Mr. BINGHAM. That is correct, Senator. Senator Moss. Thank you, Mr. Bingham. If we have problems, we will communicate with you. Thank you for a fine presentation. Mr. BINGHAM. Thank you, sir. Senator ANDERSON. Mr. Goss. STATEMENT OF FLOYD L. GOSS, CHIEF ELECTRICAL ENGINEER AND ASSISTANT MANAGER, LOS ANGELES DEPARTMENT OF WATER AND POWER, ACCOMPANIED BY WILLIAM A. MYERS, CHAIRMAN, WATER AND POWER COMMISSION, CITY OF LOS ANGELES, LOS ANGELES, CALIF.; MYRON B. HOLBURT, PRINCIPAL HYDRAULIC ENGINEER, COLORADO RIVER BOARD, STATE OF CALIFORNIA; AND PETER G. LOWERY, SENIOR ELECTRICAL ENGINEER, LOS ANGELES DEPARTMENT OF WATER AND POWER Mr. Goss. Mr. Chairman, my name is Floyd Goss. I am chief electrical engineer and assistant manager of the Los Angeles Department of Water and Power. I have with me today on my left Mr. Pete Lowery, who is the senior electrical engineer in charge of the resource development for the power system of the Los Angeles Department of Water and Power. On my right is Mr. Myron Holburt, who is the principal hydraulic engineer for California's Colorado River Board. I had expected to have with me also Mr. Gilmore Tillman, the chief assistant city attorney for water and power. However, he is very seriously ill, and was unable to be here, which he greatly regrets, and so do I. I appreciate the opportunity to present this statement on behalf of the city of Los Angeles and its department of water and power in connection with the Hualapai power project as it relates to the Colorado River Basin project. I shall endeavor to make these points: First. The department of water and power recommends the immediate authorization and construction of Hualapai Dam and powerplant. Second. We recommend increasing the generating capacity of the Hualapai powerplant from the 1,500,000 kilowatts originally proposed for the project to 5 million kilowatts as a combined hydropumped storage peaking plant. Third. We believe that the peaking power from a 5-million-kilowatt plant, if the units were to be operated as integral parts of the power systems it serves, can be absorbed by the market within 6 years after the plant goes into service, commencing, say, in 1976. Fourth. Hualapai peaking power is more attractive to us than peaking power generated by nuclear or fossil-fuel thermal plants, both from the standpoint of lower cost and greater flexibility. It is assumed that the Hualapai units serving us would be fully integrated into our system for peaking and spinning reserve, and operated as a part of that system, just as our present units are. Fifth. The financing and operation of the larger Hualapai powerplant can be accomplished in several ways. This can be done as at Hoover Dam, where both the powerplant and dam were financed by the United States, and the generating units are operated under Federal agency contracts by the utilities responsible for repayment of their cost. Alternatively, each utility having an entitlement in the project could prepay its share of the capital costs of a larger Hualapai peaking-pumped storage plant. The department of water and power is willing to subscribe for a share of this power on either basis. In either event, we would provide our own transmission lines. If arrangements were made for prepayment by the utilities, the Federal capital required for the 5-millionkilowatt plant would be several hundred million dollars less than the Federal capital required for the proposed 1.5-million-kilowatt plant and transmission lines. The larger plant would, in addition, provide a substantially greater contribution to the development fund than the smaller plant. Sixth. An early decision to proceed with the project is imperative, because transmission lines to be constructed or reconstructed within a short distance of Bridge Canyon, and now in advanced planning stages, must be designed for larger capacities than are presently contemplated, so that Hualapai power can be delivered to load centers at the lowest cost and within maximum value. As evidenced by its filing of an application, project No. 2272, as amended September 1960, with the Federal Power Commission for the construction of the Bridge Canyon power project, the Department of Water and Power of the City of Los Angeles has been interested in a project at this site for many years. Expiration of the moratorium for an FPC license at the Hualapai site caused the Department to review its position on this project commencing in January of 1967. During this review, it became apparent to us that the best use of this site to meet future power demands would be as a combined hydro-peaking-pumped-storage project with a greatly enlarged capacity of the powerplant. We are very familiar with the advantages of this type of project, having recently completed a 2-year engineering study culminating in a contract with the State of California for a similar project at Castaic, Calif. We had discussed the peaking-pumped-storage concept informally with representatives of the Colorado River Board and the Department of Water Resources of the State of California, but the first public expression of our interest in this project was made before the Subcommittee on Irrigation and Reclamation of the House of Representatives in March of 1967. On April 5, 1967, the Colorado River Board of California passed a resolution supporting the enlarged project. Since our presentation before the congressional subcommittee, we have met on several occasions with representatives of the U.S. Bureau of Reclamation and with representatives of Pacific Southwest electric utilities and water agencies. Considerable discussion was held concerning this complex project and potential problems which might arise. However, no information has been presented in these meetings that would negate any of the conclusions contained in our proposal. We are, today, more convinced than ever that Hualapai can be an outstanding project of tremendous benefit to the entire nation. COMBINED HYDRO-PEAKING-PUMPED-STORAGE DEVELOPMENT Preliminary engineering studies which we have made indicate that the Hualapai site should be developed as a combination hydropeaking-pumped storage project rather than a conventional peaking plant as originally proposed. Under the new concept, low-cost energy from thermal plants would be used to pump water back into the reservoir during off-peak periods. This water would be released, together with the water required for downstream use, during the hours of peak demand. The total Hualapai generating capacity usable in this way would be 5 million kilowatts, rather than the 1.5 million kilowatts planned under the old concept, which did not include the use of pumped storage. Sites such as Hualapai, which permit the development of both a high-head regulated streamflow powerplant, and augmentation by pumped storage, are extremely rare. The Hualapai site is ideally suited to such an installation. The full value of the resource could be obtained only by complete integration of such a plant into the systems of the utilities which absorb the power. So integrated, it could be operated with great flexibility generating from zero to full load. For example, the units might at times be operated for spinning reserve, available against emergencies in the system as instant insurance against blackouts. But when needed, the full capacity of 5 million kilowatts might be generating power on peaks. At times, only part of the plant might be at work, while at other times it could be fully employed in pumping water back into the reservoir for later use. TRANSMISSION There are already a number of high-voltage transmission lines in the vicinity of the site of the Hualapai project, some of them extending to the southern California area. Additional lines are either under construction or planned in connection with the development of large coal-fired plants in the Four Corners area and elsewhere on the Colorado River. The incremental cost of a present increase in the planned capacity of these lines to enable them to transmit Hualapai power to load centers, including Los Angeles, is drastically lower than the cost of building new lines later for the sole purpose of transmitting Hualapai power. Time is therefore of the essence in making the decision to build this dam and powerplant now, as contrasted with deferring that decision POWER MARKET We believe that substantially all of the 5 million kilowatts of peaking capacity which we propose can be absorbed within a period of 6 years, commencing in 1976, when the plant is assumed to go into operation. The market area for this power can be considered to be generally the area within a circle with a radius of 250 miles and centered at the Hualapai site, plus southern California. The utilities serving this power market area have already made commitments for generating capacity and associated transmission facilities to satisfy their requirements through 1973. Some commitments have been made for the period 1974-75, although most capacity additions for this period are at this time only in an advanced stage of planning. We believe that the utilities serving this market area have not yet made substantial commitments to construct the capacity which must be added to their systems to serve the growth of load from 1976 through 1980. There is thus a present opportunity for Hualapai power to supply that need, provided the decision is made now. It is estimated that the combined loads of these utilities will be about 28 million kilowatts in 1975, and 40 million kilowatts in 1980, a total increase of 12 million kilowatts. With the addition of required reserves, these utilities will need to add about 14 million kilowatts of capacity during this 5-year period. Computer studies of expansion plans for our own system indicate that about 30 percent of the added capacity will be peaking capacity, which we believe to be a typical pattern of system development for other utilities in the market area. On this basis, the peaking requirement of the Hualapai power market area in the 5-year period following 1975 will be 4.2 million kilowatts. The remaining 800,000 kilowatts of the proposed 5 millionkilowatt capacity of the project-or any portion of that quantity not reserved for pumping could be absorbed very soon thereafter. After consideration of our requirements and those of other utilities in the service area, we believe that a reasonable share of the 5 millionkilowatt plant would be in the order of 1 million kilowatts for the Department of Water and Power. However, if additional capacity is made available for purchase, we would be willing to contract for substantially more than this amount. COST TO GOVERNMENT AND EFFECT ON DEVELOPMENT FUND The total Federal investment in the dam, a 1.5 million-kilowatt powerplant, and the transmission lines, as originally proposed, was $540 million. The total Federal investment in the dam and the 5 million-kilowatt powerplant which we proposed could be as much as $729 million or as low as $254 million, or less than half the Federal investment originally proposed for a project less than a third as large. The reduced Federal investment of $254 million would be the consequence of prepayment by the utilities of the capital cost of the units serving them, and non-Federal financing of the transmission lines. Other utilities may prefer Federal investment in the powerplant; however, the Department of Water and Power would prefer to make its own investment in this fashion, prepaying the cost of the units integrated into its system. The estimated capital cost of the dam and powerplant proposed for the 1.5-million-kilowatt installation was $234 per kilowatt. This capi 79-247-67— -22 tal cost estimate is reduced to $146 per kilowatt for the 5-millionkilowatt plant which we propose. Based on the Federal cost of money, the annual cost of capacity at the bus bar furnished by the larger plant is estimated to be cheaper by about $3.50 per kilowatt-year than the cost of capacity at the bus bar supplied by the smaller plant. If capacity at the bus bar were to be sold for $4.60 per kilowatt-year, the contribution to the development fund from the Hualapai powerplant would be approximately $1.1 billion at the end of 75 years. If capacity were to be sold for as much as $7 per kilowatt-year, the contribution to the development fund from the Hualapai powerplant would be $2.1 billion at the end of 75 years. The contribution from the smaller plant was estimated to be $0.85 billion. The quantity of energy generated by the flow of the stream would be essentially the same for either size of powerplant. Additional energy, however, would be generated on peak by the use of pumpedback water in the larger plant. This water would be pumped by lowcost off-peak thermal-generated energy supplied by the participating utilities rather than by the United States. CONSERVATION OF NATURAL RESOURCES Statements have been made that steam peaking units and even nuclear peaking units are economically more attractive than peaking power from Hualapai. So far as we know, no manufacturer has offered to either design or to build nuclear peaking units. From our knowledge of the high annual capital cost associated with nuclear units, we seriously question their attractiveness for this use. Conventional fossil fuel-burning peaking units are notoriously inefficient; hence they waste valuable, irreplaceable natural resources, It is also a waste of a valuable natural resource to delay construction of the Hualapai project beyond that date when there is a need for the capacity and energy from this project within the area where it can logically be marketed. CONCLUSIONS From our studies which are discussed briefly above, we have concluded (1) A 5-million-kilowatt hydro peaking-pumped storage development of the Hualapai site is feasible and will provide substantially increased benefits as compared to the 1.5-million-kilowatt plant originally planned for the site. (2) The utilities in the area can provide a market for Hualapai power. (3) Since only incremental additions to existing and planned transmission capacity will be necessary, economic transmission from the project can be provided. (4) Authorization of the project at this time is necessary to permit planning for integration of Hualapai capacity with other capacity to be installed in the 6-year period following 1975. There is included with the statement a chart showing the investment in the Hualapai project under the alternatives suggested in my statement, and the investment in the smaller plant. I have also included |