INTRODUCTION

The Tennessee Valley Authority is a corporation wholly owned by the Federal Government. It was created by the Congress in 1933 for the unified conservation and development of the resources of the Tennessee Valley. TVA is charged with the responsibility for developing the Tennessee River for navigation, flood control, and the generation of electric power; for chemical research and the production of experimental fertilizers useful in agriculture and national defense; and for encouraging, in the national interest, the agricultural and industrial development of the Tennessee Valley region.

The TVA is an independent agency under a Board of Directors responsible to the President and the Congress for the conduct of a coordinated resource development program. It is currently financed from two sources: Appropriated funds and corporate funds available as proceeds of its operations. The enactment of proposed legislation would provide for the issuance of revenue bonds as an additional means of financing power facilities.

SUMMARY OF APPROPRIATION FINANCED BUDGET

This budget proposes for 1959 an appropriation of $16,850,000 and utilization of $2,207,000 estimated to be carried forward from 1958, a total of $19,057,000, for the activities summarized on pages 1 and 2. Of this, $8,982,000 is for navigation facilities most of which is for continuing construction of a new lock at Wilson Dam, Ala. Other capital requirements total $2,800,000, including $50,000 for preliminary design studies of a new multipurpose dam and reservoir project on the Clinch River at the Melton Hill site. This brings total requirements for acquisition of assets to $11,782,000. Appropriation financed operating expensesnavigation, flood control, fertilizer research, watershed protection and improvement, etc. are estimated at $7,275,000.

SUMMARY OF CORPORATE FINANCED BUDGET

The corporate financed activities, summarized on pages 3 and 4, are estimated to require $294,753,000 for 1959. Of this, $126,980,000 is for acquisition of assets most of which is for additions to the power system; $170,327,000 is for operating expenses mainly for the power and fertilizer programs; and $2,554,000 represents an estimated decrease in inventory balances. Income is estimated at $277,383,000, of which $253,712,000 is from power operations. Payments to the United States Treasury in 1959 are estimated at $2,063,000, all from proceeds other than power. Payments from power proceeds made and budgeted through June 30, 1958, are more than the amount required at June 30, 1959, to provide for total payments over a 40-year period equal to appropriations made for power facilities in service.

It is expected that during the second session of the 85th Congress legislation will be enacted to provide for the issuance by TVA of revenue bonds as an additional means of financing power facilities. Additional generating capacity will then need to be scheduled to meet power requirements. Present estimates indicate that 600,000 to 1,200,000 kilowatts will be needed to carry safely the loads in the winter of 1961-62. It is too early now to reach a firm conclusion on the total amount of new capacity needed and a reappraisal of the requirements will be made after the Congress has acted on revenue bond financing legislation. It is planned that the new capacity will include a new steam station and additions to existing hydro capacity.

NAVIGATION, FLOOD CONTROL, AND POWER PROGRAM-Multipurpose DAM

MELTON HILL DAM AND RESERVOIR

The 1959 estimate includes $50,000 for preliminary design studies of a multipurpose dam and reservoir on the Clinch River about 23 miles upstream from its confluence with the Tennessee River near Kingston, Tenn. The site is 9 miles southwest of Oak Ridge, 7 miles north of Lenoir City, and 19 miles west of Knoxville, Tenn. The dam will be a combination concrete gravity and earth embankment structure having a maximum height of about 82 feet, a crest length of 1,000 feet, including a gate-controlled spillway section of 150 feet, a navigation lock 175 feet in overall width, and a powerhouse section 210 feet long. Maximum pool will be at elevation 795 and the structure will create a reservoir 44 miles long with a volume of 118,600 acre-feet. The reservoir will extend up the Clinch River to a point about 8 miles above Clinton, Tenn.

The navigation lock, located at the right bank of the river, will have a chamber 75 feet wide by 400 feet long and will provide a normal maximum lift of 60 feet. It will extend navigation from the Watts Bar Reservoir upstream to Eagle Bend, a few miles above Clinton. The lock and the navigation channel will provide for riverborne movements of pulpwood and a significant amount of coal. Power generating equipment will have a total rated capacity of 72,000 kilowatts provided by two 36,000-kilowatt units, and will increase the dependable capacity of the system by 80,000 kilowatts.

The total project, including switchyard, is estimated to cost $35 million. Considering direct navigation and power benefits only, the benefit-cost ratio for the project as a whole is 1.4:1. Although recreation benefits created by this project have not been evaluated above, they are extraordinarily significant.

NAVIGATION PROGRAM

One of TVA's primary objectives is the development of the Tennessee River for the benefit of navigation. Through a series of multipurpose dam and reservoir projects and related facilities, a 9-foot navigable channel has been provided. The following sections describe 1959 plans for additions to navigation facilities and for performing engineering related to operating the navigation channel. A summary of the benefits of the navigation system is included.

NAVIGATION FACILITIES

The 1959 estimates for proposed navigation facilities are $8,982,000 from appropriated funds and $125,000 from corporate funds. Plans have been developed in cooperation with representatives of the Corps of Engineers.

Continuing construction of a new navigation lock, Wilson Dam, Ala., $8,978,000 The 1959 estimate includes $8,978,000 for continuing construction of a new lock at Wilson Dam, started in fiscal year 1957. The new lock will have a single lift with 110-foot by 600-foot chamber and a dredged canal from the lower lock entrance to the head of Pickwick Reservoir, bypassing lock and dam No. 1. The plan provides for replacing the present lock and dam No. 1 by deepening the existing lower lock chamber at Wilson Dam. The existing locks at Wilson Dam as modified by deepening the lower chamber will be kept in operating condition as an auxiliary or for emergency standby service. The total cost of the project is estimated at $35 million, of which $24,945,000 will have been obligated by June 30, 1958. The new lock is scheduled to be in service in April 1959 and is to be completed by June 1960, including all related channel improvements and cleanup work.

Navigation channel improvements, $4,000

This is for completing engineering reports and drawings of navigation channel improvements.

Alteration of bridges across navigation channels (planning and design studies), $125,000

With the increase in total traffic and size of floating equipment on the Tennessee River, certain bridges which were built a number of years ago now constitute serious hazards to river traffic. It is now apparent that narrow spans on some of these bridges will need to be replaced by wider spans within the next few years. The 1959 estimates include $125,000 for planning and preliminary design work on replacing spans for two bridges. In accordance with the provisions of H. R. 3182 (Public Law 301, 77th Cong., 1st sess.), this work will be financed from corporate funds.

NAVIGATION OPERATIONS

Appropriated fund requirements for direct navigation expense in 1959 are $220,000, compared with $234,000 in 1958. Net expense figures for 1959 are $2,972,000 and for 1958 $2,926,000. Net expense is the direct expense of the program less income from river terminals plus depreciation on navigation facilities (which involves no cash outlay), administrative and general expenses, and a portion of multipurpose reservoir operations expense.

Breakdown of actual expense of navigation operations for 1957 and estimates for 1958 and 1959

1. Navigation Engineering and investigations, $215,000 This includes the performance of engineering work to assure that physical facilities—locks, channels, safety harbors, and navigation aids-are operated, maintained, and modified or improved to meet the navigation needs of the waterway and to develop and make available basic technical data and services required by the public in using the waterway. Also included are transportation economic studies to investigate and appraise the opportunities for use of the waterway, the barriers inhibiting its use, and the benefits coming from the Federal investment in navigation facilities. The work is largely of a continuing nature comprising in part day-to-day operating problems of the waterway and in part longer range investigations leading to recommendations for improved facilities. Navigation engineering and investigations also include the review and determination of the effects of proposed structures on navigation, as required by section 26a of the Tennessee Valley Authority Act, and revision of reservoir navigation charts and maintenance of 1,100 markers on more than 225 miles of secondary channels. TVA also provides barge lines, shippers, and others with technical data concerning the waterway. The navigation engineering and investigations work does not duplicate that of any other Federal agency.

2. Operation of locks and terminals, $5,000

This includes the cost of furnishing electric power to the Corps of Engineers for operating the navigation locks on the Tennessee River, the expense of administering leases for three public-use river terminals owned by TVA but leased to private operators, and a credit resulting from operation of a coal terminal at