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Professor Magnusson, of the University of Washington, Director of the Engineering Experiment Station, in Bulletin No. 78, dated February 1935, gives the firm power available at Grand Coulee under the proposed' high-dam development as 1,032,000 kilowatts. He bases this figure on a minimum regulated flow of 49,400 second-feet available 100 percent of the time and an approximate static head of 307.2 feet, with an overall efficiency of 80 percent. The annual mean flow of the Columbia River at this point is 109,000 second-feet.

The proposed power installation at Grand Coulee is 1,890,000 kilowatts. The most recent estimate for the dam, reservoir, powerhouse, and interest charges was: Dam, reservoir, and power plant.

$181, 101, 000 Interest charges during construction.

15, 000, 000 Total..

196, 101, 000 Professor Magnusson estimated the cost of the dam and reservoir at $130,500,000, including interest during construction, and this deducted from the total estimate of $196,100,000 provides an approximate estimate of $65,601,000 for the powerhouse and equipment.

The irrigation development associated with the Grand Coulee project is designed to irrigate 1,200,000 acres of fertile soil. The pumping station, dams, reservoir, and irrigation canals have no physical connection with the power development.

İt is proposed to use the secondary energy from the power development to pump the surplus or flood waters of the Columbia River up into the irrigation reservoir for use during the irrigation season. Whether the irrigation development is constructed or not, no change in the cost of the power development would ensue.

If designed as a power project to produce firm power at 50-percent and 80-percent load factor, the capacity and estimated cost would be those shown in the following table:

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In preparing the above cost estimates no allocations of investment have been made to navigation and flood control, and naturally no irrigation costs have been included. According to Professor Magnusson the completion of the present project will increase the firm power at Bonneville by 58 percent, and will improve navigation by raising the seasonal low-water surface at Bonneville by 2.9 feet, with greater effects on intermediate points.

The dam will also be a major factor in flood control for the Columbia River Basin.

The following table emphasizes the exceptional cheapness of Grand Coulee power by showing that, without allocations, the cost of this power delivered over a vast transmission network would be less than the fixed charges alone on a comparable steam generating plant:

Grand Coulee power developmentComparison of annual costs necessary to provide

equivalent amounts of power and energy at the load center when produced by steam and by hydro

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No attempt has been made to show the savings over the delivered cost of steam power, as no serious proposal has ever been made to generate such a quantity of steam power in the Northwest. The gross cost of Grand Coulee power at the bus, at $8.30 per horsepoweryear, is less than half the rate paid by high load factor industries at Niagara Falls. The availability of such cheap power, in conjunction with the natural resources, irrigable land and water transportation of the region, and modern conceptions for the utilization of electric energy, lay the basis of a wealth-producing development of the region which has many historical counterparts.

BOULDER DAM DEVELOPMENT

It must be realized that this analysis is based on hypothetical assumptions that have no relation to the contractual relations existing for the sale of Boulder Dam power. Actually all the firm and secondary energy generated at Boulder Dam has been contracted for.

Under the Boulder Canyon Act, enacted under date of September 21, 1928, by the Seventieth Congress, the Secretary of the Interior in 1930 negotiated contracts with the city of Los Angeles, the Southern California Edison Co., and others whereunder these agencies agreed to lease from the United States the privilege of generating power at Boulder Dam and to pay therefor 1.63 mills per kilowatt-hour of energy generated for the so-called firm energy and one-half mill per kilowatt-hour for the so-called secondary energy.

The Government did not undertake to generate power nor to sell power at the switchboard, but only to build the dam and power house and to purchase and install the generating machinery. The charges of 1.63 mills and one-half mill for the firm and secondary energy respectively cover only the privilege of using falling water for the purpose of generating power. The lessee must pay as a rental charge, for the use of the generating equipment and power house during the 50-year period of the lease, the cost to the Government of the generating machinery and appurtenances which the contract provides are to be installed and to remain the property of the United States. This cost under the contract, is to be repaid by the lessees in installments over a period of 10 years from the time the equipment is purchased by the Government, with interest at 4 percent on deferred installments. It can be seen, therefore, that the actual conditions attending the purchase of Boulder Dam power differ considerably from the conditions imposed in following Mr. Fowle's assumptions as to a 50-percent load factor and no sale for secondary energy.

The Boulder Dam project is a combined irrigation, power, water supply and flood control project. The irrigation feature is the AllAmerican Canal which takes off 250 miles down stream from the power development. The water supply feature which is being built by the metropolitan water district of Los Angeles takes off 150 miles down stream from the power development. The flood-control feature is represented by reserving 9,500,000 acre-feet of storage capacity in the reservoir at all times for this purpose.

In determining the cost of this power development the cost of the irrigation canal is not included, having nothing to do with the power development. It is, in fact, a liability because being an irrigation project primarily, water for this purpose is considered the paramount use. This use should be disregarded where only a power development is considered.

The metropolitan water district pays $250,000 for the water used in its aqueduct for water-supply purposes. This amount is not deducted from the annual cost of the power development because it has no influence on the power developed.

The flood-control feature, however, in reserving one-third the volume of the reservoir, does directly affect the development of power, as this capacity must be provided for in the reservoir, through increased height of dam. The apportioning of this cost was based on the fact that the cost of a dam tends to increase as the cube of the

height, and the volume of the reservoir tends to increase as the cube of the height, so that the cost of the dam tends to vary directly as the volume of the reservoir. With a total reservoir volume of 30,500,000 acre-feet the allocation to flood control should be the apportionment of the dam and reservoir cost in the ratio of 9,500,000 to 21,000,000. This would result in a figure of $25,400,000 being assigned to flood control.

The firm power that can be developed at a 50 percent and 80 percent load factor, the necessary generating capacity and the estimated cost of such development built for power purposes only are shown in the following table:

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A comparison between the annual cost of steam at Los Angeles, Calif., using oil at $1 per barrel under the previously mentioned steam-station assumptions, and power from Boulder Dam delivered at the load is given in detail in the following table.

The savings indicated there are such as to pay the annual charges at 4 percent on the All American Canal and the flood-control feature about four times as shown below:

Flood control..
All American Canal..

$25, 000, 000
43, 130, 000

Total.-

68, 130, 000 Annual charges $68,130,000, at 44 percent...

3, 065, 850 Boulder Dam power developmentComparison of annual costs necessary to provide

equivalent amounts of power and energy at the load center when produced by steam and by hydro

50-percent load factor

80-percent load factor

Hydro

Steam

Hydro

Steam

4,380,000
3, 942, 000

3, 942, 000
3, 942, 000

4,380,000
3, 942, 000

3, 942, 000
3, 942, 000

Output. M kilowatt-hours:

Net generation.

Delivered at load.
Capacity, kilowatts:

Installed.
Reserve
Dependable..
Delivered (90 percent efficient).

1,062, 500

62, 500 1,000,000 900,000

1, 125,000

225,000
900, 000
900,000

687, 500

62, 500 625, 000 562, 500

760,000 197, 500 562, 500 562, 500

Boulder Dam Power development/Comparison of annual costs necessary to provide

equivalent amounts of power and energy at the load center when produced by steam and by hydro-Continued

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The results of the above analysis, covering St. Lawrence power and the three major Federal projects on the Pacific coast, may be summarized as follows:

Mills per kilowatt-hour

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The purpose of this section is to develop by example the standard basis of comparison for alternative sources of power supply on a transmission network, as applied to the determination of economic investment limits for public hydro projects.

The criterion for such determination will be the probable lowest cost of modern steam-generated power delivered on the network as developed in appendix 1. A summary of these costs is shown in the following table:

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