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tee to make that delivery to you under the most adverse conditions that will come to our plant.

Mr. FASCELL. Any conditions? You just agree to deliver to me X number of units of power. I don't care what the conditions are if I have a contract with a damage clause for nondelivery. So then am I correct from a technical standpoint, that is, as engineer to engineer, the thing that is at issue between these two statements is an interpretation of the same set of facts or a disagreement with the basic facts on water availability and availability of head?

Mr. WEAVER. Correct.

Mr. FASCELL. If that is the case then, Mr. Chairman, I think that what we need would be, if we don't already have it some place, would be that data. Is it already in the report?

Colonel HEWITT. It is already in the report.

Mr. FASCELL. Water availability and head availability?
Colonel HEWITT. Yes, sir.

Mr. FASCELL. Those are only part of the factors. That is (b) of the capacity component of our power value. We need the other half which has to come from the Federal Power Commission, which is (a); that is capacity, cost, and annual cost on a dollar basis per kilowatt of capacity. That is not available to us any place?

Mr. WEAVER. You mean the cost

Mr. FASCELL. Capital cost.

Mr. WEAVER. To the Federal Government?

Mr. FASCELL. I am talking about the capital component of power value. Which is the capital cost and the annual cost based upon the dollars of kilowatt capacity? That is your study?

Mr. WEAVER. That is right.

Mr. FASCELL. We don't have that.

Mr. WEAVER. We could supply it to you.

Mr. FASCELL. We would like to have it because it is in dispute. Mr. CRUM. We used $15.50 for kilowatt and 1.7 mills for energy. Those were made available to the International Boundary and Water Commission.

Mr. FASCELL. If I, as another engineer, come up with $50 all we have is a disagreement on conclusion. I can't evaluate this unless I know what you base your $15.50 on.

Mr. WEAVER. We can give you the makeup of that.

Mr. FASCELL. Otherwise I can't challenge the other man's makeup or yours.

Mr. SELDEN. Without objection, Mr. Fascell, when that information is supplied, we will include it in the record at this point. (The information requested is as follows:)

Hon. ARMISTEAD I. SELDEN, Jr.,

FEDERAL POWER COMMISSION,
Washington, February 16, 1960.

Chairman, Subcommittee on Inter-American Affairs, Committee on Foreign Affairs, House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: Reference is made to the testimony given by Mr. Frank L. Weaver, Chief of this Commission's Division of River Basins, before the Subcommittee on Inter-American Affairs, House Committee on Foreign Affairs, on February 10, 1960, pertaining to H.R. 8080, 86th Congress, 1st session, a bill to authorize the conclusion of an agreement for the joint construction by the United States and Mexico of a major international storage dam on the Rio Grande in accordance with the provisions of the treaty of February 3, 1944, with Mexico, and for other purposes. It is understood that you wish to have

for insertion in the record of this hearing the backup data for the power values used by the Commission's staff in its analysis of the power aspects of the Diablo project.

The total annual value of hydroelectric power supply is considered to be made up of two components: (1) a "capacity value" which corresponds to the fixed elements of the cost of power supply from alternative new steam-electric plants, which in the case of Diablo would be the most likely alternative supply; and (2) an "energy value" which corresponds to the variable elements of the cost of power supply, mostly fuel, from such alternative plants. These capacity and energy components of power value are expressed in terms of dollars per kilowatt per year of dependable capacity and mills per kilowatt-hour of average annual energy, respectively.

In the case of the Diablo project, as well as for most other hydroelectric projects, the estimated "at site" cost of producing electric power at modern steamelectric plants was developed as a first step. This basic cost was then increased by transmission costs and losses to arrive at the cost of steam-electric power at the market, this cost representing the value of the power at market. This value at market was then reduced by the hydroelectric transmission costs and losses to obtain the value of hydroelectric power at the site of the Diablo project.

The detailed computation of the power values used by the staff in its analysis of the Diablo project are given below.

Size of plant_.

Size of units.

Alternative steam-electric plant

525,000 kilowatts. 175,000

Type of structure_

Kind of fuel_.

Investment cost, dollars per kw-

Cost of fuel, cents per million British thermal units.

Derivation of annual capacity value

[In dollars per kilowatt]

Annual capacity cost of steam-electric plant:

kilowatts.

Outdoor.

Gas.

18.

105.

Fixed charges (13.03 percent of investment: includes 6.25 percent for cost of money, 0.85 percent for depreciation, 0.35 percent for interim replacements, 0.25 percent for insurance, and 5.33 percent for Federal, State, and local taxes) –.

$13.68

Fixed operating costs (includes costs of fuel, operation and maintenance, and administrative and general).

2. 53

Total__

16. 21

Annual cost of transmitting steam-electric capacity to market___ Annual cost of steam-electric capacity at market, or value of Diablo capacity at market_

2.62

18. 83

[blocks in formation]

Allowance for losses in transmitting steam-electric power to market_---
Incremental cost of steam-electric energy at market_
Allowance for losses in transmitting Diablo power to market and adjust-
ment for lower plant factor of Diablo as compared with steam-electric
plant---

At-site value of Diablo energy

Use

Sincerely yours,

1.82 .18

2.00

[blocks in formation]

tee to make that delivery to you under the most adverse conditions that will come to our plant.

Mr. FASCELL. Any conditions? You just agree to deliver to me X number of units of power. I don't care what the conditions are if I have a contract with a damage clause for nondelivery. So then am I correct from a technical standpoint, that is, as engineer to engineer, the thing that is at issue between these two statements is an interpretation of the same set of facts or a disagreement with the basic facts on water availability and availability of head?

Mr. WEAVER. Correct.

Mr. FASCELL. If that is the case then, Mr. Chairman, I think that what we need would be, if we don't already have it some place, would be that data. Is it already in the report?

Colonel HEWITT. It is already in the report.

Mr. FASCELL. Water availability and head availability?
Colonel HEWITT. Yes, sir.

Mr. FASCELL. Those are only part of the factors. That is (b) of the capacity component of our power value. We need the other half which has to come from the Federal Power Commission, which is (a); that is capacity, cost, and annual cost on a dollar basis per kilowatt of capacity. That is not available to us any place?

Mr. WEAVER. You mean the cost

Mr. FASCELL. Capital cost.

Mr. WEAVER. To the Federal Government?

Mr. FASCELL. I am talking about the capital component of power value. Which is the capital cost and the annual cost based upon the dollars of kilowatt capacity? That is your study?

Mr. WEAVER. That is right.

Mr. FASCELL. We don't have that.

Mr. WEAVER. We could supply it to you.

Mr. FASCELL. We would like to have it because it is in dispute. Mr. CRUM. We used $15.50 for kilowatt and 1.7 mills for Those were made available to the International Boundary and Water Commission.

energy.

Mr. FASCELL. If I, as another engineer, come up with $50 all we have is a disagreement on conclusion. I can't evaluate this unless I know what you base your $15.50 on.

Mr. WEAVER. We can give you the makeup of that.

Mr. FASCELL. Otherwise I can't challenge the other man's makeup

or yours.

Mr. SELDEN. Without objection, Mr. Fascell, when that information is supplied, we will include it in the record at this point. (The information requested is as follows:)

Hon. ARMISTEAD I. SELDEN, Jr.,

FEDERAL POWER
Washington

Chairman, Subcommittee on Inter-American Affairs,

fairs, House of Representatives, Washington, D DEAR MR. CHAIRMAN: Reference is made to th L. Weaver, Chief of this Commission's Div Subcommittee on Inter-American Affairs, on February 10, 1960, pertaining to H.R to authorize the conclusion of an agr United States and Mexico of a ma Grande in accordance with the p with Mexico, and for other pur

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16, 1960

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Mr. FASCELL. Everybody agrees you can sell all the power you want out of this project; is that right?

Mr. MASON. You want the data we used to support our conclusions as to the cost ratio of 1 to 1, anything that relates to our conclusion? Mr. WEAVER. The Congressman asked how we arrived at that $15.50 and the 1.7 mills.

Mr. FASCELL. When I get the two together, I hope I can evaluate the cost ratio or you will hear from us. I am doing it piecemeal and not

all at once.

Mr. MASON. We would like to give it to you all at once. We will supply that.

Mr. FASCELL. Those are all the questions I have, Mr. Chairman.
Mr. SELDEN. Are there any other questions?

If not, I want to thank you, Mr. Weaver, Mr. Mason, and Mr. Crum for your statements and your answers to our questions.

We have with us today also Mr. N. B. Bennett, Jr., Assistant Commissioner of the Bureau of Reclamation of the Department of the Interior.

Mr. Bennett.

STATEMENT OF NEWCOMB B. BENNETT, JR., ASSISTANT COMMISSIONER, BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR

Mr. BENNETT. I do not have a prepared statement, Mr. Chairman, nor has the Interior Department had time to prepare a formal report on the bill.

Mr. SELDEN. I would like to ask you, then, to describe for the subcommittee the Department's interest and responsibilities in the construction and the operation of the proposed dam and also what part the Department has played in the development of the plans for this dam.

Mr. BENNETT. I will be happy to do that, Mr. Chairman. The Department's interest is severalfold. We have cooperated with the International Boundary and Water Commission, U.S. Section, on the construction of Falcon Dam. We have rendered engineering consulting services to them on their preliminary designs for the present dam. We have underway work in the lower valley below Falcon on four different projects which require investments of money by the United States.

So we are interested, of course, in seeing that the investment we are making there is protected.

In addition to that, we are the marketing agents for the power now generated at Falcon Dam. We have that responsibility by act of Congress passed in 1954.

We have not participated in the overall planning of this project. We have, as I indicated, participated in giving our engineering advice and consultation on the design problems of the dam.

We did write the letter of January 29, 1959,1 which is published on page 141, I believe, of the Senate document, which sets forth the views of the Interior Department on the plan proposed in that document.

1 See app. II, p. 263.

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