We also urge that this committee, by suitable language in or otherwise, indicate that the construction of a complete transmission system be contemplated and that the Bureau of Etion be instructed to proceed with the necessary engineering a and include in its future budget presentations requests for thes sary funds to complete the system in time to meet power pro and market requirements. In particular, early consideration. be given to the following lines: Flaming Gorge to Sinclair, Fax Gorge to Provo, Glen Canyon to Provo, Farmington to Albuq and Glen Canyon to Phoenix.

Thank you very much, gentlemen.

Mr. CANNON. Mr. McPhail, you are an old friend of the con You have appeared before this committee many times over a period of years.

We have learned to depend on you, on your technical know='and your engineering skill, on your analysis of these various situat

We have before us at this time as a part of this presentation a port prepared by the Kuljian Corp. This corporation has el tained by the Colorado River Basin Consumers Power, Inc., wi consists of the preference customer groups operating in or adjace the area in which the hydroelectric power for the Colorado R storage project will ultimately be delivered.

The committee would be glad and would appreciate it if you wo look at the map which is submitted here by Kuljian Corp. in corre tion with this presentation-and I will ask the clerk to hand p map-and tell us if this project outlined in this map is what you at this time approving and recommending.

Mr. MCPHAIL. Yes, sir, it is.

Mr. CANNON. It is identical. We want to know if your map identical with the one presented in the Bureau's justifications. I may answer that when the transcript comes to you after you have. time to look it over.

The following answer was submitted:

Mr. MCPHAIL. The maps presented are basically the same insofar as t backbone system is concerned. Our map has some variations and additi 115 kilovolt lines leading to customers load centers.

Mr. CANNON. In the meantime, Mr. Wilson, is there anything f ther?

Mr. WILSON. Just permission to file our statements.

Mr. CANNON. They will be made a part of the record at this tit (The statements follow:)

STATEMENT OF MARION M. WILSON

Mr. Chairman and members of the committee, I am Marion M. Wilson, of ! Morgan, Colo., representing the Colorado River Basin Consumers Power, I of which I am president. We sincerely appreciate the opportunity to apphere today.

Our organization, previously known as the Upper Colorado River Prefent Users Committee, represents over 1,250,000 preference consumers in the five Stof Arizona, Colorado, New Mexico, Utah, and Wyoming-five States united common program.

We have been active on Colorado River storage project power matters duri the past 2 years. We have given considerable time and study to this co problem directly affecting the future of our area.

eve a Federal power transmission system is a fundamental necessity ccessful operation of the Colorado River storage project—to assure payment, maximum assistance to participating projects, and the depower to major load centers of preference customers in the States of ado River Basin at costs which will not adversely affect power rates ers. We believe construction on such a system should begin this year 961.

o Basin Consumers is organized to represent the thousands of cusrved by nonprofit power systems in the Colorado River Basin area. to expedite the two-way flow of information between administration he Congress, other interested groups, and agencies and the actual conpower.

t project was to compile load data of preference users based on estiished by the individual systems. This data has served to supplement of the Bureau of Reclamation, and its accuracy is reflected in the ement between Bureau and Colorado River Basin Consumer figures. gures show that preference power users, including those in Arizona, times use all project power.

recheck of these estimates against actual purchases reveals that many ceeded their projected 1959 demand. While most of our systems are small, they combine to form a dynamic and growing market for electric 1 this growth can only be enhanced by the general economic developemplated in the project.

seriously concerned by the status of the power features of the storage Construction of the main-stem units, including generation facilities, sing rapidly and interest on these power features is accumulating. s will repay 91 percent of all project cost, yet the power transmission f the project are a year behind. If construction is further delayed, steful crash program, involving considerable strain on all segments tric equipment, apparatus, and construction industry, would get the before project generation began.

e stipulations laid down by this committee in its report last year as t, this has been a busy year and largely productive.

10 the Bureau outlined to all potential users a tentative transmission 1 tentative power flows. This system closely resembled the one prehis committee by the preference group in May of last year, so we to add to it.

er companies, proceeding on much different preference user load data, h their own outline which they presented to the Bureau of ReclaOctober 1 and to the consumer group on October 13.

line differed substantially from our program, and from the earlier the power companies which contemplated a Federal backbone transtem, with some distribution over reasonably available company lines. nber 15, we advised the companies and the Bureau that we could r the outline as a firm proposal because "it did not contain definitive egarding quantities, costs, or terms and conditions under which ld be wheeled or delivered to preference users." To date, we have definitive reply to our request for cost data.

mber it became obvious that independent engineering assistance aluable to us in evaluating further developments or programs. We nate to secure the services of Harvey McPhail, formerly Assistant er of the Bureau of Reclamation. His survey is contained in the 'Federal Transmission System for Colorado River Storage Project as y Preference Customers," dated March 1, 1960, which has been sup. It is our answer to the request for factual information. ry 19, 1960, E. O. Larson, director of region IV, Bureau of Reclamarded a letter to the power companies containing five principles by companies' presentation was to be evaluated. The five principles must be of sufficient capacity to assure delivery of available power. must be no interference with the ability of the Bureau to serve customers to the extent they would be served by federally constructed one lines must provide suitable integration among Federal project ities at the time required to meet project objectives, and project use times be the overriding consideration.

"4. Charges made for delivery of power must not adversely affect project feasibility and payout, and particularly must be such as not to reduce quantity or timing of irrigation assistance.

"5. If utilities construct the backbone high-voltage transmission lines, they must accept also the responsibility of providing transmission for delivery at lower voltages to load centers of preference customers to the same extent as would prevail under a federally constructed system."

A meeting was held on February 25 between the power companies and the Bureau when these principles and their effect on the companies' proposal was discussed.

A similar meeting was requested by the preference group and the principles were discussed in detail. As a result of this meeting, preference customers left this meeting with the following understandings:

1. No firm power will be available to the companies since preference mand is equal to project output.

2. The estimated power rate of about 6 mills at major load centers repay both the power cost with interest and the irrigation portion of mas stem units, within 50 years, and still provide the full schedule of assistant to irrigation projects in subsequent years.

3. With the same rate, the Bureau could afford only as much in wheeling payments as will not adversely affect project repayment.

4. A Federal system would serve all project needs including full irrig tion assistance. Any substitute system must serve not only these projed needs for a repayment period of from 85 to 100 years but must also provis equal service to load centers of preference users, without adversely affecting power rates.

These, in our opinion, are excellent yardsticks. We believe that the burde of proof should lie with any proposed alternate system since it involves wheeling over company systems of public power beyond any existing contract period. We cannot gamble the future of the Colorado storage project on contracts to be written many years hence.

Full study should be given to the companies' proposal-but study should be based on hard facts and not on the immediate appeal of a lowered Federal in vestment or potential taxes which can only be added to preference custome cost. From these very customers must come sufficient power revenues to pre vide 91 percent of the total repayment, including irrigation assistance.

These major facts and others account for the recommendation of Colorad River Basin Consumers Power, Inc., for an all-Federal system. We are re questing this committee for the addition of $5 million to the transmission d vision for fiscal 1961 so that the Bureau can begin construction of a line fro Flaming Gorge to Oak Creek, Colo., and a line from Glen Canyon to Curecant via Farmington, N. Mex. This request is for lines which all interested partie agree should be built by the Federal Government and which will be require for any system built.

Obviously, this leaves great gaps in the total system required. We belie that other lines are of equal importance. It should be noted no interconnectic is provided between Glen Canyon, Provo, Utah, and Flaming Gorge or betweɛ this system and the lower Colorado system (Phoenix and Glen Canyon), the project and Bureau facilities in New Mexico (Farmington to Albuquerque or the project and facilities in Wyoming (Flaming Gorge to Sinclair). A re sonable program would indicate the desirability of starting these lines als which would require additional funds.

We appreciate this opportunity to present our thinking to this committee.

STATEMENT OF HOWARD SCOTT

Mr. Chairman and members of the committee, I am Howard Scott, manage of the Colorado Rural Electric Association of Denver, Colo.

The Colorado Rural Electric Association is pleased to appear before this com mittee to give our united support to the power transmission program for the Colorado River storage project outlined to you by Colorado River Basin Cosumers Power, Inc.

We wish to fully support the recommended funds to initiate construction of the curecanti unit and the participating projects as recommended in the budget and by the Colorado Water Conservation Board, the Upper Colorado Commis sion, and the Governor of Colorado.

ral electric systems in Colorado serve about a quarter of a million teen now purchase their power, either in whole or in part, from of Reclamation. Cooperatives located in northeastern Colorado er from Bureau lines of the western division of the Missouri Basin thers receive service through wheeling arrangements between the the Public Service Co. of Colorado.

eratives generate their own power in a central steam plant; three ement their leased plant with purchases from municipal systems reau. In all, Colorado cooperatives have about 65,000 kilowatts of ation capacity.

the cooperatives have immediate need for additional capacity or Others will require additional power in about 1963, the te for Flaming Gorge power.

ower.

Colorado rural electric systems will be needing additional power by c total power demand will compound rapidly as project generation line.

the magnitude of this power demand and the importance of the ver storage project to Colorado, the rural electrics of Colorado were in the formation of Colorado River Basin Consumers, Inc., a group represent them and other preference users in the area of the project. ur support of an all-Federal system, not on an assumption that a em is somehow magic or a gift from Washington, but rather on what o be good, sound economics and good business. We are convinced Federal system will best meet the requirements of the project and preference users. The Colorado River storage project vitally affects water development of the upper Colorad Basin area, and any power d be designed to provide maximum assistance to this water developent that construction of transmission facilities begin this year. truction has been underway for several years and delivery facile available when project generation begins. We are about 1 year Il matters affecting the transmission division of the project. If is delayed another year, it will result in an uneconomic crash atch up.

hat at least $5 million be made available in the appropriation for This minimum sum covers the lines from Flaming Gorge to Oak and the Glen Canyon-Farmington-Curecanti-Poncha segment, which ave agreed should be constructed by the Federal Government.

e the other lines of the project, those to interconnect Glen Canyon, , and Flaming Gorge, Flaming Gorge and the Bureau facilties in armington and the Bureau facilities in New Mexico, and the storage em with the lower Colorado system, are of equal value.

ging that this committee, by suitable language in the bill or othert clear that a Federal system be contemplated for construction and reau of Reclamation be instructed to proceed with the necessary studies so that it can include in its future budget presentations the nds and the specific lines to be built to meet power production and irements. Whatever system is built, it must be paid for by the stomer. Conservative load data now conclusively demonstrates ace users in the Colorado River Basin can at all times absorb all r. We have a critical interest in the charge that must be paid by an all-Federal system, the estimated cost of wholesale power at a ber of load centers, is 6 mills. The projection of power to be sold ars, at 6 mills, will cost preference users $1,700 million wholesale. onal mill of cost at wholesale would be $5 million per year or a 1 billion dollars in just 50 years-and the utimate period of the -un nearly 100 years.

S.

ny reduction in this basic return to the Government for this power st as much away from project repayment or from assistance to projects. Thus, what might be listed as a small cost or repayace has an uncanny way of multiplying into millions of dollars in ext.

bone and muscle on our support of a Federal interconnection syseral system will have but one purpose one master to serve and I be the project. It will require a minimum of contractual relations

60—pt. 541

with other utility systems, yet it will insure delivery to users having a prefer by law. Any joint system will involve a myriad of contractual rea precise but complex electrical arrangements. We feel that only a s solely on the needs of this complex project stretching over severa equal to the task.

By this, we do not mean that there is no place for other utility s investor utilities of the Colorado River Basin have maintained at this project since its inception. They then advised the Congress that participate in transmitting project power to ultimate preference t a Federal backbone transmission system. This offer has since beer zër include, under as yet undefined conditions, certain company portin (7 backbone system.

The outline of this proposal shows little company line in Colorado ana no Federal line in the other States of the Colorado River Basin.

We believe that any proposal should bear the burden of proof thr serve project purposes, irrigation assistance, and preference users as i a Federal system. Congress itself took this position in the authorizing !" (H. Doc. 1087, 84th Cong.) which stated:

"Their (the companies') proposal provides essentially that the S construct the backbone transmission lines connecting major powerplant project and that use be made of the existing system of the compan additions thereto to market the power.

"The proposal is consistent with the policy expressed by the Congre many years in appropriation acts and elsewhere whereby the Federal Govern builds the basic backbone transmission system and distribution is made tre existing systems where satisfactory arrangements can be worked ou "Therefore, the committee expects the proposal by the private powe panies for cooperation in the development to be carefully considered Department *** and the electric power and energy of the project to keted, so far as possible, through the facilities of the electric utilities up.. in the area, provided, of course, that the power preference laws are comple and project repayment and consumer power rates are not adversely affe This is not a casual concern on our part. Following this congres mandate, the Bureau of Reclamation has been studying the most recent pri submitted by the investor group on October 1, 1959. To provide guideli this comparison, the Bureau forwarded to the irvestor group a five-poin statement which we believe of such importance as to include in fuli: "1. Lines must be of sufficient capacity to assure delivery of available ↑ "2. There must be no interference with the ability of the Burean to preference customers to the extent they would be served by federally constr lines.

"3. Backbone lines must provide suitable integration among Federa power facilities at the time required to meet project objectives, and proje must at all times be the overriding consideration.

"4. Charges made for delivery of power must not adversely affect pri feasibility and payout, and particularly must be such as not to reduce quat timing of irrigation assistance.

"5. If utilities construct the backbone high-voltage transmission lines must accept also the rsponsibility of providing transmission for delive lower voltages to load centers of preference customers to the same ext would prevail under a federally constructed system."

On December 15, 1959, the preference users, through the then existing Colorado Basin Preference Users Committee, advised the investor group si Bureau that they could not consider the companies' outline as a firm [* because "it does not contain definitive proposals regarding quantities. terms and conditions under which power would be wheeled or deliver preference users.'

We have not as yet received any definitive answer or costs from vestor group. In Colorado, our only measure of what might be proposed wheeling toll now imposed-1 mill per kilowatt-hour for each 50 miles certainly not in keeping with the five principles stated above.

To briefly summarize the position of the Colorado rural electrics: 1. The Colorado River storage project is designed to develop the w sources of the Colorado River available to Colorado, New Mexico, Utah.

A

1 Letter from E. O. Larson, director, U.S.S.R., region 4, to E. M. Naughton, Utah ? & Light Co., Jan. 19, 1960.