A-93229, MARCH 21, 1938, 17 COMP. GEN. 763

A-93229: Mar 21, 1938

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

" IS FOR INTERPRETATION IN THE LIGHT OF THE PLAN REFERRED TO IN SAID ACT. AS FOLLOWS: ARRANGEMENTS PRELIMINARY TO COMMENCING CONSTRUCTION OF THE COLORADO BIG THOMPSON PROJECT ARE ABOUT CONCLUDED. ONE OF THE LAST PRELIMINARIES WILL BE EXECUTION OF A REPAYMENT CONTRACT WITH THE CONSERVANCY DISTRICT WHICH HAS BEEN ORGANIZED UNDER A SPECIAL STATE LAW FOR THE PURPOSE OF REPRESENTING THE WATER USERS ON THIS PROJECT. THE RELEVANT FACTS AND HISTORY OF THIS MATTER CLEARLY SHOW THAT THE CONSERVANCY DISTRICT IS NOT TO HAVE ANY OBLIGATION OR RIGHTS WITH RESPECT TO THE POWER FEATURES. WAS PRESENTED TO THE SENATE BY SENATOR ADAMS ON JUNE 15. A COPY OF IT IS ATTACHED HERETO. ON PAGE 23 OF THIS DOCUMENT IT IS SHOWN THAT THE PLAN FOR THE PROJECT INCLUDES TWO MAJOR FEATURES.

A-93229, MARCH 21, 1938, 17 COMP. GEN. 763

APPROPRIATIONS - IRRIGATION AND POWER PROJECT - STATUTORY LIMITATION - INTERPRETATION ON BASIS OF INCORPORATED REFERENCE THE PROVISO IN THE ACT OF AUGUST 9, 1937, 50 STAT. 595, MAKING THE INITIAL APPROPRIATION FOR THE CONSTRUCTION OF AN IRRIGATION AND POWER PROJECT, THAT "NO CONSTRUCTION THEREOF SHALL BE COMMENCED UNTIL THE REPAYMENT OF ALL COSTS OF THE PROJECT SHALL * * * BE ASSURED BY APPROPRIATE CONTRACTS WITH WATER CONSERVANCY DISTRICTS," IS FOR INTERPRETATION IN THE LIGHT OF THE PLAN REFERRED TO IN SAID ACT, WHICH CONTEMPLATES REIMBURSEMENT BY IRRIGATION DISTRICTS OF CONSTRUCTION COSTS CHARGEABLE TO IRRIGATION FEATURES OF THE PROJECT ONLY--- AS DISTINGUISHED FROM POWER FEATURES--- AND THE APPROPRIATION MAY BE CONSIDERED AVAILABLE FOR THE PROJECTS--- POWER FEATURES AS WELL AS IRRIGATION FEATURES--- UPON THE EXECUTION OF SUCH REPAYMENT CONTRACTS AS MAY BE NECESSARY TO COVER REPAYMENT OF THE COST OF THE IRRIGATION FEATURES ONLY.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, MARCH 21, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF MARCH 9, 1938, AS FOLLOWS:

ARRANGEMENTS PRELIMINARY TO COMMENCING CONSTRUCTION OF THE COLORADO BIG THOMPSON PROJECT ARE ABOUT CONCLUDED. ONE OF THE LAST PRELIMINARIES WILL BE EXECUTION OF A REPAYMENT CONTRACT WITH THE CONSERVANCY DISTRICT WHICH HAS BEEN ORGANIZED UNDER A SPECIAL STATE LAW FOR THE PURPOSE OF REPRESENTING THE WATER USERS ON THIS PROJECT. IN CONNECTION WITH THE PREPARATION OF THIS REPAYMENT CONTRACT, A QUESTION HAS BEEN RAISED AS TO WHETHER THE CONSERVANCY DISTRICT SHOULD BE OBLIGATED TO REPAY THE CONSTRUCTION COSTS OF BOTH THE IRRIGATION FEATURES AND THE POWER FEATURES OF THE PROJECT. THE RELEVANT FACTS AND HISTORY OF THIS MATTER CLEARLY SHOW THAT THE CONSERVANCY DISTRICT IS NOT TO HAVE ANY OBLIGATION OR RIGHTS WITH RESPECT TO THE POWER FEATURES.

A SYNOPSIS OF THE REPORT ON THE COLORADO-BIG THOMPSON PROJECT, CONTAINING THE PLAN OF DEVELOPMENT AND THE COST ESTIMATES PREPARED BY THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, WAS PRESENTED TO THE SENATE BY SENATOR ADAMS ON JUNE 15, 1937. THE SENATE ORDERED THAT IT BE PRINTED; AND IT BECAME SENATE DOCUMENT NO. 80, 75TH CONGRESS, 1ST SESSION. A COPY OF IT IS ATTACHED HERETO. ON PAGE 23 OF THIS DOCUMENT IT IS SHOWN THAT THE PLAN FOR THE PROJECT INCLUDES TWO MAJOR FEATURES, WHICH ARE CALLED THE "IRRIGATION PROJECT" AND THE "POWER PROJECT.' ON THE SAME PAGE THE "IRRIGATION PROJECT" IS DESCRIBED, AND ON PAGE 24 OF THE ESTIMATED CONSTRUCTION COSTS CHARGEABLE TO THE "IRRIGATION PROJECT" ARE ITEMIZED. ON THE SAME PAGE THE PLAN FOR REPAYMENT OF THE "IRRIGATION PROJECT" COSTS IS OUTLINED, AND THE PLAN CLEARLY SHOWS THAT THE CONTRACT WITH THE WATER USERS' ORGANIZATION IS TO PROVIDE FOR REPAYMENT OF THE "IRRIGATION ROJECT" COSTS ONLY. ON PAGES 24, ET SEQ., THE FEATURES OF THE "POWER PROJECT" ARE DESCRIBED; AND ON PAGE 31 THE PLAN FOR FINANCIAL OPERATION OF THE POWER SYSTEMS IS OUTLINED. THIS OUTLINE CLEARLY SHOWS THAT THE PART OF THE CONSTRUCTION COSTS CHARGEABLE TO POWER ARE TO BE REPAID FROM POWER REVENUES. ON PAGE 32, IT IS FURTHER SHOWN THAT BESIDES THE INITIAL POWER DEVELOPMENT THERE ARE FIVE ADDITIONAL POWER PLANTS WHICH ARE PLANNED TO BE DEVELOPED IN THE FUTURE IN A MANNER THAT WILL KEEP PACE WITH THE POWER REQUIREMENTS OF THE SECTION BEING SERVED AND THAT WILL NOT TIE UP FOR A PERIOD OF YEARS A LARGE UNEARNING INVESTMENT.

EXAMINATION OF SENATE DOCUMENT NO. 80 THUS CLEARLY SHOWS THAT THE PLAN OF THE COLORADO-BIG THOMPSON PROJECT IS ONE BY WHICH THE WATER USERS' ORGANIZATION, THE CONSERVANCY DISTRICT, IS TO REPAY ONLY THE CONSTRUCTION COSTS CHARGEABLE TO THE IRRIGATION FEATURES OF THE PROJECT AND BY WHICH THE POWER FEATURES ARE TO BE CONSTRUCTED AND OPERATED BY THE UNITED STATES AS SEPARATE AND DISTINCT FEATURES, WITH THE CONSTRUCTION COSTS THEREOF TO BE REPAID FROM POWER REVENUES.

IN THE INTERIOR DEPARTMENT APPROPRIATION ACT, THE FISCAL YEAR 1938, ACT OF AUGUST 9, 1937, 50 STAT. 564, 595, THE CONGRESS APPROPRIATED $900,000 FOR CONSTRUCTION OF THE COLORADO-BIG THOMPSON PROJECT IN THE FOLLOWING LANGUAGE:

"COLORADO-BIG THOMPSON PROJECT, COLORADO: FOR CONSTRUCTION IN ACCORDANCE WITH THE PLAN DESCRIBED IN SENATE DOCUMENT NUMBERED 80, SEVENTY-FIFTH CONGRESS, $900,000; PROVIDED, THAT NO CONSTRUCTION THEREOF SHALL BE COMMENCED UNTIL THE REPAYMENT OF ALL COSTS OF THE PROJECT SHALL IN THE OPINION OF THE SECRETARY OF THE INTERIOR, BE ASSURED BY APPROPRIATED (SIC) CONTRACTS WITH WATER CONSERVANCY DISTRICTS, OR IRRIGATION DISTRICTS OR WATER USERS' ASSOCIATIONS ORGANIZED UNDER THE LAWS OF COLORADO, OR OTHER FORM OF ORGANIZATION SATISFACTORY TO THE SECRETARY OF THE NTERIOR; "

ON DECEMBER 21, 1937, THE PRESIDENT APPROVED THE FINDING OF THE PROJECT'S FEASIBILITY, MADE BY THE SECRETARY OF THE INTERIOR UNDER SUBSECTION B, SECTION 4, ACT OF DECEMBER 5, 1924 (43 STAT. 701), WHICH PROVIDES AS FOLLOWS:

"THAT NO NEW PROJECT OR NEW DIVISION OF A PROJECT SHALL BE APPROVED FOR CONSTRUCTION OR ESTIMATES SUBMITTED THEREFOR BY THE SECRETARY UNTIL INFORMATION IN DETAIL SHALL BE SECURED BY HIM CONCERNING THE WATER SUPPLY, THE ENGINEERING FEATURES, THE COST OF CONSTRUCTION, LAND PRICES, AND THE PROBABLE COST OF DEVELOPMENT, AND HE SHALL HAVE MADE A FINDING IN WRITING THAT IT IS FEASIBLE, THAT IT IS ADAPTABLE FOR ACTUAL SETTLEMENT AND FARM HOMES, AND THAT IT WILL PROBABLY RETURN THE COST THEREOF TO THE UNITED STATES.'

IT IS STATED IN THE FINDING OF FEASIBILITY, WITH REGARD TO THE TOTAL ESTIMATED COST OF $31,702,772 FOR THE ORIGINAL CONSTRUCTION (WHICH DOES NOT INCLUDE THE FIVE ADDITIONAL POWER PLANTS PLANNED TO BE BUILD IN THE FUTURE AS POWER REQUIREMENTS WARRANT):

"OF THIS COST $6,902,772 HAS BEEN TENTATIVELY ALLOCATED TO THE POWER DEVELOPMENT LEAVING $24,800,000 TO BE REPAID BY THE IRRIGATION INTERESTS. EXCEPT FOR THE EQUITABLE ALLOCATION OF COSTS TO POWER DEVELOPMENT, NO CREDIT OR REVENUES FROM POWER SALES WILL BE MADE TO THE IRRIGATORS BUT ALL WILL BE RETAINED BY THE UNITED STATES.'

IT IS FURTHER STATED IN THE FINDING, WITH REGARD TO THE PROBABLE RETURN TO THE RECLAMATION FUND OF THE COST OF CONSTRUCTION:

"THE PAYMENT OF CONSTRUCTION COSTS WILL BE DERIVED FROM THE SALE OF WATER FOR IRRIGATION PURPOSES AND THE SALE OF ELECTRICAL ENERGY. THE REPAYMENT CONTRACTS WHICH WILL BE EXECUTED WITH A WATER CONSERVATION OR IRRIGATION DISTRICT WILL PROVIDE FOR PAYMENT OF THE CONSTRUCTION COSTS THAT ARE ALLOCATED TO IRRIGATION FEATURES FROM REVENUES OBTAINED FROM TWO SOURCES: ONE BY MEANS OF DIRECT TAXATION OF ALL PROPERTY WITHIN THE DISTRICT AND THE OTHER BY THE SALE OF WATER FOR SUPPLEMENTAL USE ON THOSE LANDS TO WHICH WATER IS ALLOTTED BY THE DISTRICTS. THESE LATTER PAYMENTS WILL BE SECURED BY TAX LIENS ON THE FARMS RECEIVING BENEFITS OF WATER FROM THE PROJECT. * * * IT IS CONSIDERED THAT THE MEANS PROPOSED FOR REPAYMENT OF CONSTRUCTION CHARGES WILL PROVIDE AMPLE SECURITY AND SUFFICIENT FUNDS FOR THE RETURN OF COSTS OF CONSTRUCTION.'

IN MY OPINION, THE ADMINISTRATIVE CONSTRUCTION OF THE LANGUAGE IN THE APPROPRIATION ITEM, INVOLVED IN THE FINDING OF FEASIBILITY AND THE PRESIDENT'S APPROVAL THEREOF, IS THE PROPER CONSTRUCTION TO BE PLACED ON THE LANGUAGE OF CONGRESS. THE PLAN OUTLINED BY THE BUREAU OF RECLAMATION IN ITS REPORT ON THE PROPOSED PROJECT, WHICH REPORT BECAME SENATE DOCUMENT NO. 80, AND WAS INCORPORATED BY CONGRESS IN ITS AUTHORIZATION OF THE PROJECT, IS THAT THE WATER USERS SHOULD BE OBLIGATED THROUGH THE REPAYMENT CONTRACT OF THEIR DISTRICT TO REPAY ONLY THE CONSTRUCTION COSTS CHARGEABLE TO IRRIGATION. CONGRESS APPROPRIATED $900,000 FOR CONSTRUCTION OF THE PROJECT IN ACCORDANCE WITH THE PLAN DESCRIBED IN SENATE DOCUMENT NO. 80, 72TH CONGRESS; AND THAT DOCUMENT AND THE PLAN THEREIN DESCRIBED THEREBY BECAME INCORPORATED AS PART OF THE LEGISLATIVE LANGUAGE. THE PROVISO, ENACTED BY CONGRESS AS A LIMITATION ON THE EXPENDITURE OF THE $900,000, MUST BE CONSTRUED IN VIEW OF THE PLAN ADOPTED BY CONGRESS. TO CONSTRUE THIS PROVISO AS REQUIRING A REPAYMENT CONTRACT COVERING ALL THE COSTS OF BOTH THE IRRIGATION FEATURES AND THE POWER FEATURES OF THE PROJECT WOULD BE TO REJECT IN THE PROVISO THE PLAN THAT IS ADOPTED IN THE FOREGOING PART OF THE APPROPRIATION ITEM. SUCH A CONSTRUCTION WOULD REQUIRE THE CONSERVANCY DISTRICT TO UNDERTAKE REPAYMENT NOT ONLY OF THE COSTS INVOLVED IN THE INITIAL POWER DEVELOPMENT BUT ALSO THE COSTS INVOLVED IN THE FIVE ADDITIONAL POWER PLANTS WHICH ARE PLANNED TO BE CONSTRUCTED IN THE INDEFINITE FUTURE. A CONSTRUCTION THAT WOULD DO SUCH VIOLENCE TO THE PLAN ADOPTED BY CONGRESS CERTAINLY SHOULD NOT BE MADE IF THERE IS ANY OTHER REASONABLE CONSTRUCTION WHICH WILL HARMONIZE THE PROVISO AND THE PLAN. PAGE 23 OF SENATE DOCUMENT NO. 80, IT IS STATED THAT,"THIS PROPOSED DEVELOPMENT CONSISTS OF TWO PROJECTS: FIRST, THE IRRIGATION PROJECT, AND SECOND, THE POWER PROJECT.' THE PROVISO REQUIRES A REPAYMENT CONTRACT WITH THE WATER USERS' ORGANIZATION COVERING ,ALL COSTS OF THE PROJECT," NOT "ALL COSTS OF THE PROJECTS" OR "OF THE IRRIGATION PROJECT AND OF THE POWER PROJECT.' THE CONTRACT IS TO BE WITH THE WATER USERS' ORGANIZATION, NOT WITH THE INITIAL AND FUTURE ELECTRIC POWER CONSUMERS. THE SENSIBLE CONSTRUCTION, AND THE ONLY POSSIBLE CONSTRUCTION THAT HARMONIZES ALL PARTS OF THE LEGISLATION, IS THAT THE REPAYMENT CONTRACT WITH THE WATER USERS' ORGANIZATION MUST COVER ALL COSTS OF THE "IRRIGATION PROJECT" AS PROVIDED IN THE PLAN ADOPTED BY CONGRESS.

EXAMINATION OF THE LEGISLATIVE HISTORY OF THE APPROPRIATION ITEM VERIFIES THIS CONSTRUCTION. THE ITEM WAS INTRODUCED IN THE SENATE AS AN AMENDMENT TO H.R. 6958, SEVENTY-FIFTH CONGRESS, FIRST SESSION, AND IT BECAME A SUBJECT FOR CONSIDERATION AND REPORT BY A CONFERENCE. THE HOUSE DEBATE ON THE AMENDMENT, FOLLOWING THE CONFERENCE REPORT CLEARLY INDICATES THAT THE APPROPRIATION ITEM IN QUESTION WAS UNDERSTOOD BY THE HOUSE TO PROVIDE FOR SEPARATION OF THE TWO FEATURES, THE ,IRRIGATION PROJECT" AND THE "POWER PROJECT.' CONGRESSMAN RICH, ONE OF THE MANAGERS ON THE PART OF THE HOUSE IN THE CONFERENCE, IN EXPLANATION OF WHAT THE ITEM WOULD PROVIDE MONEY FOR, INSERTED IN THE RECORD THE ITEMIZATIONS OF CONSTRUCTION COSTS WHICH ARE SET FORTH IN SENATE DOCUMENT NO. 80 AND WHICH SHOW SEPARATION OF THE COSTS INTO THOSE CHARGEABLE TO IRRIGATION AND THOSE CHARGEABLE TO POWER. IN RESPONSE TO CONGRESSMAN CUMMINGS' STATEMENT,"AND ALL THE POWER BELONGS TO THE GOVERNMENT," CONGRESSMAN RICH RESPONDED,"YES.' CONGRESSMAN CUMMINGS THEREUPON ADDED,"WE ARE GIVING IT TO THE GOVERNMENT.' (SEE CONG.REC., VOL. 81, PP. 7413, 7414.) THESE STATEMENTS IN THE LEGISLATIVE DEBATE NECESSARILY INVOLVE THE UNDERSTANDING THAT THE "IRRIGATION PROJECT" IS TO BE PAID FOR BY THE WATER USERS AND IS FOR THEIR BENEFIT, AND THAT THE "POWER PROJECT" IS TO BE PAID FOR FROM POWER REVENUES AND THAT THE WATER USERS ARE TO HAVE NO OBLIGATIONS OR RIGHTS WITH RESPECT TO THE "POWER PROJECT.'

AS IS EVIDENT IN THE FINDING OF FEASIBILITY AND THE PRESIDENT'S APPROVAL THEREOF, THE ADMINISTRATIVE DETERMINATION OF THE QUESTION INVOLVED HAS ALREADY BEEN MADE. SUBSEQUENTLY, HOWEVER, SOME PARTIES INTERESTED IN THE COLORADO-BIG THOMPSON PROJECT HAVE TAKEN THE POSITION THAT THE REPAYMENT CONTRACT WITH THE WATER USERS' ORGANIZATION, WHICH IS A CONDITION PRECEDENT TO COMMENCEMENT OF CONSTRUCTION, MUST COVER THE CONSTRUCTION COSTS OF BOTH THE "IRRIGATION PROJECT" AND THE "POWER PROJECT" AS DESCRIBED IN SENATE DOCUMENT NO. 80. IF THE REPAYMENT CONTRACT SHOULD OBLIGATE THE DISTRICT TO REPAY THE CONSTRUCTION COSTS OF THE "POWER PROJECT," THE DISTRICT WOULD NO DOUBT CLAIM THE POWER REVENUES. INDICATED IN THE FOREGOING PARAGRAPHS, IT HAS BEEN AND IS MY DEFINITE OPINION THAT THE DISTRICT IS TO HAVE NEITHER OBLIGATIONS NOR RIGHTS WITH RESPECT TO THE "POWER PROJECT.' HOWEVER, IN ORDER TO OBVIATE ANY POSSIBILITY OF MISUNDERSTANDING IN THE MAKING OF THE REPAYMENT CONTRACT OR OF INTERRUPTION IN THE CONSTRUCTION PROGRAM AFTER THE LETTING OF CONSTRUCTION CONTRACTS, I AM REQUESTING YOUR OPINION AT THIS TIME ON THE QUESTION WHETHER FUNDS WILL BE AVAILABLE FOR CONSTRUCTION AFTER EXECUTION OF A REPAYMENT CONTRACT, WHICH IN THE OPINION OF THE SECRETARY OF THE INTERIOR WILL ASSURE REPAYMENT OF THE CONSTRUCTION COSTS OF THE ,IRRIGATION PROJECT.'

THE BUREAU IS READY TO PROCEED WITH THE PROJECT, AND SINCE IT WILL RELIEVE UNEMPLOYMENT AND THERE IS CONSIDERABLE LOCAL PRESSURE FOR US TO BEGIN CONSTRUCTION, I WOULD APPRECIATE RECEIVING AN EARLY REPLY.

WHILE THE PROVISO OF THE APPROPRIATION ACT OF AUGUST 9, 1937, QUOTED IN YOUR LETTER, SPECIFICALLY STATES THAT NO CONSTRUCTION SHALL BE COMMENCED UNTIL THE REPAYMENT OF ALL THE COSTS OF THE PROJECT SHALL, IN THE OPINION OF THE SECRETARY OF THE INTERIOR, BE ASSURED BY APPROPRIATE CONTRACTS WITH WATER CONSERVANCY DISTRICTS, IRRIGATION DISTRICTS, OR WATER USERS' ASSOCIATIONS, IT IS OF PARTICULAR SIGNIFICANCE THAT SAID APPROPRIATION ACT AUTHORIZES THE CONSTRUCTION OF THE PROJECT IN ACCORDANCE WITH THE PLAN DESCRIBED IN SENATE DOCUMENT NO. 80.

AN EXAMINATION OF SENATE DOCUMENT NO. 80 INDICATES THAT THE PRIMARY PURPOSE OF THE PROJECT IS THE DIVERSION OF WATER FOR IRRIGATION PURPOSES AND THAT THE PRODUCTION OF POWER IS, TO A CERTAIN EXTENT, MERELY INCIDENTAL THERETO. SAID DOCUMENT SHOWS THE PLAN OF THE DEVELOPMENT TO CONSIST OF AN IRRIGATION PROJECT AND A POWER PROJECT, AND THE FINANCIAL SET-UP AND REPAYMENT PLAN OF EACH PROJECT IS SET FORTH THEREIN IN DETAIL.

ON PAGE 24 OF SAID DOCUMENT AFTER A SUMMARY OF THE ESTIMATE OF THE IRRIGATION PROJECT COSTS IN THE AMOUNT OF $24,800,000, THE FOLLOWING APPEARS UNDER THE HEADING "REPAYMENT: "

TWENTY-FOUR MILLION EIGHT HUNDRED THOUSAND DOLLARS UPON 310,000 ACRE-FEET AT $80 PER ACRE-FOOT.

TWO DOLLARS PER ACRE-FOOT ON 40-YEAR REPAYMENT BASIS. IN THE ABOVE REPAYMENT IS PREDICATED UPON THE CONTRACTS TO BE MADE UPON A BASIS OF 310,000 ACRE-FEET. * * *

THE FOLLOWING IS SHOWN ON PAGE 31 OF THE DOCUMENT UNDER:

FINANCIAL OPERATION OF POWER SYSTEM

IT IS CONTEMPLATED THAT THE INITIAL POWER DEVELOPMENT WOULD CONSIST OF THE CONSTRUCTION OF POWER PLANT NO. 1 ONLY, TOGETHER WITH SUCH TRANSMISSION LINES AND SUBSTATIONS AS ARE REQUIRED TO SUPPLY POWER TO THE GRANBY PUMPING PLANT AND TO COMMERCIAL MARKETS. THE ESTIMATED CONSTRUCTION COST OF THE STRICTLY POWER FEATURES, AS WELL AS ITEMS WHICH IT IS EXPECTED THAT POWER REVENUES WILL REPAY, IS GIVEN BELOW.

IT IS ASSUMED THAT 5 MILLS PER KILOWATT-HOUR CAN BE SECURED FOR FIRM ENERGY AND 1.8 MILLS PER KILOWATT-HOUR FOR SECONDARY ENERGY WITH DELIVERY AT THE MARKET. IN EACH CASE 10 PERCENT LOSS IS ALLOWED FOR TRANSMISSION. THE FOLLOWING GIVES THE FINANCIAL SET-UP FOR POWER PLANT NO. 1, OPERATION COSTS AND RETURNS.

WHILE FOR THE PURPOSE OF THIS REPORT THE ALLOCATION OF CONSTRUCTION COST TO IRRIGATION AND POWER HAS BEEN MADE ON THE BASIS SET OUT BELOW, IT IS UNDERSTOOD THAT THIS ALLOCATION IS NOT THEREBY FIXED, AND THE SAME MAY BE CHANGED AS FURTHER INFORMATION MAY WARRANT UNTIL SUCH TIME AS THE CONTRACT FOR REPAYMENT OF THE COST OF THE IRRIGATION FEATURES HAS TAKEN FINAL FORM.

AND IN THE CONCLUSION ON PAGE 33, IT IS STATED:

(8) THAT THE REVENUES FROM THE COMMERCIAL POWER GENERATED AT POWER PLANT NO. 1 WILL PAY FOR THE POWER FEATURES AS SET UP UNDER THE INITIAL POWER DEVELOPMENT * * *.

(9) THAT THE COST OF THE IRRIGATION FEATURE OF THE PROJECT IS WITHIN THE ABILITY OF THE WATER USERS TO PAY.

SINCE THE PLAN DESCRIBED IN SENATE DOCUMENT NO. 80 WAS SPECIFICALLY ADOPTED IN THE ACT OF AUGUST 9, 1937, SUPRA, MAKING THE INITIAL APPROPRIATION FOR THE PROJECT, AND SINCE SUCH PLAN CONTEMPLATES THAT ONLY THE CONSTRUCTION COSTS CHARGEABLE TO THE IRRIGATION FEATURES ARE TO BE REPAID BY THE WATER CONSERVANCY DISTRICTS, IRRIGATION DISTRICTS, OR WATER USERS' ASSOCIATIONS, THE PROVISO OF SAID ACT IS READILY SUSCEPTIBLE OF THE INTERPRETATION THAT THE CONTRACTS REFERRED TO THEREIN CONTEMPLATES ONLY SUCH CONTRACTS AS MAY BE NECESSARY, IN THE OPINION OF THE SECRETARY OF THE INTERIOR, TO COVER REPAYMENT OF THE COST OF THE IRRIGATION FEATURES OF THE PROJECT.

ACCORDINGLY, YOU ARE ADVISED THAT IF, IN THE OPINION OF THE SECRETARY OF THE INTERIOR, CONTRACTS ENTERED INTO FOR REPAYMENT IN ACCORDANCE WITH THE PLAN OUTLINED IN SENATE DOCUMENT NO. 80 WILL ASSURE REPAYMENT OF THE COSTS OF THE PROJECT AS CONTEMPLATED BY THE PROVISO OF THE ACT OF AUGUST 9, 1937, THERE WOULD APPEAR NO REQUIREMENT FOR THIS OFFICE TO HOLD THAT THE APPROPRIATION IS NOT AVAILABLE FOR CONSTRUCTION OF THE PROJECTS--- POWER FEATURES AS WELL AS IRRIGATION FEATURES--- AFTER EXECUTION OF SUCH REPAYMENT CONTRACTS. IN OTHER WORDS THE QUESTION STATED IN THE NEXT TO LAST PARAGRAPH OF YOUR LETTER IS ANSWERED IN THE AFFIRMATIVE.