IV

THE LAW'S STANDARDS AND
REQUIREMENTS

In this omnibus proceeding, six separate licensing decisions are called for, namely—

(a) the Escondido Mutual Water Company wants a new license, virtually a renewal of the license they received in 1924, which expired in 1974. The City of Escondido joins in, endorses Mutual's application, and wants to be a joint licensee.

(b) The Department of the Interior wants the Commission to recommend to Congress Federal takeover of the entire project.

(c) In the alternative, the Department of the Interior and the several Indian Bands want a "nonpower license" to the Bands under Section 15(b). Note that there is only one San Luis Rey, and favorable action upon any one of these three choices precludes affirmative action on both of the others.

(d) The Vista Irrigation District's license status is to be determined, either to the effect that no license is required or appropriate or, in the alternative, that Vista may not continue its unlicensed joint use of the canal, so must apply for a license, in default of which its water could not go down the canal.

(e) The Staff wants any license issued as above to be broadened to include Vista's Lake Henshaw and Henshaw Dam.

(f) The connecting electric lines of the San Diego Gas and Electric Company which lead into the small power generator on the Rincon land have to be re-licensed, if the rest of the project is. (This is P-559.)

To determine the agenda for these six separate rulings, one turns to the Federal Power Act, Part I being the 1935 re-enactment of what was called the Federal Water Power Act of 1920, its 28 sections comprising 16 U.S.C. 792–823. The statute makes it clear that application no. (b), the Federal takeover, must be examined first because if the Commission shall conclude to recommend Federal takeover, then it is not supposed to approve any application at all. The rules about takeover are found in Section 7(c) and in Section 14(a). In Chapter VI below, these and other sections are considered, together with the Department's recommendation,' and the conclusion is there stated that the Commission should not recommend Congressional takeover.

Next in order is application no. (c) above, the Bands' program for a nonpower license, since that issue is supposed to be decided "in issuing any licenses under this section except an annual license." The controlling language of the nonpower license provision is in Section 15(b), as follows:

whenever it [the Commission] finds that in conformity with a comprehensive plan for improving or developing a waterway or waterways

for beneficial public uses all or part of any licenses project should no longer be used or adapted for use for power purposes *

In that event, the Commission may license all or part of the project works for nonpower use, but on the condition that the new licensee pay in Mutual's "net investment," to the same extent as would be required to be paid by the United States in the case of takeover. If the nonpower license issues, it is to be a temporary one, evidently meaning, as it goes on to say, that as soon as another state or Federal agency is ready to assume regulatory supervision, then the nonpower license shall terminate. This subject is taken up in Chapter VII below, where it is concluded that, under the circumstances, a nonpower license may not issue.

Next in order is to consider application no. (a), Mutual's application for a new license, in which the City of Escondido joins. Several sections govern this matter and they must all be read together, for Section 14(b) specifies that-

***the Commission shall entertain applications for a new license and decide them in a relicensing proceeding pursuant to the provisions of section 15.

Turning to Section 15, one learns that the Commission, under authority of that section, may issue a new license either to the original licensee or to a new licensee

upon such terms and conditions as may be authorized or required under the then existing laws and regulations.

Scattered through the law are many conditions which, to the extent so incorporated, must be found or imposed to validate a new license, such as

(i) If it is a new (and different) licensee, he must pay in the old licensee's "net investment" and assume its contracts as the United States would be required to do in the event of Federal takeover. S. 15(a).

(ii) In issuing new licenses under Section 15, the Commission "shall" give preference to applications by states and municipalities, provided their plans are deemed "equally well adapted *** to conserve and utilize in the public interest the water resources of the region ***." S. 7(a).

(iii) If the two competing applicants are not municipalities or states, the winner is to be the applicant whose plans are found to be "best adapted to develop, conserve, and utilize in the public interest the water resources of the region ***" (if it is clear the applicant can carry out such plans). S. 7(a).

(iv) Per Section 10, all licenses issued under the Federal Water Power Act "shall be on the following conditions"

That the project adopted, including the maps, plans and specifications, shall be such as in the

judgment of the Commission will be best adapted to a comprehensive plan for improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, for the improvement and utilization of waterpower development, and for other beneficial public uses, including recreational purposes

(v) The licensee must pay reasonable annual charges in an amount to be fixed, which, in the case of tribal lands embraced within an Indian reservation, shall include, subject to the approval of the Indian tribe, a reasonable annual charge for the use of the land. (Minor projects may be without charges "except on tribal lands within Indian reservations.") S. 10(e).

(vi) The license must be conditioned upon its acceptance by the Licensee in all its terms, including "such further conditions, if any, as the Commission shall prescribe in conformity with this Act *." S. 6.

Thus, the Commission's authority to act on the three applications is complete and definitive in the sections referred to, meaning Section 6, Section 7, Section 10, Section 14 and Section 15. There is also another Section, number 4(e), which gives the Commission a parallel authority to issue licenses, or it may be regarded as one incorporated in all the others.

There is a fair doubt as to what extent Section 4's provisions should be or were intended to be applied, or could be thought appropriate, to the relicensing of a project already long since licensed and built, as distinguished from the more normal case of a proposal for a license for a water development not yet even begun. On the one hand, it is most earnestly contended that by its own language and by its incorporation in Section 15, as recited above, Section 4's many provisions are as fully applicable here as in any other. Equally earnestly it is pointed out that Section 4 is designed for new projects, not for relicensing, and that where Section 4 merely "authorizes and empowers" the Commission to take certain action-namely, to issue licenses that authority of Section 4 is not applicable here, because the action to be taken is already authorized and required by Section 15, as above quoted.

Anyway, as written, Section 4 gives this authority to the Commission (whether or not limiting or defining the authority given by Section 15) to license dams and other project works "upon any part of the public lands and reservations of the United States" if the applicant's purpose in constructing, operating or maintaining the works is for the improvement of navigation, the development of power or to utilize surplus water power from a Government dam. All of this is from Section 4(e), and to the extent that it applies here, there is for consideration a double proviso reading as follows:

Provided, That licenses shall be issued within

any reservation only after a finding by the Commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired, and shall be subject to and contain such conditions as the Secretary of The Department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservation.

Thus, in summary, it is undoubted that a license may issue only if the licensee accepts such further conditions as the Commission shall prescribe (Section 6); the applicant must be the one whose plans are best adapted to develop, conserve and utilize in the public interest the water resources of the region (Section 7); it must be best adapted to a comprehensive plan for improving or developing the waterway for water power and other beneficial public uses, including recreation (Section 10(a)); and finally, the licensee must pay the annual charges to be fixed, subject to the approval of the tribe (Section 10(e)).

However, all of the foregoing conditions, provisions and requirements are subject to waiver in the Commission's discretion if deemed to be in the public interest, except the annual charge within Indian reservations may not be waived—all of this because it is definitely a minor project, see Section 10(i).

So, all of these provisions must be taken, read together, and at least considered in passing on Mutual's application.

Next, in connection with Vista's case (d), it must be determined whether it is unlawful for Vista “for the purpose of developing electric power" to maintain its dam partly on the public lands or to jointly operate the water conduit across the reservations, all without any FPC license at all, unless it be found to be authorized by a permit or right-of-way granted prior to June 10, 1920-for all of which, see Section 23(b). (Not at all, says Vista, because this sentence came along only in 1935, and it was not meant to cover dams already long since built and in use.)

If Vista shall be found to be in an unlawful activity, as there recited, in that event "the Attorney-General may, on request of the Commission or of the Secretary of the Army" institute court action for injunction, mandamus or other process as may be indicated, for which purpose the District Courts are given jurisdiction.

So, first one decides on Congressional takeover, then the Bands' plan for a nonpower license, then the plan of Mutual and Escondido for a renewal of the license (and San Diego's related power line project); and finally, the status of Vista and Henshaw Dam. To apply these various standards, provisions and requirements of the law requires a thorough understanding of the nature of the area, the economic effects, the social effects, and the environmental effects of all of the several

programs, and all of that is the subject of the next chapter.

V

THE LAY OF THE LAND, THE FACILITIES, AND THE ENVIRONMENT'

A. Location and Functions of the Existing Project

Project 176 is located on the San Luis Rey River and Escondido Creek. The project begins at a diversion dam constructed across the San Luis Rey River about 9 miles downstream from Lake Henshaw Dam, the only significant impoundment on the river. From the diversion dam, the project's 13.5-mile long Escondido Canal runs southwestwardly to Lake Wohlford on Escondido Creek, the project's terminal storage reservoir. In its course the project canal traverses the La Jolla, Rincon and San Pasqual Indian Reservations. Water stored in Lake Henshaw is conveyed through project facilities to users in the communities of Escondido and Vista.

The project conveys to Escondido an annual average amount of 2,700 acre-feet of water developed by Mutual's appropriations on the San Luis Rey River. In addition, project facilities convey to Escondido an average annual amount of 4,100 acrefeet of water purchased by Mutual from water developed at Lake Henshaw, together with 7,800 acre-feet per year of Vista Irrigation's water conveyed through the project facilities under contractual arrangements between Vista Irrigation and Mutual. These water flows, totalling 14,600 acrefeet per average year, serve a major portion of the municipal and irrigation needs of the two communities. A certain amount of water is also delivered under contract to the Rincon Indian Reservation for irrigation and ground water recharge.

A by-product of the water project is the generation of hydroelectric power at the Rincon and Bear Valley power plants and recreation at Lake Wohlford. The two power plants produce on the order of 4 million kilowatt-hours of energy per year, with the annual amounts varying historically from 1.0 to 7.3 million kilowatt-hours. Total installed capacity is 760 kW. Since 1954, the major portion of the power generated is integrated into the overall supply of San Diego Gas & Electric Company. The remainder of the power is supplied to the Rincon Indians pursuant to a 1914 contract between the United States and Mutual. Recreational usage at Lake Wohlford includes boating, fishing and picnicking. Recreational use on project lands is currently estimated to be in the range of 135,000 visitor-days per year. The San Diego County Department of Parks and Recreation has prepared plans to enhance the recreational benefits of the Lake Wohlford area.

B. History

In 1895 the Escondido Irrigation District,

predecessor of Mutual, began the diversion of water from the San Luis Rey River at the Escondido Intake and the conveyance of the water to the Escondido area. Terminal storage was provided at Bear Valley Reservoir, a regulatory reservoir on Escondido Creek, now known as Lake Wohlford. In 1905, Mutual was formed to take over the operations and assets of the bankrupt Escondido Irrigation District. The City of Escondido now owns or holds proxies to approximately 90% of Mutual's stock. Non-project facilities of Mutual are currently operated by the City as part of an integrated water system.

Opportunity for power development was early recognized and the small Rincon and Bear Valley hydroelectric plants were constructed between 1914 and 1916. While recreational use of Lake Wohlford also occurred early in the project life, major recreational development was not undertaken until the early 1930's when the fishery was expanded and became one of the finest inland fishing spots in San Diego County.

During the early 1920's, San Diego County Water Company constructed Henshaw Dam on the headwaters of the San Luis Rey River above the Escondido Canal intake. At the elevation of the spillway, the dam could impound a reservoir of 194,000 acre-feet storage capacity. Pursuant to various contracts between Mutual and San Diego County Water Company, its predecessors and successors, certain waters are released from Lake Henshaw in satisfaction of Mutual's appropriative rights; in addition, a portion of the water developed by Lake Henshaw is sold to Mutual. The contracts also grant to San Diego Water Company the right to convey additional water, over and above that sold to Mutual, through Escondido Canal and into Lake Wohlford. The water so conveyed is delivered to Vista Irrigation, the customer for virtually all of the water developed at Lake Henshaw over and above that purchased by Mutual.

In the late 1920's, in order to accommodate the conveyance of the additional water made available by Lake Henshaw, the Escondido Canal was enlarged and Bear Valley Dam, which impounds Lake Wohlford, was raised.

In 1946, Vista Irrigation acquired San Diego Water Company and thus succeeded to the rights and obligations appurtenant to Lake Henshaw. A severe drought beginning in the late 1940's prompted Vista Irrigation in the 1950's to construct a well field to extract water from the ground water basin lying above Lake Henshaw in order to maintain the supply of water to Escondido and Vista. The water so extracted is conveyed to Lake Henshaw and then delivered to the two communities in the same manner as run-off into the reservoir. The waters are divided between Mutual and Vista Irrigation in accordance with contracts between the two entities.