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is about midway between Bishop and San Bernardino, in this section here [indicating on map]-well, instead of Inyokern, I should say at Searles Lake, there has developed a large potash business. fact, Searles Lake is the principal source of potash for the consumption of this country: that is, it is the principal domestic source of potash; and there are several thousand horsepower installed there that we are serving. Now, without our power, that development would never have taken place. I think that is a fair statement.

Around Victorville, our power has played an important part in developing large cement plants. At the time we entered that territory, there was one plant in there, with probably less than 1,000 horsepower installed. To-day, there are two of the largest cement plants in California, with a total installed capacity of around 6,000 horsepower, turning out, I should say, around 10,000 barrels of cement a day in those two plants.

Also, as a result of the bringing in of this power, there has been throughout certain sections of Riverside and San Bernardino Counties the development of a very considerable pumping load. We have over 17,000 horsepower in motors on our lines, engaged in lifting water for irrigation purposes throughout that section.

And in Imperial Valley, there has developed a very large load in the manufacture of ice. As it happens, one of our associated companies has financed the installation of those ice plants, involving an investment of several millions of dollars, and requiring for their operation, approximately, half of the total load of Imperial Valleythe total electrical load. There is between 5,000 and 6,000 horsepower installed in those ice plants.

It has taken much of courage and daring on the part of both the engineers and the financiers who have been connected with this enterprise to carry it through to success. It has called for the investment of between $25,000,000 and $30,000,000; and it has involved, for considerable period-I might say for long periods-the deferment of divisions and the reinvestment of earnings in these properties: and above all, it has called for an abiding faith in the future of this potentially rich but, even to-day, undeveloped territory.

Now, that covers my opening statement, and I will next read to your committee a letter addressed to the committee, which I have signed as president of the Southern Sierras Power Co., and which officially sets forth the views of that company

Mr. LITTLE (interposing). May I ask one question at that point?
Mr. WEST. Yes.

Mr. LITTLE. How far can this power be carried successfully, according to your experience?

Mr. WEST. Well, that is a little difficult to answer, for this reason: That the total distance you can afford to carry it is very largely dependent upon the character of the load that you would be serving at the other end. I would say, though, that we could carry this power for a couple of hundred miles farther, with a concentrated load at the other end. For instance, I think it might be feasible to take this power from Yuma to Ojo, where there is a large demand for power in the electrolytic treatment of copper.

Mr. LITTLE. You can carry it 700 miles away from your center; is that what you mean?

Mr. WEST. I mean we could probably carry it 200 miles further. on a commercial basis.

Mr. LITTLE. Nine hundred miles?

Mr. WEST. No; we are carrying it to-day 517 miles.
Mr. LITTLE. That is what I say, about 700 miles?

Mr. WEST. Yes; about 700 miles.

Now, we are carrying this power at 88,000 volts in California. Our lines are designed for 140,000 volts. For instance, we plan in the next year or two to raise the voltage on those lines. Now, as you raise the voltage, you increase the carrying capacity of your lines; and it will enable you to carry the power further, without any great additional loss in current.

Mr. HAYDEN. What is the percentage of loss in transmission for 500 miles?

Mr. WEST. I can give you the total loss for our whole system for 1923; I think I have it here. It was exactly 36 per cent. Now, that includes distribution losses, as well as transmission losses.

Mr. HAYDEN. But if you raise the voltage from $8,000 to 140,000

Mr. WEST (Continuing). Now, if we carry that power, all of it, 500 miles, the losses would be much greater. You know we start distributing that power from almost the point at which it is generated, and continue to distribute it until we reach the end of the line. Mr. HAYDEN. What is your estimate of your loss between your power plant and Yuma?

Mr. WEST. We do not have any retail losses there; that is just wholesale current. I should say around 33 per cent.

Mr. HAYDEN. And by increasing the voltage

Mr. WEST (interposing). To 140,000 or 150,000 volts?
Mr. HAYDEN. Yes; what would then be your losses?

Mr. WEST. Those losses would be substantially reduced, unless you increased your load on your line at the same time. The losses vary with the size of your conductor, with the voltage that you are transmitting your power at, and with the load on the line-the amount of current you are transmitting over the line.

Now, I am not an engineer; but I will make this statement: That theoretically, at least, there is practically no limitation on the distance you can transmit power. It comes down to the question of how far you can transmit it commercially.

Mr. HAYDEN. That is, as compared with the price of fuel and other sources of power at the point where you sell it?

Mr. WEST. Yes, sir; that must always be a factor. You will always have potential competition: and although, under the California Railroad Commission regulations, we are guaranteed against an invasion of our territory by another utility as long as we serve that territory at reasonable rates and adequately, yet, of course, we are not protected against competition from other kinds of power, or power produced by other means.

Mr. HAYDEN. What is the cost per mile of your new transmission line?

Mr. WEST. Of our new ones?

Mr. HAYDEN. Yes: your latest design of transmission line that carries 140,000 volts?

Mr. WEST. Well, I can not answer that, because our line has been designed, our principal line, for 140.000 volts. It was built a good many years ago. So we are not building a new line: we will be stringing additional insulators. I should say, however, that a 150,000-volt line would cost in the neighborhood of $15,000 a mile. I think there are engineers here, however, that could answer that question better than I can.

Mr. RAKER. How much did it cost you?

Mr. WEST. The line that we built cost us under $10,000.

Mr. HAYDEN. Has your company ever paid any dividends?

Mr. WEST. Yes: we are paying dividends to-day on our preferred stock.

Mr. HAYDEN. And you are paying interest on your bonds?

Mr. WEST. We are paying interest on our bonds. We are earning our interest, and have practically done so at all times on a two to one or better basis, that is, the net earnings available for the payment of interest charges, after paying operating expenses have been twice or more than total interest charges.

Mr. SWING. What return did the California Railroad Commission grant you on your investments?

Mr. WEST. It grants us approximately 8 per cent; that is, it allows us to make 8 per cent if we can earn it.

Mr. SWING. Is it not 9 per cent, in the last

Mr. WEST (interposing). No: it is just a fraction over 8 per cent. Mr. HAYDEN. How is the capital that you have in the business divided, as between stock and bonds?

Mr. WEST. Well, we issue bonds under the limitations of our mortgage, on the basis of 80 per cent of our investment in new property. However, we are not bonded up to 80 per cent of the total moneys invested in our properties; that is the limitation. however, in our mortgage. I should say, however, it runs about 70 per cent. Mr. LITTLE. As I understand you, you think it is practicable to cover a territory 1,400 miles across?

Mr. WEST. Yes, sir: I do, with a power plant in the center: I think it is thoroughly practicabale. For instance, constructing it to-day, a line built to go such a distance would be, not 88,000 volts. or 150,000 volts, but it would be around 220,000 volts. Moreover. 220.000 volts transmission is thoroughly proven on the Pacfiic coast. One reason that we transmit at the lower voltages is, in the first place, we have built our system up gradually, as required to serve à load that has developed gradually; and it would have been, from an economic standpoint, impractical, for instance, to have built into Imperial Valley a 150,000 volt line; the cost of the line would have been in excess of what the load at the other end of the line would warrant.

Now, may I be permitted to read this statement?

Mr. LEATHERWOOD. I just want to ask one question before you pass on to the letter: You spoke of serving the potash plants. What is that?

Mr. WEST. That is the American Trona Co., at Searles Lake.

Mr. LEATHERWOOD. Is that a going concern?

Mr. WEST. It is operating continuously.

Mr. LEATHERWOOD. Where do they market their product?
Mr. WEST. They market their product all over the United States.

Mr. LEATHERWOOD. They are producing potash and marketing it all over the United States?

Mr. WEST. Yes, sir; potash and borax, both.

Mr. LEATHERWOOD. What is their principal output-potash or borax, or both?

Mr. WEST. I should say to-day it is probably borax. During the war it was potash; and in making that statement I base it on the dollars returned. I think they are getting more money out of their borax than out of their potash.

Mr. LEATHERWOOD. Well, is it not a fact that they are practically limiting their entire output now to borax?

Mr. WEST. I do not think so.

Mr. LEATHERWOOD. Is it not a fact that the potash industry in this country has practically gone out of business?

Mr. WEST. Well, it is in a pretty sad way; I think that is correct ; that foreign competition, competition from Germany, is making it very difficult for a potash manufacturer to do business in this country: and unless there is a by-product-unless either the potash itself is a by-product, or there is another by-product in connection with the potash-it probably is not feasible for an American manufacturer to produce potash.

Mr. LEATHERWOOD. I know the manufacturers in my State claim that they can not compete, and they have shut down in my district a $11,000,000 plant.

Mr. WEST. Yes, sir. Well, this is a very large plant that the American Trona Co. has at Searles Lake. According to the Government report, they have the largest deposit of potash in the United States at that point.

I will now read the letter; it is dated March 5, 1924.

Mr. LITTLE. Is that letter submitted as part of your sworn testimony?

Mr. WEST. Yes, sir.

To the Hon. Addison T. Smith, Chairman,

MARCH 5, 1924.

and to the Members of the Committee on Irrigation and Reclamation,

House of Representatives of the United States:

In response to the invitation of your chairman, the Southern Sierras Power Co. respectfully submits for the consideration of the committee its views with reference to the problem of Storage on the Colorado River.

The company is deeply interested in any legislation designed for the protection or effecting the future development of the lower Colorado River basin by reason of the fact that

1. Practically the entire basin, including Imprial and Coachella Valleys, the Yuma district, and Palo Verde Valley, is dependent upon the company's service for its supply of electric power, light, and heat.

2. That the Southern Sierras Power Co. and its associated company, the Imperial Ice & Development Co., have probably the second largest financial interest at stake in the basin, their properties in Imperial Valley alone representing some $5,000,000 of invested money.

It follows that the future of the company and its affiliated interests are irrevocably tied up with the development of the Colorado River basin.

STORAGE ON THE LOWER COLORADO BASIN

It is our belief that storage reservoirs on the Colorado River and its tributaries are of paramount importance in connection with the safeguarding and ultimate development of the lower Colorado River basin. Such storage reservoirs will result in

(a) Protection against flood-water menace to the lower basin.

(b) The desilting in considerable measure of Colorado River water, thus simplifying the problem of the river's control and materially reducing the cost of operating and maintaining the irrigation systems below

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(c) The impounding of flood water which can be released to meet shortages in supply for irrigation demand in the lower basin that are to-day threatened during periods of exceptionally low stream flow, and so as to make possible in the future, as market and other conditions warrant, the reclamation of large areas of how arid land in both the upper and lower basins.

(d) The development of large blocks of hydroelectric power at reasonable costs, which will later be needed to meet the rapid-increasing demands of the Southwest.

POSITION OF COMPANY

For reasons stated, we favor the building of one or more large reservoirs for the storing of water on the Colorado River at as early a date as is consistent with a complete engineering study of the problem, so that a coordinated plan for the development of the entire river may be adopted by the Government, which will result in an ultimate maximum development of benefits at a minimum cost.

While recognizing in view of the great benefits to be gained as above outlined the importance of the early construction of storage reservoirs on the Colorado River, we deplore the exaggerated and misleading statements that have been broadcasted over the country as to the imminent danger in which Imperial Valley stands of being inundated by the flood waters from the Colorado River, with great loss of life and property values. These statements, which we believe are wholly unsupported by the facts, are working incalculable injury to the credit and standing of the valley and may take years to live down.

The construction of the Pescadero cut, together with the protective works now installed, with the organization and equipment available for flood defense, has practically removed the flood menace until such time as the new region into which the river now empties below the cut shall silt up to an elevation higher than the territory lying to the west and north intervening between the river and Imperial Valley, a period variously estimated at from 10 to 25 years.

With the silting up of the Pescadero region it will be practical by ent to divert the river still farther to the east, thereby again deferring the reoccur rence of serious flood menace to Imperial Valley.

These relief measures against flood menace are, however, temporary in their character and flood protection can only be permanently secured through storage reservoirs both on the Colorado and Gila Rivers. Further, the conWe accordingly strongly struction of storage reservoirs is necessary before any substantial addition to the present irrigated area can be safely made. urge such appropriate action by the United States Government and other authorities involved as will permit prompt construction of one or more such reservoirs.

We further believe that the building of such reservoirs and of the power plants to be installed in connection therewith can in the public interests be best committed to private enterprise under some such plan as is proposed by the Southern California Edison Co., which, while retaining Gomernment control and supervision as to the location and character of works to be erected. as to the impounding and release of water therefrom and as to the rates to be charged for power, will at the same time wholly relieve both the Govern ment and the territory to be benefited from all expense in connection with the construction of said projects.

Whether the building of reservoirs on the Colorado River is accomplished by public or private agencies, our company will expect to have allocated to it such portion of the power to be developed in connection therewith as will reasonably be required for the service of the territory dependent upon it for electric light, heat and power, and to meet the cost thereof either by directly participating in the expense of developing such power or by purchase of the power so allocated to it at the rates and upon the conditions as may be prescribed by the regulating authorities.

ADVANTAGES OF PUBLICLY REGULATED BUT PRIVATELY OWNED DEVELOPMENT

Among the advantages that will accrue from a publicly regulated but privately owned development of the proposed project, we desire to point out the following:

It will avoid all demands upon the United States Treasury for this project at a time when public economy is the most vital of all issues.

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