I concur in the recommendation of the Bureau of the Budget. Mr. BALDWIN. That comment of the Secretary of the Army is not included in the sheet the Corps of Engineers has submitted to us on this project. Colonel PINNELL. I don't know that the Secretary-and I would suppose you would have to address the question to the Secretary, sir-but I don't know that the Secretary would disagree with the Bureau of the Budget. Mr. BALDWIN. Mr. Chairman, I ask unanimous consent the letter of the Secretary of the Army from which the colonel has quoted be inserted in the record at this point. Mr. JONES. Without objection, it is so ordered. The members should take note of the letter of the Secretary concurring with the Bureau of the Budget. This type of arrangement seems to me wholly unsatisfactory. (The letter referred to follows:) Hon. JOHN W. MCCORMACK. Speaker of the House of Representatives. JULY 12, 1965. DEAR MR. SPEAKER: I am transmitting herewith a favorable report dated June 11, 1965, from the Acting Chief of Engineers. Department of the Army, together with accompanying papers and illustrations, on the Cheat River, Rowlesburg Dam and Reservoir, W. Va., in response to resolutions of the Committees on Public Works, U.S. Senate and House of Representatives, adopted April 30, 1958, and June 3, 1959. The views of the Governor of West Virginia, the Departments of the Interior, Agriculture, Commerce, and Health, Education, and Welfare, the Public Health Service, and the Federal Power Commission are set forth in the enclosed communications, together with pertinent replies of the Chief of Engineers. In commenting on the report, the Bureau of the Budget recommends that the hydroelectric power features described in the project report not be authorized for Federal construction at this time. Further consideration of Federal development should be deferred pending completion of action on the application by the Federal Power Commission. Should the Commission act favorably, it would be expected that the power company would undertake the power development within a reasonable period of time. Should the Commission act unfavorably on the application or should the power company fail to undertake the power development within a reasonable period of time, consideration could then be given to whether the power features should be authorized for Federal development. I concur in the recommendation of the Bureau of the Budget. The Bureau of the Budget advises that, subject to consideration of the above recommendation, there would be no objection to the submission of the proposed report to the Congress. However, it states that no commitment can be made at this time as to when any estimate of appropriation would be submitted for construction of the project, if authorized by the Congress, since this would be governed by the President's budgetary objectives as determined by the then prevailing fiscal situation. A copy of the letter from the Bureau of the Budget is enclosed. Sincerely yours, Mr. JOHNSON. Mr. Chairman. STANLEY R. RESOR, Mr. JOHNSON. Colonel, where do they figure to get the power for the pump-storage part of the project? Colonel PINNELL. The energy to pump the water up to the pumpstorage reservoir would be obtained during off peak time from local power sources. The power system in the area is adequate to provide sufficient off peak power to pump the water up to the reservoir. Mr. JOHNSON. That power would come from private power companies operating in the area? Colonel PINNELL. Yes, sir. Mr. JOHNSON. Wouldn't it be necessary to build some of this pumpstorage project into the dam when you construct the dam? Colonel PINNELL. No, sir. This system works as follows: The dam itself, you will note, is completely separate from the powerhouse and the pump-storage reservoir. They are separated by a considerable distance. During offpeak periods electric energy would be used to pump water up to the storage reservoir, and then in peak periods, or peak demand periods for electric energy, the water would be released to the powerhouse generating electricity to satisfy demands in the system. Mr. JOHNSON. I understand that, but I understood you to say there was a part of the pump-storage facility that would be constructed at the time the dam was constructed, amounting to $1,500,000. Colonel PINNELL. It is the intake tunnel and the control tower, sir. These are the only two items which would be additional to the normal dam construction. Mr. JOHNSON. I presume the Corps of Engineers have studied the power potential on this project. Colonel PINNELL. Yes, sir. Mr. JOHNSON. Was it your recommendation the power facilities should be built? Colonel PINNELL. Yes, sir, by Federal or non-Federal interests. We think the power should be provided to optimize the benefits from this water resource. Mr. JOHNSON. In authorizing this project we would be encouraging the Federal Power Commission to make a decision on it? Colonel PINNELL. I don't know how to encourage them, sir. They are an independent agency in that respect. They have an application pending. Mr. JOHNSON. This project does have power potential in it, and in your recommendations you recommend it be a multiple-purpose project in order to provide the power facility. I should think you would want this issue settled. Colonel PINNELL. Yes, sir, we would like it settled, and we would like a decision. We have not taken a position, that is, the Chief of Engineers has not taken a position that the development of the power should be either Federal or non-Federal. Neither specifically. The Chief's position was that the power potential should be exploited. Mr. JOHNSON. Is there opposition to the Federal Power Commission permit? Colonel PINNELL. The Department of the Interior, in its letter to the Chief of Engineers, dated May 3, 1965, states: This Department has requested that the Federal Power Commission dismiss or defer meaning the application until the Congress has had an opportunity to act upon your proposal. So this action has not been taken. Of course, the Federal Power Commission is still considering the application which is pending. I know of no other opposition. Mr. JONES. What you are saying is the Federal Power Commission is making no decision, the corps is not going to make any decision, and nobody else is going to make any decision except what we do. Is that right? Colonel PINNELL. I think you might draw that conclusion. Mr. JONES. Mr. Gray. Mr. GRAY. Colonel, in computing the benefit-cost ratio on this project have you taken into consideration the ARA benefits, the redevelopment benefits being derived in this region? Colonel PINNELL. We have. Mr. GRAY. Is that part of the 2-to-1 benefit-cost ratio? Colonel PINNELL. No, sir; this is without the ARA benefits. We have calculated it with ARA benefits and it is 2.5 to 1. Mr. GRAY. About four points for the ARA benefit? Colonel PINNELL. Yes, sir; in this case. Mr. GRAY. That is all. Mr. CLAUSEN. Just one question, Mr. Chairman. Mr. JONES. Mr. Clausen. Mr. CLAUSEN. If I understand the project correctly, in effect you really have two projects here, do you not? You have two dams in the construction of this project. Is that correct? Colonel PINNELL. No, sir. We have one dam, which is for the Rowlesburg Dam. The upper reservoir does not have a dam in the normal sense. It is a depression or basins, and there is some work required to contain the pool but, generally speaking, not a dam in the usual terms. Mr. CLAUSEN. I see on the map itself "dam" three times as far as the system, according to the drawing you have on the board. sir. Colonel PINNELL. These are more like levees than they are dams, Mr. CLAUSEN. I see "d-a-m" spelled three times there. Colonel PINNELL. They are called embankment-type structures. I concede they are dams, sir. Mr. CLAUSEN. I was concerned about the same question Mr. Johnson raised a moment ago on the fact this project can go forward with or without the power facilities to which the Bureau of the Budget has objected at the moment. Colonel PINNELL. Yes, sir. Mr. CLAUSEN. Thank you. Mr. JONES. Mr. James T. Dailey, Jr., of Kingwood, W. Va. We are pleased to have your statement. STATEMENT OF JAMES T. DAILEY, JR., KINGWOOD, W. VA. Mr. DAILEY. Thank you, Mr. Chairman. Mr. JONES. Do you have a prepared statement? Mr. DAILEY. I do not, Mr. Chairman. I would like to speak very briefly. Mr. Chairman, Mr. Kee, and other members of the subcommittee, my name is James T. Dailey, Jr. I am a resident of Kingwood, W. Va., and I speak on behalf of a delegation, including the State senator from this district, Mr. Wolf, Mr. Rideneour of the AFL-CIO, and other persons who are here in favor of this project. 52-529-65-pt. 1-27 I would like to say to the committee generally the area involved is the Cheat River. This is the only major stream between the beginning of the Monongahela River at Fairmont, W. Va., and McKeesport, Pa. Either directly or indirectly the Cheat River is responsible for in excess of 50 days of nonuse of the Monongahela River for river transportation, either by virtue of high water or low water. The Cheat is a pure water stream, and its development for water resources would, of course, be very beneficial to the users of Monongahela River. Mr. JONES. What is your position and that of those you are representing here this morning on the development of the hydroelectric power? Mr. DAILEY. I am in favor of the hydroelectric power. I speak on behalf also of the Preston Public Service Corp. This is an independent electric generating distribution company located in Preston and Monongahela Counties, W. Va., serving approximately 2,200 residential customers. Mr. JONES. Do you advocate the Federal Government construct the facilities or that the Federal Power Commission issue a license? Mr. DAILEY. We advocate that they be constructed and that this power be open for use by this particular company I speak of. It makes no difference to the owners of this company whether it be federally developed or under license to the Federal Power Commission, but we hope it will be developed. It is needed. Mr. JONES. You are not answering the question. You are like the Corps of Engineers: you say you want it built but don't say whether you want the Federal Government to do it or the Appalachia Power Co., or who. That is what we want to know. Mr. DAILEY. I want the Federal Government to do it if that is necessary to make this power publicly available to the distributing company that I speak of. Mr. JONES. They have to give the preference customers first lick at it. Mr. DAILEY. I feel it would make no particular difference as long as it is built. I think it is a matter of choice, but I think the hydroelectric development is needed. I think the river is of such a size it will very definitely benefit the area. Mr. BALDWIN. May I ask a question? Mr. JONES. Sure. Mr. BALDWIN. As you know, there is a pending application before the Federal Power Commission. Would you not consider it rather strange for this committee to take an action to authorize the expenditure of Federal taxpayers' funds for the construction of power facilities when there is an application pending before the Federal Power Commission that has not yet been ruled upon by the Federal Power Commission? Mr. DAILEY. In answer, I feel if it can be constructed without the taxpayers paying the cost it should be done, as long as the power is publicly available to the electric companies in the area other than the Monongahela Power Co. system. And I feel it would be. I speak quite frankly. There will be an application filed with the Federal Power Commission on behalf of the company I speak for for use of this power, whoever would generate it. Gentlemen, I would like further to add this concerning the particular area involved: there is no mineral of any kind such as coal, oil, and gas or anything that would be destroyed by the lands which would be inundated through this reservoir. The timber has been cut in this valley in recent years, and in terms of land acquisition cost it should be a most favorable situation. Secondly, in terms of the tax structure, both Preston and Tucker Counties, the land involved is of a low classification and valuation. both. It is all practically class 2 property, and the tax yield from this is not great nor, do I believe, essential for the continuance of government functions of either county. I feel the gain to be derived from the recreational buildings, cottages, and the like of that, that would follow this would far outweigh in benefits as against the land or any possible tax loss. Generally speaking, we feel this project, the people are in favor of it. Of course, I would be less than frank if I would state this is entirely unanimous. There are persons who do oppose it. But being personally a landowner in this valley and in Tucker County as well, I can safely say the overwhelming majority of the people believe this is a most beneficial and worthy project. Of course, it being located where it is in terms of this Washington area, in terms of Pittsburgh, the recreational dollars would be great. us. Mr. BALDWIN. I have one other question, Mr. Chairman. Mr. JONES. Yes. Mr. BALDWIN. We have three different recommendations now before We have a Corps of Engineers recommendation that we go ahead and authorize the entire project with hydroelectric power. We have a Bureau of the Budget recommendation that we authorize only the project without any hydroelectric power. And we have a half-way in between proposal of the Senate which says we would authorize the project in two stages: First, construction of that portion of the project that does not involve hydroelectric power, to allow the Federal Power Commission to make a ruling, and then depending upon the nature of the ruling of the Federal Power Commission, if the Federal Power Commission approves the application pending before it, then we do not authorize the use of Federal funds for the hydroelectric facility. But if the Federal Power Commission rules adversely on the application pending before it, then we authorize automatically the Federal construction of the power facilities. Which of these three diverse recommendations do you support? Mr. BALDWIN. Just a moment ago you indicated you were in favor of Federal construction regardless, without waiting for the decision of the Federal Power Commission. Mr. DAILEY. I believe, Mr. Baldwin, I stated I was in favor of availability of this power publicly for other customers. We believe, if this project is authorized, that the Federal Power Commission, which has moved into the regulation of this type of rates and sale, will act favorably upon the application which I speak of. It is the availability of power of which I am in favor. As far as the particular interest of the Preston Public Service Corp. of which I speak, I am sure they will be protected by the Federal Power Commission and |