Opinion ID: 528399
Heading Depth: 2
Heading Rank: 2

Heading: Seattle's Hydroelectric License

Text: 9 In 1927, the FPC issued the City of Seattle a fifty-year license for the Skagit River Project No. 553 (Project 553) in northwestern Washington, which acknowledged Seattle's authority to operate the existing Gorge Dam, reservoir, and powerhouse and authorized the City to construct and operate the Diablo hydropower project. Article 24 of the license prescribed Seattle's obligation to pay reasonable annual charges to compensate the United States for the use of federal land and for the FPC's administrative costs. The charges would be determined in accordance with FPC regulations (issued pursuant to section 10(e) of the Federal Water Power Act, 41 Stat. 1063, 1069 (1920) (FWPA), the FPA's predecessor). 10 In a July 23, 1937 order, the FPC authorized the amendment of the Project 553 license to permit construction of the Ruby (now Ross) Dam and powerplant upstream from Diablo. The FPC made Seattle's license subject to the [newly enacted FPA] ... [and] to the rules and regulations of the Commission thereunder, and amended article 24 to provide for the City's payment of annual charges in the amount hereinbefore found reasonable. 11 On June 9, 1942, the FPC modified and supplemented its 1937 order and submitted to Seattle Amendment No. 1, which would be effective retroactively to July 23, 1937 and make two important changes. First, Amendment No. 1 incorporated the clause in the 1937 order subjecting the Project 553 license to all the terms and provisions of the [Federal Power] Act and of the rules and regulations of the Commission pursuant thereto.... Second, it amended article 24 to delete reference to regulations promulgated under the FWPA and instead required the City to pay annual charges [s]ubject to the provisions of Section 10(e) of the [FPA], and fixed annual charges at $215.36 for federal land used for transmission lines and $1,066.57 for land used for other purposes. Seattle accepted Amendment No. 1 on January 5, 1943. 12 Article 24 of the Project 553 license has been altered a number of times to increase annual charges. Most recently, in 1964, the FPC fixed annual charges at $320.40 for transmission lines on federal lands and $1,830.89 for other uses. City of Seattle, 31 F.P.C. 1268, 1273 (1964). Since that time, the Commission has never changed these dollar amounts. 13 On July 5, 1977, six months after the effective date of Order No. 560 (which established a fluctuating per acre annual charge), the FPC amended the Project 553 license in Opinion No. 808, 59 F.P.C. 196 (1977), aff'd sub nom. Swinomish Tribal Community v. FERC, 627 F.2d 499 (D.C.Cir.1980). Opinion No. 808 authorized Seattle to raise the height of the Ross Dam, which would create a reservoir extending for several miles into British Columbia. While article 24 was revised to reflect the project's increased authorized installed capacity of 1,057,000 horsepower, it retained the annual charges for land use at the 1964 levels. 59 F.P.C. at 236-37. 14 The FPC, however, did add articles 66 and 67 to the license. See id. at 242. Article 66 required Seattle, within one year after completion of construction of the Ross Dam extension, to file revisions to Exhibits F and K documenting the acreage of project lands, including U.S. lands, within the project boundary.... Article 67 provided: The Commission reserves the right to determine additional annual charges, if any, for the use and occupancy of U.S. lands until after revised Exhibits F and K are filed. 15 As it turned out, articles 66 and 67 never took effect because of a 1984 agreement in which Seattle cancelled the planned increase in the height of Ross Dam (which would have flooded lands on the British Columbia side of the Skagit River), and British Columbia in return promised to deliver to Seattle a quantity of electric power equivalent to that which would have been generated by raising the dam. This agreement was approved by treaty. See Treaty Between the United States of America and Canada Relating to the Skagit River and Ross Lake, and the Seven Mile Reservoir on the Pend D'Oreille River, Apr. 2, 1984, Sen. Treaty Doc. No. 98-26, 98th Cong., 2d Sess. (1984), --- T.I.A.S. ---- (Treaty). If British Columbia ever breached the agreement, Seattle would have the right to increase the height of Ross Dam pursuant to Opinion No. 808. Id. art. II, Sec. 1(a). 16 On October 25, 1977, two days before Seattle's fifty-year Project 553 license was to expire, the Commission issued the City a one-year license containing the same terms and conditions as the existing license, to be reissued annually until the agency ruled on Seattle's new license application. FERC's subsequent billings, for the years 1977 through 1983, reflected annual charges to the City of $320.40 for use of 95.5 acres of federal land for transmission lines and $1,830.89 for use of 15,200.41 acres for other project purposes.