Following my testimony before your Subcommittee on October 17, I was troubled that I had not adequately conveyed to you the commitment of the Washington Public Power Supply System to abide by all requirements of law applicable to the mining claims which the Supply System has under option from Fremont Energy Corporation. The Supply System is a public agency. In the past, it has met fully all its obligations under the law, and it will continue to do so in the future. Therefore, I am enclosing a supplemental statement, and I request that you authorize its inclusion in the record of your Subcommittee's hearings. Again, thank you for the opportunity to testify on the important issues being addressed by your Subcommittee. Sincerely, EFA:vm Enclosure EDWIN F. ALDEN SUPPLEMENTAL STATEMENT OF WASHINGTON PUBLIC POWER SUPPLY SYSTEM As the Washington Public Power Supply System has stated previously, a combination of two present-day uranium market conditions--extremely high prices and unreliable sources of supply--resulted in the Supply System's decision to begin a long-term program of acquiring lands with uranium potential. The objective of this program is the mining and beneficiation of uranium deposits by the Supply System for use in its five nuclear power plants. The Supply System's intent is, and always has been, to develop uranium resources promptly so it can use them in nuclear plants which are scheduled for service in the 1980s. The process leading to actual production, however, is lengthy and expensive. seams, as does coal. Uranium does not occur in veins or Commercially recoverable uranium frequently lies deep underground, many hundreds of feet below the surface and many miles' distance from surface indications of its presence. Therefore, any uranium exploration program must begin with the acquisition of large areas of land. The exploration process, consisting of deep drilling to 500 or 1,000 feet, is one which continually narrows the area of focus. Most of the land originally acquired is discarded eventually; only those lands that the deep drilling program shows to have potentially commercially recoverable deposits are retained. Further drilling occurs on these lands to establish indicated or proven reserves. Only then is an uranium mine opened. The only available lands with uranium potential susceptible of such an exploration program and meeting the Supply System's criteria were, and still are, federal lands. As we have said, the Supply System, as a public agency, decided to acquire only lands shown by a preliminary exploration to have uranium potential. The only course available to the Supply System, consistent with this decision, was the acquisition of existing mining claims. Before the Supply System entered its agreement with the Fremont Energy Corporation, it was fully aware of the requirements of federal and Wyoming law that would have to be met. Specifically, the Supply System was aware of the federal requirement that $100 worth of assessment work be performed each year on each mining claim.1/ The Supply System, as a public agency, is acutely conscious of its obligations under law. The Supply System has always intended to meet fully those obligations. The Supply System is meeting them now and will continue to do so in the future. 1/ 30 U.S.C. 828. The only Wyoming requirement for assessment work is found in Wyo. Stats. 830-11. This Section, however, applies only to placer claims. An uranium mining claim is a lode claim. To fully understand the assessment work obligation relating to the Supply System claims, it must be remembered that the only penalty for failure to perform the required assessment work is that the claims are subject to overstaking. Both federal and Wyoming law specifically allow assessment work to be resumed by the original locator or its successor in interest; and both laws provide that once assessment work is resumed and continued at the statutory level, the claims no longer are subject to overstaking, In other words, both irrespective of past failures.2/ federal and Wyoming law allow past failures to comply with the assessment work requirements of those laws to be cured. Thus, the Supply System, when it entered the Fremont transaction, had a right to rely on the curative provisions of federal and Wyoming law. The Supply System signed the Fremont agreements intending to utilize the curative provisions by resuming assessment work on all claims and thereafter fully meeting the assessment work obligations. Shortly after the agreements were signed, assessment work resumed as to all 18,000 claims. During the first full assessment year in which the Supply System will have rights to the Fremont claims (the year ending September 1, 1978), the Supply System will meet fully the $100 per claim assessment work requirement on all claims in which it retains an The interest at assessment year end. It will do so in the following manner. During the assessment year, the exploration program begun in April 1977, will be continued. results of that program will be used to determine which of the 18,000 claims do not have indicated uranium potential. These claims will be dropped by the Supply System, and the Supply System will record documents releasing its option as to these claims. Thus, the Supply System expects that, at the end of the assessment year on September 1, 1978, it will only hold under option approximately 7,000 mining claims. Additionally, during the assessment year, the Supply System will perform $100 of assessment work with respect to each of the approximately 7,000 claims that will be retained as of September 1, 1978. The Supply System's budget for this assessment year is sufficient to accomplish this. If, however, during the year it should appear that the budget is insufficient, it will be increased. The Supply System submits that this program will meet fully all applicable requirements of federal and Wyoming law. During the course of the hearings, several members of the Subcommittee and at least one witness noted that "overstaking" is a remedy provided by law for either improper location practices or failure to perform the requisite assessment work. They implied that the Supply System should |