SOUTHWESTERN POWER ADMINISTRATION The Southwestern Power Administration markets power from 16 Corps of Engineers projects in Missouri, Arkansas, Oklahoma, and Texas. SWPA constructs and operates its own transmission system and also uses facilities owned by others. The budget for 1970 included $260,000 to initiate construction of lines and facilities to complete the interconnection of Federal hydro projects in Arkansas and Oklahoma. It now appears that such con struction is not needed and a budget amendment has been submitted are to delete these funds. Receipts from the sale of power in fiscal year 1970 are estimated at $21.2 million. Appropriations requested total $8.3 million. FEDERAL WATER POLLUTION CONTROL ADMINISTRATION Since becoming Secretary, water pollution problems and activities have taken a large portion of my time and attention. I am convinced that with proper administration; adequate financing: good, tough enforcement; and with the cooperation of State and local govern ments coupled with the support of private industry and the genera public, we can realize progress in cleaning up polluted waters, as well as in preventing further pollution. Mr. Chairman, and members of the committee, the budget reques for the Federal Water Pollution Control Administration, although constrained because of the national fiscal situation, represents another milestone in attaining our objective, "Clean Water." The total request is nearly $306 million which provides an increase of $5.1 million ove fiscal year 1969. The proposal for the waste treatment works construction gra program provides $214 million, the same amount as was appropriated for fiscal year 1969. This level of funding is considerably less tha the amount authorized by the Federal Water Pollution Control A as amended. As you know, the States and local communities are qui unhappy with the fact that the Federal Government has not bee fulfilling its commitment in this area. I am also concerned and a having our staff study alternative ways we can overcome the curren fiscal obstacles. you. Official Thank you for the opportunity of appearing before of the Department will be appearing before you in the next few day and will be available to discuss with you in detail the budget request Mr. KIRWAN. I want to compliment you on a very fine statemen REDUCTION IN BUDGETS FOR WATER AND POWER AGENCIES I am very concerned at the drastic reductions which have be made in the water and power agencies of the Interior compar partment. These other agencies still show an increase of $77.8 millio over 1969. I am especially concerned that a 24-percent reduction l been made in the Bureau of Reclamation budget, which was alread grossly underfunded in the January budget. The 1970 estimate for construction for the Bureau is only $129 million which would be the lowest appropriation since 1958. PUBLIC WORKS APPROPRIATIONS FOR 1970 FOR WATER AND POWER RESOURCES DEVELOPMENT AND THE ATOMIC ENERGY COMMISSION HEARINGS BEFORE A SUBCOMMITTEE OF THE NINETY-FIRST CONGRESS ALASKA POWER ADMINISTRATION BONNEVILLE POWER ADMINISTRATION FEDERAL WATER POLLUTION CONTROL SOUTHEASTERN POWER ADMINISTRATION 29-776 O Printed for the use of the Committee on Appropriations U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1969 COST OF DELAY IN RECLAMATION PROJECTS The water us Petra V Mr. KIRWAN. Have you compiled any estimate of the cost that will result from the delay and stretchout of the Reclamation projects! Secretary HICKEL. The Bureau of Reclamation has not made an estimate of the total effect of the stretchout of the Reclamation program. However, we have recently made a study to measure in dollars ex some of the principle economic effects of budgetary constraints on three major projects in our current construction program: Westlands Distribution System, San Luis Unit; Third Powerplant, Grand Coulee Dam; and Fryingpan-Arkansas project. The study showed clearly that once a project is underway, signifi cant added costs and losses in revenues and benefits are inescapable when construction is stretched beyond an optimum schedule by fund restrictions. It also demonstrated that case-by-case studies are necessary as there were no central tendencies or uniform trends applicable to the projects investigated which could be generalized into neat sen sitivity curves. Constraints could be imposed in a larger number of possible combinations in dollar magnitude and timing, moreover, responses varied in severity depending on the time when construction sequences were upset and progress impeded. The results summarized here reflect the short run effects for the most severe of several alternative 1-year constraints assumed in fiscal year 1970 for the three projects, which amounted to funding reductions of 53 to 55 percent of the optimal program levels. In each instance, either the entire project or an important feature thereof was by about 1 year. delayed For every dollar cut on Westlands Destribution System, potential adverse effects to the Federal Government and water user amount to about $1.99 in added costs and losses in revenues, or $8.63 in added costs and benefit losses. Corresponding figures for Grand Coulee Dam, Third Powerplant are $1.01 and $1.42, and for Fryingpan-Arkansas project they are $0.58 and $1.17. REDUCTION IN SOUTHERN NEVADA WATER PROJECT Mr. KIRWAN. The budget revisions make a reduction of $11 million, or about 50 percent, in the January 15 estimate for the southern Ne vada water project. This will postpone the availability of project water 1 year. What will be the effects of this delay in terms of cost to the Colorado River Commission of Nevada in interest payments? Secretary HICKEL. Commissioner Dominy, would you like to answer that question? Commissioner DOMINY. Yes, Mr. Secretary. as between are There antici the The southern Nevada water project cut in the budget, that which was submitted in the so-called Johnson budget and in the revised Nixon budget is a significant item, and it will delay for approx imately 1 year the service to the cities and communities that pating water from the southern Nevada project. Our estimates on increase of costs for these delays vary considerably from project to project, but when you take all items into consideration, each year delay probably means from $2 to $3 additional costs for each dollar reduced now. That takes into account the inflation and the extra cost of PUBLIC WORKS APPROPRIATIONS FOR 1970 APRIL 21, 1969. STATEMENT OF THE SECRETARY OF THE INTERIOR WITNESSES HON. WALTER J. HICKEL, SECRETARY JAMES R. SMITH, ASSISTANT SECRETARY, WATER AND POWER DAVID D. DOMINICK, COMMISSIONER, FEDERAL WATER POLLUTION CONTROL ADMINISTRATION FLOYD E. DOMINY, COMMISSIONER, BUREAU OF RECLAMATION FRANCIS M. WILES, ACTING DIRECTOR OF BUDGET, OFFICE OF THE SECRETARY Mr. KIRWAN. I am happy to welcome you here this morning, Mr. Secretary. Before you begin, I would like to say that in my opinion, the man who preceded you was a great man and a great Secretary of Interior. Although you have been Secretary for only a short time, you have already indicated that you'll do a fine job and I wish you every suc cess. Mr. KIRWAN. Mr. Secretary, I believe you have a statement that you would like to read for the record. Secretary HICKEL. Yes. It is a short statement and I would like to read it. Mr. KIRWAN. Please proceed. GENERAL STATEMENT Secretary HICKEL. Mr. Chairman, Mr. Rhodes, and members of the committee: It is indeed a pleasure to be here and to appear before this committee which has really done so much for the Nation in developing its water resources, providing the electric power and providing a good start on a water pollution control program. I believe one of our most pressing problems is to stop the discharge of untreated or inadequately treated waste and sewage into our streams and rivers. I think without a doubt we all know that water pollution is one of the great menaces of the nation and must be controlled. We need to continue extensive abatement efforts at all levels-Federal, State, and local. The most significant issue here is that of funding. Nevertheless, I intend not only to continue our efforts in the field of water pollution prevention and control, but to intensify them within the confines of a tight budget. As Secretary, I am also responsible for the marketing of almost 86 billion killowatt-hours annually. Through new developments in technology, we are on the threshold of a new era of low-cost power in many parts of the country. We must strive to make sure that every American family has an adequate supply of power-be it public or private-at the lowest cost consistent with reliable service and an adequate return on investment. This will mean cooperation between privately owned utilities, public groups and the Federal Government; a three-way partnership. You have my pledge that the power-marketing agencies of the Department, plus the Bureau of Reclamation, will serve to the best of their ability to achieve this goal. We are asking this committee for $685.8 million to carry out our water pollution control, reclamation and power marketing programs. I would like briefly to touch on the 1970 estimates before this committee and highlight the programs. BUREAU OF RECLAMATION The year of and rel State with th Alaska tional e United of usin Alaska Colum The total fiscal year 1970 appropriation request for all activities of the Bureau of Reclamation is $245,880,000. This is $29,222,500 less than the 1969 appropriation and is in line with constraints placed on public works activities as a part of the administration's endeavor to combat inflation. The reduction has been applied primarily to the construction program on contracts yet to be awarded. In effect, the reductions to the construction program will result in a slowdown of construction activity now underway, and while this will cause some stretchouts as projects proceed on a reduced level of expenditure, it will not result in a work stoppage on any project. The pro reliab effect New advanced planning starts include $900,000 on the Central Arizona project, Arizona; $100,000 on the Mountain Park project, Oklahoma; and $100,000 on the San Felipe project, California. Also included is $150,000 to start construction on the West San Bernardino te County water district loan program, California. TH I want to assure the committee of my support of the reclamation program, however, I am sure we are in agreement that steps must be taken immediately to reduce the inflation spiral which is of concern to all. Ruinous inflation could well destroy the very economic base which the reclamation program is designed to enhance and stabilize. Certainly any deferment of public works which will lessen inflation pressures is a necessary alternative. and In my review of the budget programs in the Department I was impressed that expenditures made for reclamation are close to total reimbursability. The dollars returned to the Treasury each year are impressive. It is estimated that for fiscal year 1970 these revenues will total about $256 million, which is greater than the total reclamation budget request now before you. These revenues will continue to grow each year as additional projects start producing revenue. There is a substantial backlog of authorized work to be carried forward. Increased appropriations in future years are needed if the work is to progress economically and efficiently. I assure you that as economic conditions improve I will support the acceleration of the reclamation program designed to meet the needs of our Nation. |