hand, the La Jolla Indian Reservation would thereby lose its Henshaw-controlled fishery benefits within the same reach of the San Luis Rey River and, as a result, we find that those fishery benefits are a reasonable exchange for any special water conveyance value which might be attributable to the lands occupied by the diversion facilities.

199 Although they contend that water quality differential benefits are attributable directly to tribal lands, they do not seek annual charges for them because it is believed that they will diminish or disappear with the introduction of high quality northern California water into one or both of the San Diego Aqueducts. Furthermore, they concede that the differential is offset to some extent by the uncertainty of the San Luis Rey water supply.

200 In fixing annual charges we are concerned with allocating the benefits of a water power project between two kinds of capital, land and improvements. We are not concerned with allocations among the economic elements of capital, labor and management.

201 They state, "When there is no investment required or contemplated for the new license period, there is no reason to make that initial 50-50 apportionment." Since the power license issued herein contemplates new investment in connection with rerouting of the Escondido Canal and the Henshaw facilities, the issue is moot.

202 Appendix B illustrates the allocation described herein.

203 The Henshaw development contributes one-half of the water which ultimately enters the computation of the Net Water Benefit.

204 The other 62.5% should be allocated to the Licensees, consisting of the sum of (a) the other 37.5% of the Net Water Benefit which is attributable to the conveyance function and, therefore, should be allocated to the Licensees as the owners of the improvements and (b) the other 25% of the Net Water Benefit which is attributable to the water flowing through the Escondido Canal, which is the other one-half of the Henshaw development water and should be allocated to the Licensees because Vista owns the improvements and substantially all of the land comprising the Henshaw development.

205 As is discussed below, a linear unit also provides a vehicle for precluding a distortion by the Lake Wohlford project area.

206 The figures are derived from the 1975 Exhibit K maps and differ somewhat from those contained in Exhibit B-94 which were derived from earlier Exhibit K maps. Because the distances from Station 279A (assumed with Station 281A to be on a boundary of the San Pasqual Indian Reservation) to Stations 279 and 280 are not shown on Exhibit K-8 (January 1975), the distance from Station 279 to Station 280 has been apportioned so that the length of the Escondido Canal through the San Pasqual Indian Reservation is consistent with Exhibit B-94.

207 More than 50% of the Net Water Benefit will inure to the benefit of the Licensees because they own some of the land as well as all of the improvements.

208 While the result would benefit the three Bands principally, it would also benefit the Licensees as landowners.

209 Considering that the rights-of-way of Project No. 176 at present cover 311.08 acres, and that the Lake Wohlford project area traverses about the length of the Escondido Canal and occupies 843 acres, a linear unit of development provides a vehicle for precluding the numerically larger number of acres of Lake Wohlford storage lands from distorting the allocation of economic value.

210 While the approximation of 10,250 feet is used for

the purpose of illustration and discussion in this Opinion and order, the actual linear distance should be used in computing the annual charges. The Licensees should file new Exhibit K maps which should include all traverse distances which are necessary for the computation of annual charges pursuant to the power license issued herein.

211 Although Mutual sold the remaining part of its water distribution system to Escondido in conjunction with the 1970-71 tender offer and Operating Agreement, the court-approved arrangements are such that they are being treated as a single entity for the purpose of this discussion.

212 The costs associated with the power which is neither consumed in the operation and maintenance of the Rincon power plant, nor sold or resold to the Rincon Band, should be reflected elsewhere, such as in the operation and maintenance of the water supply facilities of Project No. 176.

213 The Rincon Band receives the benefit of the inexpensive power and should not receive a second benefit in the form of an upward adjustment of the revenues on which its annual charges are based. If the power supply arrangements between Mutual and the Rincon Band should be changed, as, for example, if the agreement of February 2, 1914 should be declared invalid, the formula approach of Article 30 will reflect the new arrangements.

214 Government lands other than tribal lands will be disregarded in this instance because they represent approximately 6% of the lands occupied by the Rincon penstock and power house, and because the Net Rincon Power Benefit is minor in comparison to the Project No. 176 Net Water Benefit.

215 The Presiding Judge would have fixed the amount at $100 per mile. Although no objections have been raised as to that amount, it is not synchronous with the amount prescribed by the Commission's Regulations under the Federal Power Act for the use of Government lands for transmission line rights-of-way only, which amount is approximately $12.50 per mile for 1979 for the 20-foot wide rights-of-way occupied by the wire-lines in question. See TERMS OF THE TRANSMISSION LINE LICENSE. Since the servitude of those wire-lines is reasonably comparable to that of the Project No. 559 12 kV transmission line, the Commission's Regulation applicable to transmission line rights-of-way only will be applied to the tribal lands in question.

216 The agreement of June 4, 1894, speaks of furnishing an ample supply and quantity of water to the La Jolla and Rincon Bands at the expense of Mutual's predecessor, and provides, further,

That the right to the free use of a sufficient quantity of water from the flume or canal of said company as hereinbefore stipulated shall continue and be in force so long as the Indians shall reside upon the said reservations*

As we understand that agreement, the La Jolla and Rincon Bands would not be charged for their water, and the costs applicable to the water used by them would be "absorbed" by Mutual's predecessor and subsidized by its ratepayers.

Insofar as concerns the Rincon Band, that agreement was superseded by the Agreement of February 2, 1914, which quantified that Band's entitlement at six cubic feet per second, measured at or near the intake of the Escondido Canal, and then provided that Mutual would sell electric power to the Rincon Band at specified rates for the purpose of pumping water

so that when the pumped water is added to the water which passes through the power plant, said

Indians will have all the water needed for their use, not to exceed six cubic feet per second* * *.

Since the United States pays for such power, the costs applicable to pumping water used by the Rincon Band are subsidized by the nation's taxpayers.

Although "free" water might be furnished to the Indian Service Area pursuant to Article 29, the water cannot be free in the larger economic sense since the costs of operating Project No. 176 ultimately must be borne by the ratepayers who consume the water. Under the power license issued herein, diversions of water to the Indian Service Area will reduce the Net Water Benefit of Project No. 176 and, consequently, the annual charges which are based upon the Net Water Benefit. Certainly, under such circumstances, the water diverted to the Indian Service Area is not entirely free.

217 While Article 31 retains that concept to the extent indicated as between the Bands and Licensees, the fact that annual charges are allocated among the three Bands, in part, in accordance with the relative diversions of water by them, results in an exchange among the three Bands of water for cash annual charges. Such an exchange would be particularly apparent if the Rincon Band becomes a net obligor as discussed in Footnote 218.

21 The distance traversed by the Escondido Canal through the Rincon Indian Reservation is 20.32% of the distance traversed through the three reservations. Since 20.32% of the annual charge attributable to water benefits would therefore be placed tentatively to the credit of the Rincon Band, to be reduced in proportion to that Band's share of the water diverted to its reservation, and since the Rincon Band is expected to become the dominant consumer of Escondido Canal water among the three Bands, it could conceivably become an obligor in allocating that annual charge among the Bands. Accordingly, Article 31 also applies to amounts due under Article 30 which remain unpaid.

219 That the Vista Irrigation District agrees to fulfill its obligations to the Pala Indian Reservation pursuant to section 6 of the June 28, 1922 contract between the United States and William G. Henshaw by drilling a well or wells upstream of the Pauma Narrows so that a flow of 6 cubic feet per second from said well or wells is delivered to the Pala Reservation. Provided, however, that if the Vista Irrigation District chooses to supply water to the Pala Indian Reservation from a source other than the San Luis Rey River, such arrangements may be negotiated between the Vista Irrigation District and the Pala Band of Mission Indians subject to the approval of the Secretary of the Interior.

229 Official notice is taken of the pertinent portions of U.S. Geological Survey Water Supply Paper No. 300 which describes certain estimates and measurements of the flow of the San Luis Rey River in the vicinity of Pala, California, during the last decade of the 19th century and principally during the first decade of the 20th century.

221 On the basis of the Consumer Price Index, which is officially noted, current price levels are about 4 times those in the latter 1920's. Accordingly, the $5 per mile in 1928 would translate to about $20 per mile currently.

222 See 18 CFR § 11.21: 11.76 acres x $150 per acre X .06875 x 5 = $60.64. Because the Project No. 176 communication and other service lines occupy 20-foot wide rights-of-way, the effective rate for those lines would be $12.50 per mile for 1979.

the Escondido Canal to 70 cfs and the fact that it would carry water of San Diego County Water Company, it contains nothing to indicate that the historic diversions shown in Mutual's 1921 application (about 3,700 acre-feet annually) would be increased materially or that San Diego County Water Company (and later Vista) would become Mutual's partner-in-fact in Project No. 176. Since a copy of the agreement of November 10, 1922 was not furnished to the Commission until the license was prepared and tendered in 1924, and since the terms of the license were not thereafter altered prior to its acceptance, we find that the license does not contemplate the use of Project No. 176 to convey approximately 8,286 acre-feet of Henshaw-appropriated water annually.

224 The "full understanding of the * project" conveyed by the maps, plans and specifications which were filed pursuant to Section 9(a) of the Federal Water Power Act and which were approved as part of the license, was that Project No. 176 involved a diversion of the natural flow of the San Luis Rey River, as distinguished from a diversion of a dam-controlled flow. When Henshaw Dam was under construction in 1922 the U.S. Geological Survey advised the Federal Power Commission to defer consideration of Mutual's application for a license pending the filing of another application by Vista's predecessor (Henshaw). The Commission did not do so and, in addition, apparently failed to realize when furnished with a copy of the agreement of November 10, 1922, that the "full understanding of the project" conveyed by the Section 9(a) exhibits was inconsistent with the arrangements within that agreement and, consequently, that Project No. 176 would not be operated as a run-of-the-river project, at least to the Wohlford development.

225 They say, "We are not claiming that the Commission, having once fixed annual charges, could subsequently and retroactively determine that they were inadequate."

226 Section 10(c) of the Federal Power Act provides, in pertinent part,

Each licensee hereunder shall be liable for all damages occasioned to the property of others by the construction, maintenance, or operation of the project works or of the works appurtenant or accessory thereto, constructed under the license, and in no event shall the United States be liable therefore.

See Seaboard Air Line Railroad Company v. County of Crisp, 280 F.2d 873 (5th Cir. 1960), cert. denied, 364 U.S. 942 (1961), and the explanation of that decision in Beaunit Corp. v. Alabama Power Company, 370 F. Supp. 1044 (N.D. Ala., 1973).

227 Although it is true that the Commission readjusted annual charges for Montana Power Company's Project No. 5 as of the first day after the twenty-year period specified by Section 10(e) as precluding readjustments, that day happened to coincide with the day following the one on which the Commission was formally asked for readjustment. Montana III, supra, 459 F.2d, Footnote 6, at 866. On the other hand, it is appropriate to readjust as of that date, as distinguished from the later date of a decision on the readjustment, to avoid placing a premium on delay and dilatory tactics. Montana III, supra, 459 F.2d at 868. But see Judge Leventhal's concurring/dissenting opinion at 877.

228 "The charges were not fixed as of 1967 and made retroactive to 1959. They were fixed in 1967 as the amounts which were reasonable in 1959.” Montana III, supra, 459 F.2d at 869.

229 Periods prior to the time the Commission is formally asked to fix annual charges.

[¶61,189]

230 The requests for readjustment or payment of annual charges were independent of the petitions to intervene and, therefore, are treated herein as separate petitions.

231 No form acknowledging acceptance of the amendment to Article 19 of Mutual's 1924 license for Project No. 176 is appended to this Opinion and order, as in the case of the two licenses which are issued herein. If Mutual does not file an application for rehearing pursuant to Section 313(a) of the Federal Power Act asserting that we erred, it will in fact have consented to it. The situation is analagous to the claim of an Indian/Interior veto power over annual charges which is discussed under LICENSING ISSUES-Section 10(e), as to which the District of Columbia Circuit said in Montana III, supra, 459 F.2d at 874, "As is the situation with the Tribes, the Secretary can participate as a party and avail of the provisions for judicial review."

232 There is no need to reduce that compensation for the amounts of water released to the Rincon Band. A copy of the agreement of November 10, 1922, in which Mutual agreed to satisfy the Rincon Band's natural flow entitlement from its own natural flow entitlement, was not furnished to the Commission until the license was prepared and tendered in 1924 and therefore, Mutual's agreement to satisfy the Rincon Band's entitlement from its own is not within the contemplation of the license. Accordingly, there is no need to consider Gross Canal Water or Gross Water Benefits under Mutual's 1924 license as amended herein.

233 The $8.00 per mile readjustment for the 100-foot wide right-of-way for the former Rincon-Bear Valley transmission line is the amount formerly provided by 18 CFR § 11.21 for the use of lands of the United States for transmission lines only. The Commission, in its orders issued herein on July 14 and August 26, 1977, 59 FPC 669, authorized the abandonment of that right-of-way and the termination of annual charges applicable thereto on the date of restoration of the lands.

234 Subject to certain surcharges.

235 As indicated earlier, the Escondido Canal conveys an average of about 14,600 acre-feet per year consisting of 4,100 acre-feet representing Mutual's appropriation of the San Luis Rey River, 2,700 acre-feet representing Mutual's purchases of Henshaw-stored water from Vista, and 7,800 acre-feet representing Vista's appropriation of the San Luis Rey River. On the basis of different figures principally involving volumes which are closer to the foregoing, the Bands' witness Stetson utilized the sharing of the net benefits approach to derive a net water benefit of $398,800. Since the cost of both San Luis Rey and MWD water obviously will change over time, the question of whether the differential in costs is $398,800 or only $276,412 is not as important as (1) noting from those figures the probable

level of that differential during the early years under the new power license and (2) noting the allocation of that differential among the interested parties to determine the reasonableness of the allocation and the results.

236 The releases will be less than 12% of the Gross Canal Water and, consequently, there will be no reimbursement of the Cost of Canal Water under Article 31.

237 Diversions of water from the Escondido Canal to the three Bands will be allocated ratably among the Licensees in computing the Gross Water Benefit. Since Mutual will receive 6,114 acre-feet representing 56.28% of the total of 10,864 acre-feet, 56.28% of the 1,427 acre-feet released to the Rincon Band, or 803 acre-feet of water, will be allocated to Mutual. Similarly, 43.72%, or 624 acre-feet, will be allocated to Vista.

238 The total cost will not go up if the water is not released; the cost per acre-foot will go down.

239

As illustrated, the Cost of Canal Water under Article 30 of the power license issued herein will be $216,683 for 10,864 acre-feet, or $19.95 per acre-foot.

240 It should be observed that the loss from the purchase and resale of the 293,075 kilowatt-hours is reflected in the computation to reduce the Net Rincon Power Benefit.

241 Such a stay would operate only with respect to the effective date of Ordering Paragraphs (B) and (C) hereof, issuing the two licenses.

242 Senate Report No. 621, 74th Congress, 1st Session, at page 43.

We could request the Attorney General pursuant to Section 26 to institute legal proceedings to remedy or correct the violations of the Federal Water Power and Federal Power Acts and Mutual's 1924 license which are found herein, and hopefully obtain a court order similar to Ordering Paragraph (F). But in view of the time needed for such litigation, and the fact that a stay pursuant to Section 14(b) will take effect, if at all, automatically within 30 days of the issuance of this Opinion and order (18 CFR § 16.10), Section 4(g) obviously provides a better vehicle for remedying the continuing unauthorized use and control of Project No. 176.

243 The Bands and Interior filed a joint brief on exceptions consisting of 263 pages of argument and 120 pages of Appendices, and Interior filed a separate 14 page brief. Mutual, Escondido and Vista filed a 79 page joint brief on exceptions, and Vista filed a separate 5 page brief. The Commission staff, on the other hand, filed a 49 page brief on exceptions. On December 15 and 16, 1977, the parties filed briefs opposing exceptions aggregating 117 pages. All briefs are typed single-space.