Of the $83,295 thousand estimate for power supply facilities, $81,715 thousand is for continuing construction of four steam generating units at Paradise, Widows Creek, and Bull Run projects; completion of a steam generating unit at the Colbert project; and completion of five hydroelectric units at Wheeler and Melton Hill Dams. Paradise units 1-2, Widows Creek unit 8, and Bull Run unit 1 are scheduled for commercial operation in May and October 1963, October 1964, and November 1965, respectively. The Colbert unit is to be placed in service in March 1963. All hydro units at Wheeler Dam are scheduled for operation by the end of June 1963; those at Melton Hill are expected to enter service in July and September 1963. Completion of these units on schedule will bring the estimated dependable capacity of the system by the winter of 1964-65 to 15.7 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 18.4% over estimated demands of 13.2 million kilowatts 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 extremely dry periods. It is estimated that by the winter of 1965-66 the system dependable capacity will be 16.6 million kilowatts, leaving a 16.0% reserve over estimated demands of 14.3 million kilowatts. TVA and the Mississippi Power and Light Company and the companies associated with it have completed an agreement to provide for the seasonal exchange of large blocks of capacity which results in savings in installed capacity needs by each system. This arrangement has made it possible for TVA to postpone proceeding with installation of a second 900,000-kilowatt unit, formerly scheduled for use by the winter of 1966-67. The magnitude and the locations of additional capacity needed after the winter of 1966-67 have not yet been determined. During the coming year TVA will make studies of the location and installation schedule of the second 900,000-kilowatt (or 1,100,000-kilowatt) unit on order; the 1964 budget includes $1,580 thousand for preconstruction costs on this unit. Estimated capital outlay costs in 1964 include $2,119 thousand for completing construction of Melton Hill Dam and Reservoir. Costs allocable to the power program are being financed from power proceeds and costs allocable. to other programs are being financed from appropriations. (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, vector control, plant protection and services to visitors, and operation of reservoir lands. Operating costs, funded, are estimated at $6,134 thousand for 1964, of which $1,724 thousand is allocated to navigation operations, $1,738 thousand to flood control operations, and $2,321 thousand to power operations. The remaining $351 thousand shown here is offset by nonpower proceeds derived principally from operation of reservoir lands. (e) Topographic maps of the Tennessee Valley are vital to planning, construction, and operation needs of many private organizations and public agencies, including TVA. In order to be of practical utility, the maps, now completed for the entire Tennessee Valley, must be revised periodically. The estimate for 1964 includes $100 thousand for work on those quadrangles which most urgently need revision. 2. Fertilizer, agricultural, and munitions program.— Chemical facilities at Wilson Dam, Ala., are operated as a national fertilizer development center, but by statute, they must likewise be available for munitions purposes and are an important segment of the national defense program. RESEARCH ON FERTILIZER PRODUCTS AND PROCESSES-SUMMARY OF ESTIMATED OPERATING COSTS (a) Research on fertilizer products and processes consists of fundamental research, applied research and process engineering, and technical studies of full-scale plant operations. TVA works cooperatively with the Depart ment of Agriculture and with industry to avoid duplication. Research results on technological developments and new and improved processes are made available to industry. Knowledge gained in fertilizer research is valuable also in the related field of munitions. In 1964 research will be continued on the reactions of fertilizer in the soil, on new nitrogen fertilizers of improved quality, and on incorporation of micronutrients in fertilizers. Work on finding improved methods for the production of wet process phosphoric acid will be intensified. Studies will be made to develop materials designed specifically for bulk blending and work will be continued on the development of various fertilizer coating materials and coating techniques. 3,366 3,607 2,005 4,142 Valley. Agricultural extension services of the land-grant colleges give technical guidance to fertilizer demonstration and introduction activities in the participating States. Capital outlay costs for chemical facilities are estimated at $8,395 thousand in 1964. Most of this is for continuation of a rehabilitation program which was started in 1960. Facilities to be completed in 1964 include granular combination fertilizer facilities which will be used to produce ammonium polyphosphate and nitric phosphate fertilizers; an addition to the Chemical Engineering Building at Wilson Dam, Ala.; a nitric acid unit; and nitrogen products storage facilities. During 1964 work will be continued on modernization of TVA's phosphate facilities, including the replacement of equipment for preparing phosphate ore and related materials for charging electric phosphorus furnaces and replacement of facilities for recovering fluorine emitted by the calcium metaphosphate fertilizer production unit. Plans for 1964 also include beginning construction of a fully automatic water supply system to replace the present water supply facilities at Wilson Dam, Ala. 3. Cooperative valley development program.-The overall development of the Tennessee Valley area in cooperation with State and local agencies and with tributary area associations constitutes an important part of TVA's program for the proper use, conservation, and development of the region's natural resources. Investigations ment under conditions of optimum use. Research helps develop and test corrective measures. Cooperative projects with State and local groups apply these measures to regional and special problems. Net expense..... (b) Fertilizer production and distribution has these objectives: to demonstrate the technical and commercial feasibility of new or improved processes, thereby encouraging their adoption by industry; to supply materials for test demonstration on practical farms and for wide-identify current problems and opportunities for developspread educational introduction among farmers; and to supply munitions materials or render other services for national defense. New or improved fertilizers are sold to farmers for educational purposes through industry and cooperative distributors. FERTILIZER TESTS AND DEMONSTRATIONS SUMMARY OF COOPERATIVE VALLEY DEVELOPMENT-SUMMARY OF ESTIMATED [In thousands of dollars] 69 1963 estimate 1964 estimate Receipts.. 1962 actual 1963 estimate 2,476 Distribution of administrative and gen- Distribution of administrative and general expense.. Total operating costs, funded: Nonpower proceeds.. 61 Appropriated funds .... Nonpower proceeds. Provision for depreciation......... 7 Net expense...- Cooperative valley development activities are of three types: tributary area development, forestry projects, and mineral resources investigations. Tributary area development includes TVA activities in subareas of the valley where special attention is being given to economic development. These are areas where local problems inhibit economic growth, where opportunities exist for substantially greater development of the resource base, and where local organizations, with their State and local governments, are working with TVA to find and apply methods for alleviating these problems. The basic approach is the development of local organiza TENNESSEE VALLEY AUTHORITY-Continued Public enterprise funds—Continued TENNESSEE VALLEY AUTHORITY FUND-Continued tions, the inventory of area resources by local resource work groups with TVA and State technical assistance, the selection of the most desirable alternatives for resource development, and the cooperative application of improvement measures. During 1964, TVA will take part in cooperative tributary area development work in at least 11 tributary areas where local development organizations exist or are being formed. Research on the effects of changes in land use on the quality and behavior of water in the streams will be continued to provide data useful in the balanced solution of tributary area development problems. Capital outlay costs for 1964 include $3,163 thousand for work in tributary areas. Of this, $2,587 thousand is for continuation of construction of a multipurpose water control system started in 1963 in the Beech River watershed. This represents a new approach to solutions of water control problems in small tributary watersheds by joint participation by the Federal Government and State and local agencies. The estimated total cost of the planned water control facilities is $6 million. From the cash benefits generated by the system, local agencies will repay $2 million with interest. Forestry projects aid the States, counties, landowners, and the timber industry in developing full production and use of the valley's forest resource consistent with the needs of watershed protection. Forestry projects include research and demonstrations in forest management and forest damage prevention, reforestation, wood utilization, and forest fertilizer tests. Mineral resources investigations will continue in 1964 in cooperation with State agencies. Major emphasis is on mapping mineral occurrences and supplying information on Valley mineral resources upon request. 4. General service activities.-Operating costs for this program cover primarily reimbursable services furnished at the request and expense of other agencies. The 1964 estimate of $8,437 thousand for reimbursable services includes $3,504 thousand for services for the Department of Defense in connection with the rehabilitation and operation of the Muscle Shoals phosphate development works; $2,672 thousand for services for the construction and operation of an experimental gas-cooled reactor for the Atomic Energy Commission; $809 thousand for mapping services for the Department of the Army and other agencies; $109 thousand for completing construction of a bridge over Pickwick Dam, for which reimbursement is to be received from the Public Roads Administration and the State of Tennessee; and $223 thousand for technical assistance to power distributors. The baland miscellaneous recoveries of TVA expenditures. ance is for loans of personnel and services to other agencies Capital outlay costs are estimated at $3,167 thousand for general facilities in 1964. This covers additions and replacements of office, transportation, and electronic computing equipment and facilities used jointly in conducting all TVA programs. The 1964 estimate includes $2 million for replacement of the electronic computer with one of greater speed and capacity. 1. Navigation, flood control, and power A 1962 actual 1963 estimate 1964 estimate 25,689 25,816 30,535 APPLICATION OF APPROPRIATIONS-Continued Capital outlay-Continued [In thousands of dollars] 1962 actual 1963 estimate 1964 estimale 4. General service activities: General facilities Total capital outlay. Total appropriation. 741 1,154 3,167 26,857 24,260 30.535 38,203 35,071 44,284 Unobligated balance brought forward.. Unobligated balance carried forward (-) -1,556 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, Dam and Reservoir.... 8,315 1,855 2,160 Navigation facilities: New lock at Hales Bar Dam.... 3,050 New lock at Guntersville Dam.. 60 2,640 8,700 7,968 4,621 355 5,714 358 834 Flood control facilities.. 182 1,050 Additions and improvements at existing multiple-use facilities... Investigations for future facilities. 2. Fertilizer, agricultural, and munitions program: Chemical facilities. 3,158 8,338 3. Cooperative valley development pro |