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“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 delines at lower voltages to load centers of preference customers to the same extra 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' propisaTas 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 : this meeting with the following understandings:

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

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

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

4. A Federal system would serve all project needs including full irria tion assistance. Any substitute system must serve not only these projet needs for a repayment period of from 85 to 100 years but must also prorix equal service to load centers of preference users, without adversely affect power rates. These, in our opinion, are excellent yardsticks. We believe that the burda of proof should lie with any proposed alternate system since it involves wheeling over company systems of public power beyond any existing contract perice 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 is 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 evision for fiscal 1961 so that the Bureau can begin construction of a line froc 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 belies that other lines are of equal importance. It should be noted no interconnect: is provided between Glen Canyon, Provo, Utah, and Flaming Gorge or betweti this system and the lower Colorado system (Phoenix and Glen Canyon), ir the project and Bureau facilities in New Mexico (Farmington to Albuquerque or the project and facilities in Wyoming (Flaming Gorge to Sinclair). AN 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, manager 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 1 Colorado River storage project outlined to you by Colorado River Basin Cet sumers Power, Inc.

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

ureau.

rural electric systems in Colorado serve about a quarter of a million ixteen now purchase their power, either in whole or in part, from lu of Reclamation. Cooperatives located in northeastern Colorado wer from Bureau lines of the western division of the Missouri Basin

others receive service through wheeling arrangements between the d the Public Service Co. of Colorado. bperatives generate their own power in a central steam plant; three plement their leased plant with purchases from municipal systems

In all, Colorado cooperatives have about 65,000 kilowatts of eration capacity.

the cooperatives have immediate need for additional capacity or power. Others will require additional power in about 1963, the date for Flaming Gorge power. e Colorado rural electric systems will be needing additional power by at total power demand will compound rapidly as project generation he line. g the magnitude of this power demand and the importance of the River storage project to Colorado, the rural electrics of Colorado were al in the formation of Colorado River Basin Consumers, Inc., a group d represent them and other preference users in the area of the project.

our support of an all-Federal system, not on an assumption that a stem is somehow magic or a gift from Washington, but rather on what

to be good, sound economics and good business. We are convinced 1-Federal system will best meet the requirements of the project and pf preference users. The Colorado River storage project vitally affects water development of the upper Colorad Basin area, and any power uld be designed to provide maximum assistance to this water developgent that construction of transmission facilities begin this year. astruction has been underway for several years and delivery facilbe available when project generation begins. We are about 1 year all matters affecting the transmission division of the project. If n is delayed another year, it will result in an uneconomic crash catch up. that 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 have agreed should be constructed by the Federal Government. ve the other lines of the project, those to interconnect Glen Canyon, h, and Flaming Gorge, Flaming Gorge and the Bureau facilties in Farmington and the Bureau facilities in New Mexico, and the storage tem with the lower Colorado system, are of equal value. irging that this committee, by suitable language in the bill or other

it clear that a Federal system be contemplated for construction and ureau of Reclamation be instructed to proceed with the necessary

studies so that it can include in its future budget presentations the unds and the specific lines to be built to meet power production and uirements. Whatever system is built, it must be paid for by the ustomer. Conservative load data now conclusively demonstrates ence users in the Colorado River Basin can at all times absorb all

We have a critical interest in the charge that must be paid by prs. h an all-Federal system, the estimated cost of wholesale power at a hber of load centers, is 6 mills. The projection of power to be sold ears, at 6 mills, will cost preference users $1,700 million wholesale. tional mill of cost at wholesale would be $5 million per year or a a billion dollars in just 50 years—and the utimate period of the run nearly 100 years. iny reduction in this basic return to the Government for this power ist as much away from project repayment or from assistance to s projects. Thus, what might be listed as a small cost or repaynce has an uncanny way of multiplying into millions of dollars in ext. bone and muscle on our support of a Federal interconnection sysWeral system will have but one purpose-one master to serve and 11 be the project. It will require a minimum of contractual relations

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with other utility systems, yet it will insure delivery to users having a preferede by law. Any joint system will involve a myriad of contractual relatioas an precise but complex electrical arrangements. We feel that oniy a system basan solely on the needs of this complex project stretching over sevtral States is equal to the task.

By this, we do not mean that there is no place for other utility systems TDA investor utilities of the Colorado River Basin have maintained an in this project since its inception. They then advised the Congress that they wil participate in transmitting project power to ultimate preference users ftu a Federal backbone transmission system. This offer has since been adta 4 include, under as yet undefined conditions, certain company portions of the backbone system.

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

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

“Their (the companies') proposal provides essentially that the Secret construct the backbone transmission lines connecting major powerplants project and that use be made of the existing system of the companies ar additions thereto to market the power.

"The proposal is consistent with the policy expressed by the Congress many years in appropriation acts and elsewhere whereby the Federal Goverton builds the basic backbone transmission system and distribution is made thr existing systems where satisfactory arrangements can be worked out.

"Therefore, the committee expects the proposal by the private power a panies for cooperation in the development to be carefully considered his Department *** and the electric power and energy of the project to boy keted, so far as possible, through the facilities of the electric utilities opere : in the area, provided, of course, that the power preference laws are complied and project repayment and consumer power rates are not adversely affe

This is not a casual concern on our part. Following this congreso mandate, the Bureau of Reclamation has been studying the most recent propre submitted by the investor group on October 1, 1959. To provide guideline this comparison, the Bureau forwarded to the ir vestor group a firepoint pung statement' which we believe of such importance as to include in full:

"1. Lines must be of sufficient capacity to assure delivery of available *****

"2. There must be no interference with the ability of the Bureau to preference customers to the extent they would be served by federally constru lines.

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

“4. Charges made for delivery of power must not adversely affect pro feasibility and payout, and particularly must be such as not to reduce quantit; timing of irrigation assistance.

"5. If utilities construct the backbone high-voltage transmission lines, the must accept also the rsponsibility of providing transmission for delivers lower voltages to load centers of preference customers to the same exter. 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 an: Bureau that they could not consider the companies' outline as a firm pn because "it does not contain definitive proposals regarding quantities, un 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 the vestor group. In Colorado, our only measure of what might be proposed is wheeling toll now imposed—1 mill per kilowatt-hour for each 30 miles à ch: 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 water sources of the Colorado River available to Colorado, New Mexico, Utah,

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

bg. Even though power revenue will provide 91 percent of project re-
t, water development must at all times be the overriding consideration.
r studies support an all-Federal backbone transmission system because
erve these project needs, plus providing the maximum integration of this
ystem with other Federal power systems thereby resulting in full advan-
diversity of power loads, water flows, and system control.
Federal backbone grid will also do much to smooth out the problems

to the filling of Glen Canyon Reservoir by providing the best combina-
water levels and power production at downstream plants as well as at
nyon.
istruction should be initiated in fiscal 1961 on as much of the Federal
is possible to avoid an uneconomic crash program later and to insure

capacity in place when project generation begins, even though this
uire an appropriation not contained in the budget request.
dy should continue on the balance of system lines under the clear policy
ons of the Congress and the Bureau which require that project needs
paramount.
fongress and the people of the area supported this vast and complex
ion project to bring overdue development to a great area. It should
be used for private gain or partisan advantage.
preciate this opportunity to present our thinking to this committee. We
ir continued effort to meet problems which may arise with a cooperative

STATEMENT OF HAROLD CASH

Jairman and members of the committee, my name is Harold Cash. I dent of the Wyoming State Rural Electric Association. My directors horized me to submit this statement supporting the testimony given by ey McPhail of the Kuljian Corp. and the Federal Transmission System sed in the report made by the Colorado River Basin Consumers Power,

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sent the 15 rural electric systems in the State of Wyoming, serving ember-consumers along over 16,000 miles of line. Thirteen of these re ir power from the Federal dams located within the State. Another one

Valley at Mountain View) will use Federal power upon the completion
ig Gorge.

for a few instances this power is transmitted over Federal lines to
prs within reaching distance of the cooperative. This arrangement, with
nable cost of Federal power, has brought about the electrification of 92
f the farms and ranches within the State of Wyoming.
load studies indicate that by 1963 we will be facing a power shortage

present Federal sources. Naturally, with the development of the
lorado River, we are looking forward to postponing this situation by
me power from that development via a Federal transmission line from
Gorge connecting with the Bureau lines near Sinclair, Wyo. This line
hnect the upper Colorado with the Missouri Basin grid, providing for
iversity.
g that the Bureau of Reclamation has received, and at the present time
g, proposals made by five major power companies to build a part of

Colorado transmission system; knowing that there is a part of the ion over which there is no controversy (namely: Flaming Gorge to k and Glen Canyon to Curecanti); also knowing that in order to utilize

as it becomes available, transmission lines must be started immediately. re, the rural electric systems in the State of Wyoming urge this comrecommend, and the Congress of the United States to appropriate, the

funds to start immediate construction of these two lines, as a start for Federal transmission system.

STATEMENT OF W. BERRY HUTCHINGS

irman and gentlemen of the committee, my name is W. Berry Hutcham president of the Intermountain Consumer Power Association. ative director for Utah and vice president of Colorado River Basin

Consumers Power, Inc., formerly appearing before this committee as Cpper Colorado River Preference Users Committee. I am manager of Bountiful City Light & Power for the city of Bountiful, located 10 miles north & Salt Lake City, Utah.

Intermountain Consumer Power Association was incorporated under [tah State law the 11th day of May 1957 at Salt Lake City, as a voluntary Dost, nonprofit organization for the purpose of rendering to the consumer und and operated electric light and power utilities of the municipalities and rural electric cooperatives within the State of Utah, such services as may be bera ficial and desirable and in their best interest. To aid and advise in procurement of electric power and energy for the members and their respective custodes To advise and assist in the constant struggle to survive under the shadow of the private power monopoly that exists within our State.

Utah has a total of 35 municipally owned and operated light and power systes and 4 Rural Electrification Association systems within its State boundaries.

They are as follows: Beaver City, Beaver County

Monroe City, Sevier County Blanding City, San Juan County

Monticello City, San Juan County Bountiful City, Davis County

Morgan City, Morgan County Brigham City, Box Elder County

Mount Pleasant City, Sanpete County Ephraim City, Sanpete County

Murray City, Salt Lake County Fairview City, Sanpete County

Nephi City, Juab County Fillmore City, Millard County

Oak City, Millard County Heber City, Wasatch County

Parawan City, Iron County Helper City, Carbon County

Payson City, Utah County Holden City, Millard County

Perry City, Box Elder County Hỳrum City, Cache County

Price City, Carbon County Kanosh City, Millard County

Provo City, Utah County Kaysville City, Davis County

Salem City, Utah County Lehi City, Utah County

Spanish Fork City, Utah County Logan City, Cache County

Spring City, Sanpete County Manti City, Sanpete County

Springville City, Utah County Mantua City, Cache County

St. George City, Washington County Meadow City, Millard County

RURAL ELECTRIFICATION COOPERATIVES

Escalante Power Association, Beryl, Iron County.
Flowell Electric Association, Fillmore, Millard County.
Garkane Power Association, Richfield, Sevier County.
Moon Lake Electric Association, Vernal, Vintah County.

The combined population served by this group is over 200,000. The pres power requirement exceeds 100,000 kilowatts of demand and more than 4 million kilowatt-hours of electrical power yearly. Of this amount approximate's 50 percent is purchased from private utilities at costs well above nation average.

Due to the very rapid rate of growth, both in population and power en sumption, also the continued increase of power costs, we are therefore seek additional sources of economic power to meet and fulfill our needs.

The Intermountain Consumer Power Association turned their attention as full support toward the full development of the Colorado River storage proja

We greatly appreciate the honor and privilege of meeting with this commit to present the views of the association.

ECONOMICS The association's first concern is: "The ability of the project to pay back : the U.S. Treasury the funds, plus interest, used to develop same."

The investment necessary for generation has been determined. Also a tens tive cost per kilo-watt hour has been established which is required in order ? pay back this investment with interest. The problem at hand now is who shon make the investment and control the carrier necessary for marketing the portar generated.

Our views on this are: The preference load requirements of the States of Arizona, Colorado, New Mexico, Utah, and Wyoming are large enough to absors the entire production of power on the Colorado River project at all phases of development.

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