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I concur thoroughly in the statements made by Senator Yarborough of Texas before this committee at the first hearings. The area north and west of the proposed Amistad Dam is growing and will require power.

In conclusion, I would like to point out that there is no major generation between Laredo, El Paso, and a West Texas Utility Co. plant on the Pecos River near the town of Girvin, Tex. As previously mentioned in this statement, there are some transmission lines within the area, but they are, generally speaking, one-way feed, and being such cannot render dependable, continuous service.

We respectfully request that the committee give favorable consideration to the installation of Government-owned generating facilities. This request is made so that our cooperative, as well as others, will have the opportunity by preference, to utilize sufficient quantities of power generated at a reasonable and relatively constant cost for distribution throughout the Big Bend area.

Our cooperative has by its efforts up to date definitely expressed its interest in and desire to promote the growth of the area. The cooperative has to date constructed approximately 2,000 miles of rural electric distribution lines and has under construction at present an additional 1,000 miles.

The cooperative has extended transmission lines in two areas whose growth would have been slowed considerably due to the lack of adequate power. The cooperative, with the assurance of adequate power at a reasonable rate, could and would cooperate with existing utility companies in completing an integrated transmission system in the Big Bend area.

Mr. Chairman and members of the subcommittee, we sincerely appreciate the opportunity you have given us to further explore the need for this project in the Big Bend area and sincerely hope that you will favorably vote out and pass the necessary legislation.

Mr. SELDEN. Thank you very much, Mr. Hurd, for your statement. Are there any questions?

Mr. Fascell.

Mr. FASCELL. What do you mean by the statement you would give assurance you would cooperate in an integrated transmission system?

Mr. HURD. That means existing transmission lines that feed into the area now, that we would be willing to cooperate with the utility companies that own those lines with the transmission line of our own, which we could possibly prove feasible and construct from Amistad Dam. It would be an interconnecting transmission line.

Do I understand your question, sir?

Mr. FASCELL. Yes. But I am not sure I understand your answer. Does this mean agreement would have to be entered into between the private power company and the cooperative?

Mr. HURD. You mean for joint

Mr. FASCELL. Any reason, either for transmission or

Mr. HURD. Well, yes, sir. In other words, if we were to tie into, say, their line with a transmission line of our own, there would have to be some agreement there, yes.

Mr. FASCELL. If the cooperative went to the site to get the power, would distribution depend on a wheeling agreement with the private power company?

Mr. HURD. That would require more detailed engineering study than we have made. But there is

Mr. FASCELL. You are saying, in effect, you would be willing to enter into such agreement, but you don't know where the private power company stands?

Mr. HURD. I have nothing in writing. I have talked by phone to one of the utility companies, and they in fact approached us, that if we were successful they would like to talk to us. They didn't say about what, but said they would like to talk to us.

Mr. FASCELL. As a preference customer under the law?
Mr. HURD. Yes.

Mr. FASCELL. That is all I have.

Mr. SELDEN. Mr. Burleson.

Mr. BURLESON. No questions.
Mr. SELDEN. Mr. Fisher.
Mr. FISHER. No questions.
Mr. SELDEN. Mr. Kilgore.
Mr. KILGORE. No questions.

Mr. SELDEN. Thank you very much, Mr. Hurd.

Our next witness is Mr. Tom Reavley, attorney for the Texas Electric Cooperatives, from Austin, Tex.

We are glad to have you with us, sir. Will you proceed with your statement?

STATEMENT OF TOM REAVLEY, GENERAL COUNSEL, TEXAS
ELECTRIC COOPERATIVES, INC.

Mr. REAVLEY. Thank you, Mr. Chairman.

Mr. Chairman, members of the committee, and Congressmen Fisher and Kilgore. My name is Tom Reavley. I am a lawyer practicing with a firm in Austin, Tex., and we proudly represent Texas Electric Cooperatives, Inc., which is the statewide cooperative to which the individual 76 distribution cooperatives belong.

We are very appreciative of the opportunity to come and have again the time of this committee, especially since you are as pressed as you

are.

You have already heard several of our witnesses say we hope Amistad Dam will be constructed, and I believe the record has made a good case for the construction of the dam with conservation storage and hydroelectric generation.

There is no debate here as far as I know between advocates of a big dam and advocates of a little dam, as is often the case. We have been told that Mexico will have its own hydroelectric installation on its side of the river on the dam. The witnesses here have all agreed, as far as I have heard, that tunnels and penstocks should be put into the dam on our side.

The only issue as to the power feature is whether the Federal Government will build the powerhouse and sell the power, or whether some non-Federal agency will be left to build these facilities and produce its own power.

It could be thought or said that this committee would be able to leave this issue unresolved-as to whether the Government would build its own plant or some other agency build the plant-leave this unre

solved and advance H.R. 8080 as it is, inasmuch as the bill on its face says the dam can be built either way.

But that would not be the effect of approval of H.R. 8080 in this form. Approval of the bill in its present form would be a clear decision by this subcommittee, by the full Foreign Affairs Committee, and by Congress, against public ownership of the power. It would close the door, so far as Congress is concerned, to us, the cooperatives. It would be saying someone else must build the plant and have the power. And that someone else could only be, under the circumstances, the Central Power & Light Co. This preference proviso in the bill with reference to falling water means nothing as far as we are concerned under the present circumstances, since the buyer of that falling water has to have a $10 million powerplant to use the water's fall.

This would be the consequence of the bill as drawn, because the administration has made it clear how any alternative allowed to it will be in fact exercised. The "partnership" plan is official policy. The Federal Power Commission says the Government could not recover the cost of a powerplant. The preference of the IBWC Commissioner is quite clear from his testimony. He has testified here that he assumes a longtime contract would be entered into permitting Central Power & Light Co. to build a powerplant and to operate it. The $337,000 figure he considers as reliable average rental from the water fall has been included in all of the computations of benefit and cost. The bill itself requires approval by the named committees of Congress of any agreement between the Government and a non-Federal entity by which the latter would build the plant and buy the fall of the water. But the Bureau of the Budget has told this committee that the executive department regards this extra step as unconstitutional; and, should the bill be enacted in this form, the administration will ignore the required approval.

In view of the record, I say again: If H.R. 8080 is enacted, the Congress has presented Central Power & Light Co. with a site for a hydroelectric station.

The electric cooperatives hope that at least some of the power generated at Amistad will be available for their purchase. Their power demands are growing in the case of each of the six or eight electric cooperatives in this general area. The price of fuel for steam generation is rapidly advancing. For many of these co-ops, the sole source of power is the Central Power & Light Co. That is not necessarily a comfortable position for them, particularly at rate fixing time. Incidentally, Texas has no State utility regulation by which excessive rates might be attacked.

Therefore, we hope the second paragraph of section 2 of this bill will be eliminated-lines 21 on page 2 through 9 on page 3. This is the provision to authorize the administration to lease the falling water. Then, when the time comes to provide for the marketing of the power, we would hope that the usual pattern will be followed: The Government will be directed to set a price to pay for the investment and to sell at that rate first to the normally preferred customers.

But whatever is to be finally done, as it now stands unless this committee prefers to resolve all questions about power availability and feasibility on the basis of this hearing in favor of leasing the falling

water, then it must send the dam on its way for the time being, at least, without the authorization of this paragraph of section 2.

As I see it, another course open to the committee is to follow the precedent Congress employed on the Trinity River project in California. The act which authorized that project (H.R. 4663, 84th Cong. 1st sess., ch. 872; 69 Stat. 719), provided in 1955 that the Secretary of the Interior could pursue the consideration of a partnership arrangement with the non-Federal entity, and then, if he saw fit, come back to Congress with such a proposal. Such a proposal was framed and returned to Congress in 1958 (H.R. 6997, H.R. 7407, H.R. 10005, 85th Cong., 2d sess.) but Congress has apparently chosen to lay this to rest. While that is a constitutional course by which the issue may be postponed, I have no reason to expect the attitude of Congress to be any different as to the Rio Grande than it was as to the Trinity. It seems that the issue could be resolved right now. Of course, I am ready to do it.

The issue as we see it is not one of public versus private power. We view the "partnership" label as misleading. To us, the question is whether a natural resource belonging to all the people shall be taken from them and given to the control and exclusive advantage of one company or a relatively few persons.

We regard the course now proposed to be a departure from the 50-year-old tradition and policy of the preference principle. Here are some words of the champion of that principle, President Theodore Roosevelt :

The great natural resources which are vital to the welfare of the whole people should be kept either in the hands or under the full control of the whole people *** for the benefit of all our people, and not monopolized for the benefit of the few * ** This applies to coal, oil, timber, waterpower, natural gas. (From "The Free Citizen," edited by Hermann Hagedorn, p. 151.)

This policy has been applied to waterpower specifically on many occasions, but a landmark was the Flood Control Act of 1944 (Dec. 22, 1944, ch. 665, sec. 5; U.S.C.A., title 16, sec. 825s).

Please note that this policy is not a preference for the highest bidder. It is not designed to make the most money. Its purpose, in the words of the Flood Control Act of 1944, is

to encourage the most widespread use (of the power) at the lowest possible rates to consumers consistent with sound business principles.

At this point let me quote again, if I may, from the words of Senator Thomas H. Kuchel, who was one of the leaders in the most recent successful defense of this policy-on the Trinity River project in California. He has said:

The reclamation projects of the United States are not built for profit. Their purpose is to serve the needs of the people. They incidentally-and importantly-assist in controlling floods and in controlling salinity. They provide new recreational opportunities. And, utilizing the inevitable hydro head, they produce power. * * *

If the private power industry succeeded in preventing the Government from making electricity from the Trinity available to "preference" customers, I think it only logical to expect that a like attempt would be made with respect to all Federal reclamation projects, in being or in prospectus. The efforts of the community of people to accelerate the economy of rural America through electric cooperatives would suffer a disastrous reversal (Congressional Record, Thursday, Mar. 5, 1959; pp. 499633–69713).

While this was applied particularly to the electric cooperatives, the same would be true of any other State or municipal organization or utility. What was said about the issue there is equally true here.

I am not forgetting the appraisal of the Federal Power Commission. They have told the Congress-told this committee that a Federal powerplant on Amistad would be bad business. We have presented engineers who see this differently. Most of that debate is over my head, but I take heart from some words of Mr. Newcomb B. Bennett, Jr., Assistant Commissioner of the Bureau of Reclamation, who has been one of the witnesses at this hearing. Since that appearance, I heard him say, in speaking of these hydroprojects, that "economic feasibility is more a matter of philosophy than a matter of science."

Mr. SELDEN. Where did he make this statement?

Mr. REAVLEY. In the speech he made at the National Rural Electric Cooperatives Association annual meeting at St. Louis. It was part of his published speech.

In the present picture, even a layman can spot some places where philosophy shows through.

As I understand the basis for the FPC rejection of Amistad power, it is that despite there being "the potential of large quantities of hydroelectric energy at the Diablo site" (p. 50 of the IBWC report), according to the figures they assume (taken from the IBWC) the river has not always had the flow for the generation required. Since that power is not entirely dependable, it can only be sold at the price paid for dump power. The FPC says the dump rate is 1.7 mills per kilowatt hour. This would not pay for the powerplant.

I am neither disposed nor qualified to wade into this part of the debate, but there are some questions I want to ask which it seems to me this committee would want answered before accepting this partnership plan put forward by the executive agencies.

On the 10th page of my prepared statement, you will see a chart which shows in the left column the actual annual historic riverflows at Del Rio, and then the two middle columns are taken from table 2 on page 72 of the IBWC report.

Per

I have not understood why they used the year they used to place alongside their future estimate as to the flow at the Amistad site, but these two columns are what appear in table 2 on that page. haps they have used the actual flow in these corresponding years of 1901, 1902, and so forth, for some purpose in figuring out the prediction for future 57 years.

In any event, I suppose that the figures which the IBWC has used in this column on the right here, in my exhibit, are the figures which the FPC has relied on, and they have assumed there will be actually this waterflow available for generation use over the next 57 years.

We are already familiar with the IBWC reports conclusion that whereas the actual past historically recorded annual average flow at the Amistad site is 2,985,000 acre-feet, the future expected-and I suppose the basis on which the FPC has made its computation-will be 2,294,000 acre-feet. The future is assumed to be far worse than the past.

And you look back at some of these individual years, if there is a correspondence between 1901 and 1948 and so forth, between the

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