B-127337, APR. 5, 1956:

B-127337, APR. 5, 1956:

TO BURKE-DIVIDE ELECTRIC COOPERATIVE, INC.:

THE DEPARTMENT OF THE INTERIOR, BUREAU OF RECLAMATION, HAS REFERRED TO US FOR CONSIDERATION AND APPROPRIATE DISPOSITION THE MATTER OF YOUR INDEBTEDNESS TO THE UNITED STATES FOR $5,930.10, REPRESENTING AN ADDITIONAL AMOUNT DUE FOR ELECTRIC POWER FURNISHED YOU UNDER CONTRACT NO. 179R-1597, DATED MARCH 31, 1950.

UNDER THE TERMS OF THE SAID CONTRACT YOU AGREED TO PAY THE BUREAU OF RECLAMATION, AT THE RATES SPECIFIED THEREIN, FOR ALL THE ELECTRIC ENERGY FURNISHED THROUGH THREE SUBSTATIONS, INCLUDING ONE POINT OF DELIVERY LOCATED NEAR KINCAID, BURKE COUNTY, NORTH DAKOTA, THE ONLY UNIT HERE INVOLVED. THE RECORD SHOWS THAT FROM THE DATE OF INITIAL SERVICE IN THE LATTER PART OF 1950, UNTIL JULY 13, 1954, THE AMOUNT OF CURRENT DELIVERED TO YOUR COOPERATIVE THROUGH THAT SUBSTATION SUBSTANTIALLY EXCEEDED THE QUANTITY ACTUALLY METERED AND PAID FOR BECAUSE OF INCORRECT CIRCUIT WIRING OF THE UNIT AT THE TIME OF ERECTION.

AFTER THAT ERROR WAS DETECTED AND CORRECTED THE ADMINISTRATIVE OFFICE RECOMPUTED THE ELECTRIC SERVICE RENDERED FOR THE PERIOD FROM JANUARY 1, 1951, THROUGH JULY 13, 1954, BASED ON THE BEST INFORMATION AVAILABLE, AND PRESENTED TO YOU AMENDED INVOICES REFLECTING THE CORRECTED BILLING AMOUNT, EQUAL TO A TOTAL DIFFERENCE OF $5,930.10. CONSIDERATION WAS GIVEN BY YOUR BOARD OF DIRECTORS TO THE ADDITIONAL CHARGES RAISED BY THE ADMINISTRATIVE OFFICE, AND BY RESOLUTION DATED AUGUST 3, 1955, UNANIMOUSLY APPROVED, IT WAS RESOLVED THAT THE CLAIM "BE COMPROMISED AND SETTLED ON A 50 PERCENT BASIS.'

FROM AN EXAMINATION OF THE SUBJECT RESOLUTION THE REJECTION OF FULL LIABILITY FOR THE AMOUNT DUE APPEARS TO BE PREDICATED UPON THE BOARD'S ALLEGATION THAT THE INSTANT SITUATION WAS THE RESULT OF "THE CARELESSNESS AND NEGLIGENCE OF THE BUREAU OF RECLAMATION IN PROPERLY INSTALLING AND CHECKING ITS METER AT THE POINT OF DISTRIBUTION," AND THAT "THE ERROR, IF ANY, WAS MADE WITHOUT THE KNOWLEDGE OF THE BURKE DIVIDE ELECTRIC COOPERATIVE, INC., AND THROUGH NO FAULT OF THE SAID COOPERATIVE.' THOSE ALLEGATIONS ARE NOT SUPPORTED BY THE RECORD. IN REPORT OF THE MATTER TO THE COMMISSIONER OF THE BUREAU OF RECLAMATION, UNDER DATE OF NOVEMBER 9, 1955, THE ACTING REGIONAL DIRECTOR STATED THAT:

"THE SUBSTATION AT THE KINCAID POINT OF DELIVERY WAS CONSTRUCTED BY THE COOPERATIVE AND WAS ENERGIZED SEPTEMBER 26, 1950. METERING EQUIPMENT TO MEASURE THE ENERGY DELIVERED TO THE COOPERATIVE WAS INSTALLED BY THE COOPERATIVE AND PURCHASED BY THE BUREAU, AS INSTALLED, AT A LATER DATE.'

THE REPORT FURTHER STATES, WITH RESPECT TO THE BOARD'S ALLEGATION OF NEGLIGENCE, THAT--- "THE ERROR OF THE INSTALLATION WOULD NOT BE DETECTED BY THE ROUTINE METER TESTS CONDUCTED IN ACCORDANCE WITH THEN EXISTING PRACTICE IN APPLYING THE LANGUAGE OF THE CONTRACT, THE TESTS BEING A CHECK OF THE CONDITION OF THE METER ONLY, RATHER THAN OF THE ENTIRE METERING INSTALLATION.'

FROM THE FOREGOING THE CONCLUSION OF YOUR BOARD OF DIRECTORS THAT THE ADMINISTRATIVE OFFICE IS SOLELY RESPONSIBLE FOR THE PREVIOUS BILLING ERRORS IS UNWARRANTED. MOREOVER, AN EXAMINATION OF YOUR OWN RECORDS COVERING THE PERIOD INVOLVED WOULD HAVE DISCLOSED THE FACT THAT YOU WERE DISTRIBUTING TO YOUR CONSUMERS AND BEING PAID FOR ELECTRIC ENERGY MATERIALLY IN EXCESS OF THE VOLUME FOR WHICH YOU WERE BEING INVOICED. SEEMS ELEMENTARY THAT YOU COULD NOT HAVE DISTRIBUTED MORE POWER THAN YOUR INSTALLATION RECEIVED, AND THE CHARGES RAISED BY THE BUREAU OF RECLAMATION, WHICH ARE FAIR AND REASONABLE, REPRESENT ONLY THAT EXCESS ENERGY FURNISHED. THE CORRECTNESS OF SUCH CHARGES IS SUPPORTED BY THE RECORDS OF YOUR COOPERATIVE AS DISCLOSED BY LETTER DATED AUGUST 13, 1954, FROM YOUR FORMER MANAGER TO THE BUREAU WHICH DISCLOSED, FOR EXAMPLE, THAT DURING THE CALENDAR YEAR 1953, YOU SOLD 760,327 KILOWATT HOURS, BUT PAID THE GOVERNMENT FOR ONLY 450,776 KILOWATT HOURS.

BY LETTER OF FEBRUARY 3, 1956, THE ASSISTANT COMMISSIONER OF THE BUREAU OF RECLAMATION STATES THAT YOUR COOPERATIVE HAS INDICATED A DESIRE TO HAVE ADDITIONAL POWER FURNISHED, AND REQUESTS TO BE ADVISED WHETHER A NEW CONTRACT CONTEMPLATED SHOULD BE EXECUTED IN VIEW OF THE OUTSTANDING OBLIGATION. SINCE THE FACTS OF RECORD CLEARLY ESTABLISH YOUR LIABILITY FOR THE UNPAID CURRENT, WE HAVE NO ALTERNATIVE BUT TO ADVISE THE ADMINISTRATIVE OFFICE, WHICH IS BEING DONE TODAY, THAT PROTECTION OF THE INTERESTS OF THE UNITED STATES REQUIRES THE WITHHOLDING OF THE CONTRACT ACTION CONTEMPLATED.

IN ADDITION TO THE FACT THAT THE GENERAL ACCOUNTING OFFICE IS WITHOUT LEGAL AUTHORITY TO ACCEPT AN OFFER IN COMPROMISE, NO COMPELLING REASON IS FOUND IN THE RECORD OF THE CASE WHY THE ENTIRE OBLIGATION SHOULD NOT BE SATISFIED. IF IMMEDIATE PAYMENT OF THE FULL AMOUNT DUE WOULD CREATE A FINANCIAL BURDEN ON YOUR COOPERATIVE, LIQUIDATION OF THE ACCOUNT BY PAYMENT OF ONE-HALF OF THE DEBT WITHIN 30 DAYS, AND THE BALANCE IN PERIODIC PAYMENTS WITHIN TWO YEARS WOULD BE ACCEPTABLE. UPON RECEIPT FROM YOU OF AN AGREEMENT TO LIQUIDATE THE INDEBTEDNESS IN THE MANNER SUGGESTED, OR ON ANY OTHER ACCEPTABLE TERMS, THE BUREAU OF RECLAMATION WILL BE PROMPTLY ADVISED.