90TH CONGRESS 2d Session } HOUSE OF REPRESENTATIVES REPORT No. 1852 PROVIDING FOR THE REHABILITATION OF THE SEPTEMBER 4, 1968.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. JOHNSON of California, from the Committee on Interior and Insular Affairs, submitted the following REPORT [To accompany S. 224] The Committee on Interior and Insular Affairs, to whom was referred the bill (S. 224) to provide for the rehabilitation of the Eklutna project, Alaska, and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. PURPOSE The purpose of S. 224 is to make nonreimbursable the cost of the work which was necessary to rehabilitate the Eklutna Federal hydroelectric power project in Ålaska because of damage caused by the earthquake in March of 1964. COST The enactment of S. 224 will result in a reduction of $2,805,437 in the amount required to be repaid during a 50-year period in connection with the Eklutna project. EXPLANATION OF LEGISLATION The Eklutna project is a single-purpose Federal power project serving the Anchorage-Palmer area of Alaska. The project was authorized by the Act of July 31, 1950 (64 Stat. 382) and was constructed by the Bureau of Reclamation although this is not a Federal reclamation project. On March 27, 1964, the disastrous Alaska earthquake caused serious damage to the project-chiefly to the spillway structure of the dam and the intake works and tunnel through which water is delivered to the powerhouse. Since that time, the project has been rehabilitated under existing authority. However, all expenditures for emergency repairs and permanent rehabilitation of the project are reimbursable pursuant to the authorizing act. S. 224 was introduced for the purpose of making these costs for emergency repairs and rehabilitation nonreimbursable. During the studies made to determine the costs of reestablishing the project, it was decided to build a new dam rather than rehabilitate the old dam. This decision was based primarily on the fact that the cost of the building of a new dam was only about $80,000 greater than the cost of reconstructing the old dam. However, it is appropriate to allocate on a nonreimbursable basis only the amount of the estimated cost for rehabilitation of the old dam. Thus approximately $80,000 of the total cost expended in connection with the rehabilitation of the project remains reimbursable. The nonreimbursable amount is limited by the legislation to $2,805,437 compared with the total expenditure for rehabilitation of $2,885,415. The effect of this legislation will be to give to the Eklutna power users the same measure of earthquake rehabilitation that has been received elsewhere in Alaska. It relieves them of the burden of paying for the rehabilitation-a burden which amounts to an additional mill per kilowatt-hour. In addition to relieving the power users of this burden, enactment of this legislation will ease the problem created by current competitive natural gas prices in future contract negotiations for Eklutna power. Enactment of the legislation will make Eklutna power more competitive with natural gas generation and will further the purposes of the project by aiding Alaskan economic development and assuring a stable and reliable power supply. DEPARTMENTAL REPORT The report of the Department of the Interior on H.R. 7804, the House companion bill to S. 224, follows: U.S. DEPARTMENT OF THE INTERIOR, Hon. WAYNE N. ASPINALL, OFFICE OF THE SECRETARY, Chairman, Committee on Interior and Insular Affairs, DEAR MR. CHAIRMAN: This responds to your request for the views of this Department on H.R. 7804, a bill to provide for the rehabilitation of the Eklutna project, Alaska, and for other purposes. We recommend that the bill be enacted, with the amendment suggested herein. The Eklutna project is a single-purpose Federal power project, serving the Anchorage-Palmer area of Alaska. The project was authorized by the acts of July 31, 1950 (64 Stat. 382), and August 13, 1953 (67 Stat. 574). On March 27, 1964, the disastrous Alaska earthquake caused serious damage to the project, chiefly to the spillway structure of the dam and the intake works and tunnel through which water is delivered to the powerhouse. Since that time the project has been rehabilitated. No new legislation was required to authorize the Secretary to rehabilitate the federally owned project. Under the laws governing the project, however, particularly the second sentence of section 1 of the act of July 31, 1950, all expenditures for emergency repairs and permanent rehabilitation of the project were reimbursable to the United States from project revenues. By the terms of H.R. 7804, however, the costs of rehabilitating the Eklutna project, except for the differential between the cost of the new dam and the estimate for reconstructing the old dam, are made nonreimbursable, nonrefundable, and not subject. to repayment from project revenues. Following the earthquake, studies were made to determine the costs of reestablishing the project. The original proposal was to reestablish the old dam at the original site by constructing a similar structure. The old dam, originally built by private interests, was acquired by the Government from the city of Anchorage in 1952. A rough estimate made at the time of the cost of this construction was $1,340,000. Following this estimate, however, it was determined that a slippery clay substratum beneath the old damsite had been a significant factor in the failure of the dam and that extensive and expensive work would be required to stabilize the site. After a review of the several alternatives available, it was determined that another dam could be constructed in a location close to the old site but not subject to the same ground instability. It was further determined that the costs of constructing the new dam would not be significantly greater than the costs of repairing the old dam, even without considering the extensive foundation work required at the old site. Work on the new dam, intake works, and tunnel, initiated shortly thereafter, has been completed. Actual cost of the new dam was $1,419,978, about $79,978 greater than the original estimate for reconstruction of the old dam. The project reconstruction involved no change in the basic project plan. The lip of the new spillway was set at 871 feet, the same elevation as the top of the flashboards of the old spillway. The crest of the new dam is higher than that of the old dam solely in order to provide the freeboard required to the safety of the dam. Total costs associated with rehabilitation of the project were as follows: Other costs (miscellaneous equipment, including water level gage). Total $788, 409 1, 419, 978 668, 914 8, 114 2, 885, 415 The effect of this bill will be to afford to the Eklutna ratepayers the same measure of earthquake rehabilitation that has been received elsewhere in Alaska. The alternative would be to impose upon the Eklutna ratepayers through the repayment obligation the burden of paying for earthquake rehabilitation. Current 50-year rate and repayment studies indicate that burden will be an additional mill per kilowatt-hour. This rate differential, in addition to penalizing the ultimate consumers, will add to the problem created by current competitive natural gas prices in future contract negotiations for Eklutna power. Under the comparability test, the present wholesale rate schedules, which con template full repayment for emergency repair costs and rehabilitation costs from project revenues, would not be competitive with the alternative of natural gas generation. Passage of the bill will make Eklutna power more competitive with natural gas generation, and will further the purposes of the project through aiding Alaskan economic development and assuring a stable and reliable power supply. We propose that the cost of rehabilitating the Eklutna project, less $79,978 difference between the cost of rebuilding the old dam and constructing a new dam, a total of $2,805,437, be treated as nonreimbursable. We believe the $79,978 difference attributed to making the structure less susceptible to earthquake damage should be treated as reimbursable from project revenues. The effect of this distinction would be to establish a policy of replacing like structures at no increased cost to project beneficiaries, and of charging any incremental costs attributable to improvement of the original structure to those same beneficiaries. Therefore we recommend the following amendment: on line 5, after "March 27, 1964" insert the phrase "less the difference between the actual cost of the new dam and the estimated cost of rehabilitating the old dam,". The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely yours, KENNETH HOLUM, Assistant Secretary of the Interior. COMMITTEE RECOMMENDATION The Committee on Interior and Insular Affairs recommends the enactment of S. 224. О SEPTEMBER 4, 1968.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. JOHNSON of California, from the Committee on Interior and Insular Affairs, submitted the following REPORT [To accompany S. 3058] The Committee on Interior and Insular Affairs, to whom was referred the bill (S. 3058) to amend the Water Resources Planning Act to revise the authorization of appropriations for administering the provisions of the act, and for other purposes, having considered the same, report favorably thereon with an amendment and recommends that the bill as amended do pass. The amendment is as follows: Strike out all after the enacting clause and insert the following: That section 401 of the Water Resources Planning Act (Public Law 89-80; 79 Stat. 244) is amended by deleting "$300,000" and inserting in lieu thereof "$500,000". H.R. 15731, the House companion bill to S. 3058, was introduced by Chairman Aspinall (by request). PURPOSE The purpose of S. 3058, as amended, is to increase from $300,000 to $500,000 the amount authorized to be appropriated annually for administering the provisions of title I of the Water Resources Planning Act which establishes the Water Resources Council and specifies its authorities and responsibilities. COST S. 3058 provides for an increase of $200,000 annually in the amount authorized to be appropriated by the Water Resources Planning Act. |