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Senator CORDON. Do you have those so we can know what they are?

Colonel WHIPPLE. I do not have a complete table. I would like to introduce that in the record, sir.

ESTIMATED BENEFITS

Senator CORDON. All right; put it in at this point so that we can see the estimated benefits under the $58,560,000 construction figure, and in each instance in dollars and the ratio, and the estimated benefits, and the same way of course, for the $65,335,000, so that there will clearly appear the changes and sufficient information to indicate in what field, whether it is agricultural products, improvements, or whatever other factors.

Colonel WHIPPLE. Yes, sir.
(The information referred to follows:)

FOLSOM RESERVOIR, CALIF. (a) Average annual benefits from the project as presented to Congress to request fiscal year 1954 funds and based on a total estimated project cost of $58,560,000. Flood control.

$1, 360, 000 Irrigation

1,500,000 Municipal water supply

440,000 Salinity repulsion.

500,000 Power

200, 000

Total ---

- 4,000,000 Average annual charges equal $2,510,000. Benefit-to-cost ratio 1.59.

(6) Average annual benefits from the project as presented to Congress to request fiscal year 1955 funds and based on a total estimated project cost of $65,335,000. Flood control.

$1, 630,000 Irrigation -

1, 600, 000 Municipal water supply.

440, 000 Salinity repulsion.

530,000 Power.

200, 000

Total ----

4, 400, 000 Average annual charges equal $2,800,000. Benefit-to-cost ratio 1.57.

Senator ELLENDER. According to the most recent figures that you have presented to us the cost of the Federal Government will be $65,335,000 on the part of the Corps of the Engineers and $40 million plus on the part of Interior, or a total of $105,335,000. How much additional is being expended in order to accommodate or give water to the municipalities in that area?

Colonel WHIPPLE. Sir, there is no additional cost specifically for Senator ELLENDER. The whole cost is on the Federal Government? Colonel WHIPPLE. Yes, that is correct.

that purpose.

LOCAL CONTRIBUTION

Senator ELLENDER. There is no local contributions whatever?

Colonel WHIPPLE. Sir, we do not necessarily know what arrangements will be made by the Bureau of Reclamation. After the completion of this project in accordance with the law it is turned over to the Bureau of Reclamation and conservation benefits are required to be reimbursed, but I am not familiar with the details of that.

Senator ELLENDER. Any charge by the Bureau of Reclamation would inure to the benefit of the Government in helping to amortize the cost of the project!

Colonel WHIPPLE. That is correct, sir.

TENTATIVE COST ALLOCATIONS

Senator ELLENDER. The question I am going to ask may have already been answered, but I wonder if you could tell us at this time what percentage of this entire cost is charged to flood control, how much to irrigation, how much to power, or any other factor?

General CHORPENING. I do not know whether we have those prepared allocations here or not, Senator.

Senator ELLENDER. If you do not you could put them in the record. I do not want to delay the matter. As I understand, whatever is charged to flood control is an investment that the Government will get no repayment on.

Colonel WHIPPLE. The answer to that is that since this project will be turned over to the Bureau of Reclamation, the Corps of Engineers has not attempted to make tentative cost allocations as we have for all our other multiple-purpose projects.

Senator CORDON. You have when you set up benefits, Colonel. There will be certain benefits by virtue of flood control, certain benefits resulting from beneficial use of impounded water, certain benefits result from power receipts, and so on. Those items are in your estimate, upon which you base the answer to the feasibility problem?

Colonel WHIPPLE. Yes, and we have those and I can give those. The benefit of municipal water supply is evaluated at $440,000, annually.

Senator ELLENDER. Unless the Bureau of Reclamation completes that amount or devises some way by which it can be refunded this amount will happen?

Colonel WHIPPLE. Sir, the conditions under which that is to be done allow considerable flexibility.

Senator ELLENDER. I understand that. Chances are before this is over the Federal Government is going to pay all of this. I mean in regard to this municipal water supply. I well understand in the power that whatever is allocated for power, all of it will be recovered.

COLLECTIONS FOR MUNICIPAL WATER

Senator Cordon. Do you know of any case where there has been municipal water furnished and that total cost paid by the Government?

Senator ELLENDER. Yes, you have had some, Senator.

Senator CORDON. Where are they? Let us hear about 1 or 2 of them. I want to increase my education.

General CHORPENING. Wherever there is storage built into the project for the use of municipalities, then we do make a contract to get repayment for that storage.

Senator ELLENDER. You had some in Oklahoma, did you not?

General CHORPENING. Yes, we have had them in Oklahoma, Texas, and in many parts of the country. There is another thing involved in this project, where due to the smoothing out of the flows coming down this river, the storage we discharge for power does augment or give benefits to municipalities down below due to that fact.

We have had the same thing in the Buford Dam on the Chattahoochee.

Senator CORDON. You mean it gives them a water supply?
General CHORPENING. A more constant water supply.

Senator CORDON. But it is not water that is impounded by virtue of this project?

General CHORPENING. I believe that is true, sir, in this instance. If there is impounded storage here that is to be used for municipal water, then a charge will be made. That is required under the law and we do that. In some instances there has been written into the authorization that the municipality to benefit would provide X dollars toward the construction of the project, that having provided that money, then they have the right to use the water. In other words they pay a lump

Senator ELLENDER. General, is it not a fact that it is only where you are called upon to build larger storage facilities that the municipalities are called upon to contribute? Is that the yardstick that you usually use?

General CHORPENING. That is the yardstick that is usually followed, yes.

Senator ELLENDER. When by virtue of the erection of a dam you cause the water to flow more evenly, you assist the municipality, but in most cases you do not ask for any contribution on the part of the municipal governments in those instances ?

General CHORPENING. That is correct.

sum.

COLLECTIONS FOR CONSERVATION BENEFITS

Senator ELLENDER. In this particular case is it your view that the Bureau of Reclamation is going to collect any sums from any of the municipalities that will be furnished some of this water?

General CHORPENING. There are conservation benefits here which are for irrigation. I am certain that they will make arrangements to collect for those conservation benefits. On the betterment of water there for municipal water supplies I would doubt if they would be able to make any collection because it is a benefit, it is true, but it is incidental to the construction of the project.

Senator ELLENDER. Let us exclude that for the time being. I wonder if you would be good enough to tell us how much of this cost of $105 million will be chargeable for flood control-in which event the Government pays the entire amount—what amount will be chargeable to power development, which will be repaid by virtue of the sale of electricity generated from falling water, and third, for irrigation.

Colonel WHIPPLE. Those questions can only be answered by a cost allocation and because this project is to be operated by the Bureau of Reclamation we have not made a cost allocation.

Senator ELLENDER. We would have to get that from the Bureau of Reclamation ?

Colonel WHIPPLE. Yes. We cannot give you those figures.

Senator CORDON. I can readily understand that you are not in a position to discuss cost allocation. That is going to be a matter to be determined when all the costs are in.

General CHORPENING. That is correct.

ESTIMATE OF BENEFITS

Senator CORDON. However, before you begin you had an estimate of benefits and those benefits included any power aspects. Do you have them?

Colonel WHIPPLE. We have all of the benefits except we have not brought the complete power benefit up to date because that is the part that pertains to the Bueau of Reclamation's activities. The other benefits are flood control, $1,630,000 annually; irrigation, $1,600,000 annually; municipal water supply, $440,000 annually; and salinity repulsion, $530,000.

Senator ELLENDER. Who benefits by that, the irrigation people, the cities?

Colonel WHIPPLE. The cities, yes, and the irrigation people also benefit from that.

Senator ELLENDER. That is the yearly benefit you are talking about. Colonel WHIPPLE. Yes.

Senator ELLENDER. Here is a yearly benefit of almost a million dollars and the cities are not contributing, or you do not know that they will contribute.

Colonel WHIPPLE. Sir, we cannot anticipate the interpretation of the law by the agency that is responsible and we have not attempted to make the determination.

Senator ELLENDER. I would like to know, before I vote for any other, how much would be charged to the various municipalities, or to irrigation, or the power people who are going to be benefited' by the project.

Colonel WHIPPLE. If this was our project and we were responsible for its administration we would have those figures ready for you at this time.

Senator CORDON. This is a place where the law itself was changed and this peculiar cooperative setup was provided in the law?

General CHORPENING. That is correct, sir, and it is the only one we have under construction where that unusual arrangement exists.

Senator ELLENDER. Who would build the power facilities?
Colonel WHIPPLE. The Bureau of Reclamation.
Senator ELLENDER. Are they building them now?
Colonel WHIPPLE. Yes, sir.

Senator ELLENDER. You now have $1,600,000 for flood control, $440,000 for cities, and $530,000 for fresh water. What is next?

Colonel WHIPPLE. We have allocated power benefits, only on the portion that we are building, that is, to the intake structure, of $200,000 annually.

General CHORPENING. Of course, that is a very small portion of the power benefits, because the other remaining power benefits would be credited toward the $40 million that is being expended by the Bureau of Reclamation on the powerplant itself.

RECOVERY BY GOVERNMENT

Senator ELLENDER. In the course of giving advice on the construction of this project you mean to tell this committee that you are not able to tell us now how much of this expenditure will not be recovered by the Government, that is, that is chargeable to flood control?

General CHORPENING. That is correct.

Senator ELLENDER. Is that due to the fact that this is a project that is being built by you and Reclamation? Is that the reason for not being able to give us those figures?

Colonel WHIPPLE. That is correct, sir. Necessarily when we are responsible for a cost allocation, which we make at this stage of the construction, we have our own ways of making those cost allocations. If the Bureau of Reclamation is doing it, they have methods that are slightly different and neither one of us, I do not believe, at this stage of the game has made a complete allocation, but in the end they will be the responsible agency because they are going to administer the project after its completion.

Senator ELLENDER. Do you not think it might be a better idea for us to do all that before we start building a dam like that? Can you say “Yes” or “No”?

Colonel WHIPPLE. It would be preferable to know those things in advance; this is correct, sir.

Senator ELLENDER. Any project that you have the entire construction of, you are able to give us those figures; are you not?

Colonel WHIPPLE. I have those figures for all of the other multiplepurpose projects.

Senator ELLENDER. But you do not do it here because it is going to be administered by the Interior Department and the burden is on them to bring that out

Colonel WHIPPLE. Yes.
Senator ELLENDER. Do they consult you about it?
Colonel WHIPPLE. No, sir; they have not consulted us.

Senator ELLENDER. You say that they use a certain yardstick that may be different from yours! Can you point out a few of the salient differences?

Colonel WHIPPLE. I think that would be difficult, sir.

COST ALLOCATION PHILOSOPHY

some time has proposed

General CHORPENING. Could I say something on this matter of proper method of cost allocation. The Corps of Engineers for quite

a scheme of cost allocations which we describe, method, which we think is sound. At this time, in fact for the last 6 and it is very complicated, as the separable costs-remaining benefits have been conferring at great length with the Secretary of the Interior weeks or 2 months, the Chief of Engineers and members of his staff and the Secretary's staff as well as with the Federal Power Commiswould be, if not the same, essentially the same, so that we may have the same ground rules to follow. Those conferences are getting along sion in an effort to get together on principles of cost allocation that quite well. We hope we may be able to resolve them in the near future. There is a somewhat different problem involved between the two

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