AGREEMENT AMONG MUNICIPALITIES OF APRIL 7, 1930

At a meeting of representatives of the municipalities of Anaheim, Beverly Hills, Burbank, Colton, Fullerton, Glendale, Newport, Pasadena, Riverside, San Bernardino, and Santa Ana, with Northcutt Ely, Executive Assistant to the Secretary of the Interior, on April 7, 1930, at 10 a. m., in the offices of the Metropolitan Water District, the following action was taken:

1. Pursuant to resolution unanimously adopted March 31, 1930, which allocated Boulder Dam primary energy available to the above municipalities (6 per cent of the total generated) among them in proportion to their 1929 consumption, and which directed a committee consisting of representatives of Pasadena, Beverly Hills, and San Bernardino to determine the respective figures for the eleven municipalities 1929 consumption, this committee, under the chairmanship of B. F. DeLanty, of Pasadena, reported as follows:

The committee explained that the last column, referring to pro rata of cost of the City of Los Angeles transmission line, was a rough estimate.

It was moved, seconded, and unanimously carried that the proposed allocation as presented by this committee be approved.

2. The following resolution was unanimously adopted: Resolved, That the allocation reported (full text attached hereto) be adopted; that is, of the power allocated to the 11 municipalities, each receive as follows:

City

Burbank..

San Bernardino..

Pasadena...

Percentage

of total

6. 12 11.76 26. 82

Further resolved, That generation of Boulder Canyon power for the municipalities be performed by the City of Los Angeles, and that the municipalities designate the City of Los Angeles as the agent for transmitting any Boulder Canyon power for which they contract over the main transmission lines constructed by the city for carrying Boulder Canyon power, subject to the understanding that, if on further investigation before April 15, 1932, it shall prove to be materially more economical for any municipality to make a different arrangement, it may do so; and

Further resolved, That in case of any disagreement over the question of cost of transmission of Boulder Canyon power, such disagreement will be adjusted by the Secretary of the Interior; and

Further resolved, That any municipality desiring to reserve the right to contract with the United States for power, in accordance with the allocation approved April 7, shall take formal action indicating such desire on or before May 15, 1930, and shall transmit advice of such action to the Secretary and to a committee consisting of the general manager of the light department of the City of Pasadena, who shall transmit such advice to the other municipalities. Thereafter, on or before April 15, 1931, such municipality shall enter into a final contract with the Government. Any power allocated to a municipality, but not reserved or contracted for under the two foregoing time limitations, shall be included in the allocations to those municipalities who do make such reservation and contract, in the ratio that their present allocations bear to each other; and

Further resolved, That these municipalities pledge their cooperation to make the Boulder Canyon project a success in all its phases.

[APPENDIX 36]

LETTER OF APRIL 22, 1930

FROM CHAIRMAN OF THE

SOUTHERN CALIFORNIA EDISON CO.

(LTD.)

533

SOUTHERN CALIFORNIA EDISON CO.,

Hon. RAY LYMAN WILBUR,

EDISON BUILDING,

Los Angeles, Calif., April 22, 1930.

Secretary of the Interior, Washington, D. C.

Care of NORTHCUTT ELY,

Executive Assistant.

MY DEAR MR. SECRETARY: In submitting our final proposal upon the contested point regarding the recovery and load-building period to be provided in the Boulder Dam contracts as affecting this company, I desire to make the following preliminary observations:

The Southern California Edison Co. (Ltd.) is now supplying the major portion of the market of Southern California in which the power from Boulder Dam must be sold. Specifically, with the exception of the power which will be sold to the City of Pasadena and to the Metropolitan Water District, every kilowatt-hour of electrical energy from Boulder Dam which is sold in Southern California must be taken by present customers of this company (or by two or three smaller municipality customers of other private companies). Since this company is a public utility, it is required to continue to supply these municipalities with their requirements for electrical energy until such time as they voluntarily withdraw from our system, which means, in all probability, that we must continue to supply them until the Boulder Dam supply is available. In short, the market for the major portion of Boulder Dam power is apparently to be built up and maintained by this company until Boulder Dam is ready to take it over.

When the market is taken over by Boulder Dam power, there at once results the displacement of the power which this company will be supplying at that time. This means that a large part of the generating equipment of this company will be rendered idle and the investment therein will not only not earn anything but will not carry itself until it is again usefully employed.

The market in which the company can sell this surplus supply of power which it will have on its hands as a result of the displacement by Boulder Dam power will be restricted as compared with the market until that time.

Contrasted with the situation of the City of Los Angeles and other municipalities which are to be your other customers for Boulder Dam power, you will note that this company will have a large amount of idle equipment on its hands, or, stated otherwise, a large supply of surplus power which it must first take care of before it can begin to absorb Boulder Dam power; the cities, on the other hand, by the simple device of discontinuing taking from this company, will have created a vacuum in their supply which can be immediately filled by Boulder Dam power. The cities can, in other words, take not only without loss, but profitably to themselves, so much of Boulder Dam power as is represented by the amount of demand which they transfer from the system of this company to the Boulder Dam source of supply;