Opinion ID: 343208
Heading Depth: 2
Heading Rank: 4

Heading: Legislative History of CRSP

Text: 39 Arizona Power strenuously argues that a congressional intent to prohibit geographic preferences is clearly stated in the legislative history of CRSP. It relies most heavily on a statement of the House Committee on Interior and Insular Affairs analyzing Section 7 of CRSP: All Colorado River Basin States are on the same basis with respect to acquiring electric power and energy from the project. H.R.Rep. No. 1087, 84th Cong., 1st Sess. 16 (1955), reprinted in 1956 U.S.C.Cong. & Admin.News, pp. 2346, 2362. 35 Arizona Power contends that the Secretary is thus required to treat each basin state on the same basis and that this is the standard we are to apply in reviewing the Secretary's action in this case. When the quoted statement is read out of context, Arizona Power's contention has some force. But after examining the legislative history as a whole, we conclude that Arizona Power has failed to carry its burden of demonstrating that the Marketing Criteria are clearly contradictory to legislative intent. Strickland v. Morton, supra, 519 F.2d at 470. 40
41 The debates on CRSP in general and Section 7 in particular focused on two major issues: the feasibility of marketing hydroelectric power and the application of reclamation law preferences. The first issue was highlighted by an economic struggle between the upper basin states on the one hand, and, on the other, southern California interests and representatives of various non-western states. The non-western states were concerned about the utility and fairness of appropriating $750 million in federal funds for another project designed only for the benefit of the states of the Colorado River Basin. It was argued that the cost per unit of irrigable land to be reclaimed was particularly high. CRSP advocates responded that power revenues would return most of the federal investment, and, therefore, the feasibility of marketing hydroelectric power became a crucial issue. 42 The southern California interests joined in attacking the feasibility of marketing hydroelectric power in the region. See 102 Cong.Rec. 3736 (1956) (remarks of Rep. Udall). Southern California had been the prime beneficiary of the upper basin states' failure to consume the water allocated to them under the Colorado River Compact and Boulder Canyon Project Act. See id. at 3506-07 (reprint of Holmes Article). This unconsumed water was flowing into projects on the lower Colorado River and being used to generate cheap secondary or dump power. This power was being sold to southern California utilities at rates much lower than those for firm power generated at Colorado River projects. If the upper basin states were to have projects consuming their share of Colorado River water, southern California would be deprived in large part of its access to less expensive dump power. H.R.Rep. No. 1087, supra, at 2, reprinted in 1956 U.S.C.Cong. & Admin.News, at 2347. 43 The southern California interests attacked the feasibility of marketing CRSP power by contending that it would have to be sold at relatively high rates which would not be competitive with rates for alternative energy sources. They also argued against investing in public projects when the upper basin was endowed with vast deposits of thermal energy resources, such as coal and oil shale, that could be developed by the private sector. Finally, they contended that potentially low-cost nuclear power developments in the uranium-rich upper basin would provide serious long-term competition. See, e. g., H.R.Rep. No. 1087 (minority reports), supra, at 37-41, 53, 58-59, reprinted in 1956 U.S.C.Cong. & Admin.News, at 2383-87, 2399, 2404-05. 44 The issue pertaining to reclamation law preferences arose from the assumption that preference customers would be able to purchase only a small percentage of CRSP power. CRSP was thus attacked as a federal subsidy for the private utilities which would purchase the bulk of the power. This fear of a private windfall was exacerbated by language in the early CRSP bills that appeared to give nonpreference private customers in the upper basin priority over preference customers outside the upper basin. The result of this controversy was a strong declaration of support for the public utility preference under the reclamation laws. 45 We find nothing in the legislative history when viewed in the context of the two major issues or policies of maximization of power revenues and adherence to reclamation law preferences indicating that Congress intended to prohibit a geographic preference in the marketing of CRSP hydroelectric power.
46 The legislative history of CRSP encompasses hearings and debates in the 83rd and 84th Congresses. We review the history chronologically. 47
48 On April 2, 1953, three bills to authorize storage projects on the Colorado River were introduced in the House by representatives from the upper basin states of Utah and Colorado. 36 These bills each provided a type of geographic preference for marketing power. Arizona Power places great emphasis on the fact that these mandatory geographic preferences were deleted by the House Committee on Interior and Insular Affairs. Because this is the most crucial aspect of Arizona Power's argument, we examine this episode in detail. 49 The bills were similarly worded in their directions for marketing hydroelectric power. Each required the Secretary to include in contracts with customers outside the upper basin states a provision for termination or modification to the extent deemed necessary by the Secretary to meet power demands in the upper basin states. 37 The implication of these provisions for the financial success of the projects were hotly debated. Bureau of Reclamation Regional Director Larson testified that preference customers in the upper basin states would initially use only ten per cent of the electric power. He estimated that it would take 20 years after the construction of the two largest proposed dams before the upper basin would develop a demand for all CRSP power. Representative Hosmer of Southern California feared that the difficulty in finding purchasers willing to invest in expensive transmission lines for withdrawable power threatened the economic feasibility of the project. Hearings on H.R. 4449 et al. Before the Subcom. on Irrigation and Reclamation of the House Comm. on Interior and Insular Affairs, 83d Cong., 2d Sess. 167-70 (1954). 38 50 Moffat, a representative of ten upper basin private utilities, proposed one solution. He expressed a desire that CRSP power be marketed to private utilities in the upper basin states rather than preference customers outside of the area. He also proposed that long-term contracts be entered into so that the private utilities could afford to invest in transmission facilities. Id. at 570-71. 51 Preference customers vigorously attacked these proposals. The National Rural Electric Cooperative Association prepared a statement charging that the mandatory geographic preference might lead 52 to modification and perhaps abrogation of the preference provision of the reclamation laws . . . . In other words, were the rural electic (sic) systems and other preference agencies in the upper Colorado River Basin States unable to initially or ultimately utilize all of the firm energy available from the projects, the remaining portion of the energy would be sold to nonpreference customers within these States, if they desired it, rather than to preference customers lying (even slightly) outside of the upper Colorado River Basin area, even though the power could be made available to the preference customers over the existing or proposed facilities of the Federal Government that were electrically integrated with the upper Colorado River Basin project. In general, neither State lines nor the peripheries of river basins bear any relation in distance from a project to economical transmission distances from a project. 53 Id. at 897 (emphasis added). The rural electric cooperatives also criticized the private utilities for advocating that any marketing plan be incorporated in the text of legislation. They argued that the Secretary's broad discretion in contracting with power customers should be bounded only by the traditional limitations imposed by the reclamation law preferences of Section 485h(c) and the requirement of economic stability. The cooperatives feared that participation by private utilities might deprive them of the full benefits of the project. Id. at 898. 39 54 In light of these points of contention the House Committee on Interior and Insular Affairs made two successive amendments. The Committee first substituted for the three proposed bills the language of a draft bill from the Interior Department. H.R.Rep. No. 1774, supra, at 19. In place of the mandatory withdrawal clauses of the original bills, Section 6 of the new version placed a ten-year limit on contracts to customers outside of the upper basin states unless the Secretary determined that the power sold was in excess of the probable needs in the upper basin states. 40 The Committee then amended Section 6 by deleting the time limitation on contracts with lower basin customers. It explained the purpose of its amendment as follows: 55 By this amendment all States of the Colorado River Basin would be placed on the same basis with respect to acquiring electric power from the project. In discussing section 6, the committee considered writing into this legislation a power preference provision similar to those in existing reclamation law. Such a provision was not specifically written in because the provisions in general reclamation law, including the Reclamation Project Act of 1939 (Section 485h(c)) and the Flood Control Act of 1944, would be applicable to this project under section 3. The committee wishes to make it clearly understood that, although a power preference provision is not specifically written into this legislation, the committee fully supports the application of existing power preference provisions to this project. 56 Id. at 22 (emphasis added). 57 This is the first point in the legislative history where the phrase same basis is used by a committee. Arizona Power interprets this statement as prohibiting geographic preferences. But reading the statement in the context of the hearings on the mandatory geographic preferences in the original bills, we cannot agree. No one at the hearings objected to the original preferences on the ground that the lower division states would be deprived of their fair share of CRSP power. 41 Instead the critics of the provisions were concerned solely with generating maximum power revenues while adhering to the reclamation law preference for public utilities. The Committee report expressed similar concerns. 42 We believe that when the Committee stated that all states would be on the same basis, it meant that the Secretary should have discretion to market CRSP power wherever he thinks best to maximize revenues consistent with reclamation law preferences. The Committee deleted mandatory preferences because it feared that they might unduly fetter the Secretary's discretion and hamper his efforts to achieve CRSP's underlying objectives. But the Committee did not prohibit the Secretary from adopting a geographic preference if at some time in the future he determined that such a preference was consistent with the policies of maximizing revenue and adhering to reclamation law preferences. 58 Significantly, Arizona Power does not argue that the Marketing Criteria will lead to a loss of potentially recognizable power revenues or a decrease in the firm power rates. Nor does it argue that the Marketing Criteria are inconsistent with reclamation law preferences. Arizona Power argues only that it was the congressional understanding that maximum revenues could be achieved under the reclamation law preferences only if CRSP power were sold to Arizona preference customers on a permanent basis. 59 This argument would have some substance if Arizona Power could point to clear evidence that the Committee desired a certain portion of CRSP power allocated to the lower division states and to Arizona in particular. It does not, nor could it. The Committee states that a major purpose of the bill was to provide hydroelectric power for the expanding economy of the area, referring to the upper basin. H.R.Rep. No. 1774, supra, at 11. 43 The Committee did note that there was an increasing need for electric energy (w)ithin and adjacent to the Upper Basin. Id. at 13. But it does not appear that any significant portion of Arizona was encompassed under this latter description. 44 60 We therefore conclude that it was not the House Committee's understanding that CRSP success depended on any given geographic allocation of power. The understanding was that success required only that the Secretary have discretion to market CRSP power in the best interests of the government. 61
62 Proceedings in the Senate closely paralleled those in the House. A bill was introduced there similar to those introduced in the House, S.1555, 83d Cong., 1st Sess. (1953), and hearings were held on the measure. Hearings on S.1555 Before the Subcomm. on Irrigation and Reclamation of the Senate Comm. on Interior and Insular Affairs, 83d Cong., 2d Sess. (1954). Many of the same witnesses presented similar testimony. See, e. g., id. at 575 (statement of private utilities), 687 (National Rural Electric Cooperative Association). Southern California interests again opposed the proposed legislation. See S.Rep. No. 1983, 83d Cong., 2d Sess. 25-30 (1954) (minority views of Sen. Kuchel). The House Committee's amended bill and report were before the full Senate Committee. See id. at 20-24. 63 Section 4 of the Senate bill contained a mandatory geographic preference in favor of the upper basin states identical to that contained in the House bills. There was little discussion of the marketing problem. The Committee deleted the mandatory preference but did not detail its reasons in its report. Arizona Power points to broad language in the report that there is a ready market (for hydroelectric power) throughout all the Colorado River Basin States. S.Rep. No. 1983, at 2-3. This statement, however, is ambiguous at best. The preceding paragraph specifically noted that the upper basin states anticipated rapid growth with a resulting urgent need for water and power, particularly in the Albuquerque, Denver and Salt Lake City metropolitan areas. Id. at 2. 45 The legislative history, therefore, presents no clear evidence that the Senate Committee in the 83rd Congress intended to prohibit all types of geographic preferences.
64 The House and Senate bills did not reach a vote in their respective chambers during the 83rd Congress and were left as unfinished business with the adjournment of Congress. Successor bills were introduced in the 84th Congress and one, S. 500, was eventually enacted as CRSP. 65
66 Senator Anderson of New Mexico, chairman of the Senate Subcommittee on Irrigation and Reclamation, introduced S.500 and presided over the hearings on the bill. He described S.500 as identical to S.1555 reported out of the Committee to the last Congress. Hearings on S.500 Before the Subcomm. on Irrigation and Reclamation of the Senate Comm. on Interior and Insular Affairs, 84th Cong., 1st Sess. 1 (1955). Therefore he requested the witnesses to view the hearings as supplemental to the previous hearings and to emphasize new material only. Id. 67 Testimony presented at these hearings further supports our view that not all geographic preferences are contrary to the legislative intent. Several witnesses emphasize the benefits of the project to the upper basin states. 46 Senator Hayden of Arizona denied that Arizona had any special claim to CRSP power from the Glen Canyon Dam to be built in Arizona. 47 68 Arizona Power contends that the Senate Committee's report on the hearings on S.500 reemphasized its prior position opposing preferential treatment of the upper basin. S.Rep. No. 128, 84th Cong., 1st Sess. (1955). It quotes the following paragraph from the report: 69 The committee's position on power marketing of the project is that the area to be served shall be governed only by economical transmission distance direct or through interconnections with other plants either in the Upper or Lower Basin. This policy is necessary to the economic and financial health of the project. This policy in the committee's opinion accords with established practice and policies of reclamation power operations. The committee intends that full equality of treatment be accorded to both Upper and Lower Basin power customers. Established preferences and sound business principles in accordance with existing reclamation law are intended to be applied in the marketing of power from the project, and it is not intended that Lower Basin customers should be discriminated against in any respect. 70 Id. at 14. We believe that Arizona Power's argument misses the mark. 71 We note first that the Committee described the power marketing area in much the same terms as it had in the 83rd Congress. See Section II, D, 2 b supra. It stated generally and by way of summation that there is a ready market throughout all the Colorado River Basin States. S.Rep. No. 128, supra, at 3. But it also described S.500 as designed to provide hydroelectric power to meet the projected rapidly increasing demand for power in the upper basin. 48 Second, we note that the hearings on S.500 shed no additional light on the power marketing problem. 72 We therefore conclude that the anti-discriminatory language in the Senate Committee's report merely reflects two policy decisions: first, that the reclamation law preferences be adhered to and second, that power not be marketed in favor of upper basin customers in such a way as to return less than the maximum recognizable power revenues. Arizona Power candidly admits that these two policies are articulated. When the anti-discrimination language of the last clause is construed in light of all that preceded it in the paragraph, it conforms precisely to our view. 73 Arizona Power does not argue that northern division customers served pursuant to the Marketing Criteria are outside economical transmission distances. Nor does it contend that implementation of the Marketing Criteria will impair the financial health of CRSP. Furthermore, Arizona Power fails to convince us that the established practice and policy of federal power marketing forbids all types of geographic preferences. We reject Arizona Power's theory that the Marketing Criteria clearly violate the legislative intent of the Senate Committee in the 84th Congress. 74
75 After the Senate Committee on Interior and Insular Affairs had issued its report and during the time that S.500 was debated on the floor of the Senate, the House Subcommittee on Irrigation and Reclamation held hearings on five CRSP bills introduced by upper division congressmen. 49 Hearings on H.R. 270 et al. Before the Subcomm. on Irrigation and Reclamation of the House Comm. on Interior and Insular Affairs, 84th Cong., 1st Sess., pts. 1 & 2 (1955). Subcommittee Chairman Aspinall of Colorado indicated, as Senate Subcommittee Chairman Anderson had done earlier, that the hearings in the 84th Congress were to be a continuation of the hearings on CRSP bills in the 83rd Congress. Id., pt. 1, at 1. 76 Despite Arizona Power's argument that the House Committee in the 83rd Congress had rejected all geographic preferences, witnesses before the Subcommittee repeatedly assumed that the upper basin (upper division) states would be the principal beneficiaries of CRSP power. 50 Arizona Power concedes as much. Yet the report of the House Committee omitted any clarification of what Arizona Power would consider an erroneous assumption. H.R.Rep. No. 1087, supra, at 1, reprinted in 1956 U.S.C.Cong. & Admin.News, p. 2346. Indeed, the Committee recognized the merit of the testimony submitted by representatives of the upper basin states advocating the enactment of CRSP to meet growing energy demands in their region. H.R.Rep. No. 1087, supra, at 4-5, reprinted in 1956 U.S.C.Cong. & Admin.News, pp. 2350-51. This serves as persuasive evidence that the Committee intended that the upper basin states be the primary beneficiaries of the legislation. 51 Therefore, the same basis standard of treatment for Colorado River Basin states advocated by the Committee cannot reasonably be interpreted to prohibit all types of geographic preferences. 77 Arizona Power's response to this evidence is to quote a discussion between Representative Rhodes of Arizona and Commissioner Dexheimer. 52 Arizona Power argues that the conversation reflects an understanding that the deletion of the mandatory preferences from the bills in the 83rd Congress was intended to bar all geographic preferences. This argument is not persuasive. The discussion in fact can more easily be interpreted as granting the Secretary broad discretion in marketing power as long as he complies with the reclamation law preferences and obtains optimum power revenues. 78 We therefore conclude that the House Committee's requirement that all basin states be on the same basis with respect to acquiring electric power, when viewed in light of the preceding legislative history, does not prohibit all geographic preferences in power marketing.
79 The floor debates in both legislative bodies support this conclusion. It was unquestionably the understanding in both chambers that the upper basin was eventually to receive the lion's share of CRSP power. While CRSP § 16, 43 U.S.C. § 620o defines the term States of the Upper Basin as including Arizona, it is quite clear that Congress, like the committees, did not have Arizona in mind when it referred to the upper basin in the context of power marketing. 53 80
81 Several groups opposed CRSP in lengthy debates on the Senate floor in 1955. Senator Douglas led the eastern interests opposed to appropriating money for projects of no direct benefit to them. Senator Kuchel represented the California interests who did not want their cheap source of secondary power diminished. Both groups phrased their arguments in terms of the adequacy of power revenues to reimburse most of the CRSP outlay. They also took advantage of the successful nationwide opposition to the large Echo Park project based on scenic and conservationist grounds. 82 One of Senator Douglas' arguments was that the CRSP irrigation benefits in the upper basin were high-cost and would be reimbursed only to a limited extent. 101 Cong.Rec. 4576 (1955). Subcommittee member Senator Watkins of Utah, floor manager and cosponsor of S.500, pointed out that the landowners of the upper basin would also be in the same community as the power users. The power users would reimburse a large portion of the project through payment for power. Thus members of the same community would cooperate in paying for CRSP. Id. Senator Douglas' later comments indicated that both he and Senator Watkins were referring to power users in the four upper division states. Id. at 4578. Subsequent exchanges further clarified this understanding. 54 83 We recognize that the remarks of opponents of a bill may not always be authoritative. Schwegmann Brothers v. Calvert Distillers Corp., 341 U.S. 384, 394-95, 71 S.Ct. 745, 95 L.Ed. 1035 (1951). But Senator Douglas' inferences are certainly relevant and helpful, particularly when Senator Watkins made no response to Senator Douglas' description of the states to be benefited by CRSP. Arizona v. California, supra, 373 U.S. at 583 n. 85, 83 S.Ct. 1468. More importantly, the statements of Senator Watkins, as cosponsor and floor manager, are entitled to substantial weight in construing the power marketing provisions of CRSP. National Woodwork Manufacturers Ass'n v. NLRB, 386 U.S. 612, 640, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967). Senator Watkins' representation of Utah, which stood to benefit from his interpretation of the primary power marketing area, does not diminish the probative value of that interpretation. Federal Energy Administration v. Algonquin SNG, Inc., 426 U.S. 548, 564 n. 17, 96 S.Ct. 2295, 49 L.Ed.2d 49 (1976). 55 84
85 Arizona Power's position does not fare any better when measured against the House debates of 1956. They demonstrate without question that the intent of the House in passing H.R. 3383 was to favor the upper basin states. 86 Representative Miller, a member of the Subcommittee, gave an introductory speech on the need for water and power in the growing upper basin. 102 Cong.Rec. 3471 (1956). He referred to the Colorado River Compact which allocated 7,500,000 acre-feet of water a year to both lower and upper basins and stated that CRSP would enable the upper basin to utilize effectively its share of water and the electric energy that could be generated from its water. 56 Id.; see id. at 3299 (remarks of Committee Chairman Engle). Subcommittee Chairman Aspinall, author of H.R. 3383, specifically stated that the area intended to receive CRSP benefits was composed of Colorado, Utah, Wyoming and New Mexico. Id. at 3510; see id. at 3610 (remarks of Subcommittee Member Dawson). 57 87 Opponents of the bill did not dispute this basic proposition, repeatedly reaffirmed throughout the course of the debates. As in the Senate, they attacked the power aspect of CRSP as not competitive with alternative energy sources in the upper basin area. During the lengthy debates not one member argued in favor of a position similar to that advocated by Arizona Power. We think what Arizona's representatives did advocate is significant. Immediately after ridiculing an argument against the power aspects of CRSP, Representative Stewart Udall remarked: 88 I want to tell you why my Republican colleague from Arizona (Mr. Rhodes) and I have supported this bill. We regard the Colorado River Basin as a community. This community sat down many years ago to work out a development plan. Unfortunately, southern California got ahead of us when work began. Why, then, are we here supporting this measure? Not because our State benefits from it but because we are keeping the agreement that our State made at that time. 89 Id. at 3736 (emphasis added). 90 In some cases a committee's unambiguous and unaltered treatment of an issue is more probative of congressional intent than the casual remark of a single Senator (or Representative) in the floor debate. Chandler v. Roudebush, 425 U.S. 840, 858 n. 36, 96 S.Ct. 1949, 1959, 48 L.Ed.2d 416 (1976). Our review of the extensive floor debates on CRSP convinces us, however, that in the present case those debates are highly probative of congressional intent. 58 Further, the message of those debates is clear: both legislative bodies intended the upper (northern) division states to be eventually the primary beneficiaries of the legislation. Our review of the floor debates leads us to believe that Congress intended some type of geographic preferences in favor of the states of the upper division.
91 Arizona Power has failed to carry its burden of demonstrating that the Marketing Criteria clearly violate the legislative intent behind CRSP. The deletion of the mandatory geographic preferences in the bills introduced in the 83rd Congress does not indicate an intent to invalidate all geographic preferences. In our view, that deletion had two purposes: (1) to ensure compliance with Section 485h(c) reclamation law preferences by not permitting nonpreference customers in the upper division states a priority over preference customers outside that area; and (2) to ensure that power be marketed at firm power rates that would maximize power revenues needed to reimburse the government. 92 The geographic preference of the Marketing Criteria does not contravene these policies. First, the existence of some sort of withdrawal program was certainly contemplated by Congress. The history consistently evidenced an intent to promote primarily the development of the upper division states. This intent is effectively accomplished by a scheme to market eventually the bulk of CRSP power to the upper division states while generating power revenues in the interim by selling significant blocks of power to lower division customers. Withdrawal is the only means of reconciling these two goals. 59 Second, the Marketing Criteria do not permit nonpreference customers to have a priority over preference customers. 93 We conclude, therefore, that Arizona Power has failed to establish from the legislative history that the Secretary's action falls outside the realm of his discretion and conflicts with congressional purposes. Equally significant, in our view, is Arizona Power's failure to identify in the legislative history a standard for administrative conduct against which we can measure the Secretary's action. It must be remembered that our task, or at least a part of our task, in this review is to determine whether there is (a) law to apply. Citizens to Preserve Overton Park, Inc. v. Volpe, supra, 401 U.S. at 410, 91 S.Ct. 814. Arizona Power has alleged, unsuccessfully, that the geographic preferences violate congressional intent, but it has failed to articulate what law we should apply; i. e., it did not demonstrate what the congressionally devised standard for power distribution is. 94 Perhaps Arizona Power is suggesting that the applicable law is a same basis standard. But we find this standard so vague as to be meaningless and hence no genuine limitation on the Secretary's discretion. For example, a same basis standard could be construed as requiring each of the seven basin states to receive one-seventh of the power. It should be noted that Arizona now receives more than a one-seventh share. Alternatively, the same basis standard could require allocation on the basis of each state's population, number of preference customers, past or projected energy needs, or the amount of Colorado River water allocated to each state under the Colorado River or Upper Colorado River Basin Compacts. 60 But the legislative history provides no basis for adopting any of these interpretations as the controlling standard for CRSP power distribution. Rather, that history points to a congressional commitment of the decision within certain express limitations not applicable here to the discretion of the Secretary.