Decision on the Snake

In the struggles for power-dam sites along the nation's rivers, publicly owned utilities have long enjoyed substantial advantages over private companies. Exempt from local taxation, able to finance their ventures with low-cost, tax-free bonds, they can offer consumers cheap power--at the general expense of taxpayers everywhere. And the Federal Power Act gives them preference over private claims to the same water resources.

Last week, in a precedent-setting decision, the U.S. Circuit Court of Appeals for the District of Columbia struck a major blow in behalf of private power companies. The three-judge court upheld a 1964 Federal Power Commission decision licensing Pacific Northwest Power Co., a consortium of four private power firms, to build a $257 million, 670-ft.-high dam and a generating plant at Mountain Sheep, in the middle reaches of the Snake River astride the Oregon-Idaho border. The court unanimously rejected the challenge of the Washington Public Power Supply System, a group of 16 public utilities, which wanted to erect a comparable dam at Mountain Sheep.

Prior Rights. The victory for private power stemmed from the court's finding that the private combine had first claim to harness that sector of the turbulent Snake by virtue of its 1955 FPC permit to investigate the possibilities of two smaller dams near by. Held the court: it "would be manifestly unfair" to a private company that "has expended large sums over a long period, if a state or municipality could step in and reap the fruit of its labors by obtaining a license merely because of the [Power Act] preference."

The judges simultaneously turned down an Interior Department plea that the site be reserved for federal development and rebuked Secretary Stewart L. Udall for "his long delay" in entering the case. Said the court: "The Secretary of the Interior was more than once specifically invited to participate in the proceedings, but for about two years he did nothing." The court swept aside Udall's contention that the FPC had no right to allow private dams on the Snake because they would affect water flow and power output at nine downstream plants in which the Government has invested $1.67 billion. That, ruled the court, "would mean that the existence of one federal dam in a waterway would require that any future dams therein be federally constructed. There is no such requirement."

Long Struggle. Though the struggle over High Mountain Sheep Dam has already stretched over eleven years, the fight is not over. Washington Public Power announced that it will appeal the ruling. Whoever builds it, High Mountain Sheep Dam will ultimately provide at least 2,000,000 kw. for a six-state region whose power needs are growing at the rate of 15% a year.

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