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Colonel HEWITT. It could be installed now or it could be installed later. However, should the Federal Government decide to install a hydroelectric plant at the site of the dam, it would be much more economical to build it at the same time the dam was being constructed.

Mr. FISHER. Mr. Chairman, before we conclude, there was a question raised this morning that I think Mr. Hewitt might properly comment upon, perhaps to clarify the record a bit. That is in regard to the powerplant at Falcon to which you just made reference and about which some questions were asked with particular reference to the economic feasibility of it.

The chairman asked several questions about that and expressed an interest. I think Colonel Hewitt might carry it a little further.

In regard to the powerplant at Falcon and the prospect for the sale of power there and the current sales contract that is in effect, will it pay itself out in 50 years or just what is the situation in that regard?

Colonel HEWITT. It will repay the actual cost of the construction. It will not repay the interest, nor will it repay any part of the cost of the construction of the dam.

Mr. FISHER. Would that be a rather substantial amount?

Colonel HEWITT. Around $6 million.

Mr. FISHER. So, as far as economic feasibility is concerned, it has not proved to be an economically feasible plant down there at Falcon? Colonel HEWITT. That is correct.

Mr. SELDEN. In connection with that, Colonel, what were the estimates prior to the construction of Falcon on the economic feasibility of building a powerplant with the dam?

Colonel HEWITT. I mentioned yesterday in my testimony, I believe, that at the time that Falcon was originally projected the hydro facilities were considered to be operated in connection with a Bureau of Reclamation project which was known in the valley as No. 5, where reregulating facilities would have been available.

In other words, we could have discharged from Falcon, caught it in this offstream reservoir, and then used it for irrigation down the valley.

Since project 5 did not go into construction, the possibility of using water in that manner was impossible. Had it been possible to use the water in the manner in which we originally contemplated, the returns from the Falcon sale of power would have been much higher than they are now.

Mr. SELDEN. Then, can I gather from your answer to my question that in your early figures, prior to building Falcon, you did believe that with the construction of project 5 the installation of power at Falcon dam would be economically feasible?

Colonel HEWITT. Yes, sir, we did at that time.

Mr. SELDEN. However, in the case of the Amistad Dam, even prior to the building of it, you believe that the addition of power generating facilities would not be economically feasible. Is that correct?

Colonel HEWITT. I don't believe that the installation of complete power generating facilities would be economically justified at this time. However, I do think the installation of the penstocks are feasible because we have an offer for the falling water which will more than amortize their costs.

Mr. FASCELL. Colonel, what is the status of No. 5 now?

Colonel HEWITT. I think Mr. Kilgore could answer that better than I can.

Mr. KILGORE. Off the record before I get started on that. (Discussion off the record.)

Mr. KILGORE. The proposal No. 5 which Colonel Hewitt has referred to envisioned the building of a dam in the vicinity of Mission which would have had sufficient storage capacity in it to capture and reregulate water released from Falcon for power purposes so that water could be used for irrigation purposes in the lower valley. It envisioned the building of a gravity canal originating at the point of the recapture and storage dam downstream from Falcon. That proposal was turned down by the water users in the lower valley.

I think it is entirely possible that some years hence, how many would be hard to say, that they may be interested in it again. But a Bureau of Reclamation proposal was quite expensive. It was not the feeling of the majority of the water districts and water users that they could afford to build it.

Colonel HEWITT. It was authorized by the Congress.

Mr. FASCELL. It has been authorized but it has not gone beyond that stage.

Colonel HEWITT. Yes.

Mr. FASCELL. And the magnitude of that money wise?

Mr. KILGORE. I don't remember. As project 5 will indicate, it was the fifth of many proposals which were submitted in alternative. One of the proposals was for a high line gravity canal originating at the Falcon site and I believe the cost of it was about $140 million. This was somewhat less expensive than that, but still

Mr. FRIEDKIN. Perhaps I may clarify this a bit.

Before the treaty with Mexico, before we had storage on the main river, before we had a division of waters with Mexico, there was a project envisioned to take out U.S. waters up near Falcon Dam to carry those on an inland route down to the Rio Grande.

When the treaty came along and provided for storage on the main streams and division of waters, that project was no longer necessary. This project was authorized. It provided for downstream storage also. But after the treaty and with Falcon Dam, then another project was envisioned.

Mr. FASCELL. I follow you now. There was no other project tied in with Falcon originally in order to bear out the feasibility of Falcon?

Mr. FRIEDKIN. Except as a part of this third project for diversion of waters below Falcon, as part of the plan

Mr. FASCELL. As part of the Falcon plan?

Mr. FRIEDKIN. As part of the valley gravity canal below Falcon. In the canal system there was provided for storage reservoirs all in the United States which could have been used for reregulation if these storage reservoirs were provided, but they were not provided and power development was penalized at Falcon.

Mr. KILGORE. While the internal storage in the United States that Mr. Friedkin refers to and the gravity canal that he refers to was not a part of the International Boundary Commission's plan with relation to Falcon, it was a Bureau of Reclamation proposal which at the time the Congress authorized Falcon was thought likely of construction by the Bureau of Reclamation. So that the consideration of the

feasibility of power in Falcon given by the Congress at the time of the authorization did to some extent take into consideration the likelihood of the building of this offstream storage that he has referred to. Mr. FASCELL. That gets us, as the old judge used to say, "in the instant case." Is there any such thing in this one?

Mr. FRIEDKIN. Yes, sir.

Mr. FASCELL. Tell us about it.

Mr. FRIEDKIN. With the Amistad Dam, we have downstream Falcon. It is there and there is no question about it. That is the difference.

Mr. FASCELL. There is no speculation on that. That is taken into account with respect to the present project under consideration? Mr. FRIEDKIN. Yes, sir.

Mr. SELDEN. Concerning the question of economic feasibility, the clerk has handed me the House report on the measure that authorized hydroelectric power at the Falcon Dam. I quote from the report:

A payout schedule, based on the estimated revenues, operation, and maintenance, including depreciation, and 3-percent interest on unpaid balances of construction charges, indicates that the development of hydroelectric energy at the dam would repay the costs of the hydroelectric facilities in 45 years. Continued operation of the hydroelectric plant, at the same estimated costs and revenues, would pay out, without interest, 47 percent of the United States share of costs of the dam itself, during the remaining 55 years of its economic life, estimated at 100 years.

Are there any further questions?

If not, Colonel Hewitt, we want to thank both of you gentlemen for your patience as well as your answers to all of our questions.

It may be that we will have to call on you later for additional information. If so, we will feel free to do so.

The committee stands adjourned until further call of the chairman. Mr. KILGORE. Thank you very much, Mr. Chairman.

(Whereupon, at 4 p.m., the committee was adjourned, to reconvene at the call of the chairman.)

(The following letters were submitted for inclusion in the record:)

Hon. ARMISTEAD I. SELDEN,

HEADQUARTERS,

DEPARTMENT OF THE ARMY,

OFFICE OF THE CHIEF OF ENGINEERS,
Washington, D.C., February 5, 1960.

Chairman, Inter-American Affairs Subcommittee,
Committee on Foreign Affairs,

House of Representatives.

DEAR MR. CHAIRMAN: Reference is made to telephone call of 3 February 1960, from Miss Hashagen of your staff requesting to be advised, in connection with hearings on H.R. 8080, whether the views of this office with respect to the proposed Diablo Dam are still the same as embodied in letter from the Chief of Engineers to Mr. R. R. Rubottom, Jr., Assistant Secretary of State for InterAmerican Affairs, dated 16 December 1958.1

This is to advise you that the position of this office remains as stated in General Itschner's letter to Mr. Rubottom, namely: The proposed works described in the report entitled "Proposed Diablo Dam and Reservoir," dated September 1958, are fully compatible with the responsibilities of the Corps of Engineers. Sincerely yours,

WILLIAM F. CASSIDY,

Major General, U.S. Army, Assistant Chief of Engineers for Civil Works.

1 See app. II, p. 261.

Hon. ARMISTEAD I. SELDEN, Jr.,

DEPARTMENT OF AGRICULTURE, Washington, D.C., February 9, 1960,

Chairman, Subcommittee on Inter-American Affairs,
Committee on Foreign Affairs,

House of Representatives.

DEAR CONGRESSMAN SELDEN: This is in response to a request from the subcommittee staff that you wished to know whether or not the comments of this Department to the Secretary of State dated December 18, 1958, on a report entitled "Proposed Diablo Dam and Reservoir" still represent the views of this Department.

We are glad to assure you that we consider those comments still to be applicable.

We appreciate your courtesy in inquiring as to the concern of this Department about the proposed dam and reservoir in connection with your consideration of legislation to authorize the project.

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DEAR MR. CHAIRMAN: This is in confirmation of the telephone call to Miss Hashagen from a member of my staff in response to your letter of February 4, 1960.

The Department of Health, Education, and Welfare still is in accord with the comments of Assistant Secretary Wilson to Assistant Secretary Rubottom of the State Department on January 8, 1959.3

We do not plan to send a representative to the hearings of February 8 through February 10 on H.R. 8080, which would 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.

Sincerely yours,

ROBERT A. FORSYTHE, Assistant Secretary.

Hon. THOMAS E. MORGAN,

THE SECRETARY OF COMMERCE, Washington, D.C., February 12, 1960.

Chairman, Committee on Foreign Affairs,
House of Representatives,
Washington, D.C.

DEAR MR. CHAIRMAN: In response to a telephone inquiry from your committee concerning our position on the construction of the Diablo Dam and Reservoir on the Rio Grande River, I wish to state that this Department reaffirms the position taken in Mr. Mueller's letter to the Honorable R. R. Rubottom, Jr., Assistant Secretary of State, dated December 10, 1958. We do not desire to present our views in writing or to testify on the bill H.R. 8080.

In reviewing this matter we have been concerned primarily with economy in the engineering design and construction of the facility in terms of both Federal and State funds, and the impact on the land transportation facilities affected. We are still of the opinion that the greatest economy and the least impact can be achieved in the manner we outlined to the Assistant Secretary of State. We should be glad to furnish further information and assistance if desired. Sincerely yours,

2 See app. II, p. 261.

3 See app. II, p. 262.

* See app. II, p. 259.

PHILIP A. RAY, Acting Secretary of Commerce.

t

AMISTAD DAM AND RESERVOIR

MONDAY, MARCH 7, 1960

HOUSE OF REPRESENTATIVES,
COMMITTEE ON FOREIGN AFFAIRS,
SUBCOMMITTEE ON INTER-AMERICAN AFFAIRS,

Washington, D.C.

The Subcommittee on Inter-American Affairs met pursuant to notice in room 1302, House Office Building, at 2 p.m., Hon. Armistead I. Selden, Jr. (chairman of the subcommittee), presiding.

Also present were the Honorable O. C. Fisher, a Representative in Congress from the State of Texas, and the Honorable Joe M. Kilgore, a Representative in Congress from the State of Texas.

Mr. SELDEN. The subcommittee will come to order, please.

Today we are continuing the hearings which began the 8th of February on the Amistad Dam project, with specific reference to Congressman Fisher's bill, H.R. 8080. During the hearings held on the afternoon of February 10, the subcommittee heard representatives of the Bureau of the Budget. The Bureau recommends that H.R. 8080 provide that arrangements be made with respect to water users for the repayment to the Government of costs allocated for water supply purposes.

In the light of the existing litigation in Texas regarding water rights and the difficulties inherent in distributing the cost of benefits to users, the Bureau of the Budget was asked by this subcommittee to review its recommendation.

I have received its latest position on this matter and without objection I will include the Bureau of the Budget's recommendation in the record at this point.

(The document referred to is as follows:)

EXECUTIVE OFFICE OF THE PRESIDENT,

Hon. THOMAS E. MORGAN,

Chairman, Foreign Affairs Committee,
House of Representatives, Washington, D.C.

BUREAU OF THE BUDGET, Washington, D.C., March 4, 1960.

MY DEAR MR. CHAIRMAN: At a recent hearing of a subcommittee of the Committee on Foreign Affairs on H.R. 8080, authorizing the Secretary of State to conclude an agreement with Mexico for joint construction of Amistad (Diablo) Dam, witnesses for the Bureau of the Budget were asked to reconsider recommendation No. 2, contained in an attachment to our letter to you of September 2, 1959,1 concerning repayment of water supply and irrigation costs. It is recognized that a requirement for repayment of the costs of Amistad Dam allocated to water supply and irrigation is controversial in view of the present unsettled state of water rights on the Rio Grande. However, it is clear from the report of the United States Section of the International Boundary and Water Commission, United States and Mexico, that significant water supply

1 See appendix, p. 271.

155

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