1 Balances of selected resources are identified on the statement of financial condition. The Congress created the Tennessee Valley Authority in 1933 for the unified development of a river basin comprising parts of seven States. Engineering works improve and regulate the Tennessee River and its tributaries for navigation, flood control, and the generation of electric power, and contribute in other ways to development of valley resources. Fertilizer research and agricultural activities promote conservation and improved use of land and water resources. Special attention is given to economic development problems in selected subregions. Forestry activities stress maximum use of forest resources consistent with watershed protection. All these activities are interrelated. Their common purpose is to help develop the valley's agricultural and industrial potential for the benefit of both the region and the Nation. In 1964 Other national interests are directly served. The Tennessee waterway is an interregional artery for commerce moving to and from ports in 20 States. Federal agencies used 36% of the electric energy generated by the TVA system. In national emergencies, defense needs have first call on the Muscle Shoals chemical facilities for munitions research and production; in peacetime, they serve as the country's only public research center equipped for complete development of fertilizers from laboratory to demonstration-scale production with the objective of reducing the cost of chemical fertilizer to the farmer. TVA is a corporation wholly owned by the Federal Government. Its program in 1966 will be financed from three sources: (1) appropriations by the Congress; (2) proceeds available from current power operations and borrowings against future power revenues; and (3) proceeds available from nonpower activities. Budget program-1. River and power development.-A major objective of the TVA Act is full development and use of the water resources of the Tennessee River and its tributaries. The development of these natural resources is reflected in regional and national gains in the fields of navigation, flood control, power, light and heavy industry, and recreation. System facilities to be operated in 1966 consist of 29 dams with hydroelectric generating stations, 14 navigation locks at 10 dams, 11 steam-electric generating stations, a power transmission network of about 14,233 circuit miles, and reservoir shorelines totaling more 750-100-65- -62 than 10,000 miles. In addition, TVA will operate in cooperation with local interests a multipurpose system of small dams in the Beech River tributary watershed. NAVIGATION-SUMMARY OF ESTIMATED OPERATING COSTS [In thousands of dollars] Receipts..... Operating costs: 1964 actual 1965 estimate 1966 estimate 2 Allocation of multipurpose reservoir Total operating costs, funded..... Provision for depreciation.... Total operating costs......... (a) Navigation operations of the multipurpose river development system include maintenance of adequate depths for the all-year 9-foot channel from the mouth of the river at Paducah, Ky., to Knoxville, Tenn., a distance of 650 miles. Traffic on the Tennessee waterway in calendar year 1963 was 14.4 million tons and 2.2 billion ton-miles. Transportation savings to shippers on this volume of traffic are estimated at $21.4 million, the difference between freight charges actually paid and those which would have been paid if the river had not been improved for navigation. More than 96% of these savings applied on freight originating outside the valley or moving from the valley to outside destinations. Engineering work assures that physical facilities are operated, maintained, and modified or improved to meet the needs of modern waterborne commerce. In 1966 three locks which have been in uninterrupted service for 20 years or more will be unwatered and inspected. Technical studies appraise the opportunities for use of the waterway and the barriers inhibiting its use. Data supplied to shippers and carriers help solve transportation problems, looking to full utilization of the Federal investment in the navigation channel. Advisory work with State and local agencies leads to new or improved public programs by those agencies to help assure full utilization of the waterway. 978 tions expense.-- (b) Flood control operations of the Tennessee River system maintain and use storage space in upstream reservoirs for seasonal retention of excessive runoff and regulate discharges to rates of flow which can be handled safely by downstream channels and reservoirs. Dams on the Tennessee River and its tributaries provide 11.8 million acre-feet of storage for flood control at the beginning of the flood season. Cities and agricultural lands in the Tennessee Valley are protected and flood crests are reduced on the lower Ohio and Mississippi Rivers. Since the first project in the TVA system was placed in operation in 1936, regulation of TVA reservoirs to reduce flood crests has averted damages of about $277 million in the Tennessee Valley and about $39 million on the lower Ohio and Mississippi Rivers. As a supplement to operating its reservoir system for flood control, TVA collects and analyzes flood data and studies potential flood control projects and ways to improve operations of the existing system. Technical advice and assistance given to State and local agencies in finding solutions to local urban and rural flood control problems will be continued in 1966. A frequent and valuable byproduct of these efforts is the establishment or revitalization of local planning agencies. Capital outlay costs for flood control facilities in 1966 are estimated at $2,031 thousand including $641 thousand for completing construction of two small water control reservoirs near Bristol, Tenn.-Va., and $1,390 thousand for beginning work on cooperative flood protection projects for the cities of Sevierville, Tenn., and Coeburn, Va. Total estimated cost of these facilities to be completed. by June 30, 1968, is $2.7 million for Sevierville and $1.1 million for Coeburn. POWER-SUMMARY OF ESTIMATED REVENUE AND RECEIPTS AND OPERATING COSTS (c) Power operations involve generation and transmis sion of power and sale of energy at wholesale to local distribution systems and to a small number of industries and Government agencies requiring large amounts of power. As of January 1, 1965, power was purchased and distributed by 156 local public agencies and 2 small privately owned utility companies. Total energy to be supplied to Department of the Army on the Cumberland River, and the power system from generating facilities of TVA, the the Aluminum Company of America on the Little Tennessee River is estimated to be 80.7 billion kilowatt-hours in 1966. This is about 7.3 billion kilowatt-hours greater than the energy supplied to the system in 1964 and about 6.9 billion kilowatt-hours above that estimated to be supplied in 1965. Net income from power operations, after depreciation, is estimated to be $54.7 million for 1966, as compared with $58.2 million in 1964 and an estimate of $51.0 million in 1965. The estimates assume average streamflow conditions. Better than average streamflows could produce some increase in net income over the estimates; with subnormal streamflows, the net income would be reduced by increases in production expenses. Of the $55,445 thousand estimate for power supply facilities, all to be financed from power proceeds and borrowings, $12,019 thousand is for continuing construction of Nickajack hydro units 1-4, and $11,986 thousand is for continuing construction of a generating unit in the Bull Run Steam Plant and for cleanup of construction work on a generating unit (No. 8) at the Widows Creek Steam Plant. Nickajack units 1-4, scheduled for service in November 1967 and January 1968, replace capacity presently available from the Hales Bar project which is to be removed from service. Bull Run unit 1 is scheduled for commercial operation in May 1966. Completion of these units on schedule will bring the estimated dependable capacity of the system by the winter of 1966-67 to 17.09 million kilowatts, including the Army plants on the Cumberland River and other plants operated as a part of the TVA system. This will provide a reserve of 23% over estimated demands of 13.90 million kilowatts served by TVA capacity to allow for loss of capacity because of breakdown of generating equipment and needs for its maintenance, failure of substation equipment and transmission lines, and drawdown of reservoirs during dry periods. Estimated total demands in the winter of 1966-67 are estimated at 14.40 million kilowatts, of which 0.50 million kilowatts will be served by capacity owned by others but made available to TVA under interchange arrangements. In the winter of 1967-68 it is estimated that total demands will increase to 15.20 million kilowatts, demands served by TVA capacity will be 14.20 million kilowatts, the dependable TVA system capacity will remain at 17.09 million kilowatts, and the reserve will decrease to 20.4%. By the winter of 1968-69 it is estimated that total demands will increase to 16.10 million kilowatts, demands served by TVA capacity will be 14.60 million kilowatts, the dependable TVA system capacity will remain at 17.09 million kilowatts, and the reserve will decrease to 17.1%. Cost of continuing construction of the nonpower portions of Nickajack Dam and Reservoir is estimated at $10,847 thousand in 1966. Dam closure is scheduled for November 1967, and total estimated cost including hydro units 1-4 is $66 million. A total of $5,675 thousand is required in fiscal 1966 to begin construction of Tellico multipurpose dam and reservoir. The site of this project is near the mouth of the Little Tennessee River which flows into the Tennessee River downstream from Fort Loudoun Dam. Plans include provision for a canal connecting the two reservoirs to permit operation of the two reservoirs as a single unit. Estimated total cost is $42.5 million, of which an estimated $10.9 million will be recovered from future sales of reservoir lands. Also in 1966, engineering work will be continued on the Bear Creek multipurpose water control system at a cost of $250 thousand. An estimate of $289 thousand provides for completion of the Beech River multipurpose water control system. 2. Fertilizer, agricultural, and munitions development.Chemical facilities at Wilson Dam, Ala., are maintained and operated as a national fertilizer development center, but by statute they must also be available for munitions purposes. These facilities are important in the national defense program. FERTILIZER, AGRICULTURAL, AND MUNITIONS DEVELOPMENT- Receipts: Sale of byproducts, farmer payments TVA has on firm order for future delivery a large turbogenerator with a capacity of 1,130,000 kilowatts. During 1965 TVA will continue studies to determine the most advantageous location for this unit. This additional This additional unit is now scheduled to be placed in service in the fall of 1969 to supply loads in the winter of 1969-70. The 1966 budget includes $25,742 thousand for construction work on this unit. Modernization of hydro units 1-8 at Wilson Dam, started in 1965, will continue in 1966. This work will increase the dependability and efficiency of Operating costs: these units. The 1966 estimate includes $5,190 thousand for work on these units. The 1966 budget includes $508 thousand for preliminary design work on additional steam-electric generating capacity which will be needed after the winter of 1969-70. (d) Multipurpose reservoir operations relate to the management, operation, and maintenance of 20 multipurpose reservoirs created by TVA dams. This involves water dispatching operations, water control investigations, investigations and control of reservoir ecology, plant protection and services to visitors, and operation of reservoir lands. Operating costs, funded, are estimated at $6,318 thousand for 1966, of which $1,737 thousand is allocated to navigation operations, $1,791 thousand to flood control operations, $2,336 thousand to power operations, and $43 thousand to cooperative valley development. The remaining $411 thousand is offset by nonpower proceeds derived principally from operation of reservoir lands. MULTIPURPOSE RIVER DEVELOPMENT-SUMMARY OF ESTIMATED [In thousands of dollars] Nickajack dam and reservoir..... Tellico dam and reservoir.. Bear Creek multipurpose water control system. Total multipurpose projects.. Additions and improvements, multiple-use facilities- Total multipurpose river development... 1966 10,847 Less products used in demonstra- 1964 actual 1965 estimate 1966 estimate Distributor payments for fertilizer Total receipts.. Research on fertilizer products, proc- Developmental fertilizer and muni tions production: Production expenses Fertilizer distributor demonstrations Fertilizer, agricultural, and munitions development activities are of three general types: research on fertilizer products, processes, and uses; developmental production of fertilizer materials; and demonstration and educational introduction of new materials to the American farmer. (a) Research on fertilizer products, processes, and uses consists of fundamental research, applied research, process engineering, technical studies of full-scale plant opera17.061 tions, and research on the agronomic requirements and effects of fertilizer materials. TVA works cooperatively with the Department of Agriculture, the land-grant col18,761 leges, and with industry to maximize effectiveness of re 250 289 600 1,100 |