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Mr. Fascell. There is no relationship there because it doesn't make any difference who pays it.

Mr. Frtedkin. That is right.

Mr. Fascell. I had a couple of other questions.

One of the things that it would seem to me we ought to know about in this matter is the question of the salability of power, as such, from a competitive standpoint or from the standpoint of trying to determine actual competition, if it exists, would be the existence of or the feasibility of transmission lines to the source of that power.

Colonel Hewitt. They are practically available at the site now.

Mr. Fascell. Whose transmission lines are those?

Colonel Hewitt. The C. P. & L. serves that entire area.

Mr. Fascell. The are right there?

Colonel Hewitt. Yes.

Mr. Fascell. How about any REA?

Colonel Hewitt. I have forgotten just what the representatives of the REA said yesterday, but it seems to me they said that their transmission lines were at some distance from the proposed site of the dam.

Mr. Burleson. At Uvalde, some 100 miles away.

Mr. Friedkin. 120 miles the gentleman says.

Mr. Fascell. I think we ought to have somewhere some kind of a financial estimate of what it costs to construct lines for 120 miles.

Mr. Burleson. If the gentleman will yield, you will remember, Mr. Shepperd yesterday in his testimony said that if they had a line at the site they wouldn't be permitted to bid on the power. Their setup doesn't permit them to do it.

Mr. Fascell. Could he use it at all?

Mr. Burleson. If they could, they could only use 5,000 kilowatthours, as he testified.

Mr. Fascell. For all 74 REA's?

Mr. Burleson. This REA organization is at Hondo, Tex. I asked him about the possibility of organizing a transmission cooperative of the number of local distributing cooperatives in the valley area. He said that was a possibility. It seems to me that is the only possibility that you would create as to any competitive purchasing of the power generated at this installation.

Mr. Fascell. I thought, however, he said even if they got together they would be limited, under the law in the purposes for which they borrowed the money, to rural customers.

Mr. Burleson. They would have to show feasibility to the REA for borrowing money for that purpose.

Mr. Fisher. It will be recalled that a witness on yesterday pointed out that the REA cooperatives are now engaged in the construction of a steamplant in that area of 66,000 kilowatt-hours. So they do build plants of substantial capacity. I assume if they had need for it, and could get the money, the cooperatives could buy the falling water and build a generating plant. They would, of course, have to show a need, just as I suppose they had to show a need in order to borrow the money to build the 66,000-kilowatt steamplant.

I just mention that, referring back to the testimony that was given.

Mr. Fascell. This steamplant is how far away?

Mr. Fisher. It isn't very far.

Mr. Fascell. From the damsite?

Mr. Fisher. About 150 miles.

Mr. Kilgore. Somewhere in that range.

Mr. Fascell. I know that isn't a long way in Texas, but where I come from you would be halfway to Africa.

Mr. Fisher. Just off the record.

(Discussion off the record.)

Mr. Burleson. May I ask Colonel Hewitt this question: To sort of wrap this thing up, do you see a necessity for this committee in its initial action to be overly preoccupied with the matter of, No. 1, authorizing hydroelectric power at this installation, since such a great ratio of benefit is charged to flood control; and, two, would you suggest to the committee that we authorize the project and that we cross this other bridge when we get to it? Could we not lay down policy and prospective negotiations for the disposition of power when and if the generating plant is installed?

What would be your attitude about that?

Colonel Hewitt. I should say that the authorization for the construction of the project was extremely desirable at this time. I don't think we have had any testimony from any interested party that objects to the construction of the dam. Certainly as far as the Mexican section and our section, I am sure both countries are anxious to proceed with the construction at the earliest possible moment.

Whether the authorization for the sale of falling water or for the construction of a hydroplant at Federal expense is to be given at this time, I believe that that is to be determined by the Congress.

There is one thing about it, however, and that is that the original premise of the treaty was to the effect that the countries would build a single powerhouse; that has not been found to be too practicable and at Falcon we have built two powerhouses that are identical, one on each side of the river.

Mexico is going to build a powerhouse, and by the same token they are going to expect the United States to build one, so as to conform more or less with the treaty.

That is a facet which should be considered by the committee in making their recommendations.

Mr. Burleson. I assume, of course, that when this construction was commercial you would want to know whether you were going to install hydroelectric power or not?

Colonel Hewitt. It would be cheaper to build it at that time but it could be built at a later date.

Mr. Burleson. If this committee went ahead and authorized a project and included the hydroelectric facility, it is not going to be built tomorrow. There is a lot of time to negotiating this thing without exercising ourselves over crossing every "t" and dotting every "i" it would seem tome.

Mr. Sblden. You could include certain features for the additions of a hydroelectric plant without actually building the hydroelectric plant? Am I correct?

Colonel Hewitt. We propose to install penstocks at this time. If they were not installed during the construction of the dam, it would be almost physically impossible to do it later on.

Mr. Selden. By installing the penstocks, however, you have then made provisions for the addition of a hydroelectric plant either then or at a later date? . .• .

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. Seijjen. 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. Seldest. 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. KiiiGORE. 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. Friedkitc. 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:)

Headquarters,
Department Of The Army,
Office Of The Chief Of Engineers,
Washington, D.C., February 5,1960.
Hon. Armistead I. Selden,

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 195S.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.

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