REPLY OF ADMINISTRATOR PEARL TO SENATOR JAMES E. MURRAY DEPARTMENT OF THE INTERIOR, BONNEVILLE POWER ADMINISTRATION, Portland, Oreg., January 15, 1958. Hon. JAMES E. MURRAY, United States Senate, Washington, D. C. DEAR SENATOR MURRAY: This will acknowledge your letter of January 3 with reference to our pending study and discussion of the problem of coordination of the Idaho Power Co.'s Snake River project with the Federal Columbia River system. Furnishing power from the Federal Columbia River system to the rural electric cooperatives and other Government customers in the southern Idaho area presents numerous questions which are under study. On December 20, 1957, Assistant Secretary Aandahl addressed a letter to Mr. E. H. Paskett, president of the Raft River Rural Electric Cooperative, Inc., Malta, Idaho, setting forth the Department's views to date on this subject. I had been under the impression that you were furnished a copy of this letter, but in the event this is not the case, I am enclosing a copy of that letter and of a further reply to Mr. Paskett, together with copies of Mr. Paskett's letters to the Department. The exhibit entitled "A Method of Settlement" to which you refer was a suggestion presented by the Idaho Power Co. at a meeting on August 7, 1957. This suggestion proposed that the Idaho Power Co. would pay 1 mill per kilowatt-hour for surplus summertime energy used to fill the Brownlee Reservoir and to carry its summer load. Bonneville's exchange accounts are settled at our "H" (dump) rate of 2% mills per kilowatt-hour. In order to put this 855,560,000 kilowatt-hours in an exchange account at a 1 mill per kilowatt-hour rate, it would be necessary to multiply the number of kilowatt-hours by 0.4. The resulting balances in the account would be settled at a rate of 21⁄2 mills per kilowatt-hour. This suggestion has never received serious consideration by our staff, and at this meeting the Idaho Power Co. representatives were advised that no special rate would be considered and that any settlement would have to be made at our regular Federal Power Commission approved rates. Sincerely yours, WM. A. PEARL, Administrator. 69 RAFT RIVER ELECTRIC COOPERATIVE, INC., Hon. FRED A. SEATON, Secretary of Interior, Department of the Interior, Washington, D. C. DEAR MR. SECRETARY: We have learned on good authority that the Idaho Power Co. is seeking to negotiate a contract with Bonneville Power Administration for the exchange of power between southern Idaho and the rest of the Columbia Basin over their LeGrande tie, in which they are asking for 3 kilowatts of summer pumping power for 1 kilowatt of storage released from Brownlee. We urge you to consider that the execution of such a contract fundamentally puts us in the Bonneville marketing area since we are tied right to the Idaho power transmission grid with our transmission line. We are desperately in need of more power, especially irrigation pumping power. We were informed by the Bureau of Reclamation that "we were lucky we didn't have the switch pulled on us" last summer. We have tried to buy power from Idaho Power Co. but as yet have not had a better rate quoted than 13 mills which is much higher than we can be expected to pay; since Idaho Power delivers irrigation pumping power to their own consumers in this area for approximately 6.5 mills. Here we have two separate marketing agencies in the same river basin, both under the Department of the Interior and physically integrated. The one agency is short of power to serve its preference customers and the other has an abundance of power available at the time the other is short, clearly then it is the responsibility of the Secretary of the Interior to act according to the provisions of the preference law and take action to insure that the preference customers who are in need are served. The Government as well as the people of the Northwest would benefit greatly if the two systems were integrated and coordinated. We respectfully request that in connection with the present negotiations for exchange of power with the Idaho Power Co. under the requirements of the Federal Power Commission license for Brownlee Dam that your administration stipulate as a condition for any contract that the Idaho Power Co. agree to wheel Columbia River power or other Government energy under Bonneville Power Administration standard wheeling agreements to all preference customers within the reach of Idaho Power Co. facilities. We furthermore respectfully urge that any exchange or sales contract be immediately null and void if the company declines at any time to wheel to preference customers. Very truly yours, EDWIN H. PASKETT, President, Raft River Rural Electric Cooperative, Inc. Mr. EDWIN H. PASKETT, DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D. C., December 20, 1957. Raft River Rural Electric Cooperative, Inc., Malta, Idaho. DEAR MR. PASKETT: This is in further reply to your letter of October 11 in which you request that the Department give consideration to working out an arrangement whereby your cooperative will receive additional Government power for irrigation pumping. You also request that we use the occasion for the negotiation of an exchange agreement with the Idaho Power Co. for the coordination of its Brownlee and Oxbow projects with the Northwest power pool as a means of getting wheeling provisions for Columbia River power. In this instance, coordination of the Idaho Power Co's Brownlee and Oxbow plants with the Northwest power pool and the wheeling of Bonneville Power Administration secondary energy by the company are not interrelated and one should not be used as a leverage for the other. The FPC license requires coordination, and the Department cannot as a matter of right under the license require the Idaho Power Co. to contract to wheel Columbia River power for the Government. The staffs of the Bureau of Reclamation and the Bonneville Power Administration are making studies which will throw additional light on the feasibility of the Bureau of Reclamation utilizing Bonneville Power Administration dump energy to serve additional power to your cooperative and others in southern Idaho. However, we must caution that there is a serious question as to whether this dump energy would be of any real benefit to your cooperative without the availability of some other source of firming energy and a satisfactory wheeling arrangement. It must also be borne in mind that the wheeling distance is in excess of 300 miles and the wheeling cost would have a substantial impact on the economic feasibility. Upon completion of the above-mentioned studies, we shall advise you further regarding this matter. In the meantime, the Bureau of Reclamation regional office will be in touch with you on the various aspects of the problem. Sincerely yours, (Signed) FRED G. AANDAHL, Assistant Secretary of the Interior. Mr. H. M. HINTZE, DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D. C., December 20, 1957. President, Lost River Electric Cooperative, Inc., DEAR MR. HINTZE: This is in further reply to your letter of October 30 in which you request that the Department give consideration to working out an arrangement whereby your cooperative will receive additional Government power for irrigation pumping. You also request that we use the occasion for the negotiation of an exchange agreement with the Idaho Power Co. for the coordination of its Brownlee and Oxbow projects with the northwest power pool as a means of getting wheeling provision for Columbia River power. In this instance, coordination of the Idaho Power Co.'s Brownlee and Oxbow plants with the northwest power pool and the wheeling of the Bonneville Power Administration secondary energy by the company are not interrelated and one should not be used as a leverage for the other. The FPC license requires coordination, and the Department cannot as a matter of right under the license require the Idaho Power Co. to contract to wheel Columbia River power for the Government. The staffs of the Bureau of Reclamation and the Bonneville Power Administration are making studies which will throw additional light on the feasibility of the Bureau of Reclamation utilizing Bonneville Power Administration dump energy to serve additional power to your cooperative and others in southern Idaho. However, we must caution there is a serious question as to whether this dump energy would be of any real benefit to your cooperative without the availability of some other source of firming energy and a satisfactory wheeling arrangement. It must also be borne in mind that the wheeling distance is in excess of 300 miles and the wheeling cost would have a substantial impact on the economic feasibility. Upon completion of the above-mentioned studies, we shall advise you further regarding this matter. In the meantime, the Bureau of Reclamation regional office will be in touch with you on the various aspects of the problem. DEAR MR. AANDAHL: Reference is made to your reply of December 20, 1957, to our letter of October 11 in which we requested that, in order to relieve the power shortage in southern Idaho and to financially enhance the Federal Government's power operations in the area, the Bureau of Reclamation, region 1, attempt to work out an arrangement with Bonneville Power Administration to wheel some power into Idaho from the Bonneville system. We note that you make specific reference that the FPC requirement that Idaho Power Co. coordinate their Brownlee Dam with the northwest power pool is in no way related to the wheeling of power between the northwest power pool and the southern Idaho power pool. After all the northwest power pool is practically all Bonneville Administration power and the southern Idaho pool is, in a very substantial part, Bureau of Reclamation power. If coordination of the two systems does not mean the exchange of energy for the greatest benefit to the most people concerned, then what does it mean? Does it mean only that Idaho Power Co. is to be allowed to sit between the two systems owned by the people and reap the benefits of power exchange which in reality gives them firm power from the Government plants at dump power rates? Is this to be allowed especially when the company shows no consideration for the urgent requirements of a large block of the public for power at a reasonable cost? We also note that the staffs of the Bureau and of Bonneville are studying the situation to see if there is feasibility of the Bureau using any of Bonneville's dump power. We also have had studies made that show that the Bureau has huge blocks of secondary energy that only need a small amount of firming in 1 year out of 22 to make it firm power. Since Bonneville's critical water year has not coincided, in the past, with the Bureau's critical water year it would appear that there are indeed great benefits to be had with an exchange agreement. The fact that we are 300 miles from Bonneville system should be no great disadvantage since southern Oregon is about the same distance, yet they enjoy a 4-mill rate from Bonneville Power. Another fact which indicates that the wheeling distance is of no consequence is that Idaho Power Co. is asking for 200,000 kilowatts of Bonneville Power to be wheeled into their system and we are situated very near the heart of that system. I am sure that when all the facts concerning the situation are viewed with clarity and an attitude of fairmindedness that a solution to the problem will be found that will be of benefit to all concerned. Very truly yours, EDWIN H. PASKETT, President. DEPARTMENT OF THE INTERIOR, Mr. EDWIN H. PASKETT, OFFICE OF THE SECRETARY, Washington, D. C., January 14, 1958. President, Raft River Electric Cooperative, Inc., DEAR MR. PASKETT: Thank you for your letter of January 2 referring to the possibility of supplying surplus Bonneville Power Administration energy to your cooperative. We would suggest that you make available to the Bureau of Reclamation and the Bonneville Power Administration, if you have not already done so, the studies your organization has made with respect to secondary energy on the Bureau's system and its relationship to the BPA system operations. In the discussion in our December 20, 1957, letter of the relationship of wheeling to the problem of coordination, we intended only to indicate that the wheeling of federally generated power to the Government's customers is not a requirement imposed upon the Idaho Power Co. by the FPC license provision with respect to coordination by the company with the northwest power pool. We are giving continuing attention to power marketing activities in the Pacific Northwest as they relate to the problems concerning the Raft River Electric Cooperative. As previously indicated, you will be advised as to our progress. Sincerely yours, (Signed) FRED G. AANDAHL, Assistant Secretary of the Interior. LETTER OF SENATOR JAMES E. MURRAY TO SECRETARY SEATON IN REGARD TO WHEELING Hon. FRED A. SEATON, UNITED STATES SENATE, January 27, 1958. Secretary of the Interior, Washington, D. C. DEAR MR. SECRETARY: I have had the opportunity of reviewing the correspondence between your Department and certain rural electric cooperatives in southern Idaho, and between your Department and Senator Church in which Assistant Secretary Fred G. Aandahl has acted as spokesman for the Department; particularly I have reviewed Mr. Aandahl's letter of December 20, 1957, which was sent to a number of the cooperatives. This letter raises questions having to do with your supervisory responsibility in the area of the Bonneville Power Act and certain other public project authorization bills, and I would like your views on these policy questions. Mr. Aandahl, in connection with the requests from the cooperatives for assistance in working out arrangements whereby they might receive additional Government power for irrigation pumping, has told the cooperatives that there is no interrelation between coordination of Idaho Power Co. plants at Brownlee and Oxbow with the northwest power pool and the wheeling of Bonneville power. He also raises the question of whether the wheeling distance might not substantially adversely affect the economic feasibility. He leaves the matter of further negotiations to the regional office of the Bureau of Reclamation in Boise. I believe that the statement made by Justice Douglas in Federal Power Commission v. Idaho Power Company (344, U. S. 17, 23, 1952) is relevant on Mr. Aandahl's first point. Therein Justice Douglas, for the Court, said: "Protection of the public domain, conservation of water-power resources, development of comprehensive plans for the waterwayseach of these might in the facts of a case be sufficient to authorize the grant of permission to a public utility company to use the public domain provided it agreed to use its excess capacity to transmit Government power." When Mr. Aandahl says, as he does, that "the Department cannot as a matter of right under the license require the Idaho Power Co. to contract to wheel Columbia River power for the Government," I think he equivocates on the basic issue. I think this for two reasons: (a) In the first place, the United States is not precluded by the FPC license from inserting whatever terms and conditions it legally might in its contract with the Idaho Power Co. I don't see anything about the wheeling agreement which would make this subject matter improper for consideration, and I don't see anything improper in the |