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CONTRACT FOR ELECTRICAL ENERGY 1

(1) This contract, made this 26th day of April, nineteen hundred thirty, pursuant to the act of Congress approved June 17, 1902 (32 Stat. 388), and acts amendatory thereof or supplementary thereto, all of which acts are commonly known and referred to as the reclamation law, and particularly pursuant to the act of Congress approved December 21, 1928 (45 Štat. 1057), designated the Boulder Canyon project act, between the United States of America, hereinafter referred to as the United States, acting for this purpose by Ray Lyman Wilbur, Secretary of the Interior, hereinafter styled the Secretary, and the Metropolitan Water District of Southern California, a public corporation, organized and existing under and by virtue of the laws of the State of California, hereinafter styled the district. Witnesseth:

EXPLANATORY RECITALS (2) Whereas, for the purpose of controlling the floods, improving navigation, and regulating the flow of the Colorado River, providing for storage and for the delivery of the stored waters for reclamation of public lands and other beneficial uses exclusively within the United States, and for the generation of electrical energy, the Secretary, subject to the terms of the Colorado River compact, is authorized to construct, operate, and maintain a dam and incidental works in the main stream of the Colorado River at Black Canyon or Boulder Canyon, adequate to create a storage reservoir of a capacity of not less than twenty million acre-feet of water; also to construct, equip, operate, and maintain at or near said dam, or cause to be constructed, a complete plant and incidental structures suitable for the fullest economic development of electrical energy from the water discharged from said reservoir; and

(3) Whereas, after full consideration of the advantages of both the Black Canyon and Boulder Canyon dam sites, the Secretary has determined upon Black Canyon as the site of the aforesaid dam, hereinafter styled the Boulder Canyon Dam, and has determined that the revenues provided for by this contract, together with other contracts in accordance with the provisions of the Boulder Canyon project act, are adequate in his judgment to insure payment of all expenses of operation and maintenance of the Boulder Canyon Dam and appurtenant works incurred by the United States, and the repayment within fifty (50) years from the date of completion of said works of all amounts advanced to the Colorado River Dam fund under subdivision (6) of section 2 of the Boulder Canyon project act, together with interest thereon made reimbursable under said act; and

(4) Whereas, the United States proposes to enter into an agreement with the City of Los Angeles and Southern California Edison Co. (Ltd.), severally (hereinafter referred to as the lessees) for the lease, and the operation and maintenance of a Government-built power plant to be constructed at Boulder Canyon Dam, together with the

Consolidating contracts of April 26, 1930, and May 31, 1930.

right to generate electrical energy, a copy of which said proposed lease is attached hereto marked “Exhibit A,' and by this reference made a part hereof, wherein the Secretary has reserved the authority to, and in consideration of the execution thereof is authorized by each of the aforesaid lessees, severally, to contract with the other allottees named in the allocation set forth therein for the furnishing of energy to such allottees at transmission voltage in accordance with the allocation to each allottee, and the Secretary is therein granted by each lessee, severally, the power in accordance with the provisions thereof to enforce as against each lessee the rights to be acquired by such other allottees by contracts to be entered into with the United States; and

(5) Whereas, the district is desirous of entering into a contract with the United States providing for the delivery to the district each year from the Boulder Canyon Reservoir up to but not to exceed one million fifty thousand (1,050,000) acre-feet of water, and, in connection therewith and incident thereto, the district is desirous also of entering into a contract for the purchase of electrical energy to be generated at the power plant to be leased, as aforesaid, to the City of Los Angeles (hereinafter referred to as the city), and Southern California Edison Co. (Ltd.) (hereinafter referred to as the company), to aid in the transportation of such water supply;

(6) Now, therefore, in consideration of the mutual convenants herein contained, the parties hereto agree as follows, to wit:

ALLOCATION OF ELECTRICAL ENERGY

(7) The United States will cause to be delivered to the district under and in pursuance of and subject to the provisions of the aforesaid proposed lease, attached hereto as Exhibit A, for a period of fifty (50) years from the date at which energy is ready for delivery to the city, as announced by the Secretary, in accordance with the following allocation, to wit: Of firm energy.

A. To the State of Nevada, for use in Nevada, not exceeding eighteen per centum (18%) of said total firm energy.

B. To the State of Arizona, for use in Arizona, not exceeding eighteen per centum (18%) of said total firm energy.

Should either of the States not take its full eighteen per centum (18%) allocation within a period of twenty (20) years hereof, the other may then contract for the energy not so taken up to four per centum (4%) of the total firm energy, provided that the combined amount used by the two States shall not, at any time, exceed thirtysix per centum (36%) of such total firm energy.

C. To the Metropolitan Water District of Southern California for pumping Colorado River water into and in its aqueduct for the use of such district within the following limits: (1) Thirty-six per centum (36%) of said total firm energy,

which shall be paid for whether taken or not; plus

(2) All secondary energy developed at the Boulder Dam power plant as provided in article fourteen (14) hereof; plus

(3) So much of the firm energy allocated to the States, the city and the company as may not be in use by them. Energy allocated to the States, but not in use by them, shall be released to the district

by the two lessees equally (unless they agree upon a different ratio)

as follows:

(a) If the district makes a firm contract with the Secretary

for the balance of the lease period for part or all of such unused States' energy (subject to the first right of the States thereto) such contract shall be made effective upon two years' written notice to the Secretary, and compensation to the lessees, respectively, for main trans

mission line property rendered idle; (6) If the district does not so make a firm contract for such

energy, then energy allocated to the States but not in use by them, shall be released to the district upon not less than fifteen months' written notice to the Secretary and at such compensation as the district and such lessees, respectively, may agree upon, to cover cost 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 in accordance with article twenty-two (22) (a) hereof. Such determination shall include allowance for items of costs 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 under article twenty-two (22) (a) hereof shall not be controlled by

such rate. During any year beginning June 1st, the district shall not use

any secondary energy or any unused State energy, until it has first used subsequent to June 1st, 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) (6) the city and/or the company may release so much energy as may be practicable on the same terms as provided in sub

D: To the municipalities of Anaheim, Beverly Hills, Burbank, Colton, Fullerton, Glendale, Newport Beach, Pasadena, Riverside San Bernardino, and Santa 'Ana (referred to herein as “the munici

section (3) (6) preceding:

palities"), six per centum (6%) in all, to be allocated between them as they may agree; but if no agreement is submitted to the Secretary on or before April 15, 1931, the Secretary shall determine the allocation of each.

E. To the City of Los Angeles, thirteen per centum (13%).

F. To Southern California Edison Co. (Ltd.), the Southern Sierras Power Co., the San Diego Consolidated Gas & Electric Co., and the Los Angeles Gas & Electric Corporation, referred to herein as the companies, nine per centum (9%) in all, division whereof between the companies shall be made according to mutual agreement among them, if possible. If no such agreement is submitted to the Secretary on or before April 15, 1931, the Secretary shall determine the allocation of each.

It is further agreed that

(1) So much of the energy allocated to the States (thirty-six per centum (36%) of the 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 company. In addition, all firm energy allocated to the city (thirteen per centum (13%)) shall be taken and paid for by the city.

(11) All of the energy allocated to the municipalities may be contracted for in compliance with regulations of the Secretary, by any one or more of them, as they may agree, on or before April 15, 1931. So much of the energy allocated to the municipalities as is not so contracted for, or if contracted for, 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.

(111) 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 as is not firmly contracted for by them, severally, in compliance with regulations of the Secretary on or before April 15, 1931, shall be taken and paid for by the company.

(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 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 State in any amount until the total allocated, respectively, 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

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