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Mr. PETERSON. Thank you, Senator Anderson.
Senator ANDERSOX. It was a real pleasure to work with you.
Any other questions?
Mr. Peterson. I will say that was entirely mutual.
Senator ANDERSON. I appreciate that very much.
Thank you for being here today.
Mr. PETERSON. Thank you, gentlemen.

Senator ANDERSON. We hope you are back many times before this committee. This isn't the normal place for you to appear, but we are glad to welcome you down in this room as well as in the room upstairs.

Mr. PETERSON. Thank you, sir.
Senator ANDERSON. Mr. Gatchell?

Mr. Gatchell, you are no stranger to this committee. We appreciate and have been helped by your testimony previously. We shall be very happy to have your testimony on this bill today.

Will you state your name and your position for the record again.

STATEMENT OF WILLARD W. GATCHELL, GENERAL COUNSEL,

FEDERAL POWER COMMISSION, WASHINGTON, D. C.

of this year.

Mr. GATCHELL. Thank you, Mr. Chairman.

My name is Willard W. Gatchell, and I am General Counsel for the Federal Power Commission.

The Commission has submitted its report to the committee and we sent up enough copies so that all of the members of the committee might have them. I have no prepared statement because I didn't know what further I could add to the report.

Senator ANDERSON. We want to inquire if you have any comments as to this bill, other than the report sent up, and any comments you care to make through the report. We would be glad to have that.

Mr. GATCHELL. The report is fairly short. If I may read parts of it, Mr. Chairman. (The full report of the Federal Power Commission appears at p. 5.)

The Commission considered the bill as originally presented and then the committee print of last August which was put in again in January

I believe our comments are directed to those amendments rather than to the original bill.

The Commission said:

Existing water rights lawfully acquired under State law are recognized in section 5 of the amended bill in substantially the same manner that they are recognized in section 27 of the Federal Power Act. The Power Act provides for the issuance of licenses for the construction of hydroelectric plants by nonFederal interests on lands and waters subject to the jurisdiction of Congress and for the purpose of utilizing surplus water or waterpower from a Government dam.

If I may at this point interject about the decision of the Supreme Court in Federal Power Commission against Oregon, the famous Pelton decision which I believe resulted in the preparation of this legislation. That project was proposed to be located in the Deschutes River, along lands where on the western side of the river they were within the Warm Springs Indian Reservation and on the eastern side of the river were Federal laws withdrawn for power purposes prior to the filing of the application for license, and there were Federal lands throughout the reservoir area.

The Supreme Court in passing on the issuance of that license reers to the fact that the only basis of Federal jurisdiction asserted n support of the license was the ownership of lands of the United states. There are no other conflicting issues that might have been resented. Senator WATKINS. It was conceded to be a navigable stream? Mr. GATCHELL. Senator Watkins, the question of navigability was lot raised by the staff deliberately in that case. We felt that the vasis of Federal land ownership was sufficient for jurisdictional puryoses, and the Commission made no findings as to navigability. Neither the Ninth Circuit Court nor the Supreme Court considered the tream as a navigable stream, nor did they consider the effect of this Pelton project on lower navigable capacity. So the only basis was he ownership of Federal lands. The court said

Senator BARRETT. Mr. Gatchell, was it the fact that the lands owned by the United States were reserved?

Mr. GATCHELL. It was the basis of ownership. The Court said the Desert Land Act did not apply to these particular lands because they had been reserved for power purposes. The Warm Springs Indian Reservation of course, having been set up under treaty in 1955, preceded the Desert Land Act which was first passed in 1866 and then subsequently amended two more times.

The Court said that the Desert Land Act did not apply to lands of the United States which had been reserved but applied only to public lands. The Court further pointed out that the issuance of this license did not involve in any respect an effect upon vested water rights, that vested water rights were protected under section 27 of the Federal Power Act, which I have always felt was a very desirable thing from a legislative standpoint because, unless you have that protection, you can not know where your rights may be in a subsequent period.

Therefore, the Court has recognized it in every case where we have had the question involved.

But the Court did go on to say that by reason of the issuance of this license, the State of Oregon was unable to prevent the construction of this project under the license, that it was not necessary to have two authorizations for the construction of the project.

I believe in the rest of the Commission's

Senator O’MAHONEY. Was anything said in the opinion with respect to the utilization of water ?

Mr. GATCHELL. The argument revolved around the question of the utilization of water.

Senator O'MAHONEY. Let me have the reporter repeat your last statement before I raised the question so you may understand the reason for my question.

(The reporter read from his notes as requested.)

Senator O’MAHONEY. Prevent the construction of the project. So I am asking about the utilization of the water. The construction of the project is one thing; the right to use the water is another.

Mír. GATCHELL. I beg your pardon, Senator O‘Mahoney. I was not ditrying to evade that. Senator O’MAHONEY. I know you were not.

Mr. GATCHELL. It dealt directly with the use of the water, referring to the construction and operation. The State of Oregon said that in

order to construct and operate this project the Portland General Electric Co. must secure the permission of the State hydroelectric commission. That is merely as to the use of the water. It was not as to the use of the lands or not as to anything other than the use of the water through their dams for power purposes.

Senator O'MAHONEY. Then do you understand this decision to be, in effect, a statement that a license issued by the Federal Power Commission to any applicant to build a dam upon a stream, the navigability of which has not been determined or stated, supersedes the power of the State under its constitution and under the act of admission to administer the waters within the State?

Mr. GATCHELL. Senator, I think there are two different things. In speaking of what was involved in this Pelton case I think the Court was there dealing with the right of the State as a sovereign to control the use of that water. It went back to the decision which it had rendered in the First Iowa Hydroelectric Cooperative case, to which it referred. In that case a navigable stream was involved, and the basis of jurisdiction there was asserted only on the ground of navigability. But the Court there said that the Commission had no right

270 to refuse to issue a license to the First Iowa Cooperative in the absence of State authority, because dual authority was not required under the Federal Power Act.

The Commision had refused a license, saying that before it could issue a license the applicant would have to show that it had complied with the laws of the State of Iowa. They took us into court, and the Court finally reversed the Commission and said that the Commission could issue that license if it felt that it should do so under the Federal run Power Act.

200) The State of Iowa had a provision that no authority could be granted by the State counsel, who passed upon those matters, for the use of water for power purposes where the water was not returned to the stream immediately below the powerplant, and they proposed in this case to divert the water from the Cedar River over to the Mississippi River.

Senator O'MAHONEY. Do you interpret this to mean that the Federal is Power Commission can issue licenses for the utilization of water which has not been determined to be navigable, in spite of the provisions of the law, and that the water thereby falls into the exclusive use of the while licensee, regardless of what claims may afterward be made under States law for use of the water?

In other words, does the Federal Power Act and this decision make ukid water used for power under a Federal Power Commission license take priority over the use of water for agricultural, industrial, and mining talia purposes?

Mr. GATCHELL. Yes. I thought that was your basic question, and that was what I was leading up to in the discussion of these principles. You have two things which are involved in your question. First, does the Federal Power Act supersede the State laws and give to the Federal Government exclusive right to control the use of water for power of purposes?

I think the Supreme Court has answered that question in both the First Iowa case and in the Pelton case, by saying that the Federal Power Act confers exclusive authority to the use of water, whether it in is a navigable stream or whether the control of that water arises by

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eason of the ownership of riparian lands by the United States. I hink the Supreme CourtSenator O'MAHONEY. That is, that ownership constitutes the basis? Mr. GATCHELL. I think it is the control of water. Ownership is an lusive thing. You had in your question the further point which deals vith this question of ownership. Would that right conferred by the Federal Power Commission prevent the acquisition of other rights ubsequent to the license?

Senator O’MAHONEY. Let me ask a hypothetical question. Suppose hat the applicant for a license to build a power dam were in fact the wner of the abutting land across the stream, having acquired ownership under laws of Congress, homestead, mining, or otherwise ? Mr. GATCHELL. Any way.

Senator OʻMAHONEY. Any way. Would such ownership support a license that would make the use of water for power purposes paramount to the use of water under the State law for domestic mining or agricultural purposes?

Mr. GÂTCHELL. No, sir.
Senator O’MAHONEY. It would not?
Mr. GATCHELL. It would not.

Senator O’MAHONEY. We have this confined, then, to cases in which the land is owned—I would like to put that word in quotes—by the Government.

Mr. GATCHELL. Yes, sir; I would agree with you on ownership of land. I have difficulty on ownership of water because that is a little different proposition.

Senator OʻMAHONEY. But there is a difference between ownership of land by Federal Government and ownership by private persons.

Mr. GATCHELL. There certainly is; yes, sir. I don't think the ownership of the riparian lands by private parties, that ownership alone, would confer upon the Federal Government the right to issue a license. I think that right under those circumstances must come from some other power. It would come not from the property clause of the Constitution but from the Commerce clause. That was the authority which was exempted in the First Iowa case. It would be by reason of the actual navigability of the stream or the effect of that project upon lower navigable capacity, which is entirely different from property right which was involved in the Pelton case.

Senator O'MAHONEY. The language in the decision, which was just now being called to my attention, reads as follows; this is from page 442 of volume 349 of the United States Reports:

Here the jurisdiction turns upon the ownership or control by the United States of the reserved lands on which the licensed project is to be located.

That seems to confine that decision to reserved lands under the ownership or control of the United States.

Mr. GATCHELL. Very narrowly, to reserved lands. That is all that was involved. The ownership of those lands, Senator, is of course a property right of the United States. Where I run into difficulty dealing with ownership of water is that I don't know what you mean by ownership of water because really water is never owned. It is merely the right to control the use of it. That is what was involved here.

Senator MALONE. The right to the use of the water through appropriation.

Mr. GATCHELL. Yes, sir. Vested rights, I think, are recognized in the Power Act and should be recognized.

Senator MALONE. They are recognized as a continuous beneficial use to water.

Mr. GATCHELL. Continuous. Whatever the State law says as to priority of use, as so many of the States do, putting consumptive uses first, nonconsumptive uses, and so on. Those are matters entirely within the State control which we have nothing to say about. This case was dealing with unappropriated water that flowed across lands of the United States, and no vested rights were involved.

Senator WATKINS. And no consumptive uses were involved!
Mr. GATCHELL. No consumptive uses were involved.

Senator WATKINS. Do you think that case eventually will be the basis for any further policy or wide policy?

Mr. GATCHELL. Senator, they have a difficult row to hoe. Senator Murray honored me by asking me to go out and assist the State of Montana a number of years ago in a water-use case where the water users and State Conservation Board were trying to put up a little dam on the Missouri.

The Montana Power Co. was a very powerful company and had a lot of power dams on there and they diản't want this little diversion. True, it was a small diversion, only some 10,000 acre-feet a year, and therefore it might be de minimis, but it was not small to the Montana Power Co. They put on quite a strong case. Those powerplants operate in a peculiar way. I presume that is the reason that the State asked that I go out there and assist them. I went out for the entire district court trial and was in charge of the case for the State board in that district court. We lost in the district court and then went up to the Court of Appeals for the Ninth Circuit, and the State was sustained. What they were trying to do there was to prevent the State from acquiring some irrigation consumptive rights in that Missouri River. It is true that the Montana Power Co. had for many years asserted and had on file with the State engineer, as it was required to do under State law, rights for waterpower purposes, but their rights did not seem to me, as we analyzed that situation, to prevent the State from putting this water to a consumptive use under the particular rights that the Montana Co. had. Senator WATKINS. Also to regulate it. Mr. GATCHELL. At that time, no, sir. As a result of that

case,

the Commission was able to make an investigation of those powerplants on the Missouri River and the Commission finally, after considerable opposition by the Montana Power Co., insisted that they take licenses for those projects. They took us to court, and the Commission was sustained in court. They have applied for licenses for those projects, but that is a separate story.

In this State case, however, the water rights which the State wanted to exert were for consumptive uses. I think consumptive uses are always recognized in all of the 17 Western States in a different way from nonconsumptive uses. It is true that it would interfere with the lower nonconsumptive use of the Montana Power Co. if they diverted above any one of their series of dams. But the right of the State to do that was upheld under the facts of that case.

Senator WATKINS. Did that go on to the Supreme Court ?

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