B-135063, MAR. 4, 1958

B-135063: Mar 4, 1958

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TO THE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO A LETTER DATED JANUARY 28. REQUESTING A DECISION AS TO WHETHER THERE IS AUTHORIZED THE AMENDMENT OF CONTRACT NO. 14-02-001- 754. M AND A IS OBLIGATED. SECTION 8 OF ARTICLE II OF THE CONTRACT PROVIDES THAT THE GOVERNMENT WILL PAY MONTHLY AT THE RATE OF $0.00125 PER KILOWATT- HOUR FOR THE TRANSMISSION OF POWER AND ENERGY DELIVERED BY THE GOVERNMENT INTO THE SYSTEM OF M AND A AND FOR THE TRANSMISSION OF POWER AND ENERGY PURCHASED BY THE GOVERNMENT FROM M AND A. THE CONTRACT IS TO REMAIN IN EFFECT UNTIL JUNE 30. 1951) WERE CANCELLED. THE SPECIFIC QUESTION PRESENTED IS STATED AS FOLLOWS IN THE ASSISTANT SECRETARY'S LETTER: "IS SPA AUTHORIZED TO AMEND THE CONTRACT WITH M AND A TO INCREASE THE TRANSMISSION SERVICE CHARGE PAID TO M AND A SO THAT POWER AND ENERGY WILL BE DELIVERED TO M AND A'S LOAD CENTERS AT A RATE WHICH MORE NEARLY APPROXIMATES SPA'S BASIC RATE?

B-135063, MAR. 4, 1958

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO A LETTER DATED JANUARY 28, 1958, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY OF THE INTERIOR, REQUESTING A DECISION AS TO WHETHER THERE IS AUTHORIZED THE AMENDMENT OF CONTRACT NO. 14-02-001- 754, DATED SEPTEMBER 4, 1956, BETWEEN THE GOVERNMENT, REPRESENTED BY THE SOUTHWESTERN POWER ADMINISTRATION (HEREINAFTER REFERRED TO AS SPA), AND THE M AND A ELECTRIC POWER COOPERATIVE (HEREINAFTER REFERRED TO AS M AND A), A GENERATING AND TRANSMISSION COOPERATIVE OF POPLAR BLUFF, MISSOURI, SO AS TO INCREASE THE COMPENSATION OF M AND A FOR THE SERVICES RENDERED BY IT UNDER THE CONTRACT.

UNDER THE TERMS OF THE CONTRACT, M AND A IS OBLIGATED--- SUBJECT TO SPECIFIED CONDITIONS--- TO PURCHASE FROM THE GOVERNMENT CERTAIN AMOUNTS OF ELECTRIC POWER AND ENERGY AT RATES SET OUT IN THE CONTRACT; TO TRANSMIT THE PURCHASED POWER AND ENERGY FROM THE POINTS OF INTERCONNECTION WITH ITS TRANSMISSION LINES TO ITS OWN SUBSTATIONS DESIGNATED AS POINTS OF DELIVERY; TO TRANSMIT CERTAIN POWER AND ENERGY FROM THE POINTS OF INTER- CONNECTION TO OTHER CUSTOMERS OF THE GOVERNMENT; AND TO TRANSMIT SUCH AMOUNTS OF THERMAL ELECTRIC POWER AND ENERGY AS THE GOVERNMENT MAY PURCHASE FROM M AND A. SECTION 8 OF ARTICLE II OF THE CONTRACT PROVIDES THAT THE GOVERNMENT WILL PAY MONTHLY AT THE RATE OF $0.00125 PER KILOWATT- HOUR FOR THE TRANSMISSION OF POWER AND ENERGY DELIVERED BY THE GOVERNMENT INTO THE SYSTEM OF M AND A AND FOR THE TRANSMISSION OF POWER AND ENERGY PURCHASED BY THE GOVERNMENT FROM M AND A. THE CONTRACT IS TO REMAIN IN EFFECT UNTIL JUNE 30, 1976, UNLESS SOONER TERMINATED AS PROVIDED THEREIN. BY SECTION 3 OF ARTICLE VI, TWO PRIOR CONTRACTS (NOS. ISPA-479 AND ISPA 480, EACH DATED OCTOBER 5, 1951) WERE CANCELLED.

THE SPECIFIC QUESTION PRESENTED IS STATED AS FOLLOWS IN THE ASSISTANT SECRETARY'S LETTER:

"IS SPA AUTHORIZED TO AMEND THE CONTRACT WITH M AND A TO INCREASE THE TRANSMISSION SERVICE CHARGE PAID TO M AND A SO THAT POWER AND ENERGY WILL BE DELIVERED TO M AND A'S LOAD CENTERS AT A RATE WHICH MORE NEARLY APPROXIMATES SPA'S BASIC RATE?

IT IS UNDERSTOOD THAT M AND A HAS REQUESTED AMENDMENT OF THE CONTRACT SO AS TO PROVIDE ADDITIONAL COMPENSATION TO IT FOR TRANSMITTING FROM THE POINTS OF INTERCONNECTION TO ITS LOAD CENTERS THE POWER AND ENERGY PURCHASED BY IT FROM SPA (POSSIBLY, ALSO, FOR TRANSMITTING POWER AND ENERGY FROM POINTS OF INTERCONNECTION TO OTHER CUSTOMERS OF THE GOVERNMENT AND FOR TRANSMITTING THE THERMAL ELECTRIC POWER AND ENERGY PURCHASED BY THE GOVERNMENT FROM M AND A), SO THAT THE ACTUAL COST TO M AND A FOR THE POWER DELIVERED AT ITS LOAD CENTERS WILL BE CLOSER TO SPA'S BASIC RATE. IT IS STATED, IN SUBSTANCE, IN THE ASSISTANT SECRETARY'S LETTER AND IN THE SOLICITOR'S MEMORANDUM DATED NOVEMBER 18, 1957, COPY OF WHICH WAS TRANSMITTED WITH THE LETTER, THAT THE REQUEST OF M AND A FOR AMENDMENT OF THE CONTRACT IS BASED ON ITS CONTENTION THAT CERTAIN EXPRESSIONS OF CONGRESSIONAL INTENT FOUND IN THE LEGISLATIVE HISTORY OF H.R. 6766, 84TH CONGRESS, WHICH BECAME THE PUBLIC WORKS APPROPRIATION ACT, 1956 (PUBLIC LAW 163, 84TH CONGRESS, APPROVED JULY 15, 1955), AUTHORIZE AND REQUIRE AMENDMENT OF THE CONTRACT AS REQUESTED, BEING APPLICABLE TO ALL CONTRACTS BETWEEN SPA AND GENERATING AND TRANSMITTING COOPERATIVES.

IN SUPPORT OF ITS CONTENTION, M AND A APPARENTLY RELIES ESPECIALLY ON THE FOLLOWING LANGUAGE FROM PAGE 6 OF HOUSE REPORT NO. 747, 84TH CONGRESS, ACCOMPANYING H.R. 6766:

"IN REACTIVATING THE CONTRACTS WITH THE G. AND T. COOPERATIVES, THE DEPARTMENT OF THE INTERIOR IS INSTRUCTED TO DELETE ANY PROVISIONS PROVIDING FOR THE OPTION TO PURCHASE G. AND T. TRANSMISSION LINES OR OTHER FACILITIES BY THE SOUTHWESTERN POWER ADMINISTRATION. THE CONTRACTS ARE ALSO TO PROVIDE: (1) THAT THE G. AND T. COOPERATIVES WILL OPERATE AND MAINTAIN THEIR OWN TRANSMISSION SYSTEMS UNDER LEASE TO THE SPA; (2) THAT THE SPA AND THE G. AND T. COOPERATIVES WILL SETTLE ACCOUNTS FOR POWER PURCHASED AND SOLD ON THE BASIS OF NET-BALANCE AS IS DONE UNDER EXISTING CONTRACTS TO WHICH SPA AND PRIVATE UTILITIES ARE PARTIES; AND (3) THAT POWER AND ENERGY WILL BE DELIVERED TO THE LOAD CENTERS OF ALL G. AND T. CONTRACTING SYSTEMS AT THE BASIC SPA RATE.'

SEE, ALSO, HOUSE REPORT NO. 1085, 84TH CONGRESS (THE CONFERENCE REPORT), WHERE IT IS STATED (PAGE 4):

"THE CONFEREES ARE IN AGREEMENT THAT IF NOT ALREADY INCLUDED IN EXISTING CONTRACTS PROVISIONS ARE TO BE INSERTED TO REQUIRE THAT POWER AND ENERGY BE DELIVERED TO THE LOAD CENTERS OF ALL GENERATING AND TRANSMISSION CONTRACTING SYSTEMS, IF PRACTICAL, AT THE BASIC SOUTHWESTERN POWER ADMINISTRATION RATE.'

THE PERTINENT APPROPRIATION IN PUBLIC LAW 163 IS AS FOLLOWS:

"CONTINUING FUND, SOUTHWESTERN POWER ADMINISTRATION

"NOT TO EXCEED $6,000,000 SHALL BE AVAILABLE DURING THE CURRENT FISCAL YEAR FROM THE CONTINUING FUND FOR ALL COSTS IN CONNECTION WITH THE PURCHASE OF ELECTRIC POWER AND ENERGY, AND RENTALS FOR THE USE OF TRANSMISSION FACILITIES.'

IN ADDITION TO THE FACT THAT THE ABOVE-QUOTED EXCERPT FROM HOUSE REPORT NO. 747 SPECIFICALLY REFERS TO "REACTIVATING THE CONTRACTS," IT IS BELIEVED THAT THE ENTIRE LEGISLATIVE HISTORY OF THE APPROPRIATION IN QUESTION INDICATES THAT ANY COMMENTS OR INSTRUCTIONS PERTAINING TO IT WERE INTENDED TO APPLY ONLY TO CERTAIN CONTRACTS BETWEEN SPA AND FIVE GENERATING AND TRANSMISSION COOPERATIVES WHICH HAD BEEN INOPERATIVE DURING THE FISCAL YEARS 1954 AND 1955 BECAUSE THE CONGRESS HAD NOT PROVIDED FUNDS TO KEEP THEM OPERATIVE.

THE TWO CONTRACTS OF M AND A DATED OCTOBER 5, 1951, WHICH WERE CANCELLED BY CONTRACT NO. 14-02-001-754, DATED SEPTEMBER 4, 1956, AS ABOVE STATED, WERE OPERATIVE DURING THE ENTIRE PERIOD FROM THEIR EFFECTIVE DATE TO THE DATE OF CANCELLATION AND THEREFORE WERE NOT AMONG THOSE CLEARLY INTENDED TO BE AFFECTED BY THE CONGRESSIONAL STATEMENTS IN QUESTION. CONTRACT NO. 14-02-001-754, HAVING BEEN ENTERED INTO NEARLY 14 MONTHS AFTER APPROVAL OF PUBLIC LAW 163, CANNOT BE REGARDED AS AFFECTED BY THAT STATUTE IN THE ABSENCE OF A CLEAR EXPRESSION OF CONGRESSIONAL INTENT SO REQUIRING.

WITHOUT QUOTING EXTENSIVELY FROM THE LEGISLATIVE HISTORY OF THE APPROPRIATION ACT, IT IS TO BE OBSERVED THAT THERE HAS NOT BEEN FOUND ANY INDICATION IN THE LEGISLATIVE HISTORY THAT THE STATEMENTS CONCERNING THE APPROPRIATION WERE INTENDED TO APPLY TO THE M AND A CONTRACT IN QUESTION OR TO ANY CONTRACT OTHER THAN THOSE WHICH HAD BEEN INOPERATIVE DURING THE FISCAL YEARS 1954 AND 1955. FOR EXAMPLE, IN HOUSE REPORT NO. 747 ABOVE REFERRED TO, THE FIRST PARAGRAPH RELATIVE TO THE CONTINUING FUND IS AS FOLLOWS:

"THE CONTINUING FUND LANGUAGE HAS BEEN INSERTED IN THE BILL IN THE SAME MANNER IN WHICH IT LAST APPEARED IN THE APPROPRIATION BILL FOR THE DEPARTMENT OF THE INTERIOR FOR THE FISCAL YEAR 1953. IT PROVIDES THAT THE SPA SHALL HAVE AUTHORITY TO USE POWER SALES REVENUES, SUBJECT TO AN ANNUAL LIMITATION PLACED IN THE APPROPRIATION BILL, TO PAY FOR EMERGENCY EXPENDITURES, PURCHASE OF ELECTRIC POWER AND ENERGY, AND RENTALS FOR THE USE OF TRANSMISSION FACILITIES. THIS ACTION MAKES IT POSSIBLE TO REACTIVATE VALID AND LEGAL CONTRACTS WHICH CERTAIN G AND T (GENERATING AND TRANSMISSION) COOPERATIVES HAVE WITH SPA. THESE CONTRACTS AT THEIR INCEPTION WERE EXAMINED BY THE CONGRESS AND FUNDS WERE AVAILABLE TO CARRY THEM OUT THRU THE CONTINUING FUND FOR FISCAL YEARS 1950 THRU 1953.'

THE LAST PARAGRAPH OF THE STATEMENT ON SPA IN THAT REPORT READS:

"THE AMOUNTS PROVIDED IN THE BILL FOR BOTH OPERATION AND MAINTENANCE AND THE CONTINUING FUND ARE BASED ON INFORMATION AT HAND. HOWEVER, SINCE THERE WAS CONSIDERABLE VARIATION IN THE INFORMAL ESTIMATES OFFERED DURING THE HEARINGS AS TO SPA COSTS UNDER THE REACTIVATED CONTRACTS AND SINCE THE NATURE OF THE AMENDMENTS TO THE CONTRACT COULD AFFECT THE AMOUNTS REQUIRED, IT IS RECOGNIZED THAT SOME ADJUSTMENT MAY BE NECESSARY AT A LATER DATE.'

SIMILARLY, IN SENATE REPORT NO. 700, 84TH CONGRESS, ACCOMPANYING H.R. 6766, THE FIRST STATEMENTS RELATIVE TO THE CONTINUING FUND, SPA, ARE AS FOLLOWS:

"THE COMMITTEE RECOMMENDS THAT THE SENATE CONCUR IN THE ACTION OF THE HOUSE IN PROVIDING $6 MILLION FROM THE SALE OF POWER AND ENERGY IN THE CONTINUING FUND. FUNDS MADE AVAILABLE IN THE CONTINUING FUND ARE FOR THE PURCHASE OF ENERGY AND RENTAL OF FACILITIES.

"IT IS THE DESIRE OF THE COMMITTEE THAT THE EXISTING CONTRACTS BETWEEN THE SOUTHWESTERN POWER ADMINISTRATION AND THE G. AND T. COOPERATIVES BECOME OPERATIVE IMMEDIATELY UPON APPROVAL OF THIS ACT.

"IT IS THE OPINION OF THE COMMITTEE THAT THE SECRETARY SHOULD GIVE CONSIDERATION TO AMENDING THE CONTRACTS AS FOLLOWS: * * *"

THE LAST PARAGRAPH OF THE SAID REPORT OF SPA READS:

"THE ACTION OF THE COMMITTEE IS NOT TO BE CONSIDERED A CONGRESSIONAL INTERPRETATION OF THE LEGALITY OF THE CONTRACTS INVOLVED.'

IN SENATE REPORT NO. 700, NO MENTION IS MADE OF THE MATTER OF DELIVERING POWER AND ENERGY TO THE LOAD CENTERS AT THE BASIC SPA RATE. NEITHER IS THERE FOUND IN THE DISCUSSION OF THIS APPROPRIATION ON THE FLOOR OF THE SENATE OR THE HOUSE OF REPRESENTATIVES ANY MENTION OF ANY CONTRACTS OTHER THAN THOSE ABOVE REFERRED TO AS INOPERATIVE DURING THE FISCAL YEARS 1954 AND 1955, NOR DO THE HEARINGS INDICATE THAT ANY OTHER CONTRACTS WERE UNDER CONSIDERATION BY THE COMMITTEES.

FOR THE REASONS ABOVE SET OUT AND PARTICULARLY IN VIEW OF THE FACT THAT CONTRACT NO. 14-02-001-754 WAS ENTERED INTO LONG AFTER THE APPROVAL OF PUBLIC LAW 163, THERE IS NOT PERCEIVED ANY VALID GROUND FOR CONSIDERING THE CITED EXPRESSIONS OF LEGISLATIVE INTENT AS JUSTIFYING THE AMENDMENT OF THE CONTRACT AS REQUESTED WITHOUT OTHER CONSIDERATION. ACCORDINGLY, THE SPECIFIC QUESTION PRESENTED IS ANSWERED IN THE NEGATIVE.