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Net expense..

1964 estimale

purpose of navigation, flood control, and power. System (b) Flood control operations of the Tennessee River facilities to be operated in 1964 consist of 29 dams with system maintain and use storage space in upstream hydroelectric generating stations, 12 navigation locks at reservoirs for seasonal retention of excessive runoff and 10 dams, 11 steam-electric generating stations, and a regulate discharges to rates of flow which can be handled power transmission network of about 13,485 circuit miles. safely by downstream channels and reservoirs. Dams

on the Tennessee River and its tributaries provide 11.8 NAVIGATION-SUMMARY OF ESTIMATED OPERATING COSTS

million acre-feet of storage for flood control at the begin[In thousands of dollars)

ning of the flood season. Cities and agricultural lands 1962 actual 1963 estimate 1964 estimate in the Tennessee Valley are protected and flood crests Receipts...-

2
4

5

can be reduced on the lower Ohio and Mississippi Rivers,

Since the first project in the TVA system was placed in
Operating costs:
Operating expense.

2,517
462

489

operation in 1936, regulation of TVA reservoirs to reduce Distribution of administrative and gen

flood crests has averted damages of about $160 million eral expense

44
28

30 in the Tennessee Valley and about $31 million on the Allocation of multipurpose reservoir

lower Ohio and Mississippi Rivers. As a supplement to operations expense.-

1,676 1,724

operating its reservoir system for flood control, TVA Total operating costs, funded... 4,056 2,166 2,243 collects and analyzes flood data; studies potential flood Provision for depreciation..

1,835 1,884 2,198 control projects and ways to improve operations of the

existing system. Technical advice and assistance given Total operating costs.. 5,891 4,050 4,441

to State and local agencies in finding solutions to local 5,889 4,046 4,436 urban and rural flood control problems will be intensified

in 1964. (a) Navigation operations of the multipurpose reservoir Capital outlay costs for flood control facilities in 1964 system maintain adequate depths for the all-year 9-foot are estimated at $1,050 thousand which provides for channel from the mouth of the river to Knoxville, Tenn., beginning construction of two small water control resera distance of 650 miles. Traffic on the Tennessee water- voirs near Bristol, Tenn.-Va. Total estimated cost of way in calendar year 1961 was 11.6 million tons and 1.9

the structures, scheduled to be completed in June 1965, billion ton-miles. Transportation savings to shippers on is $2.9 million. this volume of traffic are estimated at $21.1 million, the difference between freight charges actually paid and those

POWER-SUMMARY OF ESTIMATED REVENUE AND RECEIPTS AND

OPERATING COSTS which would have been paid if the river had not been improved for navigation. More than 97% of these savings

(In thousands of dollars) applied on freight originating outside the valley or moving

1962 actual 1963 estimate

Revenue and receipts: from the valley to outside destinations. Engineering work

Sales of electric energy (outside): assures that physical facilities are operated, maintained,

Federal agencies.

101,726 100,150 101,450 and modified or improved to meet the needs of modern Others.

146,466 163,980 183,390 waterborne commerce. Technical studies appraise the

Other income..

6,587 5,152 5,037 opportunities for use of the waterway and the barriers

Total revenue and receipts ------ 254,779 269, 282 289.877 inhibiting its use. Data supplied to shippers and carriers help solve transportation problems, looking to full utili- Operating costs: zation of the Federal investment in the navigation chan

Production and transmission (including nel. Advisory work with State and local agencies leads

allocation of multipurpose reservoir
operations expense).

130,368 142,279 146,507 to new or improved public programs by those agencies to

Payment in lieu of taxes..

6.740 7,328 8,203 help assure full utilization of the waterway.

Other operating expense (less interdiviCapital outlay costs for navigation facilities in 1964 are

sional sales and rents).

8,864 9,944 10,822 Interest charges ---

516

800 6.000 estimated at $11,299 thousand and include provision for beginning construction of a new lock at Hales Bar Dam,

Total operating costs, funded... 146,488 160,351 171,532 Tenn. The new lock will be a single-lift lock with a 110- Provision for depreciation..

52,131 53,200 60,000 foot by 600-foot chamber. Scheduled for service in July

Total operating costs.

198,619 213,551 231,532 1966, it is estimated to cost a total of $22 million. The 1964 estimate also provides for continuing construction of Net power income..

56,160 55,731 58,345 a new lock at Guntersville Dam, Ala., which is scheduled to be in service in June 1965; and for other navigation (c) Power operations involve generation and transchannel improvements.

mission of power and sale of energy at wholesale to local

distribution systems and to a small number of industries FLOOD CONTROL-SUMMARY OF ESTIMATED OPERATING COSTS

and Government agencies requiring large amounts of [In thousands of dollars)

power. As of September 1, 1962, power was purchased 1962 actual 1963 estimate

and distributed by 153 local public agencies and 2 small 410 451

449 privately owned utility companies. Total energy to be Distribution of administrative and general

supplied to the power system from generating facilities of expense...

21
22

25 Allocation of multipurpose reservoir opera

TVA, the Army on the Cumberland River, and the Alu1,506 1,689 1,738 minum Company of America on the Little Tennessee

River is estimated to be 73.9 billion kilowatt-hours in Total operating costs, funded... 1,937 2,162

2,212 1964. This is about 8.9 billion kilowatt-hours greater Provision for depreciation...-

1,236 1,236 1,237

than the energy supplied to the system in 1962 and about Total operating costs... 3.173 3,398 3,449

5.1 billion kilowatt-hours above that estimated to be supplied in 1963. Net income from power operations,

1964 eslimate

Operating expense.

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TENNESSEE VALLEY AUTHORITY_Continued needed after the winter of 1966-67 have not yet been

determined. During the coming year TVA will make Public enterprise funds-Continued

studies of the location and installation schedule of the TENNESSEE VALLEY AUTHORITY FUND-Continued

second 900,000-kilowatt (or 1,100,000-kilowatt) unit on

order; the 1964 budget includes $1,580 thousand for preafter depreciation, is estimated to be $58.3 million for

construction costs on this unit. 1964–$2.2 million greater than in 1962, and $2.6 million Estimated capital outlay costs in 1964 include $2,119 above the estimate for 1963. The estimates assume thousand for completing construction of Melton Hill Dam average streamflow conditions. Better than average and Reservoir. Costs allocable to the power program are streamflows could produce some increase in net income

being financed from power proceeds and costs allocable over the estimates; with subnormal streamflows, the net income would be reduced by increases in production

to other programs are being financed from appropriations.

(d) Multipurpose reservoir operations relate to the manexpenses.

agement, operation, and maintenance of 20 multipurpose POWER SYSTEM FACILITIES-SUMMARY OF ESTIMATED CAPITAL

reservoirs created by TVA dums. This involves water OUTLAY FROM POWER PROCEEDS AND REVENUE BONDS dispatching operations, water control investigations, veclin thousands of dollars)

tor control, plant protection and services to visitors, and

operation of reservoir lands. Operating costs, funded, Multipurpose dam: Melton Hill hydro units 1-2 (closing adjustments)- -41 are estimated at $6,134 thousand for 1964, of which $1,724 Other power supply facilities:

thousand is allocated to navigation operations, $1,738 Continuing construction: Widows Creek steam unit 8.

14.222 thousand to flood control operations, and $2,321 thousand Colbert steam unit 5..

1,398 to power operations. The remaining $351 thousand shown Paradise steam units 1-2.

11,721

here is offset by nonpower proceeds derived principally Bull Run steam unit 1

53,909

from operation of reservoir lands. Wheeler hydro units 9–11..

506 Additional steam unit (preconstruction costs)

1,580 (e) Topographic maps of the Tennessee Valley are vital

to planning, construction, and operation needs of many Total power supply facilities (including Melton Hill).

83,295 Transmission system facilities

private organizations and public agencies, including TVA.

51,000 Coal land and rights..

În order to be of practical utility, the maps, now completed

1,010 Additions and improvements at existing power facilities.

1,273 for the entire Tennessee Valley, must be revised periodiInvestigations for future facilities..

337 cally. The estimate for 1964 includes $100 thousand for

work on those quadrangles which most urgently need Total power system facilities.

136,915

revision.

2. Fertilizer, agricultural, and munitions program.--Of the $83,295 thousand estimate for power supply Chemical facilities at Wilson Dam, Ala., are operated facilities, $81,715 thousand is for continuing construction as a national fertilizer development center, but by statute, of four steam generating units at Paradise, Widows Creek, they must likewise be available for munitions purposes and Bull Run projects; completion of a steam generating and are an important segment of the national defense unit at the Colbert project; and completion of five hydro- program. electric units at Wheeler and Melton Hill Dams. Paradise units 1-2, Widows Creek unit 8, and Bull Run unit 1

RESEARCH ON FERTILIZER PRODUCTS AND PROCESSES-SUMMARY are scheduled for commercial operation in May and

OF ESTIMATED OPERATING COSTS October 1963, October 1964, and November 1965, respec

In thousands of dollars) tively. The Colbert unit is to be placed in service in March 1963. All hydro units at Wheeler Dam are sched- Receipts..

3

5. uled for operation by the end of June 1963; those at Melton Hill are expected to enter service in July and September Operating costs:

Operating expenses

1,960 2,151 2,273 1963.

Distribution of administrative and gen-
Completion of these units on schedule will bring the

81
86

92
estimated dependable capacity of the system by the winter
of 1964-65 to 15.7 million kilowatts, including the Army

Total operating costs, funded (ap

2,041 propriated funds)

2,237 2,365 plants on the Cumberland River and other plants operated Provision for depreciation...

40

40 as a part of the TVA system. This will provide a reserve of 18.4% over estimated demands of 13.2 million kilo

Total operating costs..

2.081 2,277 2,415 watts to allow for loss of capacity because of breakdown

2,078 2,272 of generating equipment and needs for its maintenance, failure of substation equipment and transmission lines,

(a) Research on fertilizer products and processes consists and drawdown of reservoirs during extremely dry periods of fundamental research, applied research and process It is estimated that by the winter of 1965-66 the system engineering, and technical studies of full-scale plant dependable capacity will be 16.6 million kilowatts

, leaving operations.' TVA works cooperatively with the Departà 16.0% reserve over estimated demands of 14.3 million ment of Agriculture and with industry to avoid duplicakilowatts. TVA and the Mississippi Power and Light tion. Research results on technological developments Company and the companies associated with it have com

and new and improved processes are made available to pleted an agreement to provide for the seasonal exchange industry. Knowledge gained in fertilizer research is of large blocks of capacity which results in savings in valuable also in the related field of munitions. In 1964 installed capacity needs by each system. This arrange- research will be continued on the reactions of fertilizer in ment has made it possible for TVA to postpone proceeding the soil

, on new nitrogen fertilizers of improved quality

, with installation of a second 900,000-kilowatt unit,

and on incorporation of micronutrients in fertilizers. formerly scheduled for use by the winter of 1966-67. The

Work on finding improved methods for the production of magnitude and the locations of additional capacity wet process phosphoric acid will be intensified. Studies

FE

Receipts

Operatir

Opera Distri

1962 actual 1963 estimate 1964 estimale

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Net expense.

2,410

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1962 actual

1963 eslimate

1964 estimate

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will be made to develop materials designed specifically for Valley. Agricultural extension services of the land-grant bulk blending and work will be continued on the develop- colleges give technical guidance to fertilizer demonstration ment of various fertilizer coating materials and coating and introduction activities in the participating States. techniques.

Capital outlay costs for chemical facilities are estimated

at $8,395 thousand in 1964. Most of this is for continuaFERTILIZER PRODUCTION AND DISTRIBUTION-SUMMARY OF

tion of a rehabilitation program which was started in 1960. ESTIMATED OPERATING COSTS

Facilities to be completed in 1964 include granular com(In thousands of dollars)

bination fertilizer facilities which will be used to produce

mmonium polyphosphate and nitric phosphate fertilizers;
Receipts..--
16,300 17,534 16,977 an addition to the Chemical Engineering Building at

Wilson Dam, Ala.; a nitric acid unit; and nitrogen products
Operating costs:
Operating expense.
18,211 19,336 19,060

storage facilities. During 1964 work will be continued on Distribution of administrative and

modernization of TVA's phosphate facilities, including general expense.

443
475

510 the replacement of equipment for preparing phosphate ore

and related materials for charging electric phosphorus
Total operating costs, funded:
Appropriated funds.

2,005

furnaces and replacement of facilities for recovering
Nonpower proceeds.
18,654 19,811 17,565 fluorine emitted by the calcium metaphosphate fertilizer

production unit. Plans for 1964 also include beginning
Total.
18,654 19,811 19,570

construction of a fully automatic water supply system to Provision for depreciation..

1,012 1,330

1,549

replace the present water supply facilities at Wilson Dam,
Total operating costs.-
19,666 21,141 21,119

Ala.

3. Cooperative valley development program.-The overall 3,366 3,607

4,142

development of the Tennessee Valley area in cooperation (b) Fertilizer production and distribution has these ob

with State and local agencies and with tributary area jectives: to demonstrate the technical and commercial

associations constitutes an important part of TVA's feasibility of new or improved processes, thereby en

program for the proper use, conservation, and developcouraging their adoption by industry; to supply materials

ment of the region's natural resources. Investigations for test demonstration on practical farms and for wide- identify current problems and opportunities for developspread educational introduction among farmers; and to

ment under conditions of optimum use. Research helps supply munitions materials or render other services for develop and test corrective measures. Cooperative projnational defense. New or improved fertilizers are sold

ects with State and local groups apply these measures to to farmers for educational purposes through industry and

regional and special problems. cooperative distributors.

COOPERATIVE VALLEY DEVELOPMENT-SUMMARY OF ESTIMATED

OPERATING COSTS FERTILIZER TESTS AND DEMONSTRATIONS---SUMMARY OF

[In thousands of dollars!

Net expense...

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ESTIMATED OPERATING COSTS

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1962 actual

745

1963 estimate

637

1964 estimale

732

gen

Net expense...

Receipts..

Operating costs:
Operating expenses.

1,530 2,492 3, 206 Operating costs:

Distribution of administrative and Operating expense

2,283 2,386

2,476
eral expense..

82
105

145
Distribution of administrative and
general expense.

42
52
58

Total operating costs, funded:
Appropriated funds.

1,551 2,240 2,865 Total operating costs, funded:

Nonpower proceeds.

61
357

486
Appropriated funds..

1,517 1,801 1,802
Nonpower proceeds.

808
637
732

1.612 2,597 3,351
Provision for depreciation....

7
8

9
Total...

2,325 2,438 2,534 Provision for depreciation

19
20
25
Total operating costs.

1,619 2.605 3,360
Total operating costs.-
2,344 2,458 2,559

1,550 2,247 2,873 1,599 1,821 1,827 Cooperative valley development activities are of three

types: tributary area development, forestry projects, (c) Fertilizer tests and demonstrations include laboratory and mineral resources investigations. and field plot tests to determine under controlled condi- Tributary area development includes TVA activities tions the relative efficiency of materials; studies and in subareas of the valley where special attention is being demonstrations aimed at developing more efficient and given to economic development. These are areas where economical ways of distributing and applying fertilizers; local problems inhibit economic growth, where opporand farm test demonstrations of fertilizer use. tunities exist for substantially greater development of major objectives of farm test demonstrations are to in the resource base, and where local organizations, with troduce experimental fertilizers to farmers throughout their State and local governments, are working with TVA the Nation and to improve the agriculture, forestry, and to find and apply methods for alleviating these problems. watershed-streamflow relationships of the Tennessee | The basic approach is the development of local organiza

Net

expense..

1963 eslim ale

1964 estimate

TENNESSEE VALLEY AUTHORITY-Continued

GENERAL SERVICE ACTIVITIES-SUMMARY OF ESTIMATED

OPERATING COSTS Public enterprise funds-Continued

lln thousands of dollarsi TENNESSEE VALLEY AUTHORITY FUND-Continued

1962 actual tions, the inventory of area resources by local resource

Receipts:
Reimbursements.

5,135 10,897

8,437 work groups with TVA and State technical assistance, Other ---

35
34

19
the selection of the most desirable alternatives for re-
source development, and the cooperative application of

Total receipts.

5,170 10,931 8,456 improvement measures. During 1964, TVA will take

Operating costs: part in cooperative tributary area development work in at

Appropriated funds: Bridge mainteleast 11 tributary areas where local development or- nance (23 U.S.C., sec. 320).

5

9

30 ganizations exist or are being formed. Research on the Nonpower proceeds:Reimbursablesery

ices.

5,135 10.897 8,437 effects of changes in land use on the quality and behavior of water in the streams will be continued to provide data Total operating costs, funded.... 5,140 10,906 8,467 useful in the balanced solution of tributary area develop

Net income or expense

30 ment problems.

25 -11 Capital outlay costs for 1964 include $3,163 thousand for work in tributary areas. Of this, $2,587 thousand is The 1964 estimate of $8,437 thousand for reimbursable for continuation of construction of a multipurpose water services includes $3,504 thousand for services for the control system started in 1963 in the Beech River water- Department of Defense in connection with the rehabilitashed. This represents a new approach to solutions of tion and operation of the Muscle Shoals phosphate develwater control problems in small tributary watersheds by

opment works; $2,672 thousand for services for the conjoint participation by the Federal Government and State

struction and operation of an experimental gas-cooled and local agencies. The estimated total cost of the planned water control facilities is $6 million. From the

reactor for the Atomic Energy Commission; $809 thousand cash benefits generated by the system, local agencies will

for mapping services for the Department of the Army repay $2 million with interest.

and other agencies; $109 thousand for completing conForestry projects aid the States, counties, landowners, struction of a bridge over Pickwick Dam, for which reimand the timber industry in developing full production and bursement is to be received from the Public Roads Adminuse of the valley's forest resource consistent with the needs istration and the State of Tennessee; and $223 thousand of watershed protection. Forestry projects include re- for technical assistance to power distributors. The balsearch and demonstrations in forest management and forest damage prevention, reforestation, wood utilization,

ance is for loans of personnel and services to other agencies

and miscellaneous recoveries of TVA expenditures. and forest fertilizer tests. Mineral resources investigations will continue in 1964 in

Capital outlay costs are estimated at $3,167 thousand cooperation with State agencies. Major emphasis is on

for general facilities in 1964. This covers additions and mapping mineral occurrences and supplying information replacements of office, transportation, and electronic comon Valley mineral resources upon request.

puting equipment and facilities used jointly in conducting 4. General service activities. Operating costs for this all TVA programs. The 1964 estimate includes $2 million program cover primarily reimbursable services furnished for replacement of the electronic computer with one of at the request and expense of other agencies.

greater speed and capacity.
CAPITAL OUTLAY
lin thousands of dollars)

Estimate to complete

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Financed from power proceeds and bonds:
1. Navigation, flood control, and power program:

Multipurpose dam: Melton Hill dam and reservoir...
Power supply facilities:

Widows Creek Steam Plant unit 8.
Colbert Steam Plant unit 5.
Paradise Steam Plant units 1-2.
Bull Run Steam Plant unit 1.
Additional steam unit...
Wilson hydro units 19-21.

Wheeler hydro units 9-11.
Transmission system facilities.
Coal land and rights..
Additions and improvements at existing power facilities
Investigations for future facilities...

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Total financed from power proceeds and bonds..

108,655 134.296 138,931

F Ac

174,954 134.351 136,915

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Deduct
income
1962.
1963,
1964

Funds required to complete

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Total To June 30,

estimate 1961 (net)
Financed from appropriations and nonpower proceeds:
1. Navigation, flood control, and power program:

Multipurpose dam: Melton Hill dam and reservoir.... 17,600 5,286
Navigation facilities:
New locks:
Hales Bar Dam..

22,000
Guntersville Dam..

16,500 21 Wheeler Dam..

6,500 3,704 Wilson Dam...

38, 225 37,716
Rehabilitation of original lock at Wheeler Dam....

6,799 727
Additions and improvements at existing navigation facilities.
Flood control facilities..
Additions and improvements at existing multiple-use facilities.

Investigations for future facilities.
2. Fertilizer, agricultural, and munitions program: Chemical facilities.
3. Cooperative valley development program:
Beech River multipurpose water control system.

6,000
Investigations for future facilities..
4. General service activities: General facilities.

60 76

355

60 7,968

230 5,714 169

10 679

73 2,602

358
834

32
1,357

229 8.894

182 1,050 1,640

261 6,895

60 7,916 1,195 5,917 169

10 753

80 2,574

2,440 5,215 1,190

408 834

32 1,373

229 8,435

182 1,050 1,640

261 8,395

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In thousands of dollars)

1962 actual 1963 estimale
Operations:
1. Navigation, flood control, and power

program:
Navigation operations-

4,056 2,166
Flood control operations.

1,937 2,162 Topographic mapping

143

97 2. Fertilizer, agricultural, and munitions program.-

3,654 4,137 3. Cooperative valley development program.

1,551 2,240 4. General service activities.

5

9

2,243
2,212

100

6,299

2,865

30

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Operating results and financial condition.-Retained earnings from power operations at the end of 1964 are estimated at $637,148 thousand. Net income from power operations in 1964 is estimated at $58,345 thousand. The accumulated net expense of nonpower programs at the end of 1964 is estimated at $282,629 thousand, of which $19,376 thousand is from 1964 operations. Only the power program is intended to be self-supporting; the net expense of nonpower programs is covered largely by appropriations from the Treasury. Payments to the Treasury in 1964 are estimated at $48.2 million-$38.2 million as a dividend (return on the appropriation investment in the power program) and $10 million as a reduction in the appropriation investment in the power program.

Total assets are estimated at $2,591,805 thousand at the end of 1964 as compared with an estimate of $2,488,483 thousand at the end of 1963-an increase of $103,322 thousand during 1964. The increase is mainly in fixed assets, reflecting expenditures for construction of facilities; $76,418 thousand of the increase in assets is in the power program and $26,904 thousand is in nonpower programs. The estimate of current liabilities of $67,174 thousand at June 30, 1964, is $3,269 thousand greater than the estimate of $63,905 thousand at June 30, 1963. The increase reflects liabilities mainly related to construction. Borrowings from the public for the power program are expected to increase by $50 million during 1964—from an estimate of $145 million at June 30, 1963, to an estimate of $195 million at June 30, 1964. The estimated total Government equity of $2,329,020 thousand at June 30,

Capital outlay:
1. Navigation, food control, and power

program:
Multipurpose dam: Melton Hill
Dam and Reservoir -

8,315
Navigation facilities:

New lock at Hales Bar Dam....
New lock at Guntersville Dam.. 60
New lock at Wheeler Dam... 7,968
New lock at Wilson Dam...
Rehabilitation of original lock at
Wheeler Dam..

5,714
Additions and improvements at

existing navigation facilities.. Flood control facilities...Additions and improvements at

existing multiple-use facilities... 730

Investigations for future facilities. 73 2. Fertilizer, agricultural, and muni.

tions program: Chemical facilities. 3,158 3. Cooperative valley development pro

gram:
Beech River multipurpose water

control system....
Investigations for future facilities. 98

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