Mr. RABAUT. You appear to have settled on the Foster Dam instead of the White Bridge on the reregulating reservoir. Please explain. the project as it is now constituted. General STARBIRD. The project as now constituted includes the Green Peter Reservoir, the upper of the two reservoirs, which will have a total of 430,000 acre-feet of storage, and will have 90,000 kilowatts of installed capacity. Downstream will be a reregulating dam which will reregulate the flow to give an even flow below and also provide added power benefits. Here the dam is much smaller, as to height and storage. The storage is only 61,000 acre-feet, but there will be installed therein 30,000 kilowatts of electric capacity. White Bridge Reservoir was considered again, or rather the recommended change from White Bridge to Foster was considered by the Congress and the Congress authorized the substitution of Foster in lieu of White Bridge this last year. Mr. RABAUT. Why haven't you started construction? General STARBIRD. We have been completing our preconstruction planning so that the first contracts could get underway. The first contracts will be for an access road, and for stripping the foundation of the Green Peter site. The contract for the Green Peter stripping, I believe, has been advertised now. It was to be advertised just about today. The contract for the road is in about the same situation, and we expect to obligate the funds on these two contracts by the end of the year. Mr. RABAUT. What evidence do you have of interest in water supply and navigation? General STARBIRD. I think, sir, I have discussed irrigation as it applies to similar projects. With regard to water supply for other than navigation flow and irrigation, that is, for downstream pollution benefits, elimination of certain sewage treatments, there is an abundance of water now for the populations that are there. However, there is beginning to be a pinch. I cannot promise you that we will have contacts for low flow, and for that reason there are no benefits taken in this latest estimate of benefit-to-cost ratio. Mr. RABAUT. What is the benefit-to-cost ratio? General STARBIRD. 1.3 to 1. The capacity here is for flood control and power. In the Willamette, the two fit very well, because the floods occur in the winter and the low flow is needed in the summer. Mr. JENSEN. I would like to submit these questions to be answered in the record. BENEFIT-COST RATIO What would be the benefit-to-cost ratio on this project with 4 percent interest and a power value equal to Bonneville's average revenue per kilowatt-hour, which is 2.32 miles per kilowatt-hour for fiscal year 1960; and also, in view of the recent substitution of the Foster unit for the White Bridge unit of this project, how firm is the present. estimate? Will you furnish that for the record? General STARBIRD. Yes, sir. (The information supplied follows:) Mr. RABAUT. You appear to have settled on the Foster Dam instead of the White Bridge on the reregulating reservoir. Please explain the project as it is now constituted. General STARBIRD. The project as now constituted includes the Green Peter Reservoir, the upper of the two reservoirs, which will have a total of 430,000 acre-feet of storage, and will have 90,000 kilowatts of installed capacity. Downstream will be a reregulating dam which will reregulate the flow to give an even flow below and also provide added power benefits. Here the dam is much smaller, as to height and storage. The storage is only 61,000 acre-feet, but there will be installed therein 30,000 kilowatts of electric capacity. White Bridge Reservoir was considered again, or rather the recommended change from White Bridge to Foster was considered by the Congress and the Congress authorized the substitution of Foster in lieu of White Bridge this last year. Mr. RABAUT. Why haven't you started construction? General STARBIRD. We have been completing our preconstruction planning so that the first contracts could get underway. The first contracts will be for an access road, and for stripping the foundation of the Green Peter site. The contract for the Green Peter stripping, I believe, has been advertised now. It was to be advertised just about today. The contract for the road is in about the same situation, and we expect to obligate the funds on these two contracts by the end of the year. Mr. RABAUT. What evidence do you have of interest in water supply and navigation? General STARBIRD. I think, sir, I have discussed irrigation as it applies to similar projects. With regard to water supply for other than navigation flow and irrigation, that is, for downstream pollution benefits, elimination of certain sewage treatments, there is an abundance of water now for the populations that are there. However, there is beginning to be a pinch. I cannot promise you that we will have contacts for low flow, and for that reason there are no benefits taken in this latest estimate of benefit-to-cost ratio. Mr. RABAUT. What is the benefit-to-cost ratio? General STARBIRD. 1.3 to 1. The capacity here is for flood control and power. In the Willamette, the two fit very well, because the floods occur in the winter and the low flow is needed in the summer. Mr. JENSEN. I would like to submit these questions to be answered in the record. BENEFIT-COST RATIO What would be the benefit-to-cost ratio on this project with 4 percent interest and a power value equal to Bonneville's average revenue per kilowatt-hour, which is 2.32 miles per kilowatt-hour for fiscal year 1960; and also, in view of the recent substitution of the Foster unit for the White Bridge unit of this project, how firm is the present estimate? Will you furnish that for the record? General STARBIRD. Yes, sir. (The information supplied follows:) A. BENEFIT-COST ANALYSIS By evaluating power at Green Peter Reservoir at a rate of 2.32 miles per kilowatt-hour, computed by the Bonneville Power Administration to be the average revenue received per kilowatt-hour in their entire system, and estimating annual charges using a 4-percent interest rate, an overall ratio of benefits to costs of 0.9 is indicated. The rates of the Bonneville Power Administration are based upon requirements for repaying total power costs for the system as a whole, which includes earlier low-cost projects such as Bonneville, and thus the use of the BPA average rate for sale of power is not considered a valid measure of power benefits. A valid measure of benefits is considered to be the market value of the power, normally determined as the cost of equivalent power from the source most likely to be used if the power features of the project under consideration were not available. This alternative source is usually a privately financed, modern, efficient steamplant. The use of 2%-percent interest rate for measuring annual charges, as now employed by the Corps of Engineers, is in accordance with the Bureau of the Budget Circular A-47, and is the rate for projects having an economically useful life of longer than 15 years as calculated by the Treasury Department in 1960. B. ESTIMATED COST The present estimate for Green Peter project with the Foster reregulating reservoir is considered to be reasonably firm. The estimate of $54,900,000 for Green Peter Reservoir is based on general design memorandum studies and has been adjusted to reflected experiences at Hills Creek and Cougar Reservoirs, two projects currently under construction in the same general area. The estimate of $17,400,000 for Foster Reservoir is based on a recent survey report. An adjustment in this latter estimate may be found necessary after completion of foundation explorations and after review of data collected in connection with the general design memorandum to be initiated in fiscal year 1962. Mr. PILLION. Actually, you have no contracts for irrigation on this, is that correct, General? General STARBIRD. That is correct, sir. The irrigation benefits for these are quite small because it is a power reservoir. It is only $137,000 out of a total benefit of $4 inillion. Mr. PILLION. How much is the flood-what is the total damage of flooding over the past 5 years in this area that this would alleviate? General STARBIRD. Sir, I don't have it summarized. I wonder if I could summarize that and give it to you later? I can give it as individual floods, but I can't add it that fast in my head. Mr. PILLION. Could you give us the last flood? General STARBIRD. The last was this spring and winter, and the largest one during the last 5 years was December 1955. The total preventable flood damages assigned to this project were $3,380,000. The flood of 1956, in December, $1,190,000. By rapid skimming, it looks like this total in the 5-year period would be in the order of about $7 million figured on a recurrence basis. Mr. PILLION. $72 million is quite a project. That is all. Mr. RABAUT. General, we will continue with you tomorrow morning at 10 o'clock. |