OLORADO:

MARION M. WILSON, PRESIDENT, COLORADO RIVER BASIN CONSUMERS POWER, INC.

HOWARD SCOTT, MANAGER, COLORADO RURAL ELECTRIC ASSOCIATION

D. H. TREMMEL, MANAGER, TRI-STATE GENERATION & TRANSMISSION ASSOCIATION

EW MEXICO:

PHILIP N. SANCHEZ, PLAINS GENERATION & TRANSMISSION COOPERATIVE

NORTON DAVIS, PLAINS GENERATION & TRANSMISSION CO

TAH:

OPERATIVE

W. BERRY HUTCHINGS, MANAGER, BOUNTIFUL CITY LIGHT & POWER; PRESIDENT, INTER-MOUNTAIN CONSUMER POWER ASSOCIATION

K. J. PARKINSON, MANAGER, ST. GEORGE CITY ELECTRIC; DEPUTY TREASURER, INTER-MOUNTAIN CONSUMER POWER ASSOCIATION

RAY BROWN, VICE PRESIDENT, INTER-MOUNTAIN CONSUMER POWER ASSOCIATION; DIRECTOR, MOON LAKE ELECTRIC ASSOCIATION, INC.

E. J. BALLARD, JR., GENERAL MANAGER, MOON LAKE ELECTRIC ASSOCIATION, INC.

MARION ROSS, DIRECTOR AND PRESIDENT, MOON LAKE ELECTRIC ASSOCIATION, INC.

I. W. CRAMER, DIRECTOR, MOON LAKE ELECTRIC ASSOCIATION, INC.

RALPH TAYLOR, DIRECTOR AND VICE PRESIDENT, MOON LAKE ELECTRIC ASSOCIATION, INC.

NED COLTHROP, COLTHROP & MALNER INVESTMENTS, ROOSEVELT, UTAH

WYOMING: HAROLD CASH, PRESIDENT, WYOMING STATE ASSOCIATION

Mr. CANNON. Mr. Marion Wilson.

Mr. WILSON. I have an introductory statement.

STATEMENT OF MR. MARION M. WILSON

Mr. Chairman and committee members, I am Marion M. Wilson, of Fort Morgan, Colo., representing the Colorado River Basin Conumers Power organization, of which I am president. We sincerely ppreciate the opportunity to appear here today. Our organization, reviously known as the Upper Colorado River Preference Users' Committee, represents over 1,200,000 preference consumers in the five States of Utah, Wyoming, Colorado, New Mexico, and Arizona-five States united in a common program.

We believe a Federal power transmission system is a fundamental ecessity for the Colorado River storage project-to assure project epayment, maximum assistance to participating irrigation projects, nd the delivery of power to major load centers of the preference ustomers in the States of the Colorado River Basin at costs which Fill not adversely affect power rates to consumers.

Our preference user group has been very active on upper C River power matters during the past 2 years. Our vital concer this project is demonstrated by the fact that a few months incorporated our organization, and retained the services t Harvey F. McPhail, a well-known engineering consultant merly was Assistant Commissioner of the Bureau of Recla Mr. McPhail has studied these matters and prepared a form...: neering report for us.

With your permission, Mr. Chairman, I will ask Mr. McP appear now. We have statements to file by delegates from Wyoming, Colorado, and New Mexico. I understand delegates? Arizona are scheduled to appear later this morning.

To conserve time, Mr. Chairman, I request your permission the balance of my statement, plus the statements of these other gates, and call on Mr. McPhail for his testimony at this time. Thank you.

Mr. CANNON. The statements will be made a part of the record

STATEMENT OF SENATOR WALLACE F. BENNETT OF UTAH

We will also insert a letter received from Senator Wallace F. E nett, a U.S. Senator from the State of Utah.

Hon. CLARENCE CANNON,

Chairman, Appropriations Committee,

House of Representatives, Washington, D.C.

U.S. SENATE, Washington, D.C., April 5, 197

DEAR MR. CHAIRMAN: Since you are now holding hearings on the impor public works appropriation bill, I am writing to respectfully urge yol is clude $5 million in the upper Colorado storage project appropriation fr struction of the two power transmission lines recommended by the prefere customers of the upper basin States. The budget included $518,000, but preconstruction work only.

During the first week of March this year, I was represented at a meeting ducted by the preference customers at which they urged an immediate appr tion of $5 million to build lines from the Flaming Gorge Dam to Oak Cre! Colo., and from the Glen Canyon Dam to Farmington, N. Mex. Since that I have carefully studied their recommendation and I have concluded that 21 fully justified and very much needed.

It is expected that generation of power will commence in June of 190 Flaming Gorge and that first power production at Glen Canyon will be in 2 of 1964, with full production in June of 1966. While the Bureau of Red tion could probably push hard and have the lines built in time, it seems better part of prudence to get a portion of the work underway this sumber assure that the lines will in fact be ready.

Because of the protracted strike at Glen Canyon, there will be an unexpert: large carryover of funds from the present fiscal year. When the budget submitted to Congress in January, it was estimated that there would be an million carryover at Glen Canyon, but now it is evident there will be £ million. Thus, the amount of new money required in the fiscal 1961 br. is reduced fully $8.5 million. Therefore, the $5 million can be allocated to struct the two transmission lines without any net appropriation increase for upper Colorado project. The funds should be specifically earmarked for two lines.

The two lines recommended for immediate construction by the prefere customers, that is, the municipalities and REA's, are not as controversial some others. It is my understanding that the members of the congress delegations of the States most directly affected by the lines are willing to b the Federal Government build the lines. Therefore, I feel free to support proposal in the knowledge that upper basin comity is not violated.

It is most important to the upper Colorado project to have the transmission nes ready to take the power from Glen Canyon and Flaming Gorge when it omes on the line. I therefore hope that the full committee report will act avorably upon my recommendation. Would you please include my letter in the earing record when it is printed.

Sincerely,

WALLACE F. BENNETT.

STATEMENT OF MR. HARVEY F. M'PHAIL

Mr. MCPHAIL. Mr. Chairman and gentlemen of the committee, my ame is Harvey F. McPhail, manager of the Hydroelectric Division of he Kuljian Corp. of Philadelphia, Pa.

The Kuljian Corp. was retained by the Colorado River Basin Conumers Power, Inc., in December 1959 to conduct a study to determine he power requirements of customers having preference under reclanation law in the area tributary to the Colorado River storage project ydroelectric developments and to recommend a transmission sysem for the project which would best fit their needs. Such a study has been made and the results incorporated in a report dated March 1, 1960, copies of which have been distributed to the committee. As you can see, it is not of great length and we request, if permissible, it be included in the transcript of the hearings.

This report, based upon careful and, we believe, quite conservative estimates, demonstrates that the preference customers in the five States of Arizona, Colorado, New Mexico, Utah, and Wyoming can absorb and use all of the power to be generated by the presently authorized hydroelectric plants of the project from the date of initial operation. Among the preference customers it is agreed that such use will be at the firm rates established for the sale of power. It is our considered opinion that this will have the most favorable results in achieving project repayment and expediting the construction of the participating projects.

A transmission system has been proposed which has an estimated cost comparable with estimates made by the Bureau of Reclamation in the project report upon which authorization was based. It is believed to be wholly in keeping with the spirit and intent of the authorizing legislation and will accomplish the following objectives: (1) Transmit power to strategically located load centers from which the preference customers can take it to their various loads;

(2) Provide interconnection between the hydorelectric plants of the project, thus permitting their fully integrated operation;

(3) Provide interconnection over federally owned lines between presently operating federally owned systems, including the western division of the Missouri Basin project in Colorado and Wyoming, the Rio Grande project in New Mexico, the Boulder Canyon project in California and Nevada, and the Parker-Davis project in Arizona. This arrangement will permit the Government to reap full advantage of the diversity in loads between north and south, where peaks occur at different seasons of the year, and between east and west, where time zones influence peak periods. Also, full advantage can be taken of the diversity in precipitation affecting water supply in the various drainage basins; and

(4) Permit convenient extensions to connect with additional hydroelectric plants which may be authorized for future incorporation in

the project and with yet to be authorized transmountain desa projects such as the Frying Pan-Arkansas and the San JuanRegarding connections between projects we believe it is ca importance to stress the connection with the Parker-Davis tras sion system. The problem of filling the Glen Canyon reser complicated and difficult. The magnitude of runoff during thei period control both the number of years required to achieve operating levels and the ensuing power output at Glen Cany all plants on the Colorado River below it, particularly Hoover p plant. Interconnection of large capacity will have an impe effect during this period in preserving the best combination of 1. levels and minimizing or eliminating deficiencies in power o for all concerned.

It will be noted in our report that three lines capable of trans about 500,000 kilowatts have been shown for initial construction Glen Canyon to the Phoenix area. These are considered essents. effect the interconnection with the downstream plans and to per the absorption of early production of Colorado River storage pr power in Arizona. Suggestion is also made that two of these later be transferred to the potential Marble Canyon development about 350,000 kilowatts capacity just below Glen Canyon with pro credit of investment to the Colorado River storage project. W this procedure may be somewhat unorthodox, it is certainly a practi one due to the highly economical characteristics of the Marble Cany development and the future definite need for lines to carry its omp away.

As you gentlemen are aware, the private utilities operating in Colorado River Basin and adjoining areas have presented a prop for the construction of a transmission system. The preference o tomer group represented here is opposed to that private utility pr posal. They do not believe it is in keeping with the spirit and inte of the authorization act in the following respects:

(1) It does not provide a federally owned or controlled transi sion grid interconnecting the authorized plants of the project a other Federal powerplants in the area. In this situation it does: seem probable that the Federal Government would have the full st free use of the lines to achieve the maximum of power integrat unless substantial payments were made for transmission of the por and energy involved.

(2) It proposes that the Federal Government at its expense struct certain expensive lines, involving over $40 million or ab one-third of the total, through difficult and relatively uninhab areas. However, such Federal lines would not reach any large lo centers and would interconnect only the Glen Canyon and Cureca developments. They would not connect directly with any other Fe eral systems and would have no independent operating value sin utility systems would control.

(3) The repayment of the project would probably be advers affected since the project would be entirely hemmed in by a compl belt of utility lines thus hampering the Government in full freedom power sales. The utilities have given no indication of being willing pay firm rates for any power available to them, but would be control of all outlets beyond these Federal lines.

4) No charges for transmitting power for preference customers ve been indicated. It is not known whether the utilities intend to e as a basis for these charges full utility costs, costs based upon sharof line capacity, or incremental costs related to those which they sider would be required for their own transmission needs. It is rd to conceive under any circumstance how these charges could be low as those related to a complete Federal system and therefore uld adversely affect costs of power to preference customers. The utility proposal was based upon the assumption that preference stomer loads would be such that the utilities would have available percent of the project power in 1965 and 33 percent by 1980. In ew of careful market studies conducted by the preference customers nd the Bureau of Reclamation, it appears that no project power will › available for the utilities at any time. We have no information hether this situation will affect the utilities proposal of October 1, 959. We cannot but wonder, however, what justification, from an vestor's standpoint, is present under these circumstances for the rivate utilities making the necessary very large investment in transission facilities.

The preference users in Arizona have expressed themselves as being eady and willing to absorb the unused output of the Colorado River torage project on either a permanent or a temporary basis from the lay it is available*** and at firm prices. We believe this repreents increased revenues of the highest importance to the project in arly years, perhaps as much as $50 million more than could be anticiated if sales to the utility systems only were possible.

A basic concept in the Federal Government's approach to the fiancial operation of a multipurpose project is the maintenance of a niform rate level throughout the repayment period. Thus, after he power investment is repaid with interest, an annual amount equal o the annuity previously paid for this purpose is available for credit gainst the repayment of the cost of the storage and participating projects. As about 91 percent of such costs must come from power revenues, its importance is evident. If the private utilities build the transmission system and make a continuing charge for transmitting the power, this increment of repayment will be lost. It amounts to about $6 million per year and totals from $240 million to $330 million over repayment periods of from 40 to 55 years after power investments have been amortized.

The need for immediate initiation of transmission line construction is urgent. Flaming Gorge is scheduled for initial operation in June 1963. A line must be ready by that time if power is not to be bottled up. Even with money available by the early fall of calendar year 1960, none too much time is available. Glen Canyon is scheduled for initial operation in June 1964. Due to the heavy, high-voltage type of construction involved, funds should also be available this calendar year to permit a reasonable schedule of construction. We respectfully urge that at least $5 million be made available in the appropriations for fiscal year 1961 for this purpose. It should be noted that the lines contemplated under this minimum appropriation are those from Flaming Gorge to Oak Creek and Glen Canyon to Farmington and Curecanti which the utilities have indicated should be constructed by the Federal Government.