Mr. SHEPPERD. I think that would be possible.

Mr. BURLESON. If that were possible and such existed, then the transmission cooperative could participate in a bid for power at this installation?

Mr. SHEPPERD. If they could establish feasibility for a loan to construct the transmission lines, or if they could negotiate a satisfactory wheeling contract with other parties who had the lines; yes, sir.

Mr. BURLESON. Let me ask you this further question: If the Federal Government had a policy on public power applicable to all installations such as this, which in times past I thought we had, would you favor such a policy set by the Congress for the executive department to follow? I realize, of course, that there are unique conditions at every installation. This one has it, as I presume all developments of this nature have. Would you favor such a Federal policy, taking into consideration latitude to meet specific conditions applicable?

Mr. SHEPPERD. We believe the Flood Control Act of 1944 which has been used for a great many dams and installations is a fair policy, and we believe that should be used.

Mr. BURLESON. But seemingly there is no provision which applies that policy equally as each new flood control installation is developed? Mr. SHEPPERD. Normally, it is included by the Congress, I believe and it was in Falcon.

Mr. BURLESON. On each project?

Mr. SHEPPERD. Yes, sir. It was in Falcon.

Mr. BURLESON. Thank you for your statement.
Mr. SELDEN. Are there further questions?

If not, thank you very much, Mr. Shepperd.

The Chair will not recognize Mr. Roy Krezdorn, consulting engineer for the Texas Electric Cooperatives, Austin, Tex.

STATEMENT OF ROY KREZDORN, CONSULTING ENGINEER, TEXAS ELECTRIC COOPERATIVES, INC.

Mr. KREZDORN. Mr. Chairman and gentlemen of the committee, I am Roy Krezdorn, a registered, consulting engineer retained by the Texas Electric Cooperatives, Inc., an association of 74 electric cooperatives operating in the State of Texas.

I was employed to prepare a detailed study of the electric power potential of the Amistad Dam, including its relation to the power requirements of the area.

This study was made and I submit to the committee a copy of the report.

Mr. SELDEN. Without objection, we will receive this report for the files of the subcommittee.

(The document referred to will be found in the files of the subcommittee.)

Mr. KREZDORN. Let me briefly state to you one conclusion I have reached. Based on this study, it is my opinion that the installation of power facilities by the U.S. Government is feasible at the Amistad Dam, and the hydroelectric feature should be installed concurrently with the construction of the dam.

This conclusion is based on data and information obtained from the International Boundary and Water Commission report augmented by pertinent information from other sources.

The feasibility is established on present-day values of energy and does not take into account the revenue which will be realized through the increased dependable capability at Falcon Dam and other indirect benefits.

The results represent the minimal returns and are based on conservative criteria.

The report establishes that peaking power in the amount of 75,000 kilowatts can be assured for a time duration of 352 hours each year. This value represents my estimate, based on a study of load duration curves of the annual time that the top 75,000-kilowatt demand is established.

This capability can be realized through the utilization of irrigation discharges coincident with the electric peak requirement. Through studies of irrigation demand charts it is established that 28 percent of the annual irrigation requirements are concurrent with peak electrical demands.

With an operating head of 211 feet, water releases of approximately 140,000 acre-feet will meet electrical requirements whereas irrigation releases coincident with this are 190,000 acre-feet.

Therefore, if the downstream water users are to receive no more water than they did in an average year in the past, there is available water to establish a 75-megawatt peaking capability.

Using present contractual values for power and energy sold at Falcon Dam of

Demand: 75,000 kilowatts, at $15.10 per kilowatt---

Energy:

94,700,000 kilowatt-hours at 1.47 mills per kilowatt-hour_ 52,900,000 kilowatt-hours at 1 mill per kilowatt-hour_.

Gross income__

Operating cost and maintenance_

Amortization of powerhouse and facilities: 5 percent, $10,600,000, and 50-year term.__

$1, 132, 500

Net income____

669, 000

This represents an additional revenue in the amount of $332,000 over and above the $337,000 that has been mentioned as a possible price to be received for the sale of falling water.

And it should be noted that I am assuming the release of water to meet maximum irrigation needs, whereas I understand this offer for falling water is predicated upon the right of the purchaser to control water release to meet its power purposes.

I feel I have made a conservative estimate since during most of the time streamflow is well over the values assumed, and since the value of power and energy will increase with time, because fuel for the production of electric energy is certainly going up.

Mr. Chairman, thank you for this opportunity to appear, and I will certainly welcome any opportunity to answer questions that you have. Mr. SELDEN. Thank you, Mr. Krezdorn. I want to ask you a question.

You said that the hydroelectric features should be installed. Do you mean the complete generating features?

Mr. KREZDORN. I would like to see the complete powerhouse, sir. Mr. SELDEN. How much do you estimate in this breakdown that the installation of the complete hydroelectric generating features will cost?

Mr. KREZDORN. I differ with Colonel Hewitt somewhat in that, since I figure $10,600,000.

Mr. SELDEN. What was Colonel Hewitt's estimate?

Mr. KREZDORN. $15,217,000.

Mr. SELDEN. That would make quite a difference then in the estimate, would it not?

Mr. KREZDORN. Yes, sir; it would. I have, however, letters from two major manufacturing companies offering the sale of electrical equipment, and I've estimated the cost of the powerhouse which was designed to contain this.

Mr. SELDEN. Using Colonel Hewitt's figure, how would it affect this breakdown?

Mr. KREZDORN. The amortization of the powerhouse and facilities based on 5 percent would be increased about $250,000.

Mr. SELDEN. So you would still have a remaining net income?
Mr. KREZDORN. Yes, sir.

Now this net income, I think, is about one-fourth of what you would actually realize. We have taken just the very bare minimum. That is saying water is available only when people are using it for irrigation and certainly there are going to be times when water is available at other times.

You see, we have neglected the fact that you are going to maintain the normal streamflow downstream for municipal users. This was all ruled out because we based all of these assumption on the criteria set up by the IBWC. We took no argument with their basic data. We do not concur, however, in their conclusions.

Mr. SELDEN. Mr. O'Hara

Mr. O'HARA. No questions.

Mr. SELDEN. Mr. Jackson.

Mr. JACKSON. What is your figure on the cost of generating facilities?

Mr. KREZDORN. $10.6 million.

Mr.JACKSON. I have nothing further.

Mr. SELDEN. Mr. Fascell

Mr. FASCELL. Mr. Krezdorn, how about giving us a brief rundown on your qualifications, please, so that we can qualify you in the record as an expert.

Mr. KREZDORN. I have an electrical engineering degree from Texas A. & M. I have postgraduate degrees from the University of Texas and from Texas A. & M., the latter degree from Texas A. & M. being in the nature of an honorary degree for accomplishments which I have in my field.

I was chief electrical engineer on the installation of the Lower Colorado River Authority's facilities at Granite Shoals, Marble Falls, and the pumpback installation at Buchanan, representing about $18 million of hydroelectric work.

I have my consulting firm. I am a registered professional engineer. I am a member of the AIEE, a member of the ASEE.

I think that about sums it up. I have been in the power business

about 25 years.

Mr. FASCELL. If it is not violating any personal business confidences, could you give us some idea of the scope of your clientele? I don't mean in size, but I mean in variation.

Mr. KREZDORN. I have served in the past Texas municipalities, and am at present serving the Texas Electric Co-ops.

Much further in the past I have made board studies-that is, network analyzer studies entailing joint power companies, Lower Colorado River Authority with Houston Power, Texas Power & Light with Central Power & Light.

Mr. FASCELL. Thank you, sir.

Somewhere you said you based your conclusions on information made available to you by the Commission, plus other sources and that you had no basic-there was no diversity of opinion insofar as the basic facts were concerned.

Mr. KREZDORN. Yes, sir.

Mr. FASCELL. Just so I can identify what we are talking about, are we talking about this document or another document as the Commission study? The document I hold in my hand is a Senate document, "Rio Grande International Storage Dams Project, Proposed Amistad Dam and Reservoir."

Mr. KREZDORN. There was another document I used. However, all of the information contained in your document there was contained in the other document. It was a preliminary study.

If I may outline my basic difference of conclusion, the reason that I do differ, the conclusion that there is no firm capability is involved. Now that assumes then that there is no water inflow to the reservoir during

Mr. FASCELL. Excuse me. Let's stop right there. Can you find that conclusion for me in the Commission report?

Mr. KREZDORN. It is in chart form. There is a hydrographic chart. I don't remember the chart. It is also contained in my report. There are approximately 4 years where you could not, from inflow, maintain 75,000 kilowatt firm capability. But if we are going to have conservation storage and we are going to have it for the controlled release of irrigation waters downstream-then regardless of whether water is running into the reservoir or not, there will be water released downstream to the irrigators.

That is one of the purposes of this reservoir. If water is released to the irrigators it can be released through the penstocks as well as the discharge gate. And if it is released through the penstocks, it will generate power.

Mr. FASCELL. In other words, that was one of the basic assumptions. that you emphasize in your statement?

Mr. KREZDORN. Yes, sir.

Mr. FASCELL. It is inherent in the project, in other words, that the water is going to be released for one of the primary purposes? Mr. KREZDORN. Yes, sir. And to get some of these cold facts and figures down into some basic values, at the full conservation storage, which is at elevation 1,117-there is an operating head of 211 feet, and it takes but 21 inches of this lake to meet the power requirements. You have 211 feet of head and you take 21 inches off of the top

and you have established 75,000 kilowatts peaking demand, as far as generation is concerned.

Mr. FASCELL. So you have no doubt in your mind but what the power is firm?

Mr. KREZDORN. That is right.

Mr. FASCELL. The value of it as far as you are concerned is—what did you say?

Mr. KREZDORN. At a bare minimum, it is roughly twice the $337,000. If there were no water at all running into this reservoir for 1 year, not one drop, and you discharged all of the downstream irrigation requirements, you would drag this head down approximately 31 feet. For a whole year, with not a drop coming in. So I assume then that there will be water, controlled releases for uses downstream.

Mr. FASCELL. You heard the FPC conclusion on this thing and they analyzed the same data. Now what is the variable factor? What is the difference in how they arrived at their conclusions and you arrived at yours?

Mr. KREZDORN. Well, this is conjectural, but I don't think they took into account that there was going to be controlled irrigational releases. They must not have taken this into account.

Mr. FASCELL. You feel they just discounted that completely? Mr. KREZDORN. It is the only conclusion that I can draw, sir. Mr. FASCELL. That is a point upon which we can inquire to determine whether or not that was discounted or included.

Mr. KREZDORN. Yes, sir; I think that would be a pertinent fact. Mr. FASCELL. In other words, that would be a valid point of inquiry to determine the basis of their conclusion.

Mr. KREZDORN. Yes, sir.

Mr. FASCELL. Now from a technical standpoint in your business, is the consideration of the utilization of irrigation discharges a regular, or irregular thing?

Mr. KREZDORN. The primary client or company that I have served in the past has been the Lower Colorado River Authority, a State agency of the State of Texas, and they are set up by State law as a conservation agency. So this is a primary consideration.

Power is secondary and yet they are doing very well by themselves. Mr. FASCELL. Strictly from a technical analysis standpoint-that is nonlegal, I am referring now to this proposal made by the power company, in letter form to the Commission. I am trying to get an interpretation or an understanding-not an interpretation. "Our evaluation is also based on 100 percent availability of peaking capacity."

How about translating that into the English language for me so I can understand it.

Mr. KREZDORN. Peaking capacity, in the down-to-earth definition of this particular statement, would represent electrical energy available when the purchaser needs electrical energy. When he has to have electrical energy. That would be peaking power.

Mr. FASCELL. Now you are talking about the same kind of power, aren't you, that is in your analysis?

Mr. KREZDORN. Yes, sir; 75,000 kilowatts.

Mr. FASCELL. Firm power?