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Mr. DONDERO. While he is getting the map, Colonel, is the area now being adequately served by private power companies?

Colonel GEE. The area is being served by two private utility companies, the Virginia Electric Power Co., and the Appalachian Power Co., both of which have indicated their unqualified support for the Buggs Island project and the Philpott project now under construction and have indicated they can distribute and are in the market for all of the power which can be produced by those two projects. Mr. DONDERO. What do they say about this project?

Colonel GEE. They would be very interested in being designated to market the output of the Smith Mountain project.

Mr. DONDERO. Is there any assurance that you could give to private industry that they would be permitted to buy this power at the bus bar? Colonel GEE. If I were the Secretary of the Interior, I could give you that; unfortunately, I am not.

Mr. DONDERO. Well, we will appoint you the Secretary. [Laughter.] Mr. ANGELL. How much power is involved?

Colonel GEE. 41,000 kilowatts installed capacity, sir.

Mr. ANGELL. How about the power in the two dams down the river that you mentioned?

sir.

Colonel GEE. We will get that from the document in just a minute,

Mr. DONDERO. Have you made any computation as to the cast per kilowatt of electric energy based upon the $22,000,000 estimated cost for this project?

Colonel GEE. It would involve first a division of benefits, Mr. Dondero, to set aside

Mr. DONDERO (interposing). That is, eliminating the 2 percent for flood control.

Colonel GEE. No, sir-and eliminating also the benefits to downstream power plants, which are very important in this project. Every bit of water which passes from this reservoir downstream is used over again in each plant below it on the river, and the Federal Power Commission establishes the annual charge which is made against the owners and operators of all downstream plants as a result of the building of the Smith Mountain project. This is not something which the Federal Government gives away. It is an improvement to their facility for which they are required under the law to make payment to the Treasury.

Mr. DONDERO. In other words, for the amortization of the investment; that is what you are saying?

Colonel GEE. No, sir; for the actual benefit received at their existing installations for this additional water.

Mr. DONDERO. Can you say to the committee then, Colonel, that your ratio of cost to benefit would be more than the very slight edge of 1 to 1.04?

Colonel GEE. No, sir; 1.47, I indicated, I believe.

Mr. DONDERO. I thought it was 1 to 1.04.

Colonel GEE. Yes, sir; for this individual project. The figure of 1.04 is the correct ratio.

Mr. DONDERO. That margin is very, very small

Colonel GEE (interposing). It is very difficult to locate a 4-percent investment nowadays, Mr. Dondero.

Mr. DONDERO (continuing). Because if the costs increase, as it is my judgment they will increase, even above the $22,000,000, this slight edge of 4 percent might be wiped out entirely, so that you would have to evaluate perhaps some of the benefits that would accrue to the dams lower down the river from the storage of the water at Smith Mountain Dam.

Colonel GEE. There is one further check point on that benefit-cost ratio which might result in a stoppage of this project. Let us assume for the moment that the project is authorized and that planning money is appropriated for its construction. If, during the preparation of the definite project report, which means the detailed planning of this job, it should develop that the benefit-cost ratio is actually not 1.04 but, let us say, less than 1, the project would stop at that point and would not be recommended for appropriation to the Congress.

Mr. DONDERO. Have you any information as to the cost of constructing steam-power plants in the country at the present time as compared with the hydroelectric that is proposed before the committee? Colonel GEE. We could obtain that, sir, because there is a large steam plant now under construction in the Savannah River Basin which would form a rather good basis of comparison.

Mr. DONDERO. My understanding is that it is way below the figure that has been presented to this committee, because here the figures are double what they were when the estimate was first made; that is, 1 to about 102 percent increase. My understanding is that steam construction is way below that.

Colonel GEE. The change in cost of construction of a steam-power plant does not differ greatly from the change in cost which has occurred over the last few years in the building of a large dam. Many elements that go to make up a modern steam plant have increased more in unit price than the general average of the Engineering News Record Index.

Mr. DONDERO. Do you refer to machinery?

Colonel GEE. Yes, sir.

Mr. DONDERO. That is not necessary in a hydroelectric plant.
Colonel GEE. The boilers and similar installations, sir.

Mr. DONDERO. And the engines.

I have had some information that Senator Byrd was opposed to this project. You wouldn't know about that?

Colonel GEE. We haven't heard from him with respect to it, sir. Mr. DONDERO. I may be mistaken about that.

That is all, Mr. Chairman.

Mr. PICKETT. I understand in the over-all comprehensive plan that you have proposed 11 reservoir structures, only three of which have any part of their purpose to be flood control.

Colonel GEE. That is correct, sir.

Mr. PICKETT. And those three are Philpott, Buggs Island, and Smith Mountain.

Colonel GEE. Yes, sir.

Mr. PICKETT. Smith Mountain is the one presently under consideration, and you have under authorization and construction both Philpott and Buggs Island.

Colonel GEE. That is correct, sir.

Mr. PICKETT. What is the relative ratio of flood-control benefit and the same ratio of power benefit in your estimates on the Buggs Island construction?

Colonel GEE. Reading from the report, the flood-control benefits for the Buggs Island project at 1941 price levels, $207,000 annually; for the Philpott project, $160,000 annually, and for the Smith Mountain project, $10,000 annually.

Mr. PICKETT. Now, then, what are the power benefits in those respective reservoirs annually?

Colonel GEE. The power benefits at Buggs Island, $1,758.900; at Philpott, $145,700; and at Smith Mountain, $594,800.

Mr. PICKETT. Then the Buggs Island has approximately a 97 or 98 percent power benefit and the other 2- to 3-percent flood control; is that not correct?

Colonel GEE. Yes, sir; probably a little more flood control than you have indicated there.

Mr. PICKETT. Would it exceed 5-percent flood control?

Colonel GEE. It would be between 6 and 7, according to these figures. Mr. PICKETT. The other two would be approaching then something in the neighborhood of 98 percent power and 2 percent flood control. Colonel GEE. The division on the Philpott project, the total benefits are $326,000, of which flood control makes up 160. That project is between 45- and 50-percent flood control.

Mr. PICKETT. I assume then that in the evaluation of the comprehensive plan and the reservoirs proposed to be constructed under it, you have taken into account those three reservoirs we have under discussion to be the only ones that would contribute measurably to flood control and to be justified under any reasonable basis for floodcontrol purposes.

Colonel GEE. Yes, sir; and I believe the report so states.

Mr. PICKETT. The total cost of the over-all project, based on the figures that were accumulated in the report, is what, please, Colonel? Colonel GEE. You refer to the complete basin plan?

Mr. PICKETT. Yes, sir.

Colonel GEE. $124,000,000, 1941 price level.

Mr. PICKETT. That would be projected then into a sum total of over $220,000,000 on the basis of the increased cost of construction since that time?

Colonel GEE. That is correct, sir.

Mr. PICKETT. Now, what is generally the idea of the Corps of Engineers as to the orderly course of development of the comprehensive plan, with a view of how many years it will require you to complete it if you had the money to proceed in keeping with the plan that you would like to follow?

Colonel GEE. If the Smith Mountain project should be authorized in this present session of the Congress, the earliest date for planning money would be next year. The earliest possible date for first construction money would be in fiscal 1952. It would take approximately four fiscal years to see the completion of that project, bringing it into the latter part of fiscal 1956. That would be the best possible speed you could expect to make on the construction of this project. Mr. PICKETT. You would require, then, something in the neighborhood of 15 to 20 years to complete the comprehensive plan if you just took them up in the course of an orderly procedure; is that right?

Colonel GEE. The comprehensive plan might never be completed, Mr. Pickett, if the demand did not arise for the power generated by the remaining eight projects in the over-all plan. Their only justification is power. If the demand is not there, it would be a mistake to build them, either with Federal capital or with private capital.

Mr. PICKETT. I believe that is all.

Mr. DAVIS. Are there any other questions?

Mr. JONES. What is the total cost of the eight projects that will be utilized for generation of hydroelectric power alone?

Colonel GEE. Approximately $120,000,000, based upon 1948 prices. Mr. JONES. Or a little bit more than half of the total cost of the basin project?

Colonel GEE. Yes, sir.

Mr. JONES. Has it heretofore been the policy of the Corps of Engineers to undertake such constructions as this one for the sole purpose of furnishing private utilities with generating facilities?

Colonel GEE. It has been the general practice of the Congress to authorize the Corps of Engineers to build multiple-purpose projects which produce flood-control benefits on the rivers of the United States. Where power is generated at these multiple-purpose projects, the law requires that the Department of the Interior market that power, and the method of marketing is entirely under the control of the Secretary of the Interior.

Mr. JONES. Of course, I understand that, but I gathered from your testimony that there were eight dams to be constructed, that the only benefit ratio that could be derived from those dams would be hydroelectric power and that alone.

Colonel GEE. We would be remiss in our duty as engineers serving the Congress if we did not point out to you the potentialities of the Roanoke River Basin. We have said in the report that the building of 3 of these 11 projects will produce all of that flood control which we believe to be economically justified, that the remaining 8 are straight power projects, and if it is desired that power projects be built by the Federal Government, we believe these are the sites best adapted to that purpose, and this is approximately what it will cost to develop the full capabilities of that river basin.

Mr. JONES. That is all, Mr. Chairman.

Mr. ANGELL. Colonel Gee, I understand from your statement the over-all plan, of course, is for flood control.

Colonel GEE. Yes, sir.

Mr. ANGELL. And the Federal Government's participation in it now is limited to flood control, with the exception, of course, in the building of a dam where there is hydroelectric power in that dam, the building of flood control utilizes that feature of it to preserve the electric energy which may be produced. Now these remaining dams on the river are solely for hydroelectric power only are a part of this project by reason of the fact that the dams that are constructed up the river, for instance the one under consideration now, will provide the storage water which will be furnished to these lower dams which are limited solely to hydroelectric power.

Colonel GEE. In building a run-of-river plant, sir, you can only depend upon the natural flow of that stream, unless it is augmented by some regulatory storage, such as the Smith Mountain project up

stream. That does not mean, however, that wou could not build a power installation which would be economically justified and would pay out as an investment. It means, however, that you would build a smaller plant without this upstream storage and one capable of expansion when the time came that the upstream storage had actually been built.

Mr. ANGELL. By the utilization of the storage capacity of the upstream dam, such as the Smith Mountain Dam, will the lower projects be provided with prime power the year round?

Colonel GEE. In a greater quantity than would be the case if you depended upon the river without regulation.

Mr. ANGELL. Is the Federal Government at the present time planning to develop any of those dams on the lower part of the river which are devoted exclusively to power production?

Colonel GEE. No, sir. They have the same status in this basin plan as the eight remaining projects. They are part of the approved plan. Their being in that plan certainly is no bar to a private utility company coming in and seeking to develop one of these projects.

Mr. ANGELL. And that is what is being done now.

Colonel GEE. That is being done now at Roanoke Rapids, sir. Mr. ANGELL. That is all.

Mr. McGREGOR. Colonel, I am just a little bit confused in looking at the map and trying to analyze your statement. Is this correct that your Buggs Island project on the Roanoke River and your Philpott project on the Smith River have already been authorized?

Colonel GEE. Yes, sir, and both are under construction.

Mr. McGREGOR. Your Smith Mountain Reservoir is the one that you are now asking authorization for in concurrence with the two bills that have been introduced. Now in reply to Congressman Angell's statement, I believe you said that the over-all plan was for flood control.

Colonel GEE. The original basis for the authorization of this study was to produce flood control in the Roanoke River Basin. However. we are required to present to the Congress a comprehensive plan of the basin for the use of all its water resources, one of which is in this river basin, and a very important one, the generation of hydroelectric power. Mr. McGREGOR. What percent do you consider of the over-all plan is flood control?

Colonel GEE. Evaluating that only in terms of benefits to be produced by the over-all plan, approximately 5 percent of all the benefits produced by the 11 reservoirs are flood control benefits.

Mr. McGREGOR. Then 95 percent would be power?

Colonel GEE. Yes, sir.

Mr. McGREGOR. In the over-all plan?

Colonel GEE. Yes, sir.

Mr. MCGREGOR. Now, getting back to your Smith Mountain, I believe your statement was that 98 percent of that project was power and only 2 percent flood control; is that correct?

Colonel GEE. I think that is approximately correct, yes, sir.

Mr. McGREGOR. Well, then, Colonel would it not develop at least 95 to 97 percent power rather than a majority of a flood control proposal? Colonel GEE. Yes, sir. However, I said earlier that there are only three projects of any consequence in this basin which produce flood

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