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Mr. Shepperd. Practically, I think that is correct.

Mr. Fascell. So the question is, is this dump power or isn't it?

Mr. Shepperd. In my opinion, sir, it is not dump energy when it is firm, in an amount of 45,000 kilowatts for 52 out of 56 years and the amortization of the dam is 50 years.

Mr. Fascell. In other words, you have a question as to the exact amount of power which is firm that can come out of this project?

Mr. Shepperd. That is correct. It would be only an opinion, and I am not an engineer or technical person, so I cannot testify here as an expert on this. But it would seem to me that there must be some reasonable time in which the water availability will be known in advance of the months it has to be used—4, 5, 6 months, which might help the condition.

Mr. Fascell. This is a technical question upon which the committee can get testimony undoubtedly from both sides.

Mr. Shepperd. I assume so, but not from me. I am not capable.

Mr. Fascell. In support of the position which has been recommended, do I understand you are of the opinion that the Commission solicited the opinion of the Federal Power Commission?

Mr. Shepperd. I don't know as to that, sir.

Mr. Fascell. The Federal Power Commission did something. I am not familiar with the steps here, but did they analyze the report?

Mr. Shepperd. Yes; that is what they told us. Not that report, perhaps, but

Mr. Fascell. Whatever the data was that the Commission had gathered; is that correct?

Mr. Shepperd. That is correct.

Mr. Fascell. Your testimony was that FPC did not make an independent study; is that correct %

Mr. Shepperd. That is correct. That is what they told us when we visited the FPC for information.

Mr. Fascell. Well, Mr. Chairman, it looks like to me that the committee certainly ought to have the analysis of the FPC if this is the basis of the position taken by the Commission.

If they are hanging their hat on what the FPC told them without an independent study, it seems like we ought to be in a position of evaluating technically and otherwise the analyses as against the original Commission study.

When we get around to it, I would like to see the analysis of the FPC.

Now, one other thing while I am thinking about this: In your testimony you said something about "It appears from the report of the IBWC to the Congress, which also contained a letter from J. L. Bates of Central Power & Light Co. of Corpus Christi, Tex., wherein he offers to make purchase of a falling water availability of the Amistad Dam 'under certain conditions.'"

What are those conditions?

Mr. Shepperd. I believe that letter states that is 100 percent availability of the water. One of the conditions was, I believe, that. It is in the report.

Mr. Selden. It is on page 82 of the report.

Mr. Fascell. This is what you had reference to. This is reading from the letter of Mr. Bates, president of the power company.

Our valuation is also based on 100 percent availability of peaking capacity.

Mr. Shepperd. That is one of the conditions that is set forth; yes, sir. Mr. Fascell (reading):

We recognize according to your studies, shortages will exist from time to time and while we are willing to accept the premise that hydropower can never be 100 percent reliable, our estimates of its value are computed on the basis that some regulation of water releases can be effected so that a power head can be maintained and energy deliveries can be made in a manner at least as good, if not better, than indicated by your Study DF-2. This study indicates that there would be periods of almost 28 years when no capacity shortages would exist.

Didn't I hear in someone's testimony yesterday, or is it in one of the documents, that under this agreement, no power head can be maintained or that no head can be maintained for power purposes?

Mr. Shepperd. Only for power purposes, I believe.

Mr. Fascell. So you get into a question as to whether or not you are maintaining a head only for power purposes. Nevertheless, one of the conditions seems to be, as far as this company is concerned, that they would want 100-percent availability, or at least a power head that was regulated to the point they could have some assurance, in which case they might pay $337,000 and put in the facilities on that kind of a basis.

Mr. Shepperd. That is correct; but I see no assurance of any payment when there is not 100 percent availability, and if there were 100 percent availability it would be peaking power, in my opinion. A firmer power than dump power.

Mr. Fascell. Thank you, Mr. Shepperd.

I believe I am getting some idea of the ramifications of the technical issues involved and also some of the other issues.

Mr. Selden. Mr. Burleson

Mr. Burleson. Thank you, Mr. Chairman.

Mr. Shepperd, as I understand it, you are precluded from bidding on power at Amistad. Do you have reference to your distributing co-op?

Mr. Shepperd. Yes, sir; in the first case, that is correct.

Mr. Burleson. What is the nearest point of service reached by the Southwestern Power Association Transmission Co-op to the area of the proposed Amistad Dam?

Mr. Shepperd. Mr. Burleson, there is no transmission co-op. We have transmission facilities of our own, in our own cooperative, of something like 200 miles, and the nearest point to Amistad from that is approximately—I would say Uvalde, Tex. I would say that is 90 to 100 miles, maybe a little further, to Del Rio, or the site. It would be 85 miles, probably.

Mr. Burleson. Is that a transmission cooperative?

Mr. Shepperd. No; that is my own cooperative which has the transmission.

Mr. Burleson. There is no transmission cooperative in that area?

Mr. Shepperd. Not in that sense.

Mr. Burleson. You made some reference to the possibility of an organization of a transmission cooperative in the area. Is that a possibility?

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 EOY 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

Eower facilities by the U.S. Government is feasible at the Amistad lam, 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 $1,132,500

Energy:

94,700,000 kilowatt-hours at 1.47 mills per kilowatt-hour 139, 200

52,900,000 kilowatt-hours at 1 mill per kilowatt-hour 52, 900

Gross income 1, 324, 000

Operating cost and maintenance 75, 000

Amortization of powerhouse and facilities: 5 percent, $10,600,000, and

50-year term 580, 000

Net income 689, 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.

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