Arizona republican., 1908-06-02

could be developed and at the site for plant No. a power at least equal to $50 horsepower could be developed 1 These sites and the waterways neces- sary to bring the water to them were
 the property of the Arizona Water Co.,,
 and the waterways were an integral
 and necessary party of the system of
 canals by which water was diverted from the river for use by land owners for irrigation. The use of the power that might be developed upon this
 system did not in any wise interfere
 with the use of the water for irriga-
 ton. Reference to almost any map of
 the valley will show the relative loca-
 tion of the canals and sites for power
 plants and the course of distribution
 for water for irrigation.
 On the first of March, 1901, the
 Arizona Water Co. entered into
 contract with the Phoenix Light and
 Fuel Co, the memorandum of which
 bears that date. The memorandum of
 this contract is somewhat vOluminous
 and l summarize here only those parts
 of it which seem pertinent to this in- quiry.
 l shall, for the sake of brevity. as
 the memorandum of contract itself
 does, speak of the Arizona Water Co.
 as Tine Water Co" and of the
 Phoenix Light and Fuel CO.,, as the
 Electric Co" By the terms of the contract the water company agrees to sell to the electric company:
 The exclusive right and privilege for the development and utilization of all water power obtainable from. and by means of, the canals and water owned or controlled by the said water company together with the exclusive right and privilege to establish and install power plants for generating power by electricity at any and all points on lands owned and controlled by the water company available and suitable for the location of the same as hereinafter named:" or as may be further agreed upon in writing by said parties
 The electric company on it's part agreed to erect and maintain plants at the two points l have before men, toned, as site for plant No. l, and site for plant No. ?, adequate for the de- velopment of power obtainable at those sites and provide means for the trans mission and use of the power so de- veloped and keep them efficient for use, and to use the electrical power so developed up to the full extent of the market demand for it to the exclusion of all other power. except such as it might have to substitute to supply a deficiency of that afforded by the means being used under the terms of the contract. For this power the cleo tric company agreed to pay a fixed charge or royalty of 8. 900 a year for that developed at plant No. 1. and S2.5O0 for that developed at plant No 2 For power developed in excess of 4,e0O iIlOwatt hours per day it was to pay in addition to the fixed charge or royalty of S7.5O0 per year an extra charge of $4.5O per thousand kilowatt hours until the total charge should reach S10O00 per annum. After the fixed and eXtera charges should have in the aggregate reached $10,000 the electric company was to have a dis count of 25 per cent on the excess. Provision was made for rebates for deficiency of supply, etc, etc The water company also reserved a right to use electrical power for pumping purposes for it's irrigation service for | which the electric company was to re- ceive $9 per thousand kilowatt hours. ! prevailed that such use should be of l excess power above the needs of the l electric company and not interfere | with it's business The term of the | contract was for twenty-five years | from its date.
 The electric company had, in fact, | installed power plants, lines of wire | for distributing electrical energy to | those who desired to use it for heat, | lighting or power in the city, and was ! engaged in the business of manufac- i turing gas and generating electrical !, energy for those purposes. After the execution of the contract of March l, | 1901. between the water company. and | the electric company. the electric com pany installed power plants at the sites named in the contract. erected ] transmission lines and generated and | made use of electrical energy general ed by power developed from the water diverted from the river and conveyed ! by the water company to those plants. in it's general business of supplying the inhabitants of Phoenix with light, heat and power.
 In 1904 theS United States govern ment began the construction under the provisions yof the act of June r, 1902, known as the national irrigation act, Of certain irrigation works known un- der the general denomination of the Salt River project. The comprehen- sive purpose of those works is to regu- late and impound the flow of water in [ the Salt river and to divert the water of that river and of the Verde river and carry it to and upon lands in the Salt River valley for their cultivation.
 To unify the interests of the various