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TABLE 5.-Consolidated statement by projects of construction cost of irrigation works, other items reimbursable with construction, and deductions

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$22, 483, 044. 71 $535, 232, 327. 19 $53, 839. 64$3, 455, 365.53 $149, 472. 77 $9, 223, 308. 67 $870, 613. 15 $17, 754, 302. 14$17, 127, 127.29 $21, 520, 858.20 $513, 029, 571.96

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THE work of the Division of Power, which is charged with super

vising and coordinating the power activities of the Department, continued along lines dictated by the marketing problems resulting from war operations, as well as by concern for postwar conversion and expansion.

The responsibilities of the Division have been greatly enlarged by the enactment of the Omnibus Flood Control and Rivers and Harbors Acts which direct the Secretary of the Interior to transmit and market all excess power generated at reservoir projects constructed by the War Department, ir such manner as to encourage the most widespread use of the power at the lowest possible rates to consumers consistent with sound business principles, and to give preference in its sale to public bodies and cooperatives. In this legislation the Congress reiterated the public power policy which it has developed during the past 40 years in the Reclamation, the Tennessee Valley Authority, the Rural Electrification, the Bonneville, the Fort Peck, and other acts dealing with power. Fundamentally that policy directs that the benefits of Federal power developments shall not be monopolized by limited groups, but shall be widely distributed so that the power shall develop the industry and agriculture of the Nation, and lighten the burden of the domestic consumer.

The ultimate installed capacity of the authorized flood control projects is more than 5,775,000 kilowatts, and of the authorized rivers and harbors projects is over 1,425,000 kilowatts, or a total of more than 7,200,000 kilowatts.

The Department of the Interior is now operating and marketing power from the largest aggregate of hydroelectric capacity in the world, including power which is generated at dams operated by the United States Army Corps of Engineers.

The total investment in power facilities at projects from which the Department markets the power, including parts of dams and reservoirs allocated to power, aggregated nearly $425,000,000 on June 30, 1944, on the basis of tentative power investment figures for those projects where the allocation studies have not been completed.

This figure also includes the Grand River Dam project which is owned by the Grand River Dam Authority of the State of Oklahoma but which since September 1, 1943, has been operated by the Department. The generating plants from which the Department now markets

delivered 18 billion kilowatt-hours of salable energy during the 1945 fiscal year as compared with 17.6 billion kilowatthours the preceding fiscal year. In 1940 all of the power plants under the jurisdiction of the Department produced 3,672,995,000 kilowatt-hours. As of June 30, 1945, the total installed capacity of such plants in operation amounts to 3,107,300 kilowatts. During the 1945 fiscal year the three major power agencies of the Department, the Bonneville Power Administration, the Bureau of Reclamation, and the Southwestern Power Administration generated 17,820,000,000 kilowatt hours of which 17,300,000,000 kilowatt-hours were sold for a gross revenue of $45,500,000.

Fortunately, hydroelectric power is not a "nonrecurring" assets. To be sure, the billions of kilowatt-hours that have gone to war in the past year are not available for nonwar or for future peacetime uses. But the power facilities and the river resources through which they were developed are long-run assets for the people of the United States to use in their national defense or in the general welfare. Against the 7,300,000,000 kilowatt-hours that were used for war purposes from the Columbia River projects, for instance, must be measured the untold millions of kilowatt-hours that were not developed during the year at proposed projects on that river system that have been authorized or studied. Unused resources, throughout the country, represent "frozen" assets that must be made useful by development. To that end the congressional authorization in the Flood Control and Rivers and Harbors Acts and the comprehensive development program of the Bureau of Reclamation will provide for a realization of a large portion of our unused hydro energy resources. But these vast new power resources must be sold and to accomplish this task efficiently studies by the power selling agencies of the Department are now under way in collaboration with other Federal agencies and with State and municipal organization. The successful efforts to develop and use the tremendous supply of public power for war activities, must, with the coming of VE-day and the anticipation of VJ-day, be matched by achievement of appropriate reconversion programs and load building activities in order to provide for the period of transition from a wartime basis to a peacetime economy without avoidable wastage of this natural resource.

The Division has also been working with the war agencies on the problem of disposition of fuel-operated generating plants that have

been built to serve some of our large military establishments and war plants. Acquisition by the Federal power agencies of those plants which will not be needed for defense purposes after the emergency, as a means of supplementing and firming the hydroelectric power which is now generated or will be generated by the proposed Federal plants, has been under study. Such coordination of Government facilities will result in better operations in areas of irregular stream flow, and consequently in sounder financial arrangements, lower rates, and greater regional benefits. In some instances such fueloperated plants can provide needed peaking or standby power which is now being purchased by the Government.

Regional studies.—The Division has continued its participation in studies being conducted by the agencies of the Department in efforts to work out the pattern for the administration and the extension of the multipurpose developments in the various river basins throughout the country, such as the Sacramento and San Joaquin Rivers, the Columbia River, the Missouri River, the Arkansas River, the Colorado River, and the rivers in the Southeastern section of the United States. These studies are necessary to determine the best method for making available to the people of the various areas the maximum benefits of the multipurpose projects at a minimum cost. These studies include the use of power for war production, the scheduling of construction features, the reconversion of war plants in the areas, the extension of these projects to provide additional postwar opportunities, the allocation of costs, and the power policies to be effectuated.

Rates and rate schedules.—No reductions were made in the various wholesale rates of the Department during the year, but substantial reductions were made by purchasers of low-cost Department power for fesale as required under their purchase contracts. Private power companies making such reductions include the Montana-Dakota Utilities Co., serving eastern Montana and western North Dakota, with a reduction of over $200,000 per annum; the Mountain States Power Co., serving northwestern Wyoming, with a reduction of over $25,000 per annum; The Texas Power & Light Co., serving northern and eastern Texas, with a reduction of approximately $400,000 per annum, which includes a 10 percent reduction to Federal war loads; and the Arkansas Power & Light Co., serving much of the State of Arkansas.

Thirty-seven REA-financed projects are being supplied with power at rates ranging down to about 3 mills a kilowatt-hour. Owing to the inability to obtain materials because of war-time restrictions, no increase was made within the year in the number of Rural Electrification Administration financed projects served by the power agencies within the Department.

The Division reviewed during the year several major rate studies including the interim rate for the Central Valley project in California and the rate structure of the Bonneville Power Administration in the Pacific Northwest. In connection with the latter study which is still under consideration are proposed rates for the electrification of the railroads and the generation of steam by the use of secondary electrical energy.

Contracts. Further efforts to decentralize the administration of power matters, while achieving maximum uniformity, has resulted in the establishment of standard contract provisions for Bureau of Reclamation projects.

Miscellaneous.—The Division participated in the negotiations for the disposal of the Hetch Hetchy power by the city of San Francisco in accordance with the terms of the Raker Act. The injunction against the sale of this power to the Pacific Gas & Electric Co. has been put into effect as a result of arrangements made by the city to use its power for its own municipal purposes and to sell power directly to two irrigation districts and to industrial war plants in the area.

The Division cooperated in studies and negotiations of the Bureau of Reclamation for the proposed acquisition of power facilities of Salt River Water Users' Association in Arizona and of the Minidoka and Burley power facilities in Idaho in an effort to bring about unified operating systems and to make possible lower rates. The Division also cooperated in the study of the financial feasibility of proposed power projects of the Bureau of Reclamation prior to authorization and in the handling of the power contracts of the Defense Plant Corporation for Boulder Dam power.

The Division was also able to render service to the Puerto Rico Water Resources Authority in connection with its priorities problems in the construction of the Caonillas Dam and transmission facilities which are necessary in the supplying of power to Army and Navy bases in Puerto Rico. Assistance was also given to the Territorial Government of the Virgin Islands in connection with the studies of critically needed AC generating and distributing systems for the towns of Charlotte Amalie, St. Thomas, and Christiansted and Fredericksted, St. Croix.

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