B-128818, SEP. 6, 1956

B-128818, SEP. 6, 1956

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1, 1956, REQUESTING ADVICE AS TO WHETHER WE WOULD BE REQUIRED TO OBJECT TO PAYMENT BY THE BUREAU OF INDIAN AFFAIRS OF AMOUNTS DISALLOWED ON BILLS SUBMITTED BY TONGUE RIVER ELECTRIC COOPERATIVE, INC., FOR ELECTRIC SERVICE FURNISHED UNDER CONTRACT NO. I-163-IND-177, DATED JUNE 20, 1953.

UNDER THE TERMS OF THE CONTRACT, THE COOPERATIVE AGREED TO PURCHASE AN ELECTRIC TRANSMISSION SYSTEM FROM THE BUREAU AND TO FURNISH TO THE BUREAU AT A STATED RATE ALL ELECTRIC POWER REQUIRED BY THE BUREAU FOR USE AT ITS ADMINISTRATIVE BUILDINGS AND FACILITIES UNTIL ELECTRIC POWER EQUAL TO THE PURCHASE PRICE OF THE SYSTEM HAD BEEN FURNISHED, OR UNTIL THE EXPIRATION OF 15 YEARS, WHICHEVER SHOULD FIRST OCCUR. THE COOPERATIVE ALSO AGREED TO SERVE ALL CONSUMERS THEN BEING SERVED BY THE SYSTEM, SUBJECT TO PAYMENT BY THE CONSUMER FOR SUCH POWER RECEIVED "AT THE RATES AND CONDITIONS APPLYING TO ALL LIKE CONSUMERS OF THE COOPERATIVE.'

IT IS REPORTED THAT TITLE TO THE ELECTRIC TRANSMISSION SYSTEM WAS TRANSFERRED TO THE COOPERATIVE ON NOVEMBER 4, 1952, AND THAT, BY A MEMORANDUM OF AGREEMENT DATED NOVEMBER 18, 1952, IT WAS PROVIDED THAT (1) THE COOPERATIVE WOULD FURNISH THE AGENCY ELECTRIC POWER AT THE FLAT RATE OF $730 PER 30-DAY PERIOD BEGINNING NOVEMBER 16, 1952, AND CONTINUING UNTIL SUCH TIME AS THE COOPERATIVE COULD COMPLETE METER INSTALLATIONS; (2) AS THE COOPERATIVE COMPLETED METER INSTALLATIONS, THE FLAT RATE AGREEMENT SHOULD BE APPLIED ON A PRO-RATA BASIS FOR THE FOLLOWING 30-DAY PERIOD; AND (3) AFTER INDIVIDUAL METERS WERE INSTALLED EACH INSTALLATION WOULD BE BILLED ON A METERED BASIS.

IT IS FURTHER REPORTED THAT A BREAKDOWN OF THE FLAT RATE OF $4730 INDICATES THAT IT WAS MADE UP OF A CHARGE OF $560 FOR GOVERNMENT USE AND $170 FOR 34 GOVERNMENT UNITS (EMPLOYEE RESIDENCES) AT A FLAT RATE OF $5 EACH UNTIL METERED. ALL BUILDINGS HAD BEEN COMPLETED METERED AS OF AUGUST 20, 1954, AND, AS EMPLOYEE RESIDENCES WERE METERED, THE COOPERATIVE BILLED FOR EACH METERED RESIDENCE AT THE REGULAR RATE CHARGED ALL OTHER LIKE CONSUMERS. AS GOVERNMENT BUILDINGS OTHER THAN EMPLOYEE RESIDENCES WERE METERED, THE COOPERATIVE BILLED FOR EACH METERED GOVERNMENT BUILDING AT THE SPECIAL RATE PROVIDED IN THE CONTRACT OF JUNE 20, 1952.

IN MARCH 1955, FIELD OFFICIALS OF THE BUREAU ADVISED THE COOPERATIVE THAT CHARGES FOR ELECTRICITY FURNISHED EMPLOYEES WHOSE RESIDENCES WERE METERED SHOULD HAVE BEEN BILLED UNDER THE SPECIAL RATE FOR ADMINISTRATIVE BUILDINGS AND FACILITIES, AND THAT ADJUSTMENTS WOULD BE MADE IN LATER BILLS TO RECOUP THE OVERPAYMENTS. THE COOPERATIVE THEN CONTENDED THAT IT WAS NEVER THE INTENT OF THE PARTIES TO INCLUDE SERVICE TO EMPLOYEE RESIDENCES WITHIN THE CLASSIFICATION OF ADMINISTRATIVE BUILDINGS AND FACILITIES ENTITLED TO ELECTRIC SERVICE AT THE SPECIAL RATE AS PROVIDED FOR IN THE CONTRACT.

YOUR LETTER SETS FORTH THAT ON MARCH 18, 1953, THERE WAS ESTABLISHED A POLICY OF NOT REQUIRING EMPLOYEES FURNISHED QUARTERS BY THE NORTHERN CHEYENNE AGENCY TO PAY FOR INDIVIDUAL ELECTRIC SERVICE DIRECTLY TO THE COOPERATIVE UNTIL SUCH TIME AS REVISED QUARTERS RATES BECAME EFFECTIVE. HOWEVER, AS OF OCTOBER 20, 1955, THE EMPLOYEES WERE REQUIRED TO PAY UTILITY BILLS TO THE COOPERATIVE AT THE REGULAR RATE CHARGED ALL OTHER LIKE CONSUMERS. SUCH DIRECT PAYMENT REQUIREMENT WOULD SEEM INCONSISTENT WITH THE THEORY THAT THE COOPERATIVE WAS OBLIGATED TO FURNISH ELECTRIC POWER IN GOVERNMENT BUILDINGS OCCUPIED AS RESIDENCES AT THE SPECIAL RATE AVAILABLE TO THE GOVERNMENT.

THE AREA DIRECTOR WHO EXECUTED THE CONTRACT ON BEHALF OF THE GOVERNMENT REPORTED THAT THE TERM ,ADMINISTRATIVE BUILDINGS AND FACILITIES," AS USED IN THE CONTRACT, REFERRED STRICTLY TO ADMINISTRATIVE FACILITIES SUCH AS THE AGENCY OFFICE, SCHOOLS, GARAGE, PUMPING PLANT, ETC., BUT DID NOT CONTEMPLATE THE INCLUSION OF GOVERNMENT QUARTERS OCCUPIED BY EMPLOYEES. IN THIS CONNECTION, THE ATTORNEY FOR THE COOPERATIVE HAD ALLEGED THAT, IN ORDER TO MAKE THE TRANSACTION FEASIBLE, THE COOPERATIVE HAD TO BE ASSURED THAT ALL CONSUMERS OTHER THAN THE GOVERNMENT WOULD BE REQUIRED TO PAY THE REGULAR UTILITY RATE; AND THE AREA DIRECTOR RECALLED THAT SOMEWHERE IN THE DISCUSSION WITH THE OFFICIALS OF THE COOPERATIVE A STATEMENT HAD BEEN MADE TO THE EFFECT THAT THEIR EVALUATION WAS BASED UPON PAYMENT OF THE REGULAR RATE BY GOVERNMENT EMPLOYEES.

IN THE LIGHT OF THIS RECORD OF THE NEGOTIATIONS, YOU EXPRESS THE OPINION THAT NO OTHER CONCLUSION SEEMS POSSIBLE EXCEPT THAT CONTENDED FOR BY THE COOPERATIVE. MOREOVER, YOU SUGGEST THAT THE TERM "ADMINISTRATIVE BUILDINGS AND FACILITIES" MIGHT WELL BE INTERPRETED AS EXCLUDING RESIDENTIAL UNITS SINCE THE ADJECTIVE "ADMINISTRATIVE" HARDLY CONNOTES "RESIDENCES" IN ORDINARY PARLANCE.

ON THE BASIS OF ALL OF THE INDICATED FACTS AND CIRCUMSTANCES OF THE CASE, YOU ARE ADVISED THAT WE WILL INTERPOSE NO OBJECTION TO PAYMENT BY THE BUREAU OF INDIAN AFFAIRS TO THE COOPERATIVE OF A SUM EQUAL TO THE TOTAL OF THE ADJUSTMENTS AND DISALLOWANCES MADE ON ITS PREVIOUS BILLINGS BECAUSE OF THE USE OF THE REGULAR COMMERCIAL RATE FOR POWER FURNISHED TO THE PARTICULAR RESIDENTIAL UNITS INSTEAD OF THE SPECIAL RATE CHARGEABLE TO THE GOVERNMENT FOR POWER DELIVERED TO ITS ADMINISTRATIVE BUILDINGS AND FACILITIES.

IN ACCORDANCE WITH YOUR REQUEST, THE DOCUMENTS AND CORRESPONDENCE FORWARDED WITH YOUR LETTER ARE RETURNED HEREWITH.