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We accept the fact that a tentative cost of 6 mills has been established for the in power. We, as preference customers, realize that the greatest return of oneys to the Treasurer will be derived from the sale of firm power. We are the market for allocation of this power. It is conclusive that there will be no power available to private power utilities. e are amazed that they should offer to make staggering investments in transission lines for wheeling purposes only. We cannot see where it is possible r them to expend large sums of money for this service without operating at a eat loss, that is, if their cost for wheeling is maintained the same as is pro used in the federally owned system. The loss may mean very little to the ivate utilities, because it would be very elementary for them to hide the deficit their systems financial report and the loss load would be carried by other ratelyers in elevateci rates. It is our conviction that the earliest financial repayment of this project, and 1 accumulate the largest amount of surplus funds at the earliest possible date ) aid in development of other practicipating projects can only be achieved hrough the development of a federally owned transmission system.

OPERATION We are seriously concerned and alarmed in regard to the handicaps and hardhips that will exist through private utility development of transmission lines.

It is clear and apparent that a utility developed transmission line will be deigned for the sole use of the utilities need in mind. It will establish a definite ollgate which would impose additional costs and impair flexibility needed for in orderly project operation.

As has been called to your attention, by others, there is a valuable opportunity n the development of this project to interconnect major market areas and other pasin projects which would permit diversity of power relative to seasonal load lemands, time zone differences, also watershed characteristics and conditions. It would be difficult to put a price tag on the value of taking advantage of hese opportunities. It is obvious, nowever, that there is a tremendous value hat can be attained only through a system owned and operated by the same controller, the Secretary of the Interior.

Such advantages have been foreseen by Congress as is shown in section 7, Public Law 485, 81th Congress, stating as follows:

"The hydroelectric powerplants and the transmission lines authorized by this act to be constructed, operated, and maintained by the Secretary shall be operated in conjunction with other Federal powerplants, present and potential, so as to produce the greatest practicable amount of power, and energy that can be sold at firm power and energy rates."

SUMMARY

The Intermountain Consumer Power Association members urge that the FedEral Government construct the entire transmission system that is required for Che Colorado River storage project.

It is the unanimous opinion of the group that the Federal system will:. (1) Bring a cheaper source of power to the ultimate users. (2) Establish within Utah a competitive condition which does not now exist. (3) Permit diversity of power between basin projects as well as between -reference users of different areas.

(4) Establish a single owner and controller of generation and transmission bat will give maximum efficiency resulting in the greatest benefits and quickest ossible money return to be used on participating projects. (5) Result in a marketing system that can be readily extended and inter-. onnected with future projects. The members of our association have been unimpressed with the private tilities plan because of its inadequacy in fulfilling the intent of Congress when hey authorized the Colorado River Project Law 485. We believe that only a Federal transmission system can meet the principles set forth by the Bureau f Reclamation on January 19, 1960, which are as follows: (1) Lines must be of sufficient capacity to assure delivery of available power, (2) There must be no interference with the ability of the Bureau to serve reference customers to the extent they would be served by federally constructed

nes.

(3) Backbone lines must provide suitable integration among Federal project power facilities at the time required to meet project objectives, and project uz must at all times be the overriding consideration.

(4) Charges made for delivery of power must not adversely affect projet 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 that must accept also the responsibility of providing transmission for delivery at lower voltages to load centers of preference customers to the same extra a would prevail under a federally constructed system.

CONCLUSION

We are mindful of the many responsibilities of this committee and the met problems and requests you receive. We are regardful of the importance economic investing of public funds. This is also one of our responsibilit* as public servants and we are in accord with your endeavors to invest only in the development of projects that are self-supporting.

We therefore urge your favorable consideration to the request of this asen tion to appropriate at least $5 million, to be made available for fiscal year 1967 to initiate orderly and efficient construction of the transmission lines runnir: from the Flaming Gorge terminal station to Oak Creek, Colo., and from Gla Canyon to Farmington, V. Mex., thence to Poncha Junction via Curecanti.

The members of the Utah association recognize that for them to participate in the advantages of the Federal system it will be necessary also to start the balance of the transmission lines.

Therefore we respectfully request this committee to direct the Bureau de Reclamation to proceed immediately with the necessary engineering studies right-of-way acquisitions, and initial construction of the lines from Flamin: Gorge to Provo, Utah ; Provo to Glen Canyon ; Flaming Gorge to Sinclair, Wro Glen Canyon to Phoenix, Ariz.; and from Farmington to Albuquerque, X. Mer

Delaying the development of the Colorado River storage project in this inportant aspect will further delay the realization of the return of the investment and the funds necessary for the development of present and future participatins projects.

We thank you for your time and attention,

STATEMENT OF NORTON DAVIS

My name is Norton Davis. I am manager of the Plains Electrie Generation and Transmission Cooperative at Albuquerque, V. Mex., and have been a member of the Upper Colorado River Preference Users Committee which has previous appeared before this committee. Recently there has been organized the Colorada River Basin Consumers Power, Inc., which is designed to promote the maximum use of Colorado River project power and to represent the interests of the pref. erence users. I am now serving as treasurer for this organization.

The Plains Cooperative is composed of 11 member cooperatives and serta more than 50 percent of the total area of the State of New Mexico. Due to the almost phenomenal growth and development of the area served by it, resultin: from oil, gas, and uranium activities, as well as inrreased pumping and irrigation the demands for electricity have grown at such a rate that the situation is rapidly becoming critical.

Since 1955, which was the first full year of operation, the demands hate increased at an average of 1242 percent annually. compounded; in fact, have practically doubled in this 5-year period, and from present estimates it appears that this rate of increase will continue or even accelerate over the next 5 te 10-year period.

It is of the utmost importance, then, to us and to the area which we serve that we have an immediate understanding concerning the development of the Colorado River storage project-the amount of power to be anticinated, the cost, and the availability of transmission facilities. It is practically impossible to make long-range plans until at least these basie facts are known.

In reviewing the hearing before this committee, both before and after the authorization of the Colorado River storage project, it annears that the private power companies operating in the project area have always been willing to

Jansmission lines necessary to take the power at the generating

view of the relatively small cost of the transmission lines as comcost of construction of the dams and generating plants, this is not specially since they would reap practically all of the benefits of yer investments. while all proposals profess a willingness to provide space for stomers, no price has ever been quoted, and all proposals seem on the assumption that preference users will require only a small y project power. Further, they seem to be designed so as to prevent of Reclamation from constructing an integrated system for the \f project power.

mean to criticize the principle so often announced by this comcooperation between the Bureau of Reclamation, REA cooperavate power companies in the utilization of available transmission ighly desirable and beneficial, but we do believe that the systems dependent; and that if the transmission of project power is wholly

privately owned transmission lines in any segment. then the

Bureau of Reclamation to transmit power out of the project eopardy. As a result, the feasibility of the project and the ability i to protect preference rights would be impaired, which would, in iolate project authorization. load estimates before the committee which show that the needs

users in the project area are sufficient to take all of the power soon as it is available. that the construction of the backbone transmission line as proposed in Corp. is essential to the project and to the protection of the

ers,

New Mexico is concerned, we are now connected to the Bureau of Rio Grande system at Albuquerque and, by the construction of the at of transmission lines from Glen Canyon to Pueblo (including the m Farmington to Albuquerque) as recommended in the report of IcPhail of the Kuljian Corp., and which all parties agree is necesld be in position to plan a future program looking toward a full power allocated to us. been proposed an appropriation of $5 million for immediate con

an additional $5 million for future construction and planning. e to urge the consideration of this committee to this proposal ; and the committee to direct the Department of the Interior to make le public the amount of power available and the cost at the various

ot done immediately, either we shall run the chance of leaving a thout essential requirements of power, or we will be compelled tional facilities, which may, in many instances, be duplicating, and Her the use of project power unfeasible except on a stand

or

e of project power is beneficial, not only to us but also to the

STATEMENT OF PHILIP N. SANCHEZ

Philip N. Sanchez. I am president of the board of trustees of the c Generation & Transmission Cooperative, Inc., at Albuquerque,

am also one of the organizers and a member of the board of e Mora-San Miguel Electric Cooperative located in northeastern

n Miguel Electric Cooperative is a distribution cooperation and was t organized in the State. It was originally organized in 1941 and erations in 1946. At the time we commenced operation we were

our source of power upon a privately owned utility operating ind were so dependent until the commencement of operation by e Generation & Transmission Cooperative, Inc., in 1955. During e in which we were dependent upon this private utility for our er, we were continually harassed and our growth and development reason of the apparent unwillingness of the private utility to

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make available adequate power at reasonable rates. Our average whole rate for the purchase of power was 1.7 cents and we were continually threate with curtailment or disconnection of power supply. I mention these fa 30 because we are sometimes inclined to lose sight of the difficulties entrete by rural cooperatives in attempting to make power available in areas where ti are completely dependent upon a private power company for their gues power. It has been our experience that the primary purpose of the art utility has been to establish and maintain a power monopoly and that the site of the customers and the welfare of the area served are of secondary imtu Since the organization of the Plains Electric Generation & Transmissint

. operative, Inc., and since power has been available from this source our cui tive has more than doubled its power requirements and economic develope the area as a result of availability of power and decreased costs. Thi contributed immeasurably to the welfare of the people in the area served

The Plains Electric Generation & Transmission Cooperation, Inc., sers member cooperatives in the State of New Mexico, consisting of the

Otero County Electric Cooperative, with headquarters at Alamos N. Mex. ;

Columbus Electric Cooperative, with headquarters at Deming, N. :

Sierra Electric Cooperative, with headquarters at Truth or Consequ N. Mex.;

Socorro Electric Cooperative, with headquarters at Socorro, N. Me:

Continental Divide Electric Cooperative, with headquaters at G N. Mex.;

Jemez Mountains Electric Cooperative, with headquarters at Espx N. Mex.;

Northern Rio Arriba Electric Cooperative, with headquarters at CI N. Mex.;

Central New Mexico Electric Cooperative, with headquarters at ! tainair, N. Mex.;

Kit Carson Electric Cooperative, with headquarters at Taos, N. Me:

Springer Electric Cooperative, with headquarters at Springer, X. : and

Mora-San Miguel Electric Cooperative, with headquarters at : 3 N. Mex. In most of the area served, covering more than one-half of the whole Stati ? needs for power are increasing at such a rate that it is imperative th immediate determination be made as to how the additional power require are to be served. We in the Plains Cooperative have made extensive stod order to try and determine what method of approach to use in solving the į problem. We have participated actively in the planning program of the 1 Colorado River Preference Users Committee in order to determine to extent power could be made available to New Mexico, and particularly to preference users under the Colorado River storage project. We have alwayi ported the program of the Bureau of Reclamation in recommendations ma Congress for the construction of backbone transmission lines necessary t distribution of project power and to the protection of preference custome contemplated under the act. We believe that the recent report of the Ki Corp., outlines the basic requirements necessary for this purpose.

We strongly urge that in the consideration of any proposal that the Bi of Reclamation be given the ability to transmit power out of the project a protect the preference users without dependence upon transmission facilitie vided by private power companies, as experience has shown that depedi upon private power companies for the source of wholesale power does not p adequate service.

Much has been said in the proposals made by the private power comp looking toward the construction of vital segments of transmission systems respect to savings in construction costs and in taxes which would be pai the private power companies. We do not believe either to be valid argume! first, because the savings in construction costs would be more than offs wheeling charges, and, second, the taxes paid would be merely added on part of the cost of power to the preference users or ultimate customers.

Besides, there is the very real possibility that the availability of power 11 preference customers may be curtailed or even stopped by reason of the lac capacity in the lines, which are primarily designed for the use of the power panies owning them.

is obvious from the information presented to this committee that the reference users in the Colorado River Basin States, including New

more than sufficient to absorb all of the power generated under the ability to transmit the power over owned or controlled lines is of the þrtance. Is New Mexico is concerned, if full use is to be made of the portion pct power allocated to it, an immediate determination must be made, at the State is entitled to preference power and the amount of the but also that transmission facilities are such as to insure the delivery it as a preference customer. In addition, since we are already conthe Bureau of Reclamation Rio Grande River project at Albuquerhe construction of that portion of the line from Glen Canyon to Farmto Albuquerque would considerably increase the value of this system source in the area and would enable us to plan our power development y as to make full use of project power. NON. Mr. Jensen?

ROLE OF PRIVATE AND PUBLIC POWER

SEN. Mr. Chairman, I wish to commend Mr. McPhail for ation. Phail was an engineer for the Bureau of Reclamation for - This is the 18th year I have sat on this committee and we lered these transmission requests and other requests for the nt of great areas in our country. be remembered at all times, when expenditures are requestsmission lines or a request is made for the Federal Governuild transmission lines that when we spend such money for on lines we are doing so in competition with private induspay local, State, and Federal taxes. utilities are paying now over a billion dollars a year into I Government from power revenues. They are paying in

and Federal taxes approximately a billion dollars for the schools, roads, and everything that needs tax money.

a law which provides that where private utilities and other lucing and transmission facilities are adequate to furnish preference customers or will agree to build such power and transmission facilities and will wheel the power from wer projects to preferred customers at a reasonable rate, ect the law provides that the Congress is not justified in • h appropriations for such facilities. That is known as , amendment to the Reclamation Act. Þ, the Congress must comply with the law. er companies, I understand, in this area have submitted on to build some transmission lines in this area. know what the contract provides. I might say that I have felt it necessary to tie Federal power projects together in the full benefit of the integrated system. kever, Mr. Chairman, hope that because of the terrific cost (ject, which amounts to over a billion dollars for the comject, that the Bureau of Reclamation will give full conto the proposition which is made by the private utilities. 1, I don't know what the contract provides or the proposihey have made provides, but without a doubt they are lling and ready to build the powerlines, other than those Federal Government is responsible to build.

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