Mr. FASCELL. In the capacity component, basis for the determination of that then is the availability of water and the availability of head?

Mr. WEAVER. Yes.

Mr. FASCELL. Your conclusions were that they would be 20 percent? Mr. WEAVER. The capacity factor would be 20 percent. That is nothing against the powerplant if you otherwise have a good plant there. If it has the water you could market it at 20 percent capacity factor in that region. We don't even have that. There are 4 years in which there is no power at times of system peak loads. The power is zero.

Mr. FASCELL. Those basic facts and data came from the International Commission?

Mr. WEAVER. Yes, from their study.

Mr. FASCELL. It is on their studies that you made the final conclusion?

Mr. WEAVER. That is right. There is one thing I didn't mention and I think it is important, and that is that the Commission was not adverse to this project for making power. The Commission concurred with the International Boundary Commission that the penstocks should be installed so that at such time as it is found economically feasible and possibly to resolve some of these things that we are talking about, generating facilities can be installed. The power inherent in that project is a conservation measure; the ability to install that capacity is preserved in that project. We are heartily for that. Mr. FASCELL. Thank you, sir. It is very clear.

Mr. SELDEN. In his testimony yesterday, Mr. Krezdorn conjectured that perhaps the FPC did not take into consideration the controlled releases for irrigation in making its determination.

Did the FPC take that factor into consideration?

Mr. WEAVER. We relied completely, Mr. Chairman, upon the studies, the operation studies made by the International Boundary Commission. I think they will tell you that their studies, of course, did take into account irrigation releases.

Mr. SELDEN. I think that question should be cleared up.

Mr. WEAVER. I think the Colonel here could tell you that they definitely made the study.

Mr. SELDEN. Colonel Hewitt, is that correct? Did you take into consideration the controlled releases for irrigation in making your determination?

Colonel HEWITT. Yes, sir, we did.

Mr. SELDEN. Mr. Fisher, do you have any questions that you would like to ask Mr. Weaver while he is available?

Mr. FISHER. I think there is one question that might properly call for a comment.

The question has been raised during the hearing several times about the Commission's conclusion that the dependable power there is zero. You have talked here about 20 percent.

I think to the average layman it is a little difficult for us to comprehend what is meant by zero and what is meant by 20 percent. There was a quotation on yesterday from your regional office in which they stated

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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 to 1949) we cannot assign dependable capacity to the Diablo plant due to the capacity and energy shortages cited for other years.

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Can you elaborate on that a little bit? You would think that 30 consecutive years would create quite a dependable source, not every year, but if it is 30 consecutive years, that is a lot of time.

Mr. WEAVER. I agree with you, Mr. Fisher, that is a long time. We are considering the economics of the project over a 50-year period. We know these critical periods, and the history is that they are sometimes even worse than before. That goes for both floods and the opposite end, which is drought.

All I can answer to you, it may not be satisfactory, but to repeat what I have said and that is, we have looked at the record which is available to us, and we look at the most critical period of streamflow within that record, and we think that in general that is the period which determines your dependable capacity. You might say it is a rule possibly, but we think that is what is done in all our work and it is the kind of thing that is done by everybody I know who really computes power on a dependable capacity basis.

I don't want to get into the complications of this, but there is another aspect of it which goes beyond the generalities, and that is this, that I might mention, say, a navigation dam on the Ohio River that has been considered for the installation of power generating facilities, generally up in the vicinity of Pittsburgh or below.

Practically every spring that dam is drowned out. If you put power in that dam, it would be drowned out. Utilities people in the area with whom I have talked have said they thought that it might be an error in judgment, but that they could consider the power from this plant being used in their large system where they have multiple reserves and other things, and considering the time when that outage. would occur, they thought they would be willing to consider that power practically completely dependable even though there is no power capacity there at all, say in April.

System peak is in December. We can almost always depend upon that plant to be available in December. Our loads are down in April and we can pick up any shortage that may appear through our multitude of steam plants.

That is an example where you depart from the hard and fast rule. We think that the hard and fast rule can be departed from, but in this case we don't see how the United States could build that plant and market it and guarantee power delivery. All they have is that plant. When that plant is not operating, the United States down there doesn't have a steam plant or other facilities that can pick up that deficiency. That is the thing we are talking about.

Mr. FISHER. Does that throw some light on what you say about the apparent willingness of a private power company to buy the falling water?

Mr. WEAVER. That is in the record in, I think, the Commissioner's report, their letter and so on. They say they would be willing; they estimate that they would be willing to pay an estimated amount per year for the falling water there. I don't remember the figures, but I think it is somewhat twice the annual carrying charges for the penstocks, which amount to about $90,000. They don't say, but we can

see how they might be able to use that power because they are a big system.

Their system covers a great part of the State of Texas. They have a multitude of steam electric plants and interconnections. They might well be able to use that and take a chance on that period being maybe 30 years away-maybe they can take a calculated risk on that. They can do it because they have this capacity with which they can step in and pick up the load.

Of course, there again, as I read their letter, they have circumscribed their letter with certain ifs and ands, the most important of them being the release of water. I don't think their letter is a firm offer because it is an estimate of what they think they can do. That is the way I read it.

Mr. FISHER. Would you comment on the word "zero" which has been used?

Mr. WEAVER. Zero is zero. There is nothing there.

Mr. FISHER. How do you reconcile that with your 20 percent? Twenty percent is not zero.

Mr. WEAVER. Let's put it this way: That there is 147 million kilowatts-hours to be produced and 100,000 kilowatts installed. You divided that energy by the hours in a year and that would give a certain average kilowatts. You divide that by 75,000 kilowatts installed capacity and you would find that you would only operate 75,000 on the average, including these zero periods, on the average only about 20 percent of the time.

During the period it was operating it would probably operate 22 or 23. During these particular critical periods, it would be zero. The overall average is about 20 percent.

Mr. FISHER. I think I understand what you mean by the zero. That is all, Mr. Chairman.

Mr. SELDEN. Mr. Kilgore.

Mr. KILGORE. Mr. Weaver, is dependable capacity the same term as firm power? Are they interchangeable or interrelated?

Mr. WEAVER. I think with most people they are interchangeable. Mr. KILGORE. Is there a difference between peaking capacity and the firm power?

Mr. WEAVER. Your peaking is peaking as compared with baseload. Baseload is around the clock. Peaking is part-time every day, to go up to the peaks of these loads. Firm would be simply compared with nonfirm, nonfirm being that you can't depend on it.

Mr. KILGORE. Firm power, as you indicated initially, would be somewhat the same as your capacity; it would be the power you could depend on endlessly; that is, within the 50-year life, over the entire 50 years?

Mr. WEAVER. That is right. You could say this is the least you could do.

Mr. KILGORE. I suppose the demand of most power systems has hills and valleys in it?

Mr. WEAVER. Yes.

Mr. KILGORE. And the peaking power concept here would assume that you could release irrigation water for downstream use at a higher rate at some hours of the day and meet the demand of a power system for more power at those hours.

Mr. WEAVER. I presume that could be done because depending how much—I don't know how much water would be taken out for irrigation use between Amistad and Falcon-but to the extent that water goes down to Falcon and is taken out for irrigation and presumably can be reregulated, that is the advantage of Falcon, as far as peaking is concerned, to Amistad. You get that pond down there that takes the varying flows and smooths them out for irrigation.

Mr. KILGORE. I do know from some previous experience below Falcon that efforts to release irrigation waters from Falcon on the basis of creating peaking power were not entirely satisfactory because those wads, as you referred to them, still existed to some extent in the area where the diversion needed to be made.

This would be the water passing and the lesser flow of water which wouldn't meet the diverter's demand.

Have you had access to the information that was given to the subcommittee yesterday by the two engineers?

Mr. WEAVER. No.

Mr. KILGORE. One of them, as I think the chairman indicated, projected a net income to the United States in the event the United States built a powerplant at this site, a net income of $668,000, and the other a similar figure of $524,400 on an annual basis.

Are those conclusions inconsistent with the conclusions the Commission reached?

Mr. WEAVER. Those figures sound to me like figures that we have. We say in our letter that if 75,000 kilowatts could be considered as fully dependable, then the benefit to cost ratio would be 1.1 to 1. In other words, the installation of power would be economically feasible. That computation was made having regard for the inclusion on the cost size of the ledger for the Federal project the item for taxes foregone, which you may have heard about.

In 1954 the Departments of Interior and Army and FPC agreed that taxes foregone were a proper item for inclusion on the cost size of a Federal project as an economic loss.

I think these figures are right. I will ask Mr. Crum about that. Does the figures that Congressman Kilgore mentioned of around $600,000 is that about the gross value less the taxes, or what is the situation with that?

STATEMENT OF STEWART P. CRUM, CHIEF, SECTION OF BASIN AND PROJECT PLANS, DIVISION OF RIVER BASINS, BUREAU OF POWER, FEDERAL POWER COMMISSION

Mr. CRUM. I would say it is apparent that the REA's have considered a project having a dependable capacity value in arriving at that $600,000-odd figure. We figure it is worth 1.7 mills per hour. That would only amount to about $200,000 a year on the average.

Their figure of $600,000 no doubt considers a capacity component. They must be relying on some steam support to carry them over periods when they have no power available at Amistad.

Mr. FASCELL. Are they saying that power is available all the time? Mr. CRUM. Yes.

Mr. SELDEN. Are there any further questions?

Mr. MASON. I would like to add one comment. I would like to point out that reporting on this dam isn't an isolated case. Over the

years the Commission has reported on projects with respect to power values, on Corps of Engineer projects and on reclamation projects, as well as this project, and any other project which might come up. It is a custom and habit to do that. We have a section set up to handle this work called the River Basin Division.

Congress has recognized it every year by appropriating money to carry on the work. It is directly related to our licensing function of the private and State and municipal projects because the information that this group gathers is used in licensing private properties.

Mr. FASCELL. You have done a good job of qualifying yourself as an expert.

Mr. Chairman, I have a question that I want to ask Mr. Weaver. You have put into the record the Commission's definition of dependable capacity, and the Commission takes the position as to the data supplied to them that the rating for dependable capacity is zero.

You have further concluded that the sale of the power then could only be as dump power and that it would bring a much lesser monetary cash value.

Mr. WEAVER. That is correct.

Mr. FASCELL. If another engineer on the same set of data arrives at a conclusion that there would be 75,000 kilowatts of peaking capacity at any time, are these two positions in conflict?

Mr. WEAVER. They are, because he must have a completely different definition of what dependable capacity is. I don't think he would disagree with the routing studies, the flow studies of the International Boundary Commission. I think he would accept the fact that in those months that I am talking about, in those 4 years there would be no power.

Mr. FASCELL. This is what I am trying to get at: First of all, the positions are completely opposite.

Mr. WEAVER. That is right.

Mr. FASCELL. Because in one case the Commission has assigned a zero rating of dependable capacity and in another case an engineer has said that there are 75,000 kilowatts of peaking capacity at any

time.

The variable factors, and I just want to list them, that would go up into—that are used in arriving at either decision, it doesn't make any difference what it is, I just would like to have them listed 1, 2, 3, 4, 5, 6, 7, et cetera.

Is water availability one of the factors over the lifetime period of the project for 50 years?

Mr. WEAVER. One is water.

Mr. FASCELL. Another is availability of head for the same period of time.

Mr. WEAVER. Yes.

Mr. FASCELL. Go ahead.

Mr. WEAVER. That is about it, as related to ability to generate power at the time you say it can be available to the purchaser.

Mr. FASCELL. Then what is really at issue is an interpretation of the same set of facts?

Mr. WEAVER. I would think so, and I would put it maybe in these terms, Mr. Fascell. I think we look upon it, when we say that we have some dependable capacity and we want to sell it to you, we will guaran