sion may not be reduced by this diversion below the lesser of 200 cubic feet per second or the natural flow.

The diversion would somewhat reduce energy production at Libby and at any other project which may be constructed on the Kootenai River in the United States, but this would not materially affect the value of these projects. Power production at other projects downstream in the United States would not be affected. The benefit-to-cost ratio of the Libby project of 1.2 to 1 has been based on estimated conditions as of 1985 assuming that the diversion is in effect.

Other Kootenay River diversions Canada may undertake are:

(1) after the treaty has been in force for 60 years, if undertaken between that date and the 100th year, a diversion into the Columbia River which does not reduce the flow of the Kootenay at the boundary near Newgate, British Columbia, below the lesser of 2,500 cubic feet per second or the natural flow. After the 80th year, the limitation on the flow of the Kootenai River at the boundary will be the lesser of 1,000 cubic feet per second or the natural flow. (2) In the event the United States does not construct Libby, a diversion into the Columbia River which does not reduce the flow at the boundary near Newgate, British Columbia, below the lesser of 1,000 cubic feet per second or the natural flow. Such a diversion would tend to afford flood protection to areas downstream in the United States. The quantitative limitations on Canada's Kootenai River diversions are designed to preserve the river as a live stream at the point where it enters the United States.

The diversion which may be undertaken by Canada after 60 years would substantially reduce the energy production at Libby and at any other projects which may be constructed on the Kootenai River in the United States. However, sufficient water would still be available so that the Libby and any other project on the Kootenai River in the United States could be operated to supply peak power loads. Also, the Libby Reservoir would continue to be available to provide flood control benefits downstream on the Kootenai River in the United States and on the Columbia River.

Question 2. What beneficial effects would this diversion have for flood control in the Kootenai River Basin in the United States? Do we have to pay for such beneficial effects?

Answer. The Libby Reservoir will substantially control all floodflows from the Kootenai River drainage basin upstream from the damsite. Accordingly, the diversions would have very little, if any, beneficial effect for flood control in the Kootenai River Basin in the United States after the Libby Reservoir is constructed. It is therefore not contemplated that the United States would pay for any food conrol benefits which might result from the diversions.

Question 3. Are the benefits of Libby storage at downstream hydroplants included in the B/C ratio determination?

Answer. Benefits of Libby storage at downstream hydroplants in the United States have been included in the benefit-to-cost ratio determination. Benefits of Libby storage at downstream hydroplants in Canada have not been included. Question 4. Will the downstream benefits from Libby be given priority preference ahead of proposed Canadian storage? If not, why not?

Answer. The Columbia River Treaty provides that for the purpose of determining downstream power benefits the 15,500,000 acre-feet of Canadian storage shall be considered as next added to 13 million acre-feet of usable storage at existing projects. Accordingly, the downstream benefits from Libby will not be given priority preference ahead of the proposed Canadian storage under the Columbia River Treaty.

Question 5. What effects will the treaty with Canada have on the B-C ratio of future corps projects?

Answer. Canada will provide 15,500,000 acre-feet of storage in the Columbia Basin in Canada which will be usable for regulating stream flows for improving flood protection and for increasing power generation downstream in the United States. Future storage projects in the United States might provide a similar service if the Canadian storage is not made available. The Canadian storage to be provided under the Columbia River Treaty will have an effect of reducing the benefit-to-cost ratios of future storage projects in the United States. The extent of the effect will depend upon the extent to which the Canadian storage reduces the need for services that could be provided by the future U.S. storage developments. The Canadian storage together with the storage provided by the Libby project and existing storage will be more than sufficient to control a flood equivalent to the maximum of record to 800,000 cubic feet per second at

The Dalles. While additional storage is needed to control such a flood to 600,000 cubic feet per second at The Dalles, the value of that additional storage is less than the earlier storage providing for control to 800,000 cubic feet per second.

CONSTRUCTION TIMING

Mr. RABAUT. I want to a ask you a question, General. On this Libby Dam, what proviso is there in the treaty concerning the construction limitations upon it as to time?

General STARBIRD. The treaty does carry provision that the Libby Dam must start, and by start I mean an actual element of construction, within 5 years after the treaty is ratified.

In other words, all planning would have to be completed by that date, preconstruction planning. It also provides that actual storage, full storage must be available within 7 years after the time construction is started.

Mr. RABAUT. What is the current situation on the treaty?

General STARBIRD. The current situation, sir, is that the treaty has been ratified by the United States. We are waiting action by Canada. I do know, within Canada, there are discussions going on between British Columbia and the Dominion Government. I do know, also, that certain planning, detailed planning, connected with the various structures, is already underway.

(Discussion off the record.)

Mr. RABAUT. On the record.

BENEFITS TO THE UNITED STATES

Mr. JENSEN. Sir, if Canada is given priority for downstream benefits, will this not give future U.S. projects only incremental benefits and therefore reduce present B-C ratios of U.S. projects?

General STARBIRD. The manner of establishing a distribution of benefits is to first set a total flow that we think could safely pass down the river, without breaching the levees below. That flow is 800,000 cubic feet per second.

Now what we are doing, in this treaty, is to allocate to the reservoirs as they would come in, as they are already in, to include Canadian storage and to include Libby, the benefits to achieve this reduction to 800,000 cubic feet per second.

Now later reservoirs, that are not in and recognized in this initial group, which might be built, and are not in the initial group, will naturally get a lesser degree of benefit, than if the Canadian storage were built in the initial block.

What, in summary, I am saying is that they are not getting preference over other reservoirs that will contribute to reducing the flow to that which will safely pass the levees. They are given preference, in our estimate, over later reservoirs that would come in.

Mr. JENSEN. General Starbird is a very conscientious man and he is a deep thinker and I am always prone to put great confidence in you, General. You have a great responsibility in this treaty with Canada and without a doubt you are going to see that the United States is fairly treated and will handle it in accordance with good neighborly

relations.

I will take your word on that.

Mr. RABAUT. The gentleman from New York?

Mr. PILLION. I note the benefit-to-cost ratio is rather marginal here, 1.21. This is a multipurpose project.

Does that mean flood control, plus hydropower? Are there any other purposes involved?

General STARBIRD. The primary ones, Mr. Pillion, are power and flood control. In fact, they are substantially all of the benefits. Power amounts to $14,929,000 per year, flood control $2,845,000 per year, and those are the only benefits we used in connection with this ratio. We did not use any incidental ones, for other local purposes. Mr. PILLION. Probably you have a $17-million benefit estimate per year?

General STARBIRD. This is correct.

Mr. RABAUT. Could I ask a question there?

You notice it says there, "Ratio for ultimate installation of eight units, not evaluated."

Will that lift it?

General STARBIRD. Those eight units would probably only be put in at a later date, when we got to a point where we begin to need substantial thermal as well. It is Mr. Brown's opinion, who is the chief of my engineering construction division, that it would raise it, sir. Mr. RABAUT. I thought it would.

Mr. PILLION. Does this Libby project involve just one dam with a reservoir of storage water behind it. Is that all that is included in

this?

General STARBIRD. That is all.

Mr. PILLION. As I understand it, it is a 90-mile storage reservoir? General STARBIRD. That is right.

Mr. PILLION. Running part way into Canada?

General STARBIRD. This is right.

Mr. PILLION. And will there be other storages further upstream, by Canada, to contribtue to this or not?

General STARBIRD. Not upstream, sir; no, none called for in the treaty. There are none as far as I know that are coordinated in under treaty. There are substantial storages, but they are downstream, rather than up.

DIVISION OF COSTS AND BENEFITS BETWEEN UNITED STATES AND

CANADA

Mr. PILLION. I see. How much of this cost of building the dam and buying the land up behind it, how much of this is paid for by United States and how much by Canada?

General STARBIRD. The costs that are shown here, sir, are $324 million, are entirely U.S. costs and I might state the benefits here given are also entirely U.S. benefits, they do not include flood protection for Canada or power generation in Canada.

Canada must, for this project, secure lands and rights of way for the acreage, within their country. In fact, the total is some 17,500 acres. I have seen a rough estimate of $7 million, but we do not know, sir.

Mr. PILLION. Then do I understand that the United States is investing $324 million in this and Canada is investing, your estimate was how much, $17 million?

General STARBIRD. On the order of $7 million, in this particular reservoir.

Now in the other reservoirs they build, which have 15 million acrefeet storage, they are investing something over $400 million. Mr. PILLION. I am just talking about Libby now.

General STARBIRD. Yes, sir.

Mr. PILLION. Libby, we put in $324 million, they put in 7.

Now the hydropower that is generated there, that would include the hydropower installation?

General STARBIRD. That includes the hydropower; yes, sir.

Mr. PILLION. Of the hydropower that is developed, in this Libby Dam and hydropower installation and the rest of it, how much of that power will be used by the United States and how much will be used by Canada or what is the-is there a division of power, or does all the power remain with the United States?

General STARBIRD. In this case, sir, all the power remains with the United States.

SALE OF POWER

Mr. PILLION. Everything that is generated there will be sold? General STARBIRD. That is correct. Now it might be sold across the border, but it is U.S. power, as contrasted to Canada.

Mr. PILLION. And will be sold either to Canada or to the United States?

General STARBIRD. That is correct.

Mr. PILLION. What market is there for that power now and what need is there for that power, as of the present time and the projected time, if and when this dam is built?

General STARBIRD. Libby fits into the overall Federal, non-Federal power resources of the Northwest. It is a part of the over-all.

Mr. PILLION. Is there any shortage of power there today in Montana or the immediate area?

General STARBIRD. I don't believe there is as of the present moment. However, this is a project which takes several years to build. We have estimated that the current available power in a low-water year is of the order of 6 million kilowatts. Excuse me, about 7 million kilowatts at the end of this year, when certain other plants come in. The load at the present time is somewhat less than that.

However, it is estimated that by 1964, the load will rise to 7,300,000 kilowatts, and it will further rise to the order of 11,300,000 kilowatts by 1971.

And it is in the 1971 period that Libby will begin to cut in, sir.

Now, we have actually programed, with the Bonneville Power Commission and with the Federal Power Commission, the resources coming in, so as to try to bring resources in at the same time the requirement will be there.

Mr. PILLION. This estimated benefit of 1.2, is based upon the power, selling of power of the full average 1,597 million kilowatt-hours and at what rate per kilowatt-hour?

General STARBIRD. It is contemplated the rate will be the existing Bonneville rate at the time. I believe the Bonneville rate that applies at the present time is of the order of two mills. The full amount of the rated capacity of the generators, of course, will not be realized.

The estimated total number of kilowatt-hours delivered per year, at site, is the figure that you quoted. The benefit-to-cost ratio of 1.2 to 1 is based on these power benefits, at site, and power benefits downstream, as well as the average annual flood control benefits accruing to the United States, as compared with the annual costs to the United States.

Mr. PILLION. I am wondering about the value of the whole dam from the standpoint of eventual economic justification with the marginal situation of 1.2, and I think it would require a further look after the planning is further advanced.

Thank you, Mr. Chairman.

TERMS OF TREATY

Mr. RABAUT. Because of the interest the committee is taking in this, I think it would be a good idea to put in the wording of the treaty. It is listed here in the Senate docket, Executive C, treaty with Canada, under date of January 17, 1961.

(The insert referred to is as follows:)