California Electric Power Co. v. United States

60 F. Supp. 344, 104 Ct. Cl. 289, 1945 U.S. Ct. Cl. LEXIS 83
CourtUnited States Court of Claims
DecidedMay 7, 1945
DocketNos. 45688 and 45916
StatusPublished
Cited by3 cases

This text of 60 F. Supp. 344 (California Electric Power Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Electric Power Co. v. United States, 60 F. Supp. 344, 104 Ct. Cl. 289, 1945 U.S. Ct. Cl. LEXIS 83 (cc 1945).

Opinions

Madden, Judge,

delivered the opinion of the court:

In these two cases we have written one set of findings of fact and one opinion. In case No. 45688 the plaintiff sues for $82,172.54, claiming that it was overcharged this amount by the Government for electric power taken by the plaintiff from a generating plant at Boulder Dam, in that it was denied a “load-building” or “load-absorption” period which, if granted, would have reduced its charges by the amount stated. In case No. 45916 the plaintiff sues for $184,081.31 which, it claims, it was overcharged for Boulder Dam electric power under an “interim” contract with the Government, in that it was required to pay 1.63 mills per kilowatt-hour for secondary power when the lawful price for such power was only .5 mill. References to the plaintiff apply, depending on the time of the action referred to, to the plaintiff’s former wholly owned subsidiary, the Southern Sierras Power Company, or to the plaintiff itself, either under its former name, the Nevada California Electric Corporation, or under its present name.

The Boulder Canyon Project Act of December 21, 1928, 45 Stat. 1057, required the Secretary of the Interior to obtain contracts, from future purchasers of power to be generated at the dam, adequate in his judgment to insure the payment of all costs of operation and maintenance and the repayment within 50 years from the date of completion of the project of the cost of building it, with interest. Unless and until such contracts were obtained, no money was to be spent in constructing the dam. The Secretary, on April 26, 1930, made a contract for the lease of the power privileges at the dam to the City of Los Angeles and the Southern Cali-[310]*310forma Edison Company. The City agreed to operate a part of the power plant machinery of the dam and to generate electricity at cost for itself, the Metropolitan Water District, the States of Nevada and Arizona if and when they should elect to take power, and certain other municipal corporations which were, by contracts to be made, to receive allotments of power. Edison similarly agreed to operate the rest of the generating equipment to supply power to itself and to the plaintiff and the Los Angeles Gas and Electric Corporation. The lease contract provided that the City and the other municipalities should be entitled and obligated to take power when the Secretary should announce that 1,250,000,000 kilowatt-hours per year of energy were ready for delivery; that the Metropolitan Water District, with which the Secretary on the same day made a contract for a large allotment of power, was to become entitled and obligated to take power when the Secretary should announce that 2,000,000,000 k. w. h. were available, but not sooner than 1 year after the commencement of delivery to the city; and that Edison and the other private allottees were to become entitled and obligated to take power when water capable of generating 4,240,000,000 k. w. h. was available, but not sooner than 3 years after commencement of delivery to the City. The lease was to run for 50 years from the date when delivery of power to the City should begin.

In the autumn of 1931, the Secretary made separate contracts with the cities of Pasadena, Glendale, and Burbank, California, the Los Angeles Gas and Electric Corporation and the plaintiff. The plaintiff’s contract was dated November 5, 1931. In each of these contracts the allottee agreed to take and/or pay for the percentage named in the contract of the whole amount of firm energy to be generated at the dam, at the price of 1.63 mills per k. w. h.

The lease and the several contracts allotted, by percentages, the entire 4,240,000,000 k. w. h. per year among the several allottees as firm power, i. e., as power which the Government bound itself to deliver and the allottees bound themselves to pay for. The rate to each allottee for firm power was 1.63 mills per k. w. h., except as that rate was [311]*311affected by the load-building or absorption period discussed hereinafter. It was contemplated that there would actually be more than 4,240,000,000 k. w. h. of power available, and the possible excess was secondary power. Eights in secondary power were specified in the lease and the contracts, and the rate for it was set at .5 mill per k. w. h. The table in finding 8 shows the rights of the parties to firm and secondary power.

In the lease a concession was made to the City of Los Angeles and to Edison, that they would not, for the first three years that each was bound to pay for power, be obliged to take or pay for their full ultimate allotments at the firm power rate. It was provided that, for the first, second, and third years only 55, 70, and 85 percent, respectively, need be taken, and that if more than those percentages were in fact taken, the excess would be charged for only at the .5 mill secondary power rate. This was the “load-building period” privilege, which, as we shall see, the plaintiff claims it did not get, which claim is the basis for the suit in case No. 45688. This privilege was given to the Metropolitan Water District in its contract of April 26, 1930, which was also the date of the lease. It was not given to the 3 smaller cities, nor to the Gas Company, nor to the plaintiff, in their contracts made in the autumn of 1931. As we shall see, it was later given to all of the municipalities, and to the city of Los Angeles, as the successor to the Gas Company, but not, at least in the same form, to the plaintiff, though the Government urges that it was given to the plaintiff in substance.

Contracts adequate to reimburse the Government having been made, the Government proceeded with the building of the dam. As building progressed, the prospect was that the Secretary would announce the availability of 1,250,000,000 k. w. h. per year of power, which announcement would put into effect the obligation of the City of Los Angeles to begin to pay for its percentage of power, about June 1, 1937. The dam was expected to be completed in 1936. But all the water in the river could not be impounded while the depth necessary to generate 1,250,000,000 k. w. h. was built up, since [312]*312persons downstream had the right to a flow oí some of the water for irrigation and other uses. Hence, some water would have to be released, and if it was put through the generating equipment, power not contracted for would be available. It was also expected that in the interval between each announcement and the succeeding one, water would be available to generate more power than the amount covered by the original contracts. As early as 1934 the City of Los Angeles, Edison, and the plaintiff applied to the Secretary for “interim” contracts to buy this power, when it should become available, at the .5 mill secondary power rate. The City objected to the plaintiff’s getting any of it at that rate, because the plaintiff’s “interim” would continue for some three years after the City began to pay the firm power rate of 1.63, and, the City claimed, the plaintiff was in competition with it at various points. A conference was held in Washington at which representatives of the City, the plaintiff, the United States Bureau of Reclamation and the Department of the Interior prepared and signed, on October 3, 1934, a “Memorandum of Understanding.” See finding 10. This memorandum provided that the City should have an interim contract at the secondary rate until it became bound, under the lease, to take power at the firm rate; that the plaintiff should have a similar interim contract until it, in its turn, became so bound; and that the cities of Pasadena, Glendale, and Burbank should have load-building privileges.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Westinghouse Electric Corp. v. Garrett Corp.
437 F. Supp. 1301 (D. Maryland, 1977)
Reynolds Metals Company v. The United States
438 F.2d 983 (Court of Claims, 1971)

Cite This Page — Counsel Stack

Bluebook (online)
60 F. Supp. 344, 104 Ct. Cl. 289, 1945 U.S. Ct. Cl. LEXIS 83, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-electric-power-co-v-united-states-cc-1945.