existence of a mere right-of-way gives Mutual the right to exclude the landowners from even entering upon the forbidden space, let alone using it.

However, perhaps the adequate answer is that provided by the proposed condition No. 10 of the Secretary of the Interior in Exhibit I-78-B, in effect preserving to the Bands the agricultural or other use of those portions of the lands included within the right-of-way that are not actually utilized for the facility itself. Accordingly, Article 39 should comprise Condition 10 taken from Exhibit I-78-B at page 5.

Water:

Make no mistake, this case is about water-the modern California gold rush-it is not about lands or canals or dams or electricity. Everybody wants to continue the canal operation just as it is, maybe with less water to Escondido, and even continue the antebellum type of electric operation if they have to. The struggle is, who gets the water, when, where and how much.

The Bands' plan was gradually to divert some of the water for irrigation on the reservation, sell to Mutual the balance of what they acquire of Mutual's present water, and carry Vista's water, for a price, to the Vista canal. The plan fails for several reasons, but mainly for lack of the water to start with.

Mutual's program is an aquatic status quo. Their water and Vista's will flow on as before, amounting to what seems to be 90% of the canal's flow, as an average. The balance is their diversion to the Rincon reservation, half-way down the canal, this in carrying out their 1914 contract to guarantee to the Rincons a quantity equal to six cubic feet per second of the natural flow of the river (to the extent and when there is any), as reconstructed to simulate the flow that would be occurring without Henshaw Dam.

Not always have the Rincons received it; not always have they wanted it or were prepared to make use of it, though their irrigation system is probably a century or more old. Even the figuring of their allotment came in dispute here, and during the case, Mutual's expert produced and put into operation a new formula, which enhanced their delivery; it has already improved the Rincon's position. But one hopes they have settled the picayune, alphonse and gaston argument whether the entitlement depends on their remembering to ask for it.

But a mystery remains. For all of the sheaves of nearly a century-old documents adduced, no one has been able to explain to this forum why only the Rincons were thought of in these arrangements made in the 1890's, 1914, 1922, et seq. True, there is not so much arable land in the mountains of La Jolla, but they are shown to need some water.

For the rest, there is no help at all. It was striking to look across the wide valleys toward Pauma and Yuima and see verdant greenery all

about, but only arid brown on those small reservations. The answer given was that their neighbors pump out the ground water, or buy it from the Colorado River supply district, while the reservations next door are dry, barren and infertile. Far down the river, Pala obviously needs water (and may by now be getting some help from pumps supposed to be installed by Vista under their old contract). As of now, Pala sees the San Luis Rey as a dry, rocky streambed (yet "pala" in the Luiseno language means "water").

The answer is: it is their river, their water, their heritage which Mutual's project drains away from them, albeit pursuant to ancient contracts not here and now available for reformation. But the law does permit conditions on the license in order more perfectly to carry out the law's purpose. The conditions, per Section 10(g), must not be "inconsistent with the provisions of this Act."

To be consistent, as it says, with "this Act", one turns to the law's basic ratio decidendi for what to license and what not to. Quoting again Section 10(a), one must find the project license to 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 water power development, and for other beneficial public uses, including recreational purposes; and if necessary in order to secure such plan the Commission shall have authority to require the modification of any project and of the plans and specifications of the project works before approval.

So, the key is whether it is the best plan for other beneficial public uses, including recreational purposes. Mutual does not present its plan as benefiting interstate commerce, or more than a scintilla of water power benefit. There is an appropriate recreational by-product (Lake Wohlford), but Mutual's real and avowed purpose is "other beneficial public uses," meaning, almost totally, this: more, better, and cheaper water for the residents and irrigators in and around Vista and Escondido. For this purpose, they value the project at about $6,000,000 and over half a million dollars per year, all for the benefit of the people referred to, and none other, specifically not the Indians.

One is amazed to read at p. VI-8 (and I-8 and elsewhere) of Mutual's brief that:

Of course, there is nothing in the Act, the legislative history or administrative interpretation which gives any support to the Bands' arguments that the socioeconomic status of the Indians should be considered in awarding a license.

Mutual may be advised that the Indians are very much part of "the people of America" extolled in their brief (I-7) as the public beneficiaries intended by the law. The Bands do get flood control

and a few other incidental benefits from Mutual's plan, but the Bands on the river itself get no water at all; indeed, they lose what they had, except the Rincons get their six cfs. With a condition correcting that omission, Mutual's then becomes the "best plan," etc.

It is the view, accordingly, that Mutual's program is not "best adapted to a comprehensive plan for *** developing a waterway * for other beneficial public uses" unless it makes a like provision for the common water needs of the other reservations in the valley, ie., La Jolla, Pauma, Yuima, and Pala."

Finally, this provision (as well as Rincon's six cfs) cannot be of its greatest avail to the Indians if it all comes during the flood season, and there is no natural flow available later on when it is most needed. Fortunately, Vista has ample room for added storage in its Henshaw Dam, without perceptible added cost or recognizable burden. So the condition may appropriately require that both moieities of the Indians' share of the water be stored and made available for delivery at useful times during the year.

So, the following condition attaches:

Article 40. In addition to its provision of water to the Rincons under the contracts referred to, the Licensees shall deliver an equal quantity for the use of the other Bands in the San Luis Rey valley, the delivery to be at such point on the project as may be required by the Bureau of Indian Affairs, and the water to be stored by the Licensees and made available to the Bands at and for such time periods, locations and uses as the Bureau may from time to time determine.

5. The project amendment.

Mutual's project status is not quite to remain quo. Shortly below the canal's entry into San Pasqual, still in hilly country, the canal is to be diverted southwesterly off the reservation, and to continue southwardly underground, alongside a county road, until it joins the present underground section, near the outlet to Lake Wohlford.

This will cost $656,000 (M-203), and will advantage Mutual by adding security and avoiding contamination. (The present canal, in a rural residential area, is open, unfenced, and near homes and grazing areas.) It will advantage San Pasqual in removing 12,000 feet of canal from its territory (releasing 18 acres from their present servitude), and the short section remaining (820') is to be fenced off. Hence the application amendment should be approved.

IX

SUBSIDIARY PARTIES AND ISSUES

1. The City of Escondido.

The present licensee is the Escondido Mutual Water Company, formed originally by the irrigators and other prospective water consumers of the

Escondido area. It is now about a six-million-dollar company, but one not expected, indeed not supposed to make a profit. Some small part of the stock is already owned by the City of Escondido, the city has acquired voting rights to 90% of the stock, and there seems to be a nascent agreement which will result in Escondido owning the remainder after buying out the other stockholders."2

So, in the more recent years of this case (November 1975), the City of Escondido filed an application to become a joint applicant, with the Mutual Company, for the new license. Evidently, it is contemplated that after the license issues and the stock acquisition has been completed, Mutual will be dissolved and Escondido will seek to become the sole licensee (43 Tr. 9343-9375). Actually, the city managers now run it, in the city offices.

If the people of the Escondido area prefer to operate through their municipality instead of through their Mutual Water Company, this arrangement would appear to be satisfactory for all normal questions relating to licensing, such as feasibility, public benefit and the like. No objection to this feature of the program as such has been noted, and it was pretty thoroughly discussed at the hearing.

However, a very serious question arises with respect to such a program related to any license on Indian lands held in trust status. The point is that such a license would be, for all practical purposes, in perpetuity, but neither this Commission nor the United States holds such title to the lands as to be able to grant a perpetual easement, such as the license would provide. The background is this:

By a fairly recent enactment, Act of August 15, 1953, 16 U.S.C. 828-828c, the Federal or Congressional takeover provision of the Federal Power Act (Section 14) is no longer to apply to any project owned by a state or municipality."

One takes this provision obviously to mean that, if a license shall now issue to the City of Escondido, as distinguished from the Mutual Water Company, it will no longer be subject to Federal takeover under Section 14 when that license expires. When that time comes, Section 15 will govern the issue of a new license, and Section 7 tells us that, in doing so, the Commission shall give preference to applications by municipalities if their plans are equally well adapted, etc."

Though the license be one which, on its face, lasts only 50 years, but at the end of that period it is not subject to Federal takeover under Section 14 of the Federal Power Act, and if there are conflicting, equally able applicants for a new license, very probably Escondido would have a statutory preference. And so on, after another 50 years, with the net result that a license to a city must be regarded as a perpetual one (subject only, of course, to the basic condemnation power by Act of Congress).

The trouble is: the present proposed licensor, namely the Federal Power Commission acting for [163,008

the United States, does not have a perpetual title capable of granting a perpetual easement across Indian reservation lands held in trust status.

As specified in the Mission Indian Relief Act discussed above, the trust status is for a limited period only, which has been extended from time to time; and as the Interior Department advises us, citing many cases, "The Secretary of the Interior is not authorized to dispose of Indian trust property." (Ex. I-78-A, p. 6)

Thus, with the Government's own title thus encumbered, it is not perceived how, either legally or ethically, the Government can be in the position of granting a license which, de facto at least, is in perpetuity, but de jure is not and cannot be.

Accordingly, if the City of Escondido does wish to be considered as a co-licensee, it will have to file a stipulation to the effect that it does not now and will not hereafter claim an exemption from the takeover provision of Section 14 or the preference clause of Section 7. With that stipulation entered of record, and made expressly a condition of the license, no objection is perceived to issuing the license jointly to the City of Escondido as well as to the Escondido Mutual Water Company, nor, indeed, to its later transfer from the Water Company to the City alone.

2. Vista and Henshaw Dam.

(a) Vista's unlicensed status: An entirely separate docket in this multi-faceted proceeding is E-7655, concerning the Vista Irrigation District and the investigation of their status as a nonlicensee, all as ordered by the Commission on July 30, 1971, 46 FPC 253. For the background facts, see Chapter III above, under E-7655. Vista owns Henshaw Dam and claims most of the waters it impounds; some of the water is sold to Mutual. All of Vista's water passes through the project canal and without the canal the water would be of no apparent use to Vista.

It is complained Vista is a usurper, an intruder, a trespasser, for its water transits the canal without any Federal license, permit, easement or anything else. Furthermore, its water pumping program is illegal, for Vista since the 1950's has been supplementing the natural drainage into Lake Henshaw by a concerted program of pumping out groundwater from the lands lying above and around the lake, so the pumped water can flow into the lake and enlarge its water supply, all of which, it is alleged, damages (ie., reduces) the downstream natural flow and the underground basin available for pumping by the downstream reservation Indians. Specifically it is presented as an activity which contravenes the necessary finding for a license (Section 4) to the effect the project is not inconsistent, with the purpose of the reservations establishment.

The Commission's order calls for an investigation and hearing to consider the extent of Vista's involvement in Project 176 and the occupancy of

any Indian or public lands. Consolidation was ordered.

Vista is not a licensee and does not want or ask for one. The dam and the lake are not on Indian lands, nor across a navigable river, nor was it built as a power dam or for power purposes. It is evidently true that a minor corner of the dam (for the spillway) encroaches upon the lands of the Cleveland National Forest, so a Forest Service permit was obtained.

Vista's connection with the Project arises out of its 1922 contract with Mutual, giving Vista the right in perpetuity to pass its water through the canal. Some small part of Vista's share leaves Lake Wohlford through Mutual's separate penstock and is used to generate power there before joining the rest of Vista's water in another (non-project) canal which carries it twelve miles or so over to Vista.

Currently Vista is doing the engineering work on a rehabilitation of Henshaw Dam (its original 1922 design was much too large for the water available; besides there are seismic problems, and working with the state authorities it will be reduced somewhat, but in a manner soon to remove its Forest land encroachment).

It is odd that the 1924 license to Mutual does not mention Henshaw, lacking which, it is claimed, Vista's water passing through the canal constitutes a license violation, a trespass quare clausum fregit. Not so at all, says Vista, pointing to letters and telegrams to the Commission in 1922-1924 reporting the nature of the contract and its connection with the program to be licensed. Before Mutual would accept the license in 1924, they asked for and received a telegram from FPC's Executive Secretary saying the 1922 contract is not incompatible with the license, so they accepted, and it was finally issued in June.

Neither is Henshaw Dam a secret, hidden away in the hills. In the next chapter, there is quoted a Commission minute of a 1926 meeting, concurring in a lands permit, which, in so many words, makes the statutory finding for an FPC license, virtually (if not really) issuing one.

(b) Henshaw is part of the true total project: Henshaw has no power facilities, but like any storage dam, it profoundly affects and enhances the power production, downstream, such as it is, by its regulation of the highly seasonal flow. In that sense it is even more of the total enterprise than Lake Wohlford and Bear Valley Dam, just above the main powerhouse. Not to suffer abbreviation to abort the whole truth, the essential unity and correlation of all the parts of the "comprehensive development" can only be sensed by reviewing them in order, for it will be seen that, like each step of a staircase, each unit is a part of an integrated, whole development of the resources of the San Luis Rey.

From the agreed facts, from the maps in evidence and from inspection, it is obvious that the true "project", meaning the "complete unit of

improvement or development", as the law says, comprises four distinct units; but only one of them is the subject of the present license or of the applications for new ones. The four discrete elements of the complete project are as follows:

(1) Lake Henshaw, Henshaw Dam, and its drainage area beyond, all of which are the property of the Vista Irrigation District, and none of which is included in licensed Project 176. (Lake Henshaw, however, is the source of nearly all the water that flows through Project 176 and the Staff wants it included in the license, or else in a new one to Vista.)

(2) About nine miles of the open-running San Luis Rey River, evidently about 10 feet wide (depending entirely on the gate opening at Henshaw Dam, its primary source). This, too, is not in the license, nor does anyone propose it to be. About half of the nine miles is on lands of the Cleveland National Forest or on public and private lands; the other half courses in a rather wild state through the La Jolla Indian reservation. Over this reach, the river falls 500 feet from its beginning elevation of 2700 feet, and it is here that the La Jolla's have established an enterprising and profitable public fishery, one of the very few open river fishing sites in the whole San Diego area. Manifestly, its viability depends on the circumstance of whether a steady flow is being released from the dam."

(3) The present Project 176, as now licensed, meaning

(i) the diversion dam athwart the San Luis Rey at a point in a canyon in the middle of the La Jolla reservation;

(ii) the artificial, man-made canal, which, by gravity alone, transports the water out of the San Luis Rey valley over to the valley of the Escondido Creek, for about 13 miles through and around the mountains, with perhaps a third of the canal passing through the three Indian reservations (La Jolla, Rincon and San Pasqual). The last mile or so is underground. Throughout, there is a 700-foot fall from the diversion dam to the outlet of the canal, and it is this fall which powers the movement of the water. The canal is not directly used for electric power purposes (except as a small part of the flow (10%) is diverted on the Rincon reservation to meet that Band's entitlement and, in the process, to produce a tiny amount of power, which is sold to the San Diego Company).

(iii) Lake Wohlford, into which the canal flows, an artificial lake formed by Bear Valley Dam," the drop below which produces the power in the small project powerhouse located just below the dam. All of these, the diversion dam, the canal, the small diversion on the Rincon reservation, Lake Wohlford, Bear Valley Dam and powerhouse, are the individual segments of the present Project 176, and are in the name of the present licensee, the Escondido Mutual Water Company.

(4) Vista's canal, extending 12 miles to the west

from the project dam and powerhouse just described, which takes Vista's share of the Lake Henshaw water to the Vista Irrigation District for distribution and consumption.

Note again that parts 1, 2 and 4 above are not part of the present project as licensed. Note, too, that Lake Wohlford, though part of the project, is on private lands or lands of the Mutual Water Company." Part 4, the Vista canal below Escondido, is not licensed here, and nobody wants it to be-not because it is not part of the whole enterprise; rather that is because the hydro power function ceases at step 3, just above it.

(c) The result as to licensing: The law, Section 3(11) tells us that a project (the subject matter of a license) is a "complete unit of improvement or development", including

a power house,

all water conduits,

all dams and appurtenant works and structures,

all storage, diverting, or forebay reservoirs
directly connected therewith,

the primary connecting power lines,
all miscellaneous structures,

all water rights, rights-of-way, ditches, dams,
reservoirs, lands or interest in lands neces-
sary or appropriate in the operation of the
unit.

It completely escapes one how it can be doubted that Henshaw Dam and Lake Henshaw are part of the project, as so copiously defined. It is all operated as a unit, each step is affected by the steps ahead of it. The 1926 FPC minutes cited include power as a minor function resulting from Henshaw. The whole point is that, without Henshaw, the river becomes a trickle much of the time, and the power now bravely measured in horsepower would become listed in candlepower.

Of course it must be licensed as much as the rest, down to the power house. Staff puts it on the further ground that part of Henshaw is actually on the public lands. Even if that part be now removed, as planned, it is still for licensing because it is an essential part of the "complete unit of development."

Vista denies all this, repeating there is no electricity at Henshaw, and that under Farmington, 38 a facility built before 1935 is not subject to the enforcement clause of the Federal Power Act, Section 23(b). There is no reason to deny all that, but the point is Vista's water is the main user of the canal on the Indian lands, and some Vista water makes power there and below. To recognize that use, and to permit its continuance so Vista can reap that project benefit, it must in turn join in the license.

The procedural agenda is not difficult. If and when the Commission decides finally to license Project 176 for another term, the decision is subject [163,008

to a two-year stay because of Interior's call for Congressional takeover, per Section 14(b). So, the license order need but specify that Vista must join in the application to the extent of (a) Henshaw Lake and Dam, and (b) the utilization of the canal. If there occurs no such joinder, the license may provide that it does not cover or sanction the transit of Vista's water.

Finally, for the same reasons as set out above with respect to the City of Escondido, Vista would be expected to file the same stipulation waiving takeover exemption after 50 years (and preference for relicensing) as to the portions of the project on Indian lands.

3. Noncompliance issues and the Interior Department complaint.

This multi-faceted proceeding did not begin with the license application, but with a complaint filed in September, 1970, by the Secretary of the Interior, acting as trustee for the three Bands whose reservations are crossed by Mutual's canal. Both Mutual and the City of Escondido are listed as respondents. Quite a variety of allegations comprise the complaint, all related to malefactions and misfeasances of the licensee in No. 176 with relation to the terms of the amended license of 1924, all to the detriment of the three Bands. In April, 1971, the intervention of the Bands was permitted and the cause set for hearing. About the same time, Mutual filed for a renewal of its license, due to expire in June, 1974, so these matters were consolidated in the order of July 30, 1971. Subsequently came the Department's recommendation for Federal takeover by act of Congress and the Bands' application for a non-power license, all part of this case.

A little later there came the Bands' petition for a declaratory order on the noncompliance issues, and for a ruling that the derelictions complained of should debar the issue of an annual license in 1974, otherwise due to issue in June. This was not set for hearing, so this forum's reference to the Commission on February 22, 1974, assembled the issues and cited the record adduced to date. In response, the order of March 18, 1974, directed this forum to hear and determine the issues raised, and to recommend sanctions aimed to cure the current violations, if proved, provided, it be found "appropriate and necessary to grant immediate relief to the parties for such violations * * *." So, the hearings already far along were directed to the points raised, and a separate briefing schedule was provided to permit early resolution of the current compliance matters (all while the license case was undergoing its two years of treatment under the environmental laws).

The limited-issue briefs came in during November 1974. Upon their review the forum reached the determination that remedies appropriate for the charges, if proved, did not call for immediate reformations, but are more appropriate for the relicensing determination itself. Accordingly, no

recommended decision issued and the several questions remain unanswered.

The 1974 memorandum to the Commission listed nine separate items of variance charged, meaning specifics of the general allegation that operations developed over fifty years under color of the license differed substantially from what was intended by the terms and conditions of the 1924 license and its dozen or so mesne amendments. Fortunately, by the time of briefing on these issues late in 1974, Interior-Bands dropped five of the nine charges, or else, "they are not being pressed * at this time", for: (a) some items were covered by the amendments to the license, or (b) others were thought comparatively insignificant. The four charges which remain are here taken up in order, viz:

A. Vista's water:

Water out of Lake Henshaw, claimed by Vista, transits the canal without license (recall that Henshaw was not yet built in 1924). Of course, it is true Vista's water passes through the canal, as it has done since 1925 or 1926. It is true the license to Mutual (Vista has no license) does not mention Vista's water as such.

The pages and pages of record and exhibits make it clear that Mutual's contract of 1922 with Vista's predecessor was with the record of Mutual's application when the license issued 53 years ago this month. It is shown that the Executive Secretary" was fully aware of it, per his telegram in April, and he then found no conflict between the program being licensed and the program which the contract required of Mutual, which detailed the carriage of the Henshaw water through the canal as impounded there and claimed by the dam's owner.

Later on, the Commission's order of 1926 (infra) establishes that the Commission was aware of Henshaw's purpose and operations. Besides, at least a dozen other inspections, studies and reports have made it plain, from all of which it must be concluded that the Secretary of the Interior at that time, the Secretary of War, and the Secretary of Agriculture (those officials during the 1920's constituted the Federal Power Commission) regarded the passage of Henshaw water as sanctioned by the license. Interior-Bands are correct that is not quite decisive what counts is the license, not what various functionaries knew was going on. But, at this late date, the uncertain language of the license issued by those officials must be taken to mean that the activities, including the passage of Vista water, which the officials knew about and intended to approve, were and are the activities which the license means, covers, and sanctions. That is, by now the words used in 1924 must be taken to authorize what the licensing officials thought it authorized, whether or not it would now be written differently.

Why the Henshaw water was not articulated in haec verba in the license itself cannot at this late