The demand, increasing as the years went by, that some steps be taken by the national government for the conservation of the remaining water power of the country and its use in the larger interests of the people, took shape in the enactment by Congress of the Federal Water Power Act, approved June 10, 1920.
Federal Power Commission.The act (Sec. 1) created the Federal Power Commission, consisting of the Secretary of War, the Secretary of the Interior and the Secretary of Agriculture, two of whom constitute a quorum, the chairman to be appointed by the President.
Work of the Commission.It is provided that the work of the Commission shall be done through the Departments of War, Interior and Agriculture, and provision is made for the expenses of the work (Sec. 2).
Duties of the Commission.–The commission is directed (Sec. 4) to make investigations and collect and record data concerning the utilization of the water resources of any region to be developed, the water power industry and its relation to other industries and to interstate or foreign commerce, and concerning the location, capacity, development costs, and relation to markets of power sites, and whether the power from government dams can be advantageously used by the United States for its public purposes, and what is the fair value of such power.
Licensing Power Plants. — The commission may issue licenses to citizens of the United States, or to any association of such citizens, or to any corporation organized under the laws of the United States or any state thereof, or to any state or municipality for the purpose of constructing, operating and maintaining dams, water conduits, reservoirs, power houses, transmission lines or other project works necessary or convenient for the development and improvement of navigation, and for the development, transmission and utilization of power across, along, from or in any of the navigable waters of the United States, or upon any part of the public lands and reservations of the United States, including the territories, for the purpose of utilizing the surplus water or water power from any government dam, as provided in the act.
Preliminary Permits. The commission is authorized to issue preliminary permits to enable the applicants for a license to secure the necessary data for the preparation of plans and specifications and the making of financial arrangements necessary for the construction of the project.
Hearings on Applications.-The commission is further authorized to hold hearings in connection with any application for a permit or license, and to summon and examine persons under oath.
Duration of License.It is provided (Sec. 6) that the licenses issued by the commission shall be for a period not to exceed fifty years, and conditioned upon the acceptance by the licensee of the terms and conditions imposed by the commission. Provisions are also made for their alteration, revocation, and surrender.
Preferences to States.In the issuing of preliminary permits or licenses, preferences are given to states and municipalities (Sec. 7).
Construction by United States. No application shall be granted to others where in the judgment of the commission the project should be developed by the United States, and in such case the commission is directed to maker surveys and compile the necessary data regarding the development and submit the same to Congress.
Transfer of License.No voluntary transfer of any license or of the rights thereunder can be made (Sec. 8) without the written approval of the commission.
Maintenance of Plant.The licensee is required to keep and maintain the project works in adequate repair for all purposes to which it may be put.
Liability for Damage.The licensee is liable for all damages occasioned to the property of others by the construction, maintenance or operation of the project works, but no liability shall in any way attach to the United States.
Amortization Reserves.–After the first twenty years of operation, out of the surplus earned thereafter, accumulated in excess of a specified return on the actual investment, the licensee shall establish and maintain amortization reserves which may be held until the termination of the license or applied to the reduction of the net in-vestment as the commission may fix in the license itself.
Annual License Fees.The licensee is required to pay to the United States annually, reasonable license fees compensating the government for the use, occupancy and enjoyment of its lands or other property, but states and municipalities pay no annual fees nor do plants of less than 100 horse power (Sec. 10).
Improvements to Navigation.–Where the dam or other project works are upon navigable waters of the United States, the commission may provide in the license that the licensee shall, with-out cost to the United States, construct in connection with such dams, locks, booms, sluices or other structures for navigation purposes as approved by the chief of engineers and the Secretary of War, or if not so constructed that when deemed necessary that the same be done, the licensee shall convey to the United States, free of cost, such of its land and rights of way and passage and permit the control of pools as may be required to complete such navigation facilities.
Beginning Construction.The licensee must begin construction of the project works within the time fixed in the license and not more than two years from its date, but which time may be extended not exceeding an additional two years for good cause. Failure to begin or complete construction within the time fixed by the commission shall work a termination of the license.
Government Operation.Upon a written notice of not less than two years by the commission, the United States shall have the right, (Sec. 14) upon the expiration of any license, to maintain and operate a plant, upon payment to the licensee of his just dues.
Renewal of Licenses.It is provided (Sec. 15) that if the United States does not take over the operation of a plant upon the expiration. of the original, license, the commission may issue a new license to the original licensee or to a new licensee upon suitable terms.
Federal Emergency Operation.Provision is made (Sec. 16) for operation of any plant by the United States in times of emergency for the manufacture of war materials and for the return of the property to the licensee when the necessity for such use ceases, and upon such terms as may be fixed by the commission.
Distribution of License Fees.The act pro-vides (Sec. 17) for the distribution of the license fees received by the United States among the various departments named and in fixed proportions and the use to which they shall be put.
Power Plant Rates. All licensees engaged in the developing, transmitting and sale of power for public service shall be governed in their rates and regulations by the state public service bodies where they exist (Sec. 19) and in cases where there are no such bodies, by the rules and regulations of the commission.
Plants in Interstate Business.Where any plants in their sale of power engage in interstate or foreign commerce, their rates and regulations must be just and nondiscriminatory, and where the states within which such business is done have no commission or other body to enforce the provisions of the act within their limits or to regulate and control the amount and character of the securities to be issued, or the states are unable to agree as to the same, the parties have the same rights of hearing, defense and review as are provided in the Interstate Commerce Act. (Sec. 20.)
Condemnation of Sites.Where a licensee cannot secure the necessary site or the right to use or damage property necessary to the completion of the project by contract or pledges, the commission may do so by condemnation proceedings in the United States District Courts. (Sec. 21.)
Contracts Beyond License Period.–Under the approval of the commission or a state body, a licensee may contract to supply power beyond the expiration date in such license, all such contracts to be fulfilled by the succeeding licensee, whether it be the United States or a new licensee, if the license be not renewed to the original parties (Sec. 22).
Existing Rights of Way.The act is held not to affect existing rights of way, but the holders may apply for a federal license (Sec 23).
Entry on Public Lands.Public lands in any proposed project are withdrawn from entry subject to further orders, and in cases where entry shall be permitted, the same shall be subject to the rights to the use of the same or so much thereof as may be necessary for any project and when so taken and used, the settlers are to be compensated for their damage (Sec. 24).
Revocation and Sale.Where the courts revoke power licenses, on application of the Attorney General, the courts may sell the dams or power plants (Sec. 25).
State Rights.It is provided in the act (Sec. 27) that the rights of the states as to the control, appropriation, use or distribution of water used in irrigation or for municipal or other uses, or any vested rights acquired therein shall not be affected.