and overhead of replacing energy which otherwise would have been received at the Pacific coast end of the main transmission lines by the lessees, respectively. Such cost shall include interest on and depreciation and operation and maintenance of the plant capacity while required for the generation of such substitute energy; and also appropriate allowance for interest on and maintenance and depreciation of plant capacity rendered idle because of cessation of generation of such substitute energy until such time as such plant capacity would otherwise have been installed by the lessees, respectively, for their own requirements. If the district and the respective lessees fail to agree on such compensation, such energy shall nevertheless be released to the district, and the disagreement shall be determined by arbitration or as may be provided in the respective contracts of the parties with the Secretary. Such determination shall include allowance for items of cost, and overhead as specified in this paragraph. Pending such determination, energy so released shall be paid for by the district at the rate for firm energy but the determination of compensation shall not be controlled by such rate.

During any year beginning June 1, the district shall not use any secondary energy nor any unused State energy, until it has first used subsequent to June 1, next preceding, an amount of firm energy equivalent to one-twelfth of the amount of firm energy it is obligated to take and/or pay for annually multiplied by the number of months elapsed since June 1 next preceding.

(4) If, due to temporary deficiency in secondary energy regularly used by the district, substitute energy is requested by the district in excess of the energy made available under the foregoing subparagraph (3) (b) the city and/or the company may release so much energy as may be practicable on the same terms as provided in subsection (3) (b) preceding.

D. To the municipalities of

NOTE. Amendments of March 10, 1931, and July 1, 1931, extended the date for submission of an allocation to July 15 and November 16, 1931, respectively. An agreement having been submitted to the Secretary whereby only the above municipalities elected to contract, in the amounts above stated, and the other municipalities named in regulations of April 25, 1930, i. e., Anaheim, Beverly Hills, Colton, Fullerton, Newport Beach, Riverside, San Bernardino, and Santa Ana, withdrew, the allocation under subsection D is amended as above, effective November 16, 1931.

E. To the City of Los Angeles, 14.9054% (being 13% as provided in regulations of April 25, 1930, plus 1.9054%, which is the balance of 6% allocated the municipalities by regulations of said date and not applied for by them pursuant to subsection D as amended).

NOTE.-Amended as above, effective November 16, 1931. (See note under subsection D.)

NOTE.-Amended as above, effective November 16, 1931, to accord with allocation agreement submitted pursuant to subsection F as promulgated in regulations of April 25, 1930, time having been extended to July 15, 1931, by amendment of March 10, 1931, and to November 16, 1931, by amendment of July 1, 1931.

The foregoing allocations are subject to the following conditions: (1) So much of the energy allocated to the States (thirty-six per centum (36%) of firm energy) and not in use by them, or failing their use by the district for the above purposes, shall be taken and paid for one-half by the city and one-half by the following allottees in the ratio stated below:

Southern California Edison Co. (Ltd.) –
Los Angeles Gas & Electric Corporation_
Southern Sierras Power Co..

Per cent

80

10

10

NOTE.-Amended as above, effective November 16, 1931, to accord with an allocation agreement submitted in accordance with subsection F as promulgated in regulations of April 25, 1930, time having been extended to July 15, 1931, by amendment of March 10, 1931, and to November 16, 1931, by amendment of July 1, 1931.

(11) So much of the energy allocated to the municipalities by regulations of April 25, 1930 (6%) as has been relinquished by them (1.9054%), and so much of the energy contracted for by them (4.0946%), as is not used by them directly or under contract for municipal purposes and/or distribution to their inhabitants, shall be taken and paid for by the city (without, however, impairing the obligation of said municipalities to the United States to take and for energy contracted for by them, respectively).

pay

NOTE.-Amended as above, effective November 16, 1931, to accord with an allocation agreement and elections thereunder submitted in accordance with subsection D. (See note under subsection D.)

(III) So much of the energy allocated to the Southern Sierras Power Co., the San Diego Consolidated Gas & Electric Co., and the Los Angeles Gas & Electric Corporation by regulations of April 25, 1930, as has not been or is not contracted for by them shall be taken and paid for by the Southern California Edison Co. (Ltd.). NOTE. Amended as above, effective November 16, 1931.

(IV) If any allottee is permitted by the United States to divert water from the reservoir at a time when the reservoir is not spilling, in consequence of which the amount of energy which would have been. utilized is diminished, such diminution, to such extent as may be provided in the contract, shall be debited to the allocation of firm energy herein made to such allottee; and charge for the energy equivalent of such diversion shall be made, and the amount of energy which the allottee shall otherwise be obligated to take and pay for hereunder shall be correspondingly reduced.

The reservoir shall be considered as spilling whenever water is being discharged in excess of the amount used for the generation of power, whether such waste occurs over the spillway or otherwise.

(v) Each of the States of Arizona and Nevada may, from time to time within the period of the aforesaid lease, contract for energy for use within such Ŝtate in any amount until the total allocated, respec

tively, to each is in use as provided above; and may terminate such contract, or contracts, without prejudice to the right to again contract for such energy. All such contracts shall be executed with the Secretary. A contract requiring one thousand (1,000) horsepower (of maximum demand) or less may become effective or be terminated on six months' written notice of requirement or termination given the director by the State; provided, that the notice given shall be two years if in the twelve months preceding said notice of demand the total increment to such State has exceeded five thousand (5,000) horsepower of maximum demand or if in the twelve months preceding said notice of termination the decrement to such State has exceeded five thousand (5,000) horsepower of maximum demand. In all cases the director shall immediately transmit such notice to each lessee. Whenever the amount in use is in excess of five thousand (5,000) horsepower of maximum demand, the lessees and other allottees respectively shall be compensated for property rendered idle by use of such excess in such amount as the Secretary shall determine to be equitable. Firm energy not contracted for by the States shall be available for use by the district as herein elsewhere provided, and if not in use by the States and/or the district, shall be taken and paid for one-half by the city and one-half as follows: By the Southern California Edison Co. (Ltd.), 80 per cent of said one-half; by the Southern Sierras Power Co., 10 per cent of said one-half; and by the Los Angeles Gas & Electric Corporation, 10 per cent of said one-half.

NOTE. Amended as above, effective November 16, 1931, to accord with an allocation agreement submitted pursuant to subsection F; see note thereunder. Also, regulations of April 25, 1930, provided for contingencies in event a State should make a firm contract under section 5c of the Boulder Canyon project act in lieu of accepting the allocation therein made. As the time for execution of such a firm contract under section 5c of that act has expired by the limitation stated in the act the balance of this paragraph as originally promulgated is revoked, effective November 16, 1931.

Of secondary energy.

The district shall have the right to purchase and use all secondary energy as provided in these regulations for the purposes stated in the first paragraph of subdivision C of this article. The city shall have the right to purchase and use one-half, and the allottees named in subsection F shall have the right to purchase and use a total of one-half (in the proportions in which they share the obligations assumed under subsection "y" as to unused State allocations) of such secondary energy as is not used by the district. Any such energy not used by one lessee shall be available, for the time being, to the other. To the extent that secondary energy is not taken as aforesaid, then and in such event the United States reserves the right to take, use, and dispose of such energy, from time to time, as it sees fit, giving credit therefor as provided in these regulations.

NOTE.-Modified as above, effective November 16, 1931, an allocation agreement having been submitted by the allottees named in subsection F whereby the obligation of the Southern California Edison Co. (Ltd.), under subsection "v" and its conditional rights to secondary energy under this paragraph, were both shared in the same ratio as the allocation of firm energy among them under subsection F. (See note under subsections F and "v".)

Of firm energy allocated to, but not used by the district.

In the event the district shall fail for any reason to use all or any of the firm energy herein allotted to it for the only purpose for which said firm energy is allotted to it, that is, for pumping water into

and in its aqueduct, then no disposition shall be made of such firm energy by the Secretary without first giving to a successor to the district which may undertake to build or maintain a Colorado River Aqueduct the opportunity to take said firm energy for the same purpose and under the same terms as those to which the district was obligated.

In the event no such successor takes said firm energy as provided above, then no disposition of such firm energy shall be made by the Secretary without first giving to each lessee the opportunity to contract on equal terms and conditions, to be prescribed by the Secretary, for one-half of such energy, together with such portion of the remainder as the other lessee shall not elect to take.

Of firm energy not disposed of in the foregoing allocations.

In case the dam which the United States erects provides a maximum water surface elevation in excess of one thousand two hundred twenty-two (1,222) feet above sea level (United States Geological Survey datum), and thereby increases the quantity of firm energy above the quantity of four billion two hundred forty million (4,240,000,000) kilowatt-hours allocated above, said additional firm energy shall be generated, taken, and paid for by the city on the same terms and conditions as other firm energy under its contract, but without prejudice to the foregoing allocations or to the contractual rights of other allottees.

NOTE.-Regulations promulgated April 25, 1930, reserved to the Secretary the right to contract with any municipality for this additional energy on or before April 15, 1931, and provided that energy not so contracted for should be taken and paid for by the city. This time was extended to July 15, 1931, by amendment of March 10, 1931, and to November 16, 1931, by amendment of July 1, 1931. No such contract having been applied for, this subsection is amended as above, effective November 16, 1931.

VI

Contractors hereunder shall agree as follows:

(1) To pay the United States for the use of falling water for the generation of energy for their own use, respectively, by the equipment leased hereunder, as follows:

(a) One and sixty-three hundredths mills ($0.00163) per kilowatt-hour (delivered at transmission voltage), for firm energy;

(b) One-half mill ($0.0005) per kilowatt-hour (delivered at transmission voltage), for secondary energy.

(2) The lessees of the power plant shall compensate the United States for the use of leased equipment as herein elsewhere provided; (3) The lessees shall also maintain said equipment in first-class operating condition, including repairs to and replacements machinery;

of

(4) Allottees other than the lessees shall pay the United States, for credit to the lessees, on account of use of the leased equipment;

(5) Allottees other than the lessees shall pay the United States, for credit to the lessees, on account of maintenance of said equipment, including repairs to and replacements of machinery; provided, however, that if the expenditures for replacements shall exceed at any time the sum accumulated by the lessees as a depreciation reserve in accordance with rules and regulations prescribed by the Secretary, pursuant to the Boulder Canyon project act, less all amounts pre

viously withdrawn for replacements, then the rates aforesaid shall be readjusted as hereinafter provided so as to reimburse the said lessees severally for such excess expenditures within the term of said lease.

All energy shall be measured at generator voltage and suitable metering equipment shall be provided and installed by the United States for this purpose. Suitable correction shall be made in the amounts of energy as measured at generator voltage to cover step-up transformer losses and energy required for operation of station auxiliaries in determining the amounts of energy delivered at transmission voltage as provided in these regulations.

At the end of fifteen (15) years from the date of execution of lease and every ten (10) years thereafter, the above rates of payment for firm and secondary energy shall be readjusted upon demand of any party thereto, either upward or downward as to price, as the Secretary may find to be justified by competitive conditions at distributing points or competitive centers.

The rate for falling water for generation of firm energy, which shall be uniform for all lessees, provided for by any such readjustment shall be arrived at by deducting from the price of electrical energy justified by competitive conditions at distributing points or competitive centers (1) all fixed and operating costs as provided for herein of transmission to such points; (2) all fixed and operating costs of such portion of the power-plant machinery as is to be operated and maintained by the several lessees, including the costs of repairs and replacements, together with readjustment as to replacements as is provided for in paragraph five (5) above; it being understood that such readjusted rates shall under no circumstances exceed the value of said energy, based upon competitive conditions at distributing points or competitive centers.

If the lessees or either of them shall not obtain a renewal of said lease at the expiration of the contract period, equitable adjustment for major replacements of machinery made between the date of the last readjustment of rates and the end of the contract period shall be made at the expiration of the lease.

VII

The amount of firm energy for the first year of operation (June 1 to May 31, inclusive) following the date of the completion of the dam as announced by the Secretary shall be defined as being four billion two hundred forty million (4,240,000,000) kilowatt-hours. For every subsequent year the amount defined as firm energy shall be decreased by eight million seven hundred sixty thousand (8,760,000) kilowatthours from that of the previous year.

Nevertheless, if it be determined by the Secretary that the rate of decrease of kilowatt-hours per year as above stated is not in accord with actual conditions, the Secretary reserves the right to fix a lesser rate for any year (June 1 to May 31, inclusive) in advance.

If the dam erected by the United States provides a maximum water surface elevation in excess of 1,222 feet above sea level (United States Geological Survey datum), the United States reserves the right to dispose of additional firm energy thereby made available, not to exceed ninety million (90,000,000) kilowatt-hours per year, subject to pro rata of the eight million seven hundred sixty thousand (8,760,000) kilowatt-hours annual diminution above provided for.