of the Government than would be the installation and operation of the hydroelectric facilities by the Government itself.

And, from the standpoint of the electric cooperatives, the partnership proposal offers nothing. The cooperatives would be totally denied the benefit of Federal power from the project.

It will be argued that there is no firm power potential at the Diablo site, and findings of Federal Power Commission staff to that effect will be quoted. The reasoning of the Commission staff in this matter is, we believe, patently fallacious. In his letter of April 1, 1958, to Colonel Hewitt, the FPC regional engineer stated:

"Although it is indicated that the desired monthly energy output and a capacity of 75,000 kilowatts could be maintained for 30 consecutive years (1920–49), we cannot assign dependable capacity to the Diablo plant * * *. On the other hand, a utility might be willing to contract, without too great a penalty, for power with an occasional shortage of capacity if sufficient advance notice of the impending shortage could be given."

What the FPC staff says, in effect, is that Diablo would develop firm capacity for an investor-owned utility company but not for the United States. The FPC went on to assign to the Diablo project a power value based on a dump energy rate of 1.7 mills per killowatt hour despite the fact that power from the Falcon project, downstream from Diablo, is being marketed at over 3 mills per kilowatt hour, despite the fact that Falcon is decidedly inferior to Diablo in power potential, and despite the fact that the Central Power & Light Co. has offered a partnership proposal for Diablo conditioned on 100 percent availability of peaking capacity.

These facts speak for themselves.

We urge, therefore, that in the interest of the electric cooperatives of Texas, and in the interest of the United States, that portion of H.R. 8080 which begins at line 21 of page 2 and ends at line 9 of page 3, be deleted, and that the bill as so amended be favorably reported and passed.

TABLE I.-Diablo-Value of hydroelectric potential

75,000 kilowatts at $15 per kilowatt per year.. 105,600,000 kilowatt-hours at $0.00175_. 27,400,000 kilowatt-hours at $0.001--

$1, 125, 000 185,000 27, 400

Total annual value_.

1,337, 400

NOTE 1.-The capacity at Diablo may be reduced during some years to a 45,000 kilowatt level and a corresponding loss of revenue_experienced. However, this factor is partially offset by the increase from 68 percent to 79 percent of the years during which the 15,000 kilowatt salable capacity at the downstream Falcon Reservoir would be available as a result of adding Diablo to the system.

NOTE 2.-The figures for the power and energy capability at the Diablo project are taken from S. Doc. No. 65, 86th Cong., 1st sess. The rates applied thereto are the same as those currently governing the sale of power from the Falcon project.

NOTE. The figures used are based on S. Doc. No. 65, 86th Cong., 1st sess., and on p. 40, "Diablo Dam Power Potential," an engineering study prepared by Roy Krezdorn, consulting engineer, Austin, Tex., 1959.

526, 400

Surplus power revenues per year--

Mr. SELDEN. Mr. Fascell, do you have any questions?
Mr. FASCELL. Not at this time.

Mr. SELDEN. Mr. Burleson?
Mr. BURLESON. No questions.
Mr. SELDEN. Mr. Kilgore?
Mr. KILGORE. No questions.
Mr. SELDEN. Mr. Fisher?

Mr. FISHER. I have no questions.

Mr. SELDEN. Thank you, Mr. Ellis and Mr. Robinson for your

statements.

We have one additional witness who will appear this afternoon. Mr. James Cobb, of the Texas Electric Cooperatives, from Austin, Tex.

STATEMENT OF JAMES R. COBB, GENERAL MANAGER, TEXAS

ELECTRIC COOPERATIVES, INC., AUSTIN, TEX.

Mr. COBB. Gentlemen, I am James R. Cobb, general manager of the Texas Electric Cooperatives, an association of 74 electric cooperatives in Texas. Every cooperative in the State is intensely interested in the construction of Amistad Dam on the Rio Grande. Twenty-one of our member cooperatives are directly concerned with the possibility of being able to purchase electric power from this dam.

I have been instructed by our cooperative members to recommend for them that not only should the Amistad Dam be constructed as soon as possible, but that this dam be constructed with an electric powerplant and the power developed be sold to preference consumers located in central and south Texas.

In Texas we have not been blessed with as many hydro sites comparable to other Southwestern States, such as in Oklahoma and Arkansas, or some of our other Western States. Therefore when such a dam as Amistad is contemplated, all electric cooperatives in the State are concerned.

There are numerous preference consumers in south and central Texas who can use all and more of the power that can be developed at Amistad Dam. We feel that the proposal to sell the "falling water" to a private utility that offers to pay only $337,000 for this power will not be in the best interests of the preference consumers and the U.S. Government. As pointed out by previous witnesses, there is much more income to be derived from this "falling water"-if the Government builds the generating facilities and markets this power to customers in south and central Texas.

We feel that if the Government could see fit to build powerplant facilities at the Falcon Dam in 1953, then it is even more practical and economically justifiable to build the power facilities at Amistad. As a matter of fact, Falcon hydropower availability will be increased with the construction of the Amistad Dam.

As pointed out by our engineers, peaking power in south Texas is valuable power. During the summer months, when irrigation is at its peak and the greatest amount of water is required from these two dams, there will be a coincidence of demand for electric power to serve peak summer electric loads such as irrigation wells and air conditioning. Such power is most valuable during these short summer peak months and many towns and cities in central and south Texas that distribute electric power as well as the electric cooperatives may be able to effect real savings in the construction of generating facilities to meet this demand. The power from Amistad will save millions of dollars in gas steam generating plant capacity just to take care of summer peak loads.

Gentlemen, we sincerely hope you will report out House bill 8080 favorably. However, we earnestly ask that you consider amending this bill to include the construction of powerplant facilities. We plead with you not to short sell the electric power sales potential by the acceptance of the proposal to sell the "falling water" at less than its real value.

Mr. Chairman, I have a little additional statement that is not written there and with your indulgence I would like to add this to my testimony.

Mr. SELDEN. You may proceed.

Mr. COBB. If I may be permitted I wish to add this statement.

There are a number of points raised by the IBWC report and the testimony here that frankly mystifies us. We would appreciate an opportunity to try to unravel these points and we request that our end of the testimony not be closed but that since others will be heard later on that we will also be allowed to come at that time.

Further, let me respect fully suggest that this committee ask the Federal Power Commission to reappraise the feasibility of power installations considering the opinion of both the Central Power & Light Co. and Texas Electric Cooperatives' experts to the effect that power generation is feasible and giving attention to the demonstrated fact that power generation lower on the same river at Falcon is paying out today.

I thank your committee for the kind indulgence and I appreciate the opportunity.

Mr. SELDEN. Mr. Cobb, if your group desires to be heard later, certainly that can be arranged.1

Mr. COBB. Thank you.

Mr. SELDEN. Since you are the last witness today, I will point out that we will meet again tomorrow morning at 10:30. At that time a representative of the Department of State, a representative of the Bureau of the Budget, a representative of the Federal Power Commission, and a representative of the Department of the Interior will be heard. Also, Colonel Hewitt will be available in the event members have additional questions to propound.

1 See statement of Tom Reavley, p. 222.

Are there any questions that any of the members would like to ask, Mr. Cobb?

Mr. FASCELL. I would like to ask a question dealing with the differential in the value of the proposed sale of power. I don't see how I can assume that the power will bring any value except that which somebody is willing to pay for it. And although the Federal Power Commission says that the value is zero, theoretically out of the generosity of the power company they are willing to pay $337,000, or whatever it is.

This makes the Federal Power Commission look real good.

Now what I am asking you is, are the cooperatives in a position to, pay more?

Mr. COBB. I think the cooperatives will be in a position to pay a going rate for the power. We are paying somewhat more than the Central Power & Light Co. will be paying right now at Falcon Dam. We would be in a position certainly to consider whatever the Government's costs are involved in building this generating plant, as a cost that would have to be borne by the purchasers of power, whether it was all electric cooperatives and other preference consumers or the Central Power Co. who is at present buying power from the Falcon Dam.

I would say the cost of the generating facilities would have to be borne by the consumers who buy it and they are paying more than 1.7 mills now.

Mr. FASCELL. I am assuming you can put your proposal in writing with as many ledges and protections as the present one now pending. Mr. COBB. That wouldn't be too hard, I think. This is based on the premise that they will have 100 percent availability of power at the time they need it for peaking purposes.

The electric cooperatives are going on the basis that we would like to buy some of the power and we will certainly pay the going rate for it, whatever the Bureau of Reclamation, if they were merchandising the power, would call for, as we are doing in other areas of the Southwest.

Mr. FASCELL. Is the power company wheeling power for the cooperatives at the present time out of Falcon?

Mr. COBB. No, sir, they are not. They refused to enter into a third party as a matter of fact, as I understand it the Bureau of Reclamation did not ask that there be a three-party agreement made on the sale of power from Falcon so they are distributing no power under a thirdparty agreement. It is all going into the Central Power & Light Co. line. We do have such an arrangement in the northern part of the State with Texas Power & Light Co., with some of the northeastern electric cooperatives, purchasing power that comes from Denison Dam. Mr. SELDEN. Are there any further questions?

If not, Mr. Cobb, we thank you very much.

Mr. COBB. Thank you, sir, and I thank your committee.

Mr. SELDEN. Colonel Hewitt, are you available for a few questions at this time?

Colonel HEWITT. Yes, sir.

Mr. SELDEN. Mr. Kilgore.

Mr. KILGORE. Colonel Hewitt, in studying the question of flood control on the U.S. side of the Rio Grande, has the Commission given any consideration to what the cost would be to attempt to control the

floodwaters of the Pecos and Devils Rivers by separate flood control dams on those rivers rather than by this approach, operating on the international stream under the provisions of the treaty with Mexico? STATEMENT OF COL. LELAND H. HEWITT, COMMISSIONER, U.S. SECTION, INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO

Colonel HEWITT. Yes, sir; the Commission has made such studies. We realize that if this were not an international stream, that flood control on the Rio Grande could be obtained by the construction of flood control dams on the Pecos and in the Devils River. The cost of construction of dams on the Pecos and on the Devils, which would give equal protection to the residents of Del Rio, Eagle Pass, and Laredo was a great deal larger than the American share, or the U.S. share I should say, of the cost of the construction of a dam in connection with Mexico at the Amistad site.

Mr. KILGORE. It would be fair to say that single purpose flood control structures on the Devils and Pecos Rivers would cost the United States more, considerably, than would the U.S. share of a multipurpose reservoir on the Rio Grande as proposed?

Colonel HEWITT. That is a fair statement and our estimates indicate it would cost the Federal Government about $37 million more than the investment which we have on the Amistad Dam or that we contemplate.

Mr. KILGORE. In addition to that $37 million saving at Amistad in comparison to what it would cost on the Devils and the Pecos, you pick up the conservation storage and the hydroelectric facilities there as really additional factors, since we are looking at flood control structures only on the Devils and Pecos, is that correct?

Colonel HEWITT. This would include the flood control provisions and the conservation provisions.

Mr. KILGORE. It would be a saving of $37 million plus?
Colonel HEWITT. Minus about $2 million.

Mr. SELDEN. At Falcon the power facilities were installed by the Federal Government at the same time the dam was built.

Is the sale of power from the Falcon Dam amortizing the cost of the power facilities?

Colonel HEWITT. Not at present, no, sir.

Mr. SELDEN. Has it for any of the years?

Colonel HEWITT. Actually, construction of the power facilities at Falcon Dam was visualized at the same time that another project which had been proposed by the Department of Interior for the construction of a reregulating reservoir in the vicinity of Mission, and since that project was authorized at the time, the U.S. section of the Commission undertook to capitalize on the combination of the two projects. However, although the project 5 was authorized, which I just mentioned, the reregulating reservoir in the vicinity of Mission has never been constructed and this fact has to a large extent removed the possibility of getting a higher rate for the power which was contemplated at the time the Federal powerplant at Falcon was proposed. Mr. SELDEN. Had the other facility been constructed, would the results have been different?