B-162141, FEB. 6, 1968

B-162141, FEB. 6, 1968

LEASES - MODIFICATION - RETROACTIVE DECISION ON BEHALF OF BELL COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT IN TEXAS CONCERNING MODIFICATION OF LEASE FOR OPERATION OF WATER TREATMENT AND TRANSMISSION FACILITY. RECONSIDERATION OF DECISION OF OCT. 18, 1967. WHEN CONDUCT OF PARTIES TO LEASE INDICATES INTENT TO SHARE FACILITIES ON BASIS OF NEEDS RATHER THAN ON PERCENTAGES SPECIFIED IN LEASE AND THAT CONTINUATION OF SUCH CONDUCT AFTER IMPROVEMENTS SHOWS MUTUAL AGREEMENT TO CONTINUE, USE BY GOVT. OF MORE THAN STIPULATED PERCENTAGE DID NOT CONSTITUTE BREACH OF LEASE. THEREFORE, THERE IS NO BASIS FOR WAIVER OF RENTAL DUE FROM LESSEE.

TO VINSON, ELKINS, WEEMS AND SEARLS:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 28, 1967, WITH ENCLOSURES, REQUESTING RECONSIDERATION, ON BEHALF OF BELL COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 1, TEXAS (THE LESSEE), OF OUR DECISION B-162141, OCTOBER 18, 1967, IN WHICH WE ADVISED THE SECRETARY OF THE ARMY THAT A MODIFICATION TO LEASE NO. DA-41-443-ENG-4801, BETWEEN THE LESSEE AND THE UNITED STATES, COVERING THE USE AND OPERATION OF WATER TREATMENT AND TRANSMISSION FACILITIES AT FORT HOOD MILITARY RESERVATION, TEXAS, COULD NOT BE MADE EFFECTIVE FOR ANY PERIOD PRIOR TO JUNE 1, 1967.

THE LEASE PROVIDED THAT THE LESSEE WOULD OPERATE AND MAINTAIN THE LEASED PROPERTY FOR A TERM OF 50 YEARS COMMENCING IN 1956, DURING WHICH TERM THERE WOULD BE MADE AVAILABLE TO THE RESERVATION UP TO 80 PERCENT OF THE CAPACITY OF THE LEASED PROPERTY AS OF THE DATE OF COMMENCEMENT OF THE LEASE, AND THAT THE LESSEE WOULD BE ENTITLED TO USE THE REMAINING 20 PERCENT OF THE CAPACITY FOR ITS CIVILIAN CUSTOMERS. BASED ON THE ORIGINAL PIPELINE OR TRANSMISSION CAPACITY OF 9.6 MILLION GALLONS PER DAY (MGD) FOR THE FACILITIES, THE GOVERNMENT WAS THEREFORE ENTITLED TO 7.68 MGD AND THE LESSEE TO 1.92 MGD. AS A RESULT OF CERTAIN ADDITIONS AND IMPROVEMENTS WHICH THE LESSEE MADE TO THE FACILITIES AT ITS OWN EXPENSE, AS PERMITTED BY THE TERMS OF THE LEASE, THE PIPELINE CAPACITY WAS INCREASED TO 11.25 MGD IN 1962 AND THE PLANT OR TREATMENT CAPACITY WAS INCREASED TO 26 MGD IN 1966. ACCORDINGLY, AND ON THE BASIS THAT SINCE APRIL 1966 THE GOVERNMENT BY USING MORE THAN 7.68 MGD ON VARIOUS DATES HAS ENCROACHED ON THE LESSEE'S ENTITLEMENT, THE LESSEE SOUGHT A MODIFICATION TO THE LEASE WHICH WOULD REDUCE, AS OF MAY 1, 1966, THE RENTAL CHARGEABLE TO THE LESSEE FOR THE WATER TREATED AT THE LEASED FACILITIES AND SUPPLIED BY THE LESSEE TO ITS CIVILIAN CUSTOMERS.

IN OUR DECISION OF OCTOBER 18, WE NOTED THAT ABSENT ANY ACTION BY THE LESSEE TO RETAIN TITLE TO THE ADDITIONS AND IMPROVEMENTS TO THE EXISTING GOVERNMENT FACILITIES, SUCH ITEMS BECAME THE PROPERTY OF THE UNITED STATES AND UNDER THE TERMS OF THE LEASE WERE A PART OF THE "LEASED PROPERTY" FOR USE OF WHICH THE RENTAL IN QUESTION IS CHARGEABLE TO THE LESSEE; THAT ACCORDING TO THE DEPARTMENT OF THE ARMY THE LESSEE CANNOT SUPPLY ITS CIVILIAN CUSTOMERS ENTIRELY FROM THE ADDITIONAL FACILITIES WHICH THE LESSEE HAS CONSTRUCTED SINCE ALL ADDITIONS TO THE ORIGINAL GOVERNMENT PLANT ARE AN INTEGRAL PART OF ONE SYSTEM AND SOME OF THE FACILITIES CONSTRUCTED BY THE GOVERNMENT MUST BE USED IN TREATING ALL WATER FURNISHED TO THE LESSEE'S CIVILIAN CUSTOMERS; AND THAT THE RECORDS OF THE TOTAL VOLUME OF WATER WHICH HAS PASSED THROUGH THE PLANT EACH MONTH SINCE THE LEASE TERM COMMENCED IN 1956 SHOW THAT THE GOVERNMENT HAS NEVER RECEIVED MORE THAN 70 PERCENT AND THE LESSEE NEVER LESS THAN 30 PERCENT OF SUCH VOLUME. FOR THESE AND FOR THE OTHER REASONS SET FORTH IN OUR DECISION, WE WERE UNABLE TO AGREE THAT THE GOVERNMENT'S USE OF MORE THAN 7.68 MGD ON ANY ONE DAY CONSTITUTED A BREACH OF THE LEASE AND THAT THE LESSEE'S CONSENT TO WAIVE SUCH BREACH WOULD THEREFORE CONSTITUTE CONSIDERATION FOR MAKING THE MODIFICATION RETROACTIVE FOR THE BENEFIT OF THE LESSEE.

IN YOUR REQUEST FOR RECONSIDERATION, YOU STATE THAT THERE ARE SEVERAL ERRONEOUS STATEMENTS OF FACT IN OUR DECISION. SUCH STATEMENTS INVOLVE THE USE OF THE TERM "CAPACITY" IN VARIOUS PARAGRAPHS, AND YOU APPARENTLY ARE OF THE VIEW THAT CONFUSION ON OUR PART BETWEEN THE PIPELINE CAPACITY AND THE PLANT CAPACITY HAS INFLUENCED OUR DECISION. IN THIS CONNECTION, YOU STRESS THAT IT IS THE ORIGINAL PIPELINE CAPACITY OF 9.6 MGD WHICH CONTROLS THE GOVERNMENT'S ENTITLEMENT, RATHER THAN THE PLANT CAPACITY WHICH WAS INCREASED TO 11.25 MGD BY AN INCREASE IN THE FILTER RATE IN THE WATER TREATMENT PROCESS, WITH GOVERNMENT PERMISSION, BEFORE ANY ADDITIONS OR IMPROVEMENTS HAD BEEN MADE BY THE LESSEE. SUCH PLANT CAPACITY, IT IS STATED IN APPENDIX B ENCLOSED WITH YOUR LETTER, COULD NOT BE DELIVERED TO FORT HOOD THROUGH THE PIPELINE FACILITIES EXISTING AT THE DATE OF THE LEASE.

YOU ALSO REPEAT YOUR ORIGINAL CONTENTION THAT WHEN THE PIPELINE CAPACITY OF THE ORIGINAL FACILITIES WAS INCREASED TO 11.25 MGD IN 1962 FOLLOWING THE ADDITION, AT THE EXPENSE OF THE LESSEE, OF AN 18-INCH PIPELINE (PARALLEL TO THE ORIGINAL GOVERNMENT-CONSTRUCTED 24-INCH PIPELINE), THE GOVERNMENT WAS NOT ENTITLED TO SHARE IN THE INCREASED PIPELINE CAPACITY BUT REMAINED BOUND BY ITS ORIGINAL ENTITLEMENT OF 7.68 MGD. FURTHER, TO SUPPORT YOUR STATEMENTS THAT THE PEAK DEMANDS IN EXCESS OF 7.68 MGD AT FORT HOOD DURING THE MONTHS OF MAY, JUNE AND JULY 1966 WERE MET ONLY BY THE GOVERNMENT'S ENCROACHMENT UPON THE LESSEE'S 1.92 MGD SHARE OF THE ORIGINAL PIPELINE CAPACITY PLUS RELIANCE UPON THE INCREASED PIPELINE CAPACITY ATTRIBUTABLE TO THE SUBSTANTIAL IMPROVEMENTS MADE BY THE LESSEE, YOU PRESENT DATA TAKEN FROM FLOW CHARTS MAINTAINED AT FORT HOOD. SPECIFICALLY, YOU STATE THAT THE FLOW CHART DATED JULY 21, 1966, SHOWS A PEAK RATE IN EXCESS OF 20 MGD AND THAT EXAMINATION OF OTHER FLOW CHARTS REVEALS THAT THROUGHOUT THE SUMMER OF 1966 THE PUMPING RATES BY FORT HOOD EXCEEDED THE 80-PERCENT GOVERNMENT ENTITLEMENT OF 7.68 MGD.

WITH REFERENCE TO FIGURES CITED IN OUR DECISION FOR THE PERIOD MAY 1966 THROUGH MAY 1967 SHOWING THE TOTAL QUANTITY OF TREATED WATER BY MONTHS, AND THE TOTAL NUMBER OF GALLONS USED PER MONTH BY FORT HOOD AND BY THE LESSEE, AS EVIDENCE THAT THE GOVERNMENT HAD RECEIVED NO SUBSTANTIAL BENEFIT FROM THE PLANT IMPROVEMENTS BY THE LESSEE, YOU CONTEND THAT MONTHLY FIGURES ARE MEANINGLESS AND MISLEADING. YOU ASSERT THAT SINCE THE WATER SUPPLY MUST BE ADEQUATE TO MEET BOTH DAILY AND HOURLY PEAK DEMANDS AS WELL AS FIREFIGHTING AND OTHER EMERGENCY REQUIREMENTS, THE GOVERNMENT'S PERSISTENT DAILY ENCROACHMENT UPON THE LESSEE'S 20-PERCENT ENTITLEMENT OF THE ORIGINAL PIPELINE CAPACITY HAS EFFECTIVELY AND PERMANENTLY DESTROYED THE AVAILABILITY OF SUCH ENTITLEMENT TO THE LESSEE'S PERMANENT DAMAGE AND TO THE GOVERNMENT'S PERMANENT ADVANTAGE. YOU URGE, THEREFORE, THAT THE GOVERNMENT HAS NOT ONLY RECEIVED GREAT BENEFITS FROM THE IMPROVEMENTS AND ADDITIONS MADE BY THE LESSEE BUT HAS ALSO CONSCRIPTED THE CAPACITY LEASED TO THE LESSEE. FINALLY, YOU CLAIM THAT THE ORIGINAL CONVEYANCE SYSTEM WOULD NOT HAVE BEEN ADEQUATE TO MEET THE EXPERIENCED DEMANDS. ACCORDINGLY, YOU REQUEST THAT WE ADVISE THE SECRETARY OF THE ARMY THAT THE MODIFICATION OF THE LEASE MAY BE MADE EFFECTIVE AS OF MAY 1, 1966.

SINCE THE EFFECT OF OUR DECISION OF OCTOBER 18, 1967, WAS TO AUTHORIZE THE REQUESTED REDUCTION IN RENTAL COMMENCING JUNE 1, 1967, OUR RECONSIDERATION WILL COVER THE PERIOD MAY 1, 1966 TO MAY 31, 1967, ONLY.

THE DEPARTMENT OF THE ARMY CONCURS WITH YOUR STATEMENT THAT THE PIPELINE CAPACITY ORIGINALLY GOVERNED THE AMOUNT OF WATER AVAILABLE TO FORT HOOD. HOWEVER, THE DEPARTMENT STRESSES THAT BY THE SPECIFIC TERMS OF THE LEASE THE 18-INCH WATER LINE WHICH WAS INSTALLED BY THE LESSEE IN 1961, AS WELL AS ALL OTHER ADDITIONS AND IMPROVEMENTS, SUBSEQUENTLY MADE BY THE LESSEE, BECAME THE PROPERTY OF THE GOVERNMENT. THEREFORE, THE DEPARTMENT ADVANCES THE ARGUMENT THAT THE RESULTING INCREASE IN THE TOTAL PIPELINE CAPACITY FROM 9.6 MGD TO 11.25 MGD INCREASED THE GOVERNMENT'S ENTITLEMENT TO 9.0 MGD (80 PERCENT OF 11.25 MGD) AND THE LESSEE'S ENTITLEMENT TO 2.25 MGD (20 PERCENT OF 11.25 MGD).

THE DEPARTMENT DOES NOT DENY THAT ON OCCASIONS THE GOVERNMENT HAS EXCEEDED 7.68 MGD BUT STATES THAT WITH THE EXCEPTION OF A FEW DAYS DURING THE SUMMER MONTHS OF 1966 AND 1967 THE GOVERNMENT HAS NOT EXCEEDED 9.0 MGD. MOREOVER, THE DEPARTMENT POINTS OUT THAT FROM THE COMMENCEMENT OF THE LEASE IN 1956, THE PARTIES HAVE NEVER SOUGHT TO RESTRICT THE CAPACITY ENTITLEMENTS TO 80 PERCENT GOVERNMENT AND 20 PERCENT LESSEE; RATHER, THE WATER HAS BEEN FURNISHED ON THE BASIS OF THE NEEDS OF THE PARTIES, BASED ON THE ACTUAL CAPACITY AVAILABLE AT A GIVEN TIME, AND THAT THE ACTUAL OVERALL RATIO OF USAGE HAS BEEN 60 PERCENT GOVERNMENT AND 40 PERCENT LESSEE.

CONCERNING THE AMOUNT OF WATER USED BY FORT HOOD STARTING IN 1966, THE DEPARTMENT CONTENDS YOUR STATEMENT THAT FORT HOOD USED WATER AT A RATE IN EXCESS OF 20 MGD AS EARLY AS MAY 1966 IS MISLEADING, AND WE READ YOUR EXHIBIT C, ON WHICH YOUR STATEMENT IS BASED, ONLY AS INDICATING THAT THE 7.68 MGD RATE WAS EXCEEDED ON MOST DAYS IN MAY AND JUNE 1966. WITH REFERENCE TO THE FLOW CHART FOR JULY 21, 1966, WHICH SHOWS A PEAK PUMPING RATE OF 20 MGD, THE DEPARTMENT STATES THAT SUCH CHART IS FROM THE FORT HOOD PUMPING STATION, WHICH IS NOT A PART OF THE LEASED PROPERTY; THAT THE 20 MGD PUMPING RATE LASTED FOR 36 MINUTES AND AMOUNTED TO 0.5 MILLION GALLONS; AND THAT THE PUMPING IS INTERNAL TO THE FORT HOOD WATER STORAGE AND DISTRIBUTION SYSTEM. FURTHER, THE DEPARTMENT REPORTS THAT THE FLOW CHART RECORDS PUMPING RATES ON THE DISCHARGE SIDE OF THE FORT HOOD PUMPING STATION, WHICH DRAWS WATER FROM 2.5 MILLION GALLONS OF FORT HOOD GROUND STORAGE TANK CAPACITY LOCATED ON FORT HOOD PROPERTY AT THE WESTERN TERMINUS OF THE TRANSMISSION SYSTEM WHICH IS LEASED TO THE DISTRICT LESSEE. ON THE BASIS, THEREFORE, THAT THE 2.5 MILLION GALLONS OF FORT HOOD GROUND STORAGE COULD HAVE SUPPLIED WATER AT THE 20 MGD RATE FOR ALMOST 3 HOURS WITHOUT ANY REPLENISHMENT FROM THE LESSEE, THE DEPARTMENT STATES THAT THE 20 MGD RATE OF PUMPING FOR A SHORT PERIOD OF TIME HAS LITTLE RELATIONSHIP TO THE OVERALL DAILY WATER CONSUMPTION AT FORT HOOD OR TO THE RATE AT WHICH WATER IS DELIVERED BY THE LESSEE TO THE FORT HOOD GROUND TANKS.

WITH RESPECT TO THE ADEQUACY OF THE ORIGINAL GOVERNMENT-CONSTRUCTED FACILITIES, THE DEPARTMENT REPORTS THAT THE WATER PLANT WAS BUILT BY THE GOVERNMENT TO SERVE THE NEEDS OF THE RESERVATION AND, IN THE DEPARTMENT'S VIEW, THE SYSTEM AS ORIGINALLY BUILT WOULD HAVE ADEQUATELY MET THE RESERVATION'S REQUIREMENTS.

FROM THE FOREGOING, IT IS APPARENT THAT BOTH PARTIES ARE IN AGREEMENT THAT THE ORIGINAL PIPELINE CAPACITY OF THE LEASED FACILITIES WAS 9.6 MGD, OF WHICH THE GOVERNMENT'S ENTITLEMENT WAS 7.68 MGD AND THE LESSEE'S ENTITLEMENT WAS 1.92 MGD. USING A 30-DAY MONTH AS A BASE, THE MONTHLY PIPELINE CAPACITY FOR THE TOTAL ORIGINAL SYSTEM WOULD HAVE BEEN 288,000,000 GALLONS, THE GOVERNMENT'S MONTHLY ENTITLEMENT WOULD HAVE BEEN 230,400,000 GALLONS AND THE LESSEE'S MONTHLY ENTITLEMENT WOULD HAVE BEEN 57,600,000 GALLONS. WHILE MONTHLY FIGURES WOULD NOT NECESSARILY REFLECT DAILY EXCESSES, AS YOU HAVE POINTED OUT, THE FACT THAT EITHER PARTY EXCEEDED ITS TOTAL MONTHLY ENTITLEMENT, AS COMPUTED ABOVE, IS INCONTROVERTIBLE EVIDENCE THAT THE PARTY IN QUESTION EXCEEDED ITS DAILY ENTITLEMENT AT LEAST ONCE DURING THE PARTICULAR MONTH. SIMILARLY, A TOTAL CONSUMPTION OF MORE THAN 288,000,000 GALLONS PER MONTH IS EVIDENCE THAT THE INCREASE IN THE PIPELINE CAPACITY ATTRIBUTABLE TO THE ADDITIONS AND IMPROVEMENTS MADE BY THE LESSEE HAS BEEN PUT TO USE BY EITHER OR BOTH PARTIES.

DESPITE YOUR CONTENTION THAT MONTHLY TOTALS OF CONSUMPTION ARE NOT A PROPER STANDARD FOR MEASURING THE OBSERVANCE OF THE CONTRACTUAL LIMITS ON DAILY CONSUMPTION, THE ONLY CONTRACT PROVISION AS TO THE MEASUREMENT OR DETERMINATION OF WATER CONSUMPTION IS THE REQUIREMENT THAT THE GOVERNMENT MAINTAIN RECORDS AND FURNISH MONTHLY REPORTS OF CONSUMPTION. IN ADDITION, WE FIND NO EVIDENCE, AND WE DO NOT UNDERSTAND THAT YOU CONTEND, THAT THE LESSEE HAS EVER, EITHER DURING A PARTICULAR HOUR OR DAY OR OVER ANY GREATER PERIOD, BEEN PREVENTED FROM DELIVERING TO ITS CUSTOMERS AT LEAST TWENTY PERCENT OF THE CAPACITY OF THE PLANT, EITHER ORIGINAL OR INCREASED.

AN EXAMINATION OF THE RECORDS OF THE QUANTITIES OF TREATED WATER ACTUALLY USED PER MONTH BY BOTH PARTIES FROM MAY 1956 THROUGH JULY 1967 DISCLOSES (1) THAT THE COMBINED CONSUMPTION OF THE PARTIES FIRST EXCEEDED 288,000,000 GALLONS IN MAY 1962 AND THEREAFTER EXCEEDED SUCH FIGURE IN 22 OTHER MONTHS; (2) THAT THE GOVERNMENT'S CONSUMPTION DID NOT EXCEED 230,400,000 GALLONS UNTIL JULY 1966, WHEN THE GOVERNMENT USED 262,951,000 GALLONS (AND THE LESSEE USED 179,599,300 GALLONS), AND DID NOT AGAIN EXCEED ITS ORIGINAL ENTITLEMENT UNTIL THE MONTHS OF JUNE AND JULY 1967, BOTH OF WHICH WOULD BE COVERED BY THE CONTRACT MODIFICATION AS ALREADY AUTHORIZED; (3) THAT DURING THE PERIOD MAY 1956 THROUGH DECEMBER 1961, WHEN THE PIPELINE CAPACITY WAS STILL ONLY 288,000,000 GALLONS PER MONTH, THE LESSEE'S CONSUMPTION EXCEEDED 57,600,000 GALLONS PER MONTH ON 28 DIFFERENT MONTHS, COMMENCING WITH THE MONTH OF JULY 1956, WHEN THE LESSEE USED 73,300,200 GALLONS; AND (4) THAT SINCE APRIL 1961, WHEN THE LESSEE USED 67,106,900 GALLONS, ITS MONTHLY CONSUMPTION HAS CONSISTENTLY EXCEEDED 57,600,000 GALLONS REACHING A HIGH OF 233,624,500 GALLONS IN JULY 1967, WHICH AMOUNTED TO 43.15 PERCENT OF THE TOTAL CONSUMPTION OF 541,426,500 GALLONS FOR THAT MONTH.

THE ABOVE FIGURES, IN OUR OPINION, COMPLETELY REFUTE YOUR ARGUMENT THAT SINCE MAY 1966 THE GOVERNMENT HAS DEPRIVED THE LESSEE OF ITS ORIGINAL ENTITLEMENT TO THE LESSEE'S PERMANENT DAMAGE. IN ONLY ONE MONTH PRIOR TO JUNE 1967 DID THE GOVERNMENT USE MORE THAN ITS ORIGINAL ENTITLEMENT OF 230,400,000 GALLONS, AND EVEN IN THAT MONTH, JULY 1966, THE LESSEE USED 179,599,300 GALLONS, WHICH AMOUNTED TO MORE THAN 40 PERCENT OF THE TOTAL WATER OUTPUT FOR THE MONTH. LEASES, LIKE OTHER CONTRACTS, ARE TO RECEIVE A REASONABLE INTERPRETATION THAT WILL EFFECTUATE THE INTENTION OF THE PARTIES. SINGER V. UNITED STATES, 115 F.SUPP. 166 (1953). THE INTERPRETATION GIVEN BY THE PARTIES THEMSELVES TO A LEASE, AS SHOWN BY THEIR ACTS, WILL BE ADOPTED BY THE COURT. S.S. KRESGE CO. V. SOMERVILLE MERCHANTS BUILDING, 95 F.SUPP. 912. THE MUTUAL ASSENT OF BOTH LESSEE AND LESSOR IS NECESSARY FOR MODIFICATION OF A LEASE, BUT A MODIFICATION MAY BE IMPLIED FROM THEIR COURSE OF CONDUCT. O-MALLEY INVESTMENT AND REALTY CO. V. TRIMBLE, 422 P.2D 740 (ARIZ. APP. 1967). GENERALLY SPEAKING, THE PRACTICAL INTERPRETATION OF A CONTRACT BY THE PARTIES TO IT FOR ANY CONSIDERABLE PERIOD OF TIME BEFORE IT COMES TO BE THE SUBJECT OF CONTROVERSY IS DEEMED OF GREAT, IF NOT CONTROLLING, INFLUENCE. OLD COLONY TRUST CO. V. OMAHA, 230 U.S. 100 (1913).

APPLYING THESE PRINCIPLES TO THE FACTS OF THIS CASE, IT IS OUR VIEW THAT THE CONDUCT OF THE PARTIES INDICATES A MUTUAL INTENT TO SHARE THE LEASED FACILITIES ON THE BASIS OF THEIR RESPECTIVE NEEDS, RATHER THAN ON THE BASIS OF THE PERCENTAGES SPECIFIED IN THE LEASE, AND THAT THE CONTINUATION OF SUCH CONDUCT AFTER THE VARIOUS ADDITIONS AND IMPROVEMENTS BY THE LESSEE EVIDENCES A MUTUAL AGREEMENT TO CONTINUE THE ARRANGEMENT. IN THE CIRCUMSTANCES, ANY CHANGE IN THE LONGSTANDING INTERPRETATION OF THE LEASE BY THE PARTIES WOULD NECESSARILY REQUIRE THE ASSENT OF BOTH PARTIES. MALLEY INVESTMENT AND REALTY CO. V. TRIMBLE, SUPRA. ACCORDINGLY, SINCE NO SUCH CHANGE WAS MUTUALLY AGREED UPON UNTIL MAY 25, 1967, WHEN THE LESSEE SIGNIFIED ITS AGREEMENT TO THE TERMS OF THE MODIFICATION AUTHORIZED BY THE GOVERNMENT (EXCEPT FOR THE EFFECTIVE DATE), THE USE BY THE GOVERNMENT PRIOR TO JUNE 1967 OF MORE THAN ITS STIPULATED PERCENTAGE OF ENTITLEMENT, WHETHER BASED ON THE ORIGINAL PIPELINE CAPACITY, THE INCREASED PIPELINE CAPACITY, OR THE PLANT CAPACITY AT ANY GIVEN TIME DID NOT, IN OUR OPINION, CONSTITUTE A BREACH OF THE LEASE. WE THEREFORE ADHERE TO THE CONCLUSION STATED IN OUR DECISION OF OCTOBER 18, 1967, THAT THERE IS NO ACCEPTABLE BASIS FOR WAIVER OR RELEASE BY THE GOVERNMENT OF ANY PART OF THE RENTAL DUE FROM THE LESSEE UNDER THE TERMS OF THE EXISTING LEASE FOR THE MONTHS IN QUESTION.