committee cannot spend a dollar unless it has been authorized. A very strong case has to be made when we go above the budget. Mr. DIXON. This is for planning only. Mr. CANNON. We are glad to have your suggestions. Mr. DIXON. You see, there is $8 million saved and if we could take $800,000 of that just for this planning it would be a wonderful thing for the project. Mr. CANNON. The committee is bound by very rigid rules. Mr. DIXON. I am not running again for office but before I leave Congress I desire to take this opportunity to thank you gentlemen for your vision in many instances and especially in this Colorado project, and also for the support that you gave us in passing it. It is going to be a blessing and I am sure all your lives it is going to be a source of pride to you. Mr. GOSLIN. Mr. Chairman, thank you very much for allowing the appearance of our representatives here. Mr. JENSEN. I am pleased to hear these gentlemen today. Like many other members of the committee I want to thank all of you. I have been greatly interested in this great development on the upper Colorado River. It has been my pleasure to travel over this great area on several occasions to see the great need for the development of this area. I can assure you that every member of the committee has in the past taken a fair position on everything pertaining to your area. You have great need for the water that will be held up in the upper reaches of the Colorado River Basin. There are, of course, some people lower down the river that we feel sometimes take the position the water belongs to them. I can assure you that the committee feels that you people in the areas you represent are entitled to your fair share of that water, and the committee has seen to it that you get your just dues. I was especially interested in the statement from the gentleman from New Mexico. I have in the past visited many projects in New Mexico. It happens that one time I had four brothers living there and they would explain to me the great need for more river development. So I can only say the request which you gentlemen make, over and above the budget, will be considered. As the chairman says we are not supposed to appropriate anything that is not authorized, but once in a while we do get a little ambitious and go beyond the scope of our authority. I think that is a fair statement. I would say-do not expect it. Mr. CANNON. I might say that the extraordinary situation under which you receive in 2 months 50 percent of your waterfall makes this an unusual situation. Mr. GOSLIN. Mr. Chairman, we thank you. That concludes our presentation. Mr. CANNON. Thank you, Mr. Goslin. MONDAY, APRIL 11, 1960. UPPER COLORADO RIVER STORAGE PROJECT WITNESSES HON. JOHN J. RHODES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA HON. BERT BROWN, MAYOR OF MESA LEROY KELLIS, COUNCILMAN, CITY OF MESA BERT FREESTONE, COUNCILMAN, CITY OF MESA LEE MUMFORD, COUNCILMAN, CITY OF MESA HON. CHARLES W. KIRTLAND, MAYOR, CITY OF SAFFORD PAUL POWERS, COUNCILMAN, CITY OF SAFFORD A. VAN WAGENEN, PRESIDENT, ARIZONA MUNICIPAL POWER USERS ASSOCIATION OAKLEY JORDAN, MANAGER, ARIZONA MUNICIPAL POWER USERS ASSOCIATION V. I. CORBELL, PRESIDENT, SALT RIVER PROJECT JOHN HOOPES, DIRECTOR, SALT RIVER PROJECT R. J. McMULLIN, GENERAL MANAGER, SALT RIVER PROJECT L. M. ALEXANDER, ASSISTANT GENERAL MANAGER, SALT RIVER PROJECT E. K. CARPENTER, MANAGER, RATE DEPARTMENT, SALT RIVER PROJECT Mr. CANNON. Congressman Rhodes. Mr. Rhodes is a member of this committee, a very influential member of this committee. Mr. Rhodes, will you have a seat at the table with us? I will ask you to recognize the witnesses in their turn. Mr. RHODES. Mr. Chairman, I want to thank you for this opportunity. Looking around the room, I do not know who is left in Arizona because I think about half the people are right here. This indicates the importance of this matter to our State. I might say also that one of the gentlemen who just testified was also a very valuable constituent of mine, Mr. Lucking. The gentleman who will now testify will not necessarily agree with the position Mr. Lucking took, Mr. Chairman, which, as you know, is one of the crosses we Members of Congress have to bear. At the same time, the gentlemen all agree, as I do, that Arizona is a power-hungry State. We need our just share of power from the upper Colorado system and I want to make sure that somebody, either private or public, builds lines with enough capacity so that we can get whatever amounts of power which are allocated to our State from the great 955 project to be built in Arizona on the Colorado River. With that preface, I would like first to introduce, Mr. Chairman, the representatives from my own hometown, the city of Mesa, and have each stand to be recognized: Mr. Bert Brown, mayor of Mesa and three councilmen, Mr. Leroy Kellis, Mr. Bert Freestone, Mr. Lee Mumford; and from the city of Safford, we have the mayor, Mr. Kirtland, and Mr. Powers, a councilman; and from the Salt River project we have Mr. Vic Corbell, president, Mr. Lloyd Smith, a director, Mr. John Hoopes, a director, Mr. R. J. McMullin, general manager, and Mr. E. K. Carpenter, manager of the rate department; and, we also have the president and the manager of the Arizona Municipal Power Users Association, Mr. A. Van Wagenen, and Mr. Oakley Jordan. Mr. Chairman, time was allotted by the committee to Mr. Corbell and to Mr. Van Wagenen, but they have asked the permission of the committee to yield their time to Mr. L. M. Alexander, who is the assistant general manager of the Salt River project, who will speak for the group. Mr. CANNON. Mr. Alexander, will you come to the table? Mr. ALEXANDER. I have a chart to talk from, Mr. Chairman, and I wonder if I can talk from the easel? Mr. CANNON. Certainly. STATEMENT OF MR. L. M. ALEXANDER Mr. ALEXANDER. Mr. Chairman and members of the committee, my name is L. M. Alexander. I am representing Mr. Victor I. Corbell, president of the Salt River project, at Phoenix, Ariz. Our project, as a major multipurpose reclamation project, is a preference power user in the Colorado River Basin. We are interested in the early construction of an adequate and economic transmission system from Colorado River storage project powerplants into Arizona and the other four States within the storage project area. We also have a vital stake in obtaining storage project power at the lowest possible cost. I respectfully ask that I be permitted to file with this committee Mr. Corbell's statement of our thinking in this matter. Mr. CANNON. It will be included in the record. (The statement appears on p. 959.) Mr. ALEXANDER. Mr. Corbell's summary statement states in part: The Congress has directed that, in marketing storage project power, preference laws must be complied with, and project repayment and consumer power rates must not be adversely affected. We believe these standards can only be met by the type of Federal transmission system Mr. McPhail, our representative from the Kuljian Corp., has set out for you earlier today. Such a system was authorized by the Congress under Public Law 485. Bureau of Reclamation rates for such an all-Federal system will be at a level sufficient to pay out power features and other obligations of power revenues within specified times-in fact, power revenues will pay 91 percent of the total cost of this tremendous water and power project. We have prepared a chart to demonstrate the adverse effect the utilities' counter offer, of a combination private and Federal transmission system, will have on project repayment and consumers' power rates. Gentlemen, this chart is designed to show the effect on the storage project of the things I just mentioned. The left-hand scale is a scale showing hundreds of millions of dollars. The graphs are drawn to this scale. The first graph represents an all-Federal system. It shows that with project power delivered at 6 mills per kilowatt-hour that there will be produced the required irrigation assistance of over $1 billion in the 100 years of the storage project. As I said this graph represents an all-Federal system. The next graph shows a combination system, consisting of a Bureau investment of $41 million and a utility investment of $105 million. We increased the original utility investment in order to provide transmission capacity sufficient to take power into Arizona. We believed preference laws would require this to be done. Therefore there is a total investment in a combination system-making its capability comparable to the all-Federal system. This graph shows that if power is delivered at the same 6 mills per kilowatt-hour, utility wheeling reduces required irrigation assistance the same required irrigation assistance as is shown on the first graph-by $637 million, and water projects are more than sliced in half. How can we restore required irrigation assistance to what the allFederal system will provide, that is $1 billion? Well, you can do it by increasing the rate and the consumers costs as shown on the right-hand graph. That is adding the extra utility wheeling costs on top of required irrigation assistance. What does it do? It requires that power consumers costs will be increased by 1.3 mills per kilowatt-hour for over 100 years, totaling $637 million over their costs under an allFederal system. We can conclude from this chart if utility wheeling charges are set at levels commensurate with the utilities' full costs of providing such service, their proposal will, in effect, be saving the Federal Government a $90 million investment at the expense of power consumers who will pay $637 million more for storage project power. Even if utility wheeling charges are cut in half power consumers will pay some $119 million more for their power than they would from an all-Federal system. The committees of Congress have said it was not their intention that consumer power rates should be so adversely affected. Mr. Corbell's statement further says of the utilities' proposal, "in addition, the Government would be denied revenues from diversity wheeling essentially equal to the investment the utilities offer to save the Government," an investment they hope to make to reap the benefits from the Government's billion-dollar project. Gentlemen, we believe a decision during this session of Congress is essential, since any further delay will not provide sufficient time for planning and construction. We therefore respect fully urge this committee to 1. Take action to secure the appropriation of $5 million in fiscal year 1961 to start construction of the Flaming Gorge to Oak Creek and Glen Canyon-Farmington-Curecantic lines, which all agree should be constructed by the Bureau of Reclamation. 2. Instruct the Secretary of the Interior and the Bureau of Reclamation to: (a) Proceed in fiscal year 1961 with plans, right-of-way st acquisition, surveys, and designs for the lines to Phoenix, to Farmington-Albuquerque, and to Provo-Vernal, all from Glen Canyon, and from Flaming Gorge to Sinclair, Wyo. (b) Program and budget future line construction in an orderly manner and as required to insure that facilities will be in service in time to deliver power to the market when powerplants are complete. (c) Make early determination of the marketing area and the price of power-and announce same. Gentlemen, thank you very much for this opportunity to present our thinking to you. Mr. CANNON. Thank you. That is one of the most illuminating charts I think I have ever seen. I wonder if you could supply the committee with a photographic negative of it so that we could include it in the hearings? Mr. ALEXANDER. I will, sir. (The chart referred to follows:) EFFECT ON STORAGE PROJECT COMBINATION UTILITY AND FEDERAL SYSTEM HUNDREDS 10 OF MILLIONS OF DOLLARS 8 Mr. CANNON. I think the committee and the Congress will benefit from it. Thank you. Mr. RHODES. May I ask permission that the statements of Mr. Van Wagener and Mr. Corbell be printed in the record? Mr. CANNON. They will be printed in the record at this point. (The statements referred to appear on pp. 959-963.) Mr. RHODES. I thank the committee and members for giving us this opportunity to present this matter, Mr. Chairman. That is all we have, sir. Mr. CANNON. Thank you, Mr. Rhodes. We much appreciate your cooperation. At this point I will include the statement of Congressman Udall of Arizona. |