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B-196345 1 (1980-05-01)

handle is hein.gao/gaobabjes0001 and id is 1 raw text is: I-L I IA t 'fDI z( z INI - . . .GONIPTROLIA-f GENERAW OF' 1 I F UNITED STATfl3 %vASHINGTON, P.tl. 2 544 J3-196345 flay 1, 1980 The Honorable Abraham Kazen, Jr. House of Representatives Dear AIr, Kazen: . _1., .to Mblt1IJR This is In answer to your. request for our opinion on whether contracts for the disposition and transmission of power and energy from the Falcon and Amistad hydro-electric projects violate the preference provision of the Falcon-Amistad Darn Act, (Act of Juno 18, 1954, Pub. L. No, 83-406, 68 Statl 255, as amended by the Act of December 23, 1963, Pub, L. No. 88-237, 77 Stat. 475), as wvell as on certain related Issues. We have studied the views of all the parties concerned as well as the relevant statutory previsions and other applicable documents, We do not believe the contracts In question violate eIther the preference clause or any other applicable statutory provision. This and your other questions are addressed below in the order they appear in your letter. Background On August 9, 1977, the Sou'th,Texas Electric Cooperative, Inc. (iiTEC) and Medina Electric CooperativeInc, (MEC) conracted with the United States Bureau of Reclamation, De6partmnnt of Interior (Bureau), to pmr- chase all of the podver and energflhereafter referred to collectively £45 power) to be generated at the Ani tad and Falcon hydro 'lectric facilties after the Amistad plant is placed intto corlnereial operation.. The Co'ral Power and Light Company (CPL) oWns the only transmission lines in tle vicinity of either the Falcon or Amistad dams and construction of dupli. cato h'ansznitsion facilities is appalently not a desirable alternative for the cooperatives. Accordingly, on April 17, 1978, STEC/MEC contracted with CPL for wheeling (a form of transmission) of the power the cooper- atives wer. to receive under their contract with the Bureau, CPL stipu- lated, as its price for providing such services, that it be granted the right to retain a portion of the Federal hydro-electrte energy at STEC/MEC's cost. The wheeling contrlact'divided the citput from the projects into a STE'C/ MEC entitlement of 65 percent and a CPL entitlement of 35 percent. In addition to providing wheeling tervice in return for the power, CPL express- ly assumed responsibility for payment to STEC/MEC of an amount equal to 35 percent of the annual combined cost of the Amistad-Falcon electricity. L 4 , .. , MW '1 q I ui

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