Mr. FASCELL. Do you mean the matter is now before us as to whether or not we will recommend it, or authorize it?

The point I want to know is, has the Commission recommended it? Colonel HEWITT. We have submitted it for the consideration of the committee.

Mr. FASCELL. With or without recommendation?

Colonel HEWITT. Without recommendation.

Mr. FASCELL. Now, that would be an additional cost, would it not, to acquire in fee simple public properties and to provide access roads thereto ?

Colonel HEWITT. That is true.

Mr. FASCELL. That cost is not included in here and there is no estimate of it?

Colonel HEWITT. Those costs are included in the report, sir.

Mr. FASCELL. That is all. I just wanted to be sure they were in there.

The plan does not contemplate, then, any contract with the private property owners and this Commission for public access; is that

correct?

Colonel HEWITT. Yes, sir.

Mr. FASCELL. Your benefit-to-cost ratio includes power production on the basis of the proposal made to you by Central Power & Light Co.; is that correct?

Colonel HEWITT. That is correct.

Mr. FASCELL. That is not a firm proposal?

Colonel HEWITT. It is not a formal proposal as yet. We are of the opinion, however, that it can be considered as reliable.

Mr. FASCELL. And one on which the Commission could act?
Colonel HEWITT. I believe so; yes, sir.

Mr. FASCELL. Then, I gather from that, the Commission would let the contract with the Central Power & Light Co.?

Colonel HEWITT. Under the proposal for the Central Power & Light Co. to build a plant to utilize the flowing water from the reservoir, it is assumed that a longtime contract would be entered into permitting the company to build a powerplant and to operate it.

Mr. FASCELL. And that contract would be let by the Commission? Colonel HEWITT. That contract would be let by the Commission; yes, sir.

Mr. FASCELL. The State of Texas would have nothing to do with it? Colonel HEWITT. No, sir.

Mr. FASCELL. In your study, was any comparison made with respect to benefits in the use of the power to the preference customers if the power development were a Government project?

Colonel HEWITT. To answer that question, I would have to state that the other Federal agencies' activities are governed by the Federal Power Commission. In other words, if the Federal Power Commission says that the production of power by a federally owned plant is not economically feasible, we have to be controlled by what they say. Mr. FASCELL. In other words, this Commission has made no independent study of that fact but has taken the study of the FPC in the determination that a federally constructed powerplant is not economically feasible?

Colonel HEWITT. We made our own studies, and on the basis of the assumptions made by the Federal Power Commission it was found that the construction of the Federal plant was not feasible.

Mr. FASCELL. In other words, your studies concurred with those studies of the Federal Power Commission?

Colonel HEWITT. Yes, sir-based upon their assumption.

Mr. FASCELL. Based upon the same assumptions which the Commission made?

Colonel HEWITT. Yes, sir.

Mr. FASCELL. Now, this proposal with Central Power & Light Co., is that based on, I believe it was $337,000 per year

Colonel HEWITT. Yes, sir.

Mr. FASCELL. Is that based on dump power rates? Are they contemplating purchasing that power at those rates?

Colonel HEWITT. They have a rather extensive system in the valley whereby they can, with their other powerplants, integrate the powerfrom the proposed plant at Amistad into their system.

Now, whether they propose to use it as dump power or as peaking power, I don't know.

Mr. FASCELL. That is not the point I make. I mean, maybe my question was asked improperly.

The amount of money that is paid would be paid to the Government as a result of this contract, for the use of the water. Would that be equal to the sale of power at dump rates if you had your own generating plant? Or do you know?

Colonel HEWITT. I am not sure that I understand the question, sir. I assume

Mr. FASCELL. What is the $337,000 under this proposal? What does it represent?

Colonel HEWITT. It represents the value of the falling water in the generation of power to the Central Power & Light system, when integrated with the remainder of their system.

Mr. FASCELL. Now, the question I need to know and have asked is, is that equal to, more, or less than would be received from the sale of power to a private power company if the Government had a generating plant there at dump rates or at whatever rates you could sell it to the customer?

Colonel HEWITT. If we were selling the power at dump rates we would not get net revenue of this amount.

Mr. FASCELL. How much less would it be, do you know?

Colonel HEWITT. I am informed we would get probably one-fourth of this amount, selling it at dump rates.

Mr. JACKSON. Will the gentleman yield for a moment?

Mr. FASCELL. Surely.

Mr. JACKSON. Will you tell a nonelectrician what a dump rate is? Mr. FASCELL. I am no expert, I am just inquiring.

Colonel HEWITT. You generate power for a commercial system and sometimes that power generation is not at the time of day or in the quantity at which you want it. If it is not available in the quantity and at the time you want it, you take it anyway but you take it at a reduced rate. In other words, it is there and you pay a little for it and maybe you can use it, but it is not the same rate you would take

for peaking power which would be dependable at a certain time of day and for a certain quantity.

Mr. SELDEN. Mr. Jackson, have you further questions?

Mr. JACKSON. Has any estimate been made, Colonel, as to the cost to the Federal Government of construction of a generating plant at a dam site?

Colonel HEWITT. Yes, sir; we have such an estimate. I will give it to you in just a second. We have made estimates for two different size plants, one of 70,000 kilowatts at $15,217,000, and one for 100,000 kilowatts at $19,287,000.

Mr. JACKSON. This would appear to be one of the matters which is in controversy. Are there any other issues of which you know that are in controversy with respect to this project?

Mr. SELDEN. Off the record.

(Discussion off the record.)

Mr. JACKSON. During the course of the hearing we must necessarily explore those areas in dispute or else there would be no necessity for holding a hearing. If there were no matters in dispute and everything was perfectly cut and dried-I might say I told the author of the resolution that I am very much predisposed toward the project. However, if there are these differences of opinion and perhaps you are not the one to whom the question should be directed, these things must be brought out.

I will withdraw the question.

I have nothing else at the moment.
Mr. SELDEN. Mr. Burleson

Mr. BURLESON. Thank you, Mr. Chairman.

I am perfectly willing to abandon discussion of the issue also, but perhaps to clarify somewhat, although hydroelectric power would be charged to a primary benefit, you are discussing the matter as a potential and not as a part of the immediate proposal; is that correct?

Colonel HEWITT. What we are proposing is to show the committee that we believe that there is a potential benefit, if you will, in the construction of the dam; that whether the powerplant is constructed or not, we have the opportunity, we believe, of disposing of that energy at an advantageous figure which would go far toward amortizing the cost of the structure.

Mr. BURLESON. Now, let me develop this a little further and then I shall abandon the matter at the moment.

As of now, you are discussing the potential. Now, if it is decided that hydroelectric power shall be a part of this installation, the policy as to priority of rights-purchase of power-would follow. I assume that would be accepted as laid down by the Federal Government?

Colonel HEWITT. I believe that that would naturally follow. Mr. BURLESON. If we authorize the construction of the plant, if existing provisions of law establishing the priority of purchase of power are not applicable, then it would be a matter of the Congress determining and establishing a policy, would it not?

Colonel HEWITT. I think that the result would be exactly similar to that of Falcon, where the Department of the Interior is authorized to take control of the power at the bus bars and to dispose of that power.

I believe the Department of the Interior makes a contract with a commercial firm or with the public power agencies and that the laws are very exact as to what their responsibilities and duties may be. Mr. BURLESON. I think you are correct

Colonel HEWITT. We would not sell power as such.
Mr. BURLESON. Thank you very much. That is all.
Mr. FASCELL. Mr. Chairman, just one other thing.

Colonel, just to get me straight on this thing, though, in the computation of your benefit-to-cost ratio, you do have power production included, do you not?

Colonel HEWITT. That is correct, sir.

Mr. FASCELL. You keep talking about it as a potential. If you took it out, what would be your benefit-to-cost ratio?

Colonel HEWITT. It would still be greater than unity. It would be about 1.8 to 1.

Mr. SELDEN. About 1.8 to 1?

Colonel HEWITT. Yes. Actually, that would be sort of throwing away money if we did it.

Mr. FASCELL. So what you are saying is, you either have to contract for this power or the Government has to build the plant?.

Colonel HEWITT. I would say so; yes, sir.

Mr. SELDEN. Should the Government build a plant in connection with the dam, to what figure would that reduce your benefit-to-cost ratio?

Colonel HEWITT. Well, the cost ratio for the plant on the basis of a 50-year project life is only about 0.23 to 1, and on 100 years, it would be 0.26 to 1. I would have to do a little figuring here to give you that exactly.

Mr. SELDEN. I would like to have that figure.

Colonel HEWITT. Would you be willing to let me supply that for the record a little later?

Mr. SELDEN. The subcommittee would be happy to have that for the record.

(The information requested is as follows:)

Question. What would be the ratio of U.S. benefits to costs if the Federal Government built the powerplant?

Annual benefits and costs-U.S. share (50-year life) with Federal installation of

powerplant

1 Penstocks would be constructed as a part of dam, even though powerplant not immediately constructed. 2 Power benefit based upon Federal Power Commission report that no dependable capacity available, energy value 1.7 mills per kilowatt-hour-Letter Federal Power Commission, Apr. 1, 1958, to International Boundary and Water Commission.

Mr. SELDEN. Congressman Kilgore?

Mr. KILGORE. Mr. Chairman, I wondered if I might ask a question or two at this point?

Mr. SELDEN. Yes, you may, Congressman Kilgore.

Mr. KILGORE. And while it might be better for me to comment later, I think it might be well, since Mr. Jackson has asked a question on a latent controversy here, it might be well for me to say something here which the committee might carry in its mind from here on. On page 4 of your statement there is an item referring to 290,000 acre-feet of water which might be conserved at Amistad which would otherwise be lost to the users annually. And then on page 7, there is an item which indicates that the annual conservation of water at Amistad over and above water conserved at Falcon is in the amount of 86,000 acre-feet; there appears to be a conflict between those two items. And while I know there is not, I wonder if you would give the committee some indication of the manner in which those two figures are arrived at?

Colonel HEWITT. Suppose I ask Mr. Friedken to answer that question.

STATEMENT OF JOSEPH F. FRIEDKEN, PRINCIPAL ENGINEER, SUPERVISING, U.S. SECTION, INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO

Mr. FRIEDKEN. The total of 290,000 acre-feet which is made in your first reference is total waste to the Gulf and other losses to the river, with Falcon alone.

Now, with the building of the Amistad Dam there would be increased evaporation losses, and it is that increased evaporation loss that makes up largely the difference between the 86,000 and the 290,000.

Also, another part of it is, even after Amistad there would be a small spill of about 9,000, but that is the difference.

Mr. KILGORE. So that the 86,000 acre-feet is the actual net gain in conserved water annually resulting from the building of Diablo, or Amistad Dam?

Mr. FRIEDKEN. Right.

Mr. KILGORE. The treaty requirement in the 1944 agreement between the United States and Mexico calls for, does it not, conservation space on the part of both countries and circumstances under which that conservation space may be made available from one country to the other, so that this country has a treaty obligation to have conservation space of its own in this additional structure, which treaty obligation carries with it the obligation to make that space available to Mexico for storage of her waters in the event it is not needed for storage of U.S. water?

Colonel HEWITT. That is how I should interpret it; yes, sir.

Mr. KILGORE. Then is it not also true that there are feasible circumstances under which, if we assumed the building of a dam at the Amistad site, with either no U.S. conservation storage in it, or no right to use that U.S. conservation storage, that the existence of conservation storage belonging to Mexico at the Amistad site not only could