Colonel HEWITT. Our computation indicated it would pay out under those assumptions. However, our assumptions were in error. Mr. SELDEN. Is there any reason to believe that the return from the sale of power at the proposed Amistad Dam will amortize the cost of the power facilities? Colonel HEWITT. In accordance with the principles under which the Federal Power Commission operates, and we have taken those assumptions, our cost-benefit ratio for the power features of Amistad are only about 0.25 to 1. Mr. ŠELDEN. Are there any further questions? Mr. Fisher. Mr. FISHER. Colonel Hewitt, the question has arisen during the hearings about the estimated cost of a generating plant at the Amistad site. I wonder if you have any further comments about that? You made an estimate. Colonel HEWITT. The estimates which I gave the committee yesterday were based upon information which we had received from the Bureau of Reclamation as the best estimate that they could make for powerplants of that capacity. Mr. FISHER. I believe one of your estimates was based on a plant with a capacity of 100,000 kilowatt-hours and the other one 75,000, is that correct? Colonel HEWITT. That is correct. Mr. FISHER. One was about $15 million, as I recall Colonel HEWITT. The estimate for 100,000 kilowatts was $19,387,000. The estimate for 70,000 kilowatts was $15,217,000. Mr. FISHER. Those are figures obtained from the Bureau of Reclamation? Colonel HEWITT. They were based upon unit costs which had been obtained in the construction of works for the Bureau of Reclamation. Mr. SELDEN. Mr. Kilgore. Mr. KILGORE. Colonel Hewitt, in connection with your studies on the proposal to build Amistad Dam, are you in a position to indicate how many years out of 10 or out of 50, or what percentage of the years, or any general estimate in that same field, would pertain with respect to the frequency with which Amistad could be expected to be without water? No water remaining behind the structure? Colonel HEWITT. We have made studies, of course, which are based upon past experience. We have 59 years of record. We can only estimate what may occur in the future on the basis of what has occurred in the past. Bringing the conditions of development in the river from what they were during the first period of the history, down to the present condition. The report carries this statement The capacity of 75,000 kilowatts or more would be available about 81 percent of the years. In other words, that means that in 19 percent of the years, there will not be capacity for 75,000, which means about 1 year in 5. On the 100,000 kilowatts, it would be available 62 percent of the years which means that 38 percent of the time it would not have a capacity of 100,000 kilowatts. That 38 percent means you have about 1 year in 3 when you would not have the capacity to generate 100,000 kilowatts. Those are average figures. Now, of course, you may have 10 years successively where you can expect 100,000 and you may have 20 years successively that you may expect 75,000, but on the average, it is about 1 year in 3, and 1 year in 5. Mr. KILGORE. That is all, thank you. Mr. SELDEN. Colonel Hewitt, you stated a few minutes ago that you estimate the cost-benefit ratio for power facilities alone is 0.25 to 1, or thereabouts? Colonel HEWITT. Yes, sir. Mr. SELDEN. Considering all other features of the dam, is the costbenefit ratio in excess of unity? Colonel HEWITT. Yes, sir. Mr. SELDEN. Could you give me that figure? Colonel HEWITT. That is a figure I agreed to supply for the record yesterday. That figure comes out 1.25 to 1. Mr. SELDEN. 1.25 to 1? Colonel HEWITT. Yes, sir. A correction on the 0.25 to 1: it is 0.23 to 1, on the powerplant alone. Mr. SELDEN. Are there any further questions? Mr. FASCELL. Mr. Chairman, I have a question. Mr. SELDEN. Mr. Fascell. Mr. FASCELL. Colonel Hewitt, from a practical and economical standpoint is there but one potential lessee for power purposes? Colonel HEWITT. I think that requires rather a qualified statement. I believe that if you intend to sell all of the power to a single entity, there is probably only one customer who could take the total amount of power which would be available. However, I can assume that even that company may wish to wheel the power to other connecting consumers under those circumstances. Mr. FASCELL. I see. But then it is also true, is it not, that they may not choose to do that? Colonel HEWITT. In our discussion with C.P. & L. as to how they will handle it, they indicated there will be times when they can't use the power and will have to take it over their transmission lines to connect with other companies who may be able to use it. Mr. FASCELL. But they haven't put in their proposal any place that they would be willing to wheel, on a reasonable charge basis, or going rate basis, any power that they themselves would not use? Colonel HEWITT. Their proposal, as I understand it, is that all water which passes Amistad will be paid for at a given rate and if they are unable to use that water they will still pay for it. Mr. FASCELL. So that has no direct effect on the power then, does it? Or does it? Colonel HEWITT. No, sir; it does not. That is, on a sales basis. Now I might say Mr. FASCELL. In other words, what you are saying is that the company will use whatever water they require at the time? Colonel HEWITT. Yes. Mr. FASCELL. They wouldn't develop or generate any more than they need? Colonel HEWITT. That is probably true. On the other hand they will pay for all the water which passes the dam and I might say that this offer is a tentative offer and will be subject to further negotiation. Mr. FASCELL. I realize that and I am not trying to pin down the points of a contract. I am just trying to analyze it out to determine possibilities which seem reasonable, practical, and logical. In other words, then the company would in effect spread out the cost of lost water at whatever rate the power is sold? Colonel HEWITT. That is a reasonable assumption. Mr. FASCELL. They would have to do that. Otherwise there would be no way in the world they could throw away that water. If they are not going to use the water to make power then they have to spread the cost of that water on the cost of the power they generate from the water. Colonel HEWITT. I would assume so. Mr. FASCELL. If they were not going to generate any extra power they wouldn't be selling any extra power. And if that is true, then there wouldn't be any reason to write up a contract agreeing to wheel power, particularly if they were not disposed to do it in the first instance. I mean as a business proposition. I am not trying to pierce their minds in any way nor am I ascribing any motives to anyone. If I were in their position maybe I wouldn't do it either, I don't know. Of course I would like to buy power at dump rates whenever I could, as long as I could sell it for a reasonable price and make a good profit. There is nothing wrong with that. I think that is good business. But then getting back to this then, what we are faced with is that we have no single cooperative or group of cooperatives which is in a position to lease the water rights, from a practical standpoint. That is all I have, Mr. Chairman. Mr. SELDEN. Are there any further questions? Thank you very much, Colonel. Mr. Fisher. STATEMENT OF HON. O. C. FISHER, A REPRESENTATIVE IN Mr. FISHER. Mr. Chairman, before you conclude the hearings today may I call your attention to the fact that there are two other representatives of REA cooperatives from my district here, whom I would like to introduce to the committee and have their names inserted in the record. Mr. Tom Hurd from Brackettville, Tex. He is manager of the Rio Grande Electric Cooperative. How many users do you have, Tom? Mr. HURD. We have about 3,600. Mr. FISHER. They operate along the Rio Grande. Kinney County in which he lives is also along the Rio Grande and he has told me he is sent here and is authorized to speak for the directors of his organ ization and they are in accord with the views expressed by Mr. Sheppard and others who have testified. I also have another good friend of long standing from my old native hometown of Junction, Tex., the manager of the Kimble County Electric Cooperative, Chester Kirk. He is here by authority of the directors of his organization, representing the users in that area. And may I also, Mr. Chairman, offer for the record a letter which I have from Mr. Carroll Land, manager of the Concho Valley Electric Cooperative in San Angelo, Tex., in which he expresses his interest in the flood control features of the project and its contribution to the development of southwest Texas, and also he is in accord with the views expressed by Mr. Sheppard in his testimony. Mr. SELDEN. Without objection that letter will be made a part of the record. (The document referred to is as follows:) Hon. O. C. FISHER, U.S. House of Representatives, Washington, D.C. FEBRUARY 5, 1960. DEAR SIR: Because we are vitally interested in the development of this area and its natural resources and its potential industrial and economic growth, we have been working closely with our Texas Electric Cooperative research and engineering committees on the Diablo Dam project. We know you share our feeling about the future of our area and we appreciate your present and past support of all such worthwhile projects. We hope you will endorse our thinking that an electric generating plant at the Diablo Dam site is another feasible project. Sincerely, CARROLL LAND, Manager. Mr. BURLESON. Since Mr. Fisher is introducing his constituents, I have one I would like to present, Mr. John Ammons from west Texas. Mr. Ammons is manager of REA at Roby, Tex. He is here to show his interest in this matter which I know is appreciated. Mr. SELDEN. Are there any other representatives of electric co-ops here today? Will you identify yourself, please? Mr. WAGNER. C. M. Wagner, manager of the Neuces Electric Cooperative. I understand John Young, my Congressman, is not here, but he is also interested. Mr. SELDEN. He is a very able Member of the Congress, and he is well represented by you here today. If there are no further questions, the committee stands adjourned until 10:30 tomorrow morning. (Whereupon, at 3 p.m. the committee was adjourned, to reconvene at 10:30 a.m., Wednesday, February 10, 1960.) AMISTAD DAM AND RESERVOIR WEDNESDAY, FEBRUARY 10, 1960 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INTER-AMERICAN AFFAIRS, Washington, D.C. The subcommittee met pursuant to adjournment in room G-3, U.S. Capitol, at 10:40 a.m., Hon. Armistead I. Selden, Jr. (chairman of the subcommittee) presiding. Also present were Hon. O. C. Fisher, a Representative in Congress from the State of Texas, and Hon. Joe M. Kilgore, a Representative in Congress from the State of Texas. Mr. SELDEN. The subcommittee will come to order, please. We have with us today a number of witnesses from the executive branch. There are present representatives from the Federal Power Commission, the Department of State, the Bureau of the Budget and the Department of the Interior. This morning I am going to call first Mr. Melville Osborne, who is the officer in charge of Mexican Affairs at the Department of State. Will you come up, Mr. Osborne, and have a seat here? STATEMENT OF MELVILLE É. OSBORNE, OFFICER IN CHARGE OF MEXICAN AFFAIRS, DEPARTMENT OF STATE Mr. OSBORNE. Mr. Chairman and members of the committee, in the treaty of 1944 the Government of the United States and Mexico agreed, with respect to the Rio Grande to construct jointly, through their respective Sections of the [International Boundary and Water] Commission * * * The dams required for the conservation, storage, and regulation of the greatest quantity of the annual flow of the river in a way to ensure the continuance of existing uses and the development of the greatest number of feasible projects, within the limits imposed by the water allotments specified in the treaty. The treaty contemplated at least three major dams. One of these was to be located below Laredo, Tex., and was to be completed within 8 years from the effective date of the treaty. That was Falcon Dam, which President Eisenhower and President Ruiz Cortines, of Mexico, dedicated on October 19, 1953. A second was to be located between Laredo and Eagle Pass. The third was to be located on the Rio Grande above the mouth of the Pecos River. The International Boundary and Water Commission has found, however, that the most favorable site for a second major storage dam is below the mouth of the Pecos. The detailed studies of the Commission are outlined in the feasibility report of the U.S. Section of the Com 107 51563-60—8 |