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It is to be noted that San Luis, which is exclusively an irrigation project, is a logical and long-planned extension of the Central Valley project. That great project was designed to serve California's Sacramento and San Joaquin Valleys with construction of additional features proceeding in orderly stages to meet the water requirements of particular areas as they develop and the users are willing to shoulder the cost of such features. The San Luis unit of the Central Valley project is urgently needed now and the water users stand ready to repay the cost to the United States.

The physical plan of San Luis roughly involves the capturing of a portion of the winter runoff that each year flows from the Sacramento-San Joaquin delta into the ocean, and of transporting it by means of the existing Tracy pumping plant and Delta-Mendota canal to a point near the San Luis Reservoir where it would be transported and pumped through new facilities into the proposed San Luis Reservoir for use during the irrigation season. Thus, the San Luis unit will put to beneficial use a portion of water which now wastes to the sea. It wolud almost double the utility of the existing Delta-Mendota canal system by using it at a time when it would otherwise be idle.

The San Luis service area embraces some 500,000 acres of land in Fresno, Merced, and Kings Counties. These lands have until now been completely dependent upon water pumped from deep wells that often reach a depth of 2,000 feet and require pumping lifts of from 400 to 700 feet. Year by year the ground water table has receded. Recently, it has dropped at the alarming rate of 25 feet per annum. The drop in the ground water reservoir has been accompanied by a marked deterioration in the quality of water brought to the surface. A supplemental water supply at a price the users can afford to pay is essential if this important area is to continue as a vital part of California's economy. Immediate authorization of the San Luis unit is the only solution.

Earlier in this statement I referred to the part San Luis will play in the solution of California's overall water crisis. California faces a truly staggering water problem. A few statistics will help explain the situation. California's population in 1940 was approximately 7 million. Today it is twice that figure or 14 million. Population projection for 1965 place it as 17.8 million. More than half the water presently consumptively used in California comes from underground sources. Today the overdaft of ground water supplies, according to bulletin No. 3 of the California Department of Water Resources, amounts to 4 million acre-feet per year. It is estimated that by 1965 the seasonal net deficit could amount to over 10 million acre-feet. One most serious effect of these overdrafts is being manifested in the intrusion of sea water into the principal aquifers of a number of coastal ground water basins. Last May, the State Department of Water Resources issued a comprehensive report showing that California will eventually need some 376 reservoirs which, with related facilities such as aqueduct systems, etc., will require an estimated outlay of $11,800 million. With the tremendous sums that are needed for schools, hospitals, highways, California cannot possibly do the job alone. It will continue to need the help of the Federal Government. The passage of H. R. 6035 will give a great impetus to the State's own program.

Factors which contribute greatly to the California water problem are the geographic maldistribution of its water resources and its seasonal imbalances. The northern portion of the State has a surplus of water while the central and southern areas have a deficiency. Coupled with this is the fact that our streamflows follow the snow thaws and rains which occur in the winter and early spring months, while the summers are dry. These factors plus periodic droughts make large storage reservoirs a necessity.

The Federal, State, and other officials who drafted H. R. 6035 realized that the San Luis project can be of great assistance to the State of California in its plans to transport northern water into the areas of deficiency. Accordingly, it was so prepared as to coordinate the works with the plans of the State for that purpose. It specifically permits the project facilities to be designed and constructed so that they may be integrated into and made a part of the State's overall plan. I am convinced that San Luis authorized in accordance with the provisions of H. R. 6035 will not only take care of a critical water problem in the San Luis service area, but will also provide an important link in the State's solution of its overall water problem. For these reasons, I urge favorable action on the measure by your committee.

Mr. ASPINALL. Unless there is objection, the gentleman from California, Mr. Hagen, will be permitted to place his statement with regard to this legislation in the record at this point. Hearing no objection, it is so ordered. (The document follows:)

STATEMENT OF HON. HARLAN HAGEN, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF CALIFORNIA Mr. Chairman and members of the committee, I will supplement my brief oral remarks with respect to the San Luis project with an equally brief written statement.

I have introduced H. R. 9969 which would authorize the San Luis project as a reclamation project which would depend for initiation and completion on State of California participation in some of its major physical features on the basis of mutually satisfactory agreement between the State of California and the Secretary of the Interior.

The State would build and operate the main dam on San Luis Creek, its forebay and afterbay, and the main line canal diverting water south from the storage area. These features would be of a capacity large enough to serve the needs of both the State Feather River project and the Federal San Luis project even at moments of the greatest simultaneous use.

Federal contributions to the capital cost of these works would be limited to that amount mutually agreed to be attributable to storage and delivery of San Luis waters. Federal contribution to operation and maintenance would be on the same bäsis.

Obviously, the Federal Government would have complete control of federally produced waters even though ownership of the storage structures and egress 'canal and jurisdiction of overall operation were in the State.

An obvious advantage over the Sisk bill of the plan of construction and operation contemplated by my bill is the greater emphasis on cooperative use of facilities whereby at times, by agreement, State facilities could be used for Federal purposes and vice versa, subject only to a use charge and the condition that momentarily such features were not needed for their principal purpose. Such mutual exchange of use could occur during the development period of both projects and after both projects become operational. Even water supplies surplus to one project or the other at a particular time could be so diverted.

The prime interest of the San Luis people is the dedication of cheap federally initiated power to their project and the dedication of unused capacities of other existing Federal facilities for which they will pay no part of retirement of the capital cost. Such bargain use will presumably permit receipt by them of lower cost water. For such saving they are willing to accept the 160-acre limitation even though the bulk of their lands are excess lands.

The people who oppose the unilateral development of the San Luis project, including leaders of my constituency in Kern County, have no quarrel with the economic interests of the San Luis people. They do believe, however, that the main San Luis site and supporting storage structures are necessary to the State Feather River project and will consent to their use by the San Luis project only on the basis of mutually acceptable combination use.

There is no rancor in the difference of opinion over the matter of proper integration of certain features of the Federal and State projects; however, these differences of opinion must be resolved if the San Luis project is ever to become more than a Federal authorization. I would say advisedly that any authorization which left this committee and became law would be an idle act if it did not have statewide California acceptance. There are too many imponderables to say otherwise. For example, the State will shortly own all of the San Luis Dam sites. I would doubt that the Federal Government has authority to involuntarily take State property for reclamation purposes, or assuming such authority, that it would exercise it. For example, the final arbiter of surplus-water rights in California is a State agency. I am convinced that it would not consent to an assignment of water rights which was substantially opposed at the local level. I am certain that there are other imponderables of control which currently exist in the State and they would not be eliminated by the mere fact of a Federal authorization. I am pointing out that there are checkmates existing to unilateral progress on a Federal project and that rather than seeming to establish a procedure whereby the Bureau of Reclamation could go ahead without formal State agreement, this committee should support a proposal which represented agreement before the committee of all interested California persons. I feel that the proposal I have advanced which, with refinements, could serve as an amendment to the Sisk bill is that kind of a proposal. I am advised that if it is acceptable in its current form to the Bureau of Reclamation or if it could be made so acceptable with relatively minor refinements, it is acceptable to everyone who has an active interest in this question. Respectfully submitted.

HARLAN HAGEN, M. C. Mr. ASPINALL. The first witness to be called this morning is Hon. Fred G. Aandahl, Assistant Secretary of the Interior.

Are you to be accompanied by Mr. Bellport?

Mr. AANDAHL. I will read my statement but would like to have two or three Reclamation people at the table with me, please.

Mr. ASPINALL. The request of the Governor will be granted.

Governor, will you have the gentlemen who accompany you at the table give their names, from right to left?

Mr. BENNETT. N. B. Bennett, Chief, Project Development Division, Bureau of Reclamation.

Mr. BELLPORT. B. P. Bellport, regional director, Bureau of Reclamation, Sacramento.

Mr. HEAD. Ivan P. Head, regional project development engineer, region 2, Sacramento.

Mr. ASPINALL. You may proceed.

STATEMENT OF HON. FRED G. AANDAHL, ASSISTANT SECRETARY

OF THE INTERIOR, ACCOMPANIED BY N. B. BENNETT, CHIEF, PROJECT DEVELOPMENT DIVISION, BUREAU OF RECLAMATION; B. P. BELLPORT, REGIONAL DIRECTOR, BUREAU OF RECLAMATION, SACRAMENTO; IVAN P. HEAD, REGIONAL PROJECT DEVELOPMENT ENGINEER, REGION II, BUREAU OF RECLAMATION, SACRAMENTO, CALIF., DEPARTMENT OF THE INTERIOR

Mr. AANDAHL. Mr. Chairman, it is a pleasure to appear before your committee this morning to discuss the San Luis unit of the Central Valley project and the manner in which it fits into the overall California water plan for development of the water and land resources of that State. I will not attempt a detailed description of the San Luis development in my testimony, as a representative of the Bureau of Reclamation will follow me with that information.

On December 17, 1956, Secretary Seaton transmitted to the Congress for its information his report on the San Luis unit as an interim report, in advance of recommendations for legislative action. He stated in that report thatnegotiations with the State of California concerning possible means of integrating the San Luis unit with the proposed Feather River project of the State are proceeding at the present time and their outcome will be instrumental in shaping the recommendations that this Department will make when authorizing legislation for the San Luis unit is considered by the Congress.

Following submission of this report to the Congress, numerous meetings were held with State, local, and congressional representatives concerning acceptable means of coordinating the proposed San Luis and Feather River developments. These meetings disclosed that there are no major engineering obstacles to integration as the Bureau and State engineers are in close agreement as to the physical works required. The question of how integration can best be accomplished then is one involving policy rather than engineering considerations. These also have been fully discussed by interested parties and the draft of legislation before you was negotiated by Federal, State, and local interests in which responsible officials of the Department of the Interior participated. Accordingly, on June 28, 1957, this Department reported to you favorably on H. R. 6035.

The Central Valley project was first authorized by Congress to include Shasta and Keswick dams and powerplants, the Delta CrossChannel, Contra Costa Canal, Delta-Mendota Canas and Friant Dam, Friant-Kern Canal, and Madera Canal. The project was reauthorized in 1940 to include distribution systems from the main canals. In October 1949, Congress reauthorized the project to include the American River features, and in 1950 to add the Sacramento River Canals. In 1955 the Trinity River division of the project was reauthorized.

The next large area with a critical immediate need for additional supplemental water supplies lies on the west side of the San Joaquin Valley, part of which the San Luis area-is proposed for development under legislation now before the committee.

In its relation to the Central Valley project the San Luis unit would be a further stage in the process of capturing winter waters in northern California and after meeting needs there, transferring the surplus to water-short areas to the south. This is the purpose of the irrigation features of the Central Valley project as planned by State and Federal agencies over the last 35 years. It has been and is being planned and constructed in stages to meet the needs of various localities as these needs develop, and at the same time, it is being designed to fit into plans for future use in other areas. The plans for the San Luis unit are an example of the way in which the existing project facilities can assist future expansion of the project area.

In addition to possible changes in the plan to accommodate full integration with the Feather River project, the Bureau of Reclamation contemplates one important change in the plan of development and operation of the San Luis unit to take advantage of the offer by the Pacific Gas & Electric Co. to exchange energy on a more favorable basis than possible under present contracts. Studies show that it would be economical to invest additional funds for a forebay to the San Luis pumps and for enlargement of the capacity of those pumps to permit use of off-peak energy for pumping. This additional cost, coupled with the estimated cost of the original report plan indexed to present-day construction costs, results in a current estimated cost of the San Luis unit of $290,430,000, exclusive of distribution and drainage systems. New payout studies, based on these costs and presently estimated costs of the Trinity River division, show that project costs can be fully returned during a 50-year repayment period, either under all-Federal development or joint development of the Trinity River division, with surplus revenues in amounts of $67,195,000 under allFederal development of the Trinity River division and $207,124,000 under joint development of that division. The distribution and drainage system costs are now estimated to be $192,650,000. These costs would be repaid by the local districts under separate contracts if constructed by the United States.

Addition of the San Luis unit to the Central Valley project will, of course, have an impact on our ability to provide electric power to preference agencies from the Central Valley project. If the Trinity power facilities are constructed by the Federal Government, the ability to serve preference agencies decreases from 650,000 kilowatts to 470,000 kilowatts. If the Trinity plants are constructed by Pacific Gas & Electric Co., the ability to serve preference agencies would drop from 400,000 kilowatts to approximately 290,000 kilowatts, the amount required to serve only the Sacramento Municipal Utility District and other minor contracts. The ability to serve preference customers in the amounts indicated above is dependent upon the exchange of offpeak energy for project pumping purposes as contained in the offer of the Pacific Gas & Electric Co. to purchase Trinity falling water. These decreases in service to preference agencies were, of course, taken into consideration in the payout demonstrations previously mentioned. Under either circumstance of Trinity power development we support approval of the San Luis unit and leave selection between the alternatives for power production to the hearings on Trinity River division legislation and subsequent action by the Congress.

Much of the service area of the San Luis unit is now in large ownerships. Westlands Water District, which includes two-thirds of the entire San Luis water area, is mindful of the provisions of reclamation law with regard to acreage limitations in single ownerships. Members of that district, in appearing before your committee in May of 1956, indicated their willingness to comply with those provisions of reclamation law. However, the Southern Pacific Railroad Co. which owns approximately 120,000 acres of land in the service area, 65,000 of which are in the Westlands district, informed the Bureau of Reclamation by letter of October 1, 1956, that it was not prepared to commit these lands for sale under the usual Bureau of Reclamation recordable contract.

The company further stated that it neither sought nor expected any Federal subsidy in the form of 40-year interest-free money, but was willing to pay its fair share of the irrigation benefits provided the capital and operating costs are such that the land and crops can afford to do so. The legislation which we recommend be enacted requires compliance with the land limitation provisions of reclamation law.

In the Department's report on H. R. 6035, we called attention to the requirement in section 1 providing that construction of the San Luis unit shall not be commenced until the Secretary has secured, or has satisfactory assurances of his ability to secure, all rights to the use of water which are necessary to carry out the purpose of the unit and the terms and conditions of the act. In view of the uncertainties created by recent decisions of the California Supreme Court, I wish to reiterate our opinion as to the desirability and wisdom of this provision.

H. R. 6035, in section 3, sets forth several provisions and principles to guide preparation of an agreement between the United States and the State of California for coordinated operation and joint use of the facilities of the San Luis unit. In many respects these provisions and principles contain the heart of the proposal for joint development. Among other things they contain safeguards to assure operation of

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