Legislature of the State of Nevada, entitled "An Act creating a commission to be known as the Colorado River Commission of Nevada, defining its powers and duties, and making an appropriation for the expenses thereof, and repealing all acts and parts of acts in conflict with this act," approved March 20, 1935, (Chapter 71, Stats. of Nevada, 1935), and acts amendatory thereof or supplementary thereto;

WITNESSETH THAT:

2. WHEREAS, Defense Plant is constructing a magnesium plant near Las Vegas, Nevada and will operate said plant, or have said plant operated for Defense Plant's account, for the purpose of producing metals necessary in the prosecution of war against the enemies of the Governmnt of the United States; and

3. WHEREAS, Defense Plant will require in the operation of said plant large quantities of electric energy, and desires to arrange for a supply of energy with a maximum demand of 196,000 kilowatts and in an amount of 1,206,000,000 kilowatt-hours in the year ending May 31, 1943, and in an amount of 1,500,000,000 kilowatt-hours in each of the two succeeding years, and also for an amount not exceeding 100,000,000 kilowatt-hours for testing and preliminary operation purposes in the year ending May 31, 1942; and

4. Whereas, a substantial part of said three-year power supply can be obtained from the Boulder Canyon Project (hereinafter referred to as the "Project"), and pursuant to laws relating to the national emergency said supply from said source could be made available to Defense Plant by a supply allocation or other appropriate order made by the Federal Government; and

5. WHEREAS, the United States and the affected allottees of Project power

B

are willing to arrange, without such allocation or other order, for supplying energy to Defense Plant in accordance with the terms and conditions of this agreement;

Now, therefore, in consideration of the provisions, covenants and conditions herein contained, the parties hereto agree as follows, to wit:

PART ONE

101. Concurrently herewith, the Secretary shall dispose of and sell to Defense Plant, and Defense Plant shall agree to take and/or pay for the following amounts of firm energy allotted to, but unused by, the District for the Project years of operation designated:

Year ending May 31, 1942 (for testing and preliminary op-
eration purposes) such amount as may be required, not to
exceed-

Year ending May 31, 1943....

Year ending May 31, 1944..

100,000,000 Kw-hrs.

.1,100,000,000 Kw-hrs.

.1,175,000,000 Kw-hrs.

.1,100,000,000 Kw-hrs.

Year ending May 31, 1945.

the proceeds of energy charges for such disposal, as received, to be credited on the District's obligation to take and/or pay for firm energy from the Project. 102. The energy rate charged to Defense Plant for the energy sold pursuant to Article 101, and credited to the District's obligation to take and/or pay for energy allotted to it, shall be the energy rate required to be paid by allottees for firm energy by the General Regulations for Generation and Sale of Power In Accordance With The Boulder Canyon Project Adjustment Act (hereinafter called the "Regulations"). The energy sold pursuant to Article 101 shall be generated, and the costs thereof shall be determined and distributed, in accordance with the terms and conditions of PART THREE. Defense Plant shall pay to the United States (1) the generating charges thus distributed and charged against Defense Plant for generating the energy sold pursuant to Article 101, (2) the generating charges related to Sections G-7 and T-7 during the period of segregation, following May 31, 1945, as provided in Article 305 and (3) the entire cost of Section T-7a as provided in Article 303.

103. In the contract of sale to Defense Plant it shall be provided that if in any year of operation in the three year period, June 1, 1942 to May 31, 1945, there is firm energy allotted to, but unused by, the District in excess of the amounts thereof heretofore sold by the Secretary to parties other than the District and the amounts thereof designated in Article 101, and if Defense Plant in its magnesium plant operations requires more energy than the total of the amounts of energy stated for the respective years in Articles 101 and 202, Defense Plant may at its option take all or any part of such excess energy allotted to, but unused by, the District at the rate provided in Article 102.

Defense Plant agrees that in the event it has any such requirement for more energy, it will, to the extent deemed practicable by Defense Plant considering among other things its requirements for generating capacity at sources other than the Project, meet such requirement by exercising its option under this article before meeting it from other sources of power.

104. Contingent on, and in consideration of, the contract of sale, concurrent herewith, between the Secretary and Defense Plant, the District agrees that it will so operate its aqueduct pumping and water supply system as (1) to leave unused by it, from its allocation of firm energy from the Project in the years designated in Article 101, in addition to the amounts thereof heretofore sold by the Secretary to parties other than the District, at least the respective amounts designated in Article 101, and (2) to leave unused by it all secondary energy and all unused States' energy, as contemplated by Article 13 (c) of its contract with the United States, dated May 29, 1941. The District further agrees that it will so operate its aqueduct pumping and water supply system that the maximum practicable amounts of generating capacity in the Boulder Power Plant and of such excess energy as is covered by Article 103 will be made available to Defense Plant, consistent with the proper operation of said pumping and water supply system as determined by the District.

105. By reason of Article 4 (b) (iv) of the Regulations, disposal by the Secretary of energy allotted to, but unused by, the District is subject to the proviso "that no disposition of such firm energy shall be made by the Secretary without first giving to the City, the Company [Edison Company] and The Nevada-California Electric Corporation [California-Electric] the opportunity to contract on equal terms and conditions, to be prescribed by the Secretary, for such energy, in the same proportion, and subject to the same rights with respect to proportions thereof not taken by others, as in the case of secondary energy." In the interest of expediting and simplifying the procurement of energy by Defense Plant, and without affecting in any way the provisions of Article 4 (b) (iv) of the Regulations as regards any other disposal of firm energy allotted to, but unused by, the District, the procedures and requirements of the above quoted portion of said Article 4 (b) (iv) are hereby dispensed with for the exclusive purposes of this agreement; and the City, Edison Company and California-Electric each hereby waives its rights under said Article 4 (b) (iv) in connection with disposal of any and all firm energy allotted to, but unused by, the District until but not beyond May 31, 1945, to the extent said energy is or may be disposed of to Defense Plant pursuant to this agree

ment.

106. The letter of the Secretary of the Interior to Edison Company, dated July 29, 1941, and Edison Company's reply, dated August 5, 1941, regarding energy allotted to, but unused by, the District, in connection with which letters the United States and Edison Company have taken different positions, are hereby cancelled and withdrawn; and the relation between the United

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