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BONNEVILLE DAM PROJECT COST ALLOCATION REPORT On June 26, 1945, the Federal Power Commission entered an order making a final allocation of the capital costs of the Bonneville Dam project incurred to June 30, 1944, including interest during construction at the rate of 2.5 percent per annum. The order fixed the total cost at $83,709,430, of which $5,784,055 was incurred for facilities solely for improvement of navigation; $37,681,648 for facilities solely for development of power; and $40,243,726 for facilities having joint value for the production of electric energy and other purposes.

The Commission allocated to power $20,121,800, or 50 percent of the investment in joint purpose facilities. This sum plus the direct power facilities of $37,681,648 makes a total power investment at Bonneville Dam of $57,803,448 as of June 30, 1944.

Supplemental allocations will be made by the Federal Power Commission to include costs incurred subsequent to June 30, 1944, in completing the Bonneville project.

With actual plant investment and operating cost data now available for both the Grand Coulee and Bonneville projects, the Bonneville Power Administration is having an independent commercial audit made covering cost accounts of the Administration and the two generating projects. Upon completion of the audit a comprehensive financial report will be prepared covering the operations and financial status of the entire Federal power development on the Columbia River.

BONNEVILLE REGIONAL ADVISORY COUNCIL Contributions of great value to the development of the Administration's programs were made by the Bonneville Regional Advisory Council during fiscal 1945. Representative leaders in business, industry, agriculture, education, government, and the press have served either as active members or invited guests at the various meetings of the Council in conferring with the Administrator on matters of moment concerning regional policies and the Bonneville developmental program.

Of particular interest in the activities of the Council was the adoption of a report prepared by an independent committee regarding the question of a coordinated river development program.

Other matters of importance studied and reported upon at Council moetings throughout the year included rural electrification, relation of freight rates to industrial development, electric house heating, power rates for industry and for irrigation, the Administration's advanced marketing program, the transmission construction program and problems involved in developing a coordinated research program for the region.

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THE Southwestern Power Administration was created by order of

the Secretary of the Interior on August 31, 1943, for the purpose of fulfilling the requirements of the Executive Orders 9366 and 9373 which provide for unified administrative control during the war of (a) the operation of the Grand River Dam project and the marketing of the power generated by the project, (b) the marketing of power generated by the Norfork Dam project, operated by the United States Army Engineers, and (c) the marketing of the power generated by the Denison Dam project, also operated by the United States Army Engineers. The Southwestern Power Administration assumed these duties on September 1, 1943, with the present Administrator appointed as Acting Administrator.

The Flood Control Act of December 1944 vested in the Secretary of the Interior the responsibility for distributing and marketing the power output of the multiple-purpose reservoir projects authorized by the Congress for construction by the War Department. The Southwestern Power Administration has made a general study covering all of the constructed, authorized, and proposed War Department projects on the Arkansas, White, Ouachita, Red, Brazos, Neches, and Guadalupe Rivers.

PRESENT ACTIVITIES

GRAND RIVER DAM PROJECT The Grand River Dam project was constructed by the Grand River Dam Authority, an agency of the State of Oklahoma, under a Public Works Administration loan and grant agreement. Construction was started in 1938 and the plant began commercial operation May 1, 1941. Of the total $25,113,636 estimated cost of the project, $11,113,636 was supplied by the Federal Government as a grant and $14,000,000 as a loan which is to be repaid by the Grand River Dam Authority from revenues of the project. The initial installation was four 15,000 kilowatt generating units. Space was provided in the power plant for two additional identical units. The fifth unit was

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purchased in 1941 by the Grand River Dam Authority, but priority ratings were not high enough to enable the manufacturers to proceed. Late in 1944, adequate priority assistance was granted, and installation of the unit will be completed by the end of 1945. The plant capacity will then be 75,000 kilowatts.

With the power supply for war production becoming critical in 1941, the President on November 21 assumed control of the project on behalf of the United States under section 16 of the Federal Power Act and designated the Administrator of the Federal Works Agency to operate the project and dispose of the power generated.

Contracts were negotiated for the sale of power to war industries. Forty-thousand kilowatts of the capacity were committed to the Ark-La Electric Cooperative, Inc., for transmission to the Defense Plant Corporation's aluminum plant at Jones Mills, Ark. Other war loads served are Camp Gruber near Muskogee, Okla.; the Oklahoma Ordnance Works near Pryor, Okla., and the Cardox Corporation at Claremore, Okla.

On September 1, 1943, control of the project was transferred to the Secretary of the Interior. With the end of the war approaching, negotiations have been started to return the control of the project to the State of Oklahoma.

During the period of Federal control, from November 21, 1941, through June 30, 1945, the gross revenue has been $5,499,110.

NORFORK DAM PROJECT On July 30, 1943, the President under Executive Order 9366 assigned to the Secretary of the Interior the responsibility of marketing the power and energy generated at the Norfork Dam project in Arkansas, which is a combined flood control and hydroelectric development on the North Fork of the White River. This project was constructed and is operated by the United States Army Engineer Corps. The project was built with an initial installation of one 35,000 kilowatt generating unit and provision for three additional units. The cost of the Norfork Dam project is approximately $26,000,000.

The project was operated on an emergency basis while it was under construction to meet a critical power shortage in the Southwest during the last 6 months of 1944 and until March 6, 1945, when commercial operation was begun with a full reservoir. Revenues from the sale of power amounted to $321,593 through June 30, 1945.

DENISON DAM PROJECT The Denison Dam project was built and is operated by the United States Engineer Corps. It is located on the main stem of the Red

River between Texas and Oklahoma near Denison, Tex., and Durant, Okla.

The Denison Dam project, like the Norfork Dam project, is a combined hydroelectric and flood control development. The cost of the project is approximately $54,000,000. The ioitial installation consists of one 35,000 kilowatt generating unit, and provision for four additional units.

The project was operated on an emergency basis, like Norfork, during the last 6 months of 1944 and until March 9, 1945, when commercial operation began. Revenues from the sale of power amounted to $313,892 through June 30, 1945.

MARKETING POLICIES The Grand River Dam project has its own transmission sysm which enables it to serve its customers directly and without relying on the facilities of others. Interchange agreements with the Public Service Co. of Oklahoma and the Oklahoma Gas & Electric Co. provide stand-by and off-peak steam-generated power and energy. Project sales for the fiscal year ended June 30, 1945, were 453,180,939 kilowatt-hours. During the war nearly all of the power has been delivered to war industries. A program of encouraging peacetime industries to locate in the area served by the project has been forwarded for 2 years, with the result that service to The B. F. Goodrich Co. at Miami, Okla., began in December 1944, and construction is under way to bring Grand River Dam power to the lead and zinc fields of northeastern Oklahoma. Introduction of low-cost power into the field will result in prolonging its life for probably 20 years, in the opinion of the major companies which operate in the area.

The Norfork Dam and Denison Dam projects, on the other hand, do not have adequate transmission systems; it has, therefore, been necessary to sell the entire output of the projects to the neighboring private utility companies, Arkansas Power & Light Co., Texas Power & Light Co., and Oklahoma Gas & Electric Co., for the duration of the war. The contracts provide for a reduction in rates to power users of $400,000 per year by the Texas Power & Light Co., and $150,000 per year by the Arkansas Power & Light Co., with the additional provision that rates to the rural cooperatives served by the two companies shall not exceed 6 mills per kilowatt-hour for the duration of the agreement.

Under the 1944 Flood Control Act, the Secretary of the Interior is assigned the duty of marketing the power and energy generated at all dams built and operated by the War Department to Federal agencies, public bodies and cooperatives, and private companies in that order of preference, and is authorized to construct or acquire the necessary transmission lines and related facilities. Accordingly,

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