cost or any other matter whatsoever now pending or which may come before the Commission.

(C) Nothing in this letter shall be construed to imply any guarantee or obligation on the part of the

United States in respect to any security to which this order relates.

El Paso Electric Company 215 North Stanton Street

P.O. Box 982

El Paso, Texas 79999

Attention: B. E. Bostic, Vice President
Gentlemen:

By letter dated December 28, 1978, 5 FERC 62,087, the Office of Chief Accountant, acting pursuant to the Authority Delegated in Docket No. RM78-19, August 14, 1978, authorized El Paso Electric Company (Company) to issue 2,000,000 additional shares of Common Stock, without par value, via competitive bidding.

By Amendment filed January 12, 1979, Company amended application to specify that the Company intends to issue and sell only 1,500,000 shares of Common Stock, no par value.

The Office of Chief Accountant finds:

(1) The proposed modification of the letter of authorization of December 28, 1978, is reasonable and appropriate.

Pursuant to the Authority Delegated in Docket No. RM78-19, August 14, 1978, FERC Statutes and Regulations¶ 30,016, the Office of Chief Accountant Authorizes:

The proposed issue and sale of up to 1,500,000

L. H. DRENNAN, JR. Chief Accountant

additional shares of Common Stock upon the terms and conditions and for the purpose specified in the application as amended, subject to the provisions of this order.

(A) If, pursuant to a public invitation, at least two independent proposals for the purchase or underwriting of the issuance of up to 1,500,000 shares of Common Stock, without par value, are received, the Applicant may without further order of or filing with the Commission, issue or sell the said Common Stock in accordance with the terms and conditions contained in the application, provided the securities are sold, (1) in the case of Common Stock sold on a rights offering to the bidder or bidders specifying the lowest aggregate amount of compensation to be paid by the issuer, or (2) in the case of Common Stock sold on a straight sale and not on a rights offering, to the bidder or bidders specifying the highest total price to be paid to the Company.

Provisions B, C, D and E of the original authorization of December 28, 1978, remain unchanged by the amendment filed January 12, 1979. L. H. DRENNAN, JR. Chief Accountant

On November 7, 1978, as supplemented December 22, 1978, Lone Star Gas Company, a Division of Enserch Corporation, (Applicant)' filed in Docket Nos. CP79-61 and CP79-62 applications pursuant to Section 7 of the Natural Gas Act, as implemented by paragraphs (g) and (c), respectively, of Section 157.7 of the Regulations thereunder (18 CFR 157.7(c) and (g)), for a certificate of public convenience and necessity authorizing the

construction and for permission for and approval of the abandonment, during the calendar year 1979, and operation of field gas compression and related metering and appurtenant facilities; and for a certificate authorizing the construction, during the calendar year 1979, and operation of facilities to make miscellaneous rearrangements on its system, respectively, all as more fully set forth in the applications.

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The purpose of these budget-type authorizations is to augment Applicant's ability to act with reasonable dispatch in constructing and abandoning facilities which will not result in changing Applicant's system salable capacity or service from that authorized prior to the filing of the instant application; and making miscellaneous rearrangements which will not result in any material change in the service presently rendered by Applicant.

The total cost of the proposed construction and abandonment of field compression facilities shall not exceed $1,300,000 with the cost of no single project to exceed $325,000. The total cost of construction of the gas sales or transportation facilities for miscellaneous rearrangements shall not exceed $300,000. The cost of the new facilities and abandonment cost will be financed by Applicant from internally generated funds.

Since the facilities proposed to be constructed or abandoned will be or are used in the transportation of natural gas in interstate commerce subject to the jurisdiction of the Commission, said construction and abandonment are subject to the requirements of Subsections (c) and (e) and Subsection (b), respectively, of Section 7 of the Natural Gas Act.

After due notice by publication in the Federal Register on December 1, 1978 (43 F.R. 56262), in Docket No. CP79–62, and on December 7, 1978 (43 F.R. 57338), in Docket No. CP79-61, no petitions to intervene, notices of intervention, or protests to the granting of the applications have been filed.

At a hearing held on January 19, 1979, there was received and made a part of the record in these proceedings all evidence, including the applications and exhibits thereto, submitted in support of the authorizations sought herein, and upon consideration of the record,

It is found:

(1) Applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of the Natural Gas Act and the requirements, rules and regulations of the Commission thereunder.

(2) The construction and operation of the proposed facilities by Applicant are required by the public convenience and necessity and certificates therefor should be issued as hereinafter ordered and conditioned.

(3) The abandonment proposed by Applicant is permitted by the public convenience and necessity and should be approved as hereinafter ordered.

(4) The proposed expenditures are within the limits prescribed by paragraphs (c) and (g) of

Section 157.7 of the Regulations under the Natural Gas Act.

Pursuant to the authority delegated by 18 CFR 3.5(f) (43 F.R. 36433),

It is ordered:

(A) Upon the terms and conditions of this order, certificates of public convenience and necessity are issued authorizing Applicant to construct, during the calendar year 1979, and operate the proposed facilities to be used for miscellaneous rearrangements; and to construct, during the same time period, various field compression and related metering and appurtenant facilities and to operate such facilities, all as hereinbefore described and as more fully described in the applications.

(B) Upon the terms and conditions of this order, permission for and approval of the abandonment by Applicant of the facilities in Docket No. CP79-61 are granted.

(C) The certificates issued by paragraph (A) above and the rights granted thereunder are conditioned upon Applicant's compliance with all applicable Commission Regulations under the Natural Gas Act and particularly the general terms and conditions set forth in paragraphs (c) and (g) of Section 157.7, as applicable, and in paragraphs (a), (e) and (f) of Section 157.20.

(D) The permission and approval for the abandonment granted by paragraph (B) above are conditioned upon Applicant's compliance with Section 157.7(g) of the Regulations under the Natural Gas Act and are limited to the calendar year 1979.

(E) The total cost of facilities authorized herein under Section 157.7(c) of the Commission's Regulations shall not exceed $300,000.

(F) The total cost of constructing the new or additional field compression facilities shall not exceed $1,300,000, with no single project to exceed $325,000.

(G) The grant of the certificates herein is conditioned upon Applicant's certifying to the Commission within 60 days after all construction is completed under the instant authorization that it has fully complied with the provisions of Section 2.69 of the Commission's General Policy and Interpretations.

-Footnote

Applicant, a Texas corporation having its principal place of business in Dallas, Texas, is a "natural-gas company" within the meaning of the Natural Gas Act as heretofore found by order issued April 11, 1944, in Docket No. G-442 (4 FPC 565).

On January 9, 1978, Public Utility District No. 1 of Lewis County, Washington filed an application for preliminary permit for the proposed Cowlitz Falls Project No. 2833, on the Cowlitz River in Lewis County, Washington.' The proposed project would generate electric power for transmission into an interconnected system which operates in more than one state, thus affecting the interests of interstate commerce.

Description of Proposed Project

The proposed project would have an installed generating capacity of 60,000 kW and would include a concrete gravity dam, with the power intake and powerhouse an integral part of the dam. It would be located approximately 1.1 miles downstream of the confluence of the Cowlitz and Cispus Rivers. The dam would impound a reservoir to approximately elevation 872 feet and would provide approximately 7,000 acre-feet of usable storage. A 1,130-foot long slurry trench cut-off located in a right bank saddle approximately 1,800 feet downstream of the dam would be used to control reservoir seepage from the ancient river channel to the north.

Public Notice and Agency Comments

Public notice of the filing of the application was given on April 10, 1978, with June 12, 1978, as the last date for filing protests or petitions to intervene. On May 30, 1978, the Washington Departments of Game (Game) and Fisheries (Fisheries) filed petitions to intervene. Intervention was granted to those agencies by notice dated June 29, 1978. On September 14, 1978, the Cowlitz Falls Dam Prevention Committee filed a petition to intervene out of time. This intervention was granted by notice dated October 26, 1978.

Other petitions to intervene were filed by the Cowlitz Indian Tribe (Tribe), on June 12, 1978; the Washington Department of Natural Resources (DNR), on June 19 and July 24, 1978; and the Washington Department of Ecology (Ecology), on June 30 and July 17, 1978. Intervention was granted on all of these petitions by notice dated August 23, 1978.

Fisheries requested to be made a party to the proceeding to participate in the planning and conduct of studies during the preliminary permit period necessary to identify the impacts of the proposed project on the fisheries resource and to assert claims for measures to avoid or mitigate losses to the

resource.

Game stated that the project would have

deleterious effects upon wildlife, birds, and game fish by inundating areas of wildlife habitat, possibly altering migration routes, attracting new property developments, inundating several miles of excellent trout fishery, and blocking downstream migration of fish. Game asked to be made a party to the proceeding to assist in developing the record for Commission consideration before it acts on the application.

The Cowlitz Falls Dam Prevention Committee requested that it be made an intervening party for full participation in all future aspects of this proceeding, including recreational, historical, industrial, environmental, and agricultural concerns.

The Tribe stated that the proposed project may inundate ancestral archeological sites which may be eligible for inclusion in the National Register and that Applicant should conduct a full cultural resources survey and assessment of the area during the permit period. The Tribe requested that a condition be included in the permit to provide for the study of this matter and that it be consulted by Applicant before and during any such study and survey work.

DNR was created for the purpose of managing state lands, including school trust lands and the beds of navigable waters granted to the state. DNR claims that both types of lands would be adversely affected by the proposed project.

Ecology is the agency responsible for administering the state's water management programs and for regulating the shorelines of the state. Ecology is also authorized to review dams built in the state as necessary to insure safety to life or property. Ecology claims that the proposed project would affect all these areas of its interest.

By letter dated May 11, 1978, the Secretary of the Commission circulated the application and requested Federal, State, and local agencies to comment on the proposal.

None of the responding agencies objected to the issuance of a preliminary permit. However, a number of significant comments were submitted, as discussed below.

Fish and Wildlife

The Department of the Interior (Interior) commented that it is most concerned about possible destruction of the wildlife habitat in and around the project area, noting that migration routes and wintering ranges of big game animals are particularly important.

Interior also stressed that it is very concerned

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about anadromous fish runs, detrimental consequences of inundation, and preservation of the excellent trout fishery presently located in proximity to the site.

Applicant responded that it fully intends to coordinate its activities with all appropriate agencies in resolving issues and identifying appropriate mitigation measures for project impacts.

Recreation

Interior requested that the Commission inform the Applicant that the Heritage Conservation and Recreation Service (HCRS) is available to provide assistance and advice in evaluating the recreational aspects of development sites. The Applicant is aware of this, and intends to coordinate its activities with all appropriate agencies to fully evaluate all concerns associated with the project.

Cultural Resources

Interior commented that any future environmental assessment studies should include a survey plan designed to locate, identify, and evaluate cultural resources, to be conducted by a qualified archaeologist knowledgeable of the area.

The State of Washington Office of Archaeology and Historic Preservation (OAHP) reported that a review of its records and those of the Washington Archaeological Research Center indicated that only one archaeological site is known to be located in the project area. The OAHP stated that, although other sites have not been inventoried in the project area, their existence is known from the ethnographic literature. Therefore, OAHP recommended that, as a condition of the preliminary permit, the Commission require full archaeological and historical inventory and impact mitigation pursuant to the requirements of the National Historic Preservation Act of 1966 (Pub. L. 89-665) and Executive Order 11593.

The Applicant responded that its studies will include a complete investigation and survey for archaeological artifacts in cooperation with the Washington OAHP. Article 7 of the permit will require the Permittee to perform such studies. Structural Alternatives

Interior commented that the Applicant should make a complete study of all structural alternatives, including those that would develop the full power potential of the site. The Corps of Engineers recommended that the Applicant compare both large- and small-scale development at the site and determine optimum reservoir storage as well as powerhouse size. The Applicant stated that it intends to conduct the necessary technical engineering investigations which will adequately respond to the concerns expressed by the agencies. National Forest System Access

The Forest Service requested that the permit include a special article to assure that access to the Gifford Pinchot National Forest would not be

impeded, although no National Forest lands actually lie within the proposed project boundary. This will be required by Article 12 of the permit, since two principal access roads to the National Forest could be affected by preliminary permit studies. Effects of this Preliminary Permit

Some of the concerns which have been raised address the potential effects of constructing the proposed project, not the effects of issuing a preliminary permit. The effects of the project itself will be the subject of studies under the permit. Special Articles 7, 8, 9, 10 and 11 require Applicant to study the possible effects of the proposed project on fish and wildlife, land and land use, water quality and use, recreational resources, and to consult with appropriate agencies in conducting the necessary studies. Should the Permittee find the project to be feasible and file an application for a license, all interested persons and agencies will be given notice and have opportunity to review the application and present their concerns about the effects of the project.

The purpose of any preliminary permit is to maintain priority of application for a license during the term of the permit. A permit does not authorize any construction, but it enables the Permittee to maintain its priority while conducting investigations and securing data necessary to determine the feasibility of the proposed project and to prepare an acceptable application for a license. In view of the limited field activities for the investigations required by this preliminary permit, its issuance does not constitute a major Federal action significantly affecting the quality of the human environment. It is ordered that:

(A) A preliminary permit is issued to Public Utility District No. 1 of Lewis County, Washington, for the Cowlitz Falls Project No. 2833, that would be located on the Cowlitz River in Lewis County, Washington, for a period of 36 months, effective on the first day of the month in which this permit is issued. The permit is subject to the terms and conditions of the Act, which is incorporated by reference as part of this permit, and subject to the rules and regulations the Commission issues under the provisions of the Act.

(B) This permit is also subject to the terms and conditions set forth in Form P-1 (revised October 1975) entitled "Terms and Conditions of Preliminary Permit" (designated as Articles 1 through 6 and attached to this permit (See 54 FPC 1797)), and subject to the following special conditions set forth as additional articles:

Article 7. Permittee, in the interest of protecting and developing the natural resources and other environmental values of the project area, shall consult with the appropriate Federal, state, and local agencies in their fields of responsibility and expertise, shall conduct its project investigations in a manner which protects the environmen

tal integrity of the area, and shall fully explore all feasible alternatives to the project, and alternative project designs, taking into account impacts on natural resources and other environmental values. These resources and values include, but are not limited to, forests, land management and treatment, fish, wildlife, recreation and public use, water and air quality (including water supply, ground water, waste treatment and disposal); public health and safety; archeology; historic and cultural sites; threatened or endangered flora and fauna; and scenic and aesthetic values. The Permittee shall initiate and conduct at its expense such studies as may be necessary to determine the impact of the construction and operation of the proposed project on these natural resources and values and measures needed to protect and develop them or to provide for their mitigation or replacement, including alternative designs and operational measures, and shall utilize the results of such studies in the preparation of Exhibits H, R, S, V and W to accompany any application for a license to construct and operate the project. In connection with studies pertaining to archeological, historic and cultural sites, the Permittee shall consult with the Washington State Historic Preservation Officer and the Heritage Conservation and Recreation Service of the U.S. Department of the Interior.

Article 8. The Permittee shall submit in triplicate at the close of each six-month period from the effective date of this permit, to the Secretary, Federal Energy Regulatory Commission, with a copy to the FERC Regional Engineer, San Francisco, California, or to such other officer as the Commission may designate, and a copy to any intervenor or agency consulted, upon its request, accurate statements of the progress of all investigations, consultations, and studies accomplished during the permit period and of work contemplated under this permit for the ensuing period.

Article 9. The Permittee shall, for the purpose of assuring the cooperation required by the terms of the permit, designate a liaison officer to act for the Permittee in keeping appropriate Federal, State, and local agencies specified in this permit currently informed about the progress of investigations throughout the term of the permit, and

the liaison officer shall communicate with those agencies within 60 days from the date of issuance of this permit.

Article 10. Permittee, by the end of the first year of this permit, shall (1) have consulted with the Fish and Wildlife Service of the Department of the Interior, and the Washington Departments of Fisheries, Game, and Natural Resources and arranged for the preparation of a study of any effects which the proposed project would have on fish and wildlife resources and of facilities or measures needed to conserve or develop these resources, and (2) file with the Commission and serve copies on the agencies consulted, an outline of the proposed study, including a cost estimate and letters from each of the above agencies indicating the extent of consultation. The Commission reserves the right to require modification of the proposed study. During the remaining two years of the permit, Permittee shall fund or otherwise provide for such study. A copy of the report on the study shall be filed as part of the Exhibit S of any subsequent application for license.

Article 11. Permittee shall coordinate the studies for the proposed project authorized by this permit with the District Engineer, Corps of Engineers, Walla Walla, Washington.

Article 12. Access to National Forest System lands over existing roads and trails shall not be impeded at any time without prior written notice and provision of substitute access or other arrangements satisfactory to the U.S. Forest Service.

(C) This order shall become final 15 days from the date of its issuance unless a petition appealing it to the Commission is filed under Section 1.7(d) of the Commission's Regulations, 18 CFR 1.7(d) (as amended, August 14, 1978). Failure of the Licensee to file such a petition shall constitute acceptance of this order.

-Footnote

'Authority to act on this matter is delegated to the Director, Office of Electric Power Regulation, under Section 3.5(g) of the Commission's Regulations, 18 CFR 3.5(g) (as amended, August 14, 1978, FERC Statutes and Regulations 30,016).

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