site, is completely developed and is contained in the report on the proposed project, Document 65, 86th Congress, 1st session, paragraph 33, entitled "Estimated Future River Flows," page 19. In substance, future flows at the site were estimated by modifying the actual quantities of flow for each year of record, to indicate what the quantities would have been with the present and anticipated future irrigation developments and storage works.

The source of the amount of 1.1 million acre-feet referred to by Mr. Reavley on page 529 of the transcript as the water available for generation at Amistad, is found in the report on the proposed project, paragraph 60, under the heading "Potential Hydroelectric Power Production," page 50. The stated amount represents the average annual quantity of releases which would be available to the United States for generation of hydroelectric energy and comprises one-half of the total releases for both countries, since the treaty provides that the energy shall be divided equally between the two countries. This figure was developed from extensive operation studies now in the files of the U.S. Section, International Boundary and Water Commission. These studies were available to representatives of the Rural Electrification Administration and the Federal Power Commission at the time our basic data were examined by these agencies. Should you have any further question or desire clarification, please advise. The transcript is returned herewith.

Very truly yours,

L. H. HEWITT, Commissioner.

Mr. KILGORE. Do I understand, Mr. Chairman-Mr. Reavley, do I understand the import of your testimony is that you believe a Federal powerplant should be constructed and the price for which the power would be sold under the preference clause would be the customary computation, so that there would be no surplus revenue to apply on the conservation features?

Mr. REAVLEY. I have not taken a position on that, Mr. Kilgore. I would rather not go into that right now.

Mr. KILGORE. Perhaps I am misinterpreting a portion of your

statement.

Mr. REAVLEY. I was simply saying what part of the Federal Government's investment is allocated to the cost of power and should be recovered over a period, I suppose, of 50 years. At that price the power should be available first to the usual preference customers. I did not

Mr. KILGORE. You do not at this time raise objection to the inclusion in the cost base of a portion of the conservation?

Mr. REAVLEY. I would like to stay out of that. I recognize some of the problem there. I read Mr. Smith's very fine statement. I have talked with them in the lower valley. I would not want to inject the electric co-ops into that problem.

Mr. KILGORE. I think without that additional comment the middle paragraph on page 3 of your statement could be otherwise construed. Mr. BURLESON. Mr. Chairman, you recall in earlier hearings, we touched upon the proposition at one time as to what the cooperatives in the area could do as a matter of being in a position to bid for power which may be produced at Amistad.

Now, Mr. Reavley, are we to assume that before the cooperatives in the area would be in a position to take power from Amistad, that it would follow logically it would be necessary for the distributing cooperatives to organize a transmission cooperative?

Mr. REAVLEY. Either that, or get their own loans for their own transmission lines. I think the cooperatives would have to have if they could not get some sort of wheeling agreement from somebody else who had lines there and Central Power & Light Co. would be the only one I know of-they would have to build their own transmission lines big enough to carry 139 kilovolts, or whatever it would be. They do not have them now, would not have funds to build them, and I suppose they would either have to borrow it on an individual basis or, through that area, organize a separate cooperative.

Mr. BURLESON. It would not be likely each distributing cooperative would build their own lines

Mr. REAVLEY. They would work together on it, it would be planned together whether they would seek their loans individually or together, I have no idea. Mr. Hurd's cooperative covers such a large area out there, it might be he could do his own planning for that area without going together with some of those over on the east.

Mr. BURLESON. Thank you, sir.

Mr. SELDEN. Any further questions?
Mr. Fisher, do you have a statement?

STATEMENT OF HON. O. C. FISHER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. FISHER. Of course, this Amistad project, as I see it, is primarily a flood control project, and if it were not for the international agreement which requires conservation storage, Colonel Hewitt indicated it might be purely a flood control project. We are very much distressed by the loss of more than 200 lives in one flood in 1954, and we think that ought to be stopped. It is human carnage that this Nation can ill afford. As far as I am concerned, I would have liked for the IBWC report to have justified the Government in building a generating plant. But the report, as you know, based upon Federal Power Commission study, held that it would not be justified. If you want to put it on a purely scientific basis, rather than philosophical, then the FPC finding would prevent the Government from building a powerplant.

My primary interest in building that dam is to control those floods and save countless lives and protect property. I am, therefore, anxious to see the legislation advanced and see the project authorized regardless of who builds a generating plant, if one is built.

If it should be the will of the committee that regardless of the FPC report the Government should still bear the cost of the generating plant, that is fine with me. On the other hand, if it should be found otherwise, I would still like to have the project built, because

I want to stop the flood damage. I am wondering if your views would coincide with that?

Mr. REAVLEY. Sir, I assure you the electric cooperative, especially the people in that area, are familiar with that flood damage, and being human beings and Texans, we join with you in the interest that this dam be built to control floods. The only thing we add is that if there is here a site which provides valuable hydroelectric power availability, that it be used to the widest possible extent for the people there in that area. And if the committee cannot decide finally as of now as to whether or not they agree with the FPC expectation now for what facts might show in the future, at least the door ought not to be closed now on this being a Federal project which would be profitable to the Federal Government. If the decision cannot be made that the FPC recommendation is entirely scientific and made without any possibility of error, then at least do not close the door yet on that phase of it.

We do not want to delay this bill at all.

Mr. FISHER. Regardless of what the finding of the committee may be with regard to who should build the generating plant?

Mr. REAVLEY. We do not want to delay this bill; no, sir.

Mr. FISHER. I think that was the testimony of Senator Yarborough a few weeks ago: regardless of who builds the generating facility, we want to get this dam built.

Mr. REAVLEY. And we believe the committee can send the bill on its way without resolving finally this issue. And the only way to do that would be to eliminate the second paragraph of section 2.

Mr. FISHER. As you know, the report of Colonel Hewitt was to the effect that if it should be determined by the committee to be the proper thing-and that is purely for the committee to decide that the falling water be sold, his computation, as I recall, was that in the course of the life of the project, proceeds from that would amortize the cost involved in the conservation storage. Unless the committee feels it proper to include a Government-constructed generating plant, despite the finding of the Federal Power Commission to the contrary, it may very well be that the deletion of section 2, as recommended by you, will jeopardize the passage of any bill at all. Because if there is no provision for a powerplant and no provision for the sale of falling water, as authorized in section 2, the bill will contain no provision for reimbursing the Government for cost of the conservation storage. That is, unless irrigators are required to reimburse. And we know from the testimony that to make that requirement would open a Pandora's box of uncertainty, and I understand from your testimony that you are not recommending that.

So that leaves us dependent on the power feature as the only recourse for reimbursement for the cost of the conservation storage, which is required by the treaty; the power potential is worth something and will pay for the whole conservation storage if it can be worked out on a feasible basis.

Mr. REAVLEY. Leasing the falling water is still selling the waterpower potential, and by our engineering and-because of some of these questions we believe that the Federal Government is going to make more money in the long run than it could make by leasing the falling water. It will pay for more of the dam.

Mr. FISHER. Yes. That is all.

Mr. SELDEN. Are there any further questions? Thank you very much, Mr. Reavley.

We have two additional witnesses today; we have Mr. J. L. Bates, president of the Central Power & Light Co., and he is accompanied by A. P. Jones, planning engineer for the Central Power & Light Co. If you two gentlemen will come up, we will be happy to hear from both of you.

Mr. KILGORE. I do not believe these gentlemen have been here. These are two very fine Texans and I think one of the prior witnesses said earlier the Central Power & Light is a good citizen.

Mr. SELDEN. We are glad to have both of you gentlemen here. STATEMENT OF J. L. BATES, PRESIDENT, CENTRAL POWER & LIGHT CO., CORPUS CHRISTI, TEX.

Mr. BATES. Gentlemen, my name is J. L. Bates. I reside at Corpus Christi, Tex. I am the president of Central Power & Light Co., which is a private corporation incorporated under the laws of the State of Texas.

In my opinion the proposed Amistad Dam on the Rio Grande is needed badly for flood control and conservation of water for irrigation and municipal use. I ask, therefore, to be recorded as being for the enactment of H.R. 8080 and to be allowed to make this statement concerning, primarily, the development of hydroelectric power in connection with this project.

Central Power & Light Co. is engaged in the business of generating, transmitting, distributing, and supplying electric power and energy in an area of about 43,700 square miles in 42 counties in the southern portion of Texas. It furnishes electric service in 213 cities and communities and in addition, to about 27,800 rural customers. It supplies the power requirements at 91 different points of delivery for 13 rural electric cooperatives. It owns and operates about 3,286 miles of high-voltage transmission line which forms a network and interconnects with the system of Houston Lighting & Power Co., with the system of the Lower Colorado River Authority which is a State agency, and with the city of San Antonio public utility system. It has interconnections also with the system of the West Texas Utilities Co. to the north and east of Amistad Dam site. Its high-voltage transmission system serves the area around the proposed development and it has high-voltage lines in this vicinity.

This company has steam electric generating plants with total capability of about 876,000 kilowatts and hydroelectric plants with a total capability of about 10,000 kilowatts. These figures include a steamplant and two hydroelectric plants and dams which would be flooded and rendered and inoperative by the proposed Amistad Dam.

The International Boundary and Water Commission, in connection with its studies, asked this company for an evaluation of power from a proposed dam at the Amistad site to be constructed substantially according to plans as described in Senate Document No. 65 entitled "Rio Grande International Storage Dams Project: Proposed Amistad Dam and Reservoir," which plans were based on the historical 50-year record of flow in the Rio Grande. Using further information supplied by the International Boundary and Water Commission as to proposed operating plans, power generation figures and estimated cost of a generating plant adequate to accommodate water releases to obtain the most benefit from power generation, this company arrived at a value for falling water averaging $337,000 per year. This amount is based on the estimated cost of providing from a steamplant an equivalent amount of power and energy having similar characteristics as to reliability and firm supply.

Under the treaty of February 3, 1944, Mexico and this country share equally in the power generation. The Amistad Dam would be built primarily for irrigation and flood prevention and use of falling water for power generation would have to be incidental and secondary to retaining and releasing the water for flood prevention and for irrigation. For that reason and because of variation in the amount of water in the river, any power and energy will not be firm power.

"Firm power" is power that may be relied upon as being available at any and all times. "Dump power" is power that would have to be taken when generated. Generation at Amistad could not be entirely scheduled to meet the requirements of the power user but would occur only when there is need to release water for a priority purpose. "Dump power" is of relatively small value, being as shown by representatives of the Federal Power Commission, about equivalent to the fuel cost for steamplant generation.

This company, in evaluating the prospective Amistad power, considered that its highest and best value would come from using it as "peaking power" and "reserve power" to the extent that this might be feasible considering the market available and the necessity of using the falling water consistently with retaining or releasing water for flood prevention or irrigation purposes; that is, the power that is available even though not continuously dependable would have a higher value if generated at times of peak load or used as reserve capacity so as to relieve the using system of providing capacity to meet such requirements, than it would have as dump power.

It must be taken into consideration that there will be unscheduled shutdowns and that a times there will be drought periods during which there will be no water or a greatly reduced amount of water for power generation. Assuming, however, cooperative releasing of water which it is believed could be done when such water is available without jeopardy to priority uses such power could be taken into the system of this company as to have value as peaking and reserve power. In order to realize the benefit of using the falling water to some extent for peaking power, it would be necessary to install facilities to generate about 100,000 kilowatts at average head condition-I use the term "average" because I believe previous testimony indicated a minimum of 75,000, and it could run up to as high as