Water Power Act 41 Stat. 1063 (1920)
WATER POWER ACT 41 Stat. 1063 (1920)
The failure to capitalize on the vast water power resources of the country led increasingly, in the early twentieth century, to efforts to develop and regulate unused power on public lands and navigable rivers. After a number of failed attempts at national legislation, Congress finally passed the Water Power Act in 1920.
The act established a Federal Power Commission (FPC), to be composed of the secretaries of war, agriculture, and interior, with authority to approve water power projects "for the development and improvement of navigation, and for the development, transmission, and utilization of power" on any navigable river or public lands. The act empowered the FPC to license projects for up to fifty years; it also directed preferential treatment for state or municipal projects. The rates charged for the use of water were to include only FPC expenses; moreover, the act required licensees to charge "reasonable, nondiscriminatory and just" rates and prohibited combinations or other agreements to limit output or fix prices. The act stipulated that rate-fixing and regulation be administered according to the procedures outlined in the interstate commerce act.
The Supreme Court approved extensive federal controls in united states v. appalachian electric power company (1940).