This is, of course, also the customary practice of the electric utility industry. Load growth must be forecast and provided for in advance; it is too late to make such provisions after the load already exists.

"We have been assured by the Federal Power Commission's regional offices that the 10-percent load factor power from Devils Jumps will be usable in power supply areas 12 and 19 by 1975.

"6. Question. The objection was made that the Devils Jumps plant will be in use only 10 percent of the time. Is it correct that the operation of the plant will be so limited? If so, what are the reasons? Was this use taken into consideration in analyzing the justification for the project? Does it represent an effective and economic operation?

"Answer. It is correct that the plant will be operated on an average of about 10 percent of the time. This represents the highest and best use to which the power resource can be put, and also the most effective way in which the hydroplant can be combined with thermal power to meet power needs. Hydroplants are ideally adapted to off-and-on operation, and for this reason are used extensively to meet the peak demands for power such as those that occur near dawn and dusk. A hydroplant can be started up and stopped with a minimum of difficulty. Once a hydroplant is shut down no water is used, and energy is not wasted. A thermal plant is not as well adapted to an off-and-on type of use. When the thermal plant is shut down the boilers are still hot and in operating condition, and the fires must be banked or allowed to cool with a consequent loss of energy. Then when a thermal plant is placed in operation after being shut down for a period of time, the boilers must be fired and the units made ready for operation in advance. Another factor in favor of using hydro for peaking use is that the alternate heating and cooling of materials used in modern high-speed, high-temperature thermogenerating units is not desirable from the standpoint of maintenance.

"7. Question. Are there other situations where limited use of a plant, either private or public, is made for peaking purposes?

"Answer. Yes; there are many instances where this is done. In fact, it is generally recognized as the most effective method of using hydroelectric facilities except when the available and developed hydroelectric energy exceeds power demands, in which latter circumstances hydro is used on the base of the load. As specific examples, the Laurel, Hartwell, Beaver, and Broken Bow projects of the Corps of Engineers are planned for operation at load factors between 10 and 20 percent. The Carters project of the corps will operate at load factor of 8 percent. It has been reported that the Cowans Ford plant of the Duke Power Co, in North Carolina has been designed to operate ultimately at an average load factor of only 4.5 percent.

Lieutenant Colonel PINNELL. The questions raised revolved around the justification for the project and the feasibility of marketing the power. I can summarize very briefly these questions and our responses thereto.

Concerning the question as to the validity of the benefit-to-cost ratio considering current data, we have reanalyzed the project and conclude that it still has a favorable benefit-to-cost ratio which is, as a matter of fact, 1.8 to 1.

(Subsequently the following memorandum was submitted :)

"The benefits presently estimated at $10,445,700 for power and $450,000 for recreation, a total of $10,895,700 annual benefits compared with costs of $6,190,000 for interest and amortization of the investment costs, operation, and maintenance of the project. Area redevelopment benefits based on increased employment in a distressed area, not included in the above benefit-to-cost ratio, are estimated at $847,000 annually, making total benefits of $11,742,700."

Lieutenant Colonel PINNELL. We were asked if we knew of any plans for development of this hydroelectric potential by private interests and our response is that we know of no active proposals currently or at any time since we started developing the Cumberland River Basin.

Objections were made to this project on the grounds that the power produced could not be marketed at a rate which would repay the investment. We have reexamined this point and have received from the Southeastern Power Administration confirmation of their earlier views that the project cost could be amortized.

It was alleged that this project was unjustified because of the limited use of the plant since the power would be used for peaking purposes. We know that there are many places where peaking use is a most efficient use of hydroelectric potential. As specific examples of the peaking use of hydroelectric power, the Laurel. Hartwell, Beaver, and Broken Bow projects of the Corps of Engineers

are planned for operation at load factors between 10 and 20 percent. The Carters project of the corps will operate at a load factor of 8 percent. We understand that the Cowan Ford plant of the Duke Power Co. in North Carolina has been designed to operate ultimately at an average load factor of 4.5 percent. Therefore, this project at Devils Jumps which contemplates a 10-percent load factor is not unique or unusual.

I think this summarizes the material that I have presented for the record, sir.

These statements provide the latest information developed by the Corps of Enginers, and reviewed by other agencies of the Government.

I also ask that the committee include in its record of hearings the statement I presented to this subcommittee in 1963. It provides information concerning the long study which led to the approval of Devils Jumps by the Corps of Engineers, and every interested agency of the Government, and it is still applicable. During the hearings in 1963, objection was made to the Devils Jumps project on several grounds. The cost-benefit ratio was questioned. Also questioned were the cost and economic efficiency compared to any available alternative, public or private; the interest rates and tax-free status as related to cost of any public and private alternative; the marketing of the power; and the use of the installation for peaking purposes.

The Corps of Engineers, in its statement of April 21, 1965, answered all of these questions specifically, and, I submit, satisfactorily.

I would like to say again to the subcommittee that the Devils Jumps project was approved by the Corps of Engineers and by every interested agency of the Federal Government after thorough study. It has been approved by three administrations-those of President Eisenhower, President Kennedy, and President Johnson. It has the approval of the States of Kentucky and Tennessee and, I believe, of the majority, if not all, of the members of the Kentucky and Tennessee congresional delegations. I urge the committee to approve the Devils Jumps project.

(The statement referred to follows:)

STATEMENT OF SENATOR JOHN SHERMAN COOPER BEFORE THE SUBCOMMITTEE ON FLOOD CONTROL OF THE PUBLIC WORKS COMMITTEE OF THE HOUSE OF REPRESENTATIVES, FEBRUARY 27, 1963

I thank you for giving me the opportunity to testify before your committee and to support the authorization of Devils Jumps Dam and Reservoir on the Big South Fork of the Cumberland River. The dam would be constructed in Kentucky about 48.1 miles above the confluence of the Big South Fork of the Cumberland at Burnside, Ky. I know the area well, because my home is in the adjoining county of Pulaski, at Somerset, Ky.

As the committee knows, this project was approved in 1962 by the Senate Public Works Committee, of which I am a member, after full hearings had been conducted by the committee. It was then approved by the Senate without any dissenting vote. In conference, members of your committee informed the Senate conferees that they could not approve this project and seven others which had been approved by the Senate, because they desired to conduct full hearings. I appreciate very much the early hearings that your committee is undertaking under the leadership of your chairman, Congressman Davis.

Representatives of the Corps of Engineers will testify concerning their findings. upon which their favorable report to the Congress is based. I think it proper to leave to the Corps of Engineers and other Government agencies which are concerned, the discussion of their findings, which led to the approval of the Devils Jumps project on the basis of criteria fixed by Congress. I would like to reserve the opportunity to file a more detailed statement, but today I will limit my discussion to several points which emphasize the thorough consideration which has been given this project and its wide support.

First, I point out that the Devils Jumps project was given the closest study by the Corps of Engineers at every level for a period of nearly 10 years. After this extensive and thorough examination, the project was approved at every level by the Corps of Engineers, and its authorization and construction has been recommended to the Congress. The corps found that the cost-benefit ratio was 1.2 to 1 over a 50-year amortization period. Today other projects are beirg considered and approved upon cost-benefit ratios based on a 100-year period.

Second, the committee will note from the report compiled by the Secretary of the Army that every agency of the Federal Government to which the report was submitted approved the project or, at minimum, expressed no opposition. It is interesting to note also reports of the agencies embraced the administrations of President Eisenhower and President Kennedy, and that in both administrations, the departments and agencies called upon for reports gave their approval to this project. Under the administration of President Eisenhower, final approval was postponed because the Bureau of the Budget asked in late 1960 for further advice on the marketability of the power to be generated at the Devils Jumps project. In 1961, after futrher studies by the Southeastern Power Administration, Federal Power Commission, it was again determined that the power generated at the Devils Jumps project was marketable. Following this determination, the Bureau of the Budget, as an office of the President of the United States, under the present President, gave its approval to the submission of the favorable report to the Congress. I review, if briefly, these facts to emphasize the careful study and consideration given the Devils Jumps project by the Corps of Engineers and other concerned agencies, and the unanimity of approval of its authorization and construction by two administrations.

This fact is, I believe, the most important matter under the consideration of your committee.

I know that objection has been made, and will be made, that the power from this project is not marketable at a favorable rate. But, I believe that the committee and the Congress can rely on the report of the Corps of Engineers resulting from a study which was carried on over a period of 10 years under criteria fixed by the Congress; the conclusion of the Southeastern Power Administration that the power is marketable at a rate sufficient to repay with interest within 50 years all costs allocated to power; and the statement of the Federal Power Commission that the project is economically feasible even under severe economic criteria.

The third point I make is that this project has been approved, as is required by law, by the States of Tennessee and Kentucky, and is strongly supported by the governments and officials of both States. Only this year the legislative bodies of Tennessee and Kentucky enacted resolutions requesting the authorization and construction of Devils Jumps. Further, I think it important to note that many Members of the congressional delegations of Kentucky and Tennessee are here today, supporting the authorization of this project. Congressman Eugene Siler, of Kentucky, and Congressman Howard Baker, of Tennessee, in whose districts the dam and reservoir would be located, strongly support its authorization.

Again, I believe the committee will note from the resolutions filed that the local governments of the area, and civic bodies, support fully its authorization. At the Senate hearings only two witnesses appeared in opposition to the authorization of Devils Jumps, and it was suggested that the project lacked local support. The resolutions which have been filed with the committee today by the governmental bodies of the area give answer to any suggestion that local governments and people of the area are not wholeheartedly in support of the Devils Jumps project. Living in the area, and knowing its people, I will say on my responsibility that it has the support of the people of the area.

The private utility companies of our State of Kentucky, and perhaps the private companies of other States, oppose the construction of Devils Jumps Dam and Reservoir. At the Senate hearings, representatives of the Kentucky Utilities Co. testified that they considered there was no market for the power and its costs make the project uneconomical. As I have said before, the detailed answer to this contention is one which is within the competence of the Corps of Engineers and agencies of the Government. But I want to emphasize as strongly as I can that the Corps of Engineers, which I know holds the confidence of the Congress because of its objective engineering decisions, and the Southeastern Power Administration, which is charged with this responsibility, and the Federal Power Commission have found the power can be marketed and at a rate sufficient to amortize the cost of the project.

I think it is fair to take into consideration-and I am sure the private utilities would agree with my statement-that it is their general policy to oppose public hydroelectric installations of this type. I also believe the committee has the right to take this fact into consideration, and weigh the statements of the utilities concerning marketability and cost of power against the statements of objective governmental agencies. The Corps of Engineers arrived at its deci

sion after thorough study, over a period of years-one I believe more detailed and more comprehensive than has been given by the private power companies. Mr. W. O. Gilreath and other citizens of the area have testified concerning the favorable effect the construction of this project would have on the economy of the area. I have not dwelt on this factor, important as it is, because I know the committee and the Congress is limited in large degree to the consideration of the criteria which it has prescribed. But considering that the Corps of Engneers and all other concerned departments have agreed that the criteria have been met, and recommend approval of Devils Jumps, I will say that the state ments of Mr. Gilreath and others concerning the economic situation of the area, and the effect of the project, are correct.

I have lived in this area all my life, as has my family for 170 years. I know the people. I am interested in them, and I know that this project would be of great help.

I hope very much that the committee will recommend its authorization.

Mr. EVERETT. Mr. Chairman.

Mr. JONES. Mr. Everett.

Mr. EVERETT. We always are glad to have Senator Cooper with us. He certainly always looks after the interests of the people of Kentucky and this Nation. Thank you.

Senator COOPER. Thank you very much, Congressman Everett.
Mr. JONES. Glad to have you, Mr. Carter.

STATEMENT OF HON. TIM LEE CARTER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KENTUCKY

Mr. CARTER. Mr. Chairman, I want to express my very great ap preciation to you and the members of this committee for granting us a hearing here this morning on a project in which I am and have been, for a long period of time, vitally interested. This, of coure. is the Devils Jumps Reservoir that would be located in McCreary County, Ky., on the South Fork of the Cumberland River.

Realizing the press of time and the tremendous amount of work before this committee, I will make my statement as brief as possible in order to conserve time and to afford our witnesses from the site area an opportunity to present testimony in support of the project. This project was recommended for authorization by the Corps of Engineers some years ago, and it has the support of all Federal and State agencies concerned under the present administration and two previous administrations. It also has the support of our Governor and almost the entire State delegation in Congress. Perhaps one gentleman might not agree.

This project would bring millions of dollars into the southeastern Kentucky region and would do much for that area and the entire Commonwealth of Kentucky. Just recently the Appalachian Regional Commission approved a corridor highway from Chattanooga, Tenn., to Lexington, Ky., which would enter Kentucky less than 10 miles from the project site.

Since my congressional district in which this project would be located has the second lowest median income in the United States according to the latest information available to me, and there has been a large decline in the population of McCreary and adjoining counties during the past decade, and unemployment has reached as high as 21 percent, we sincerely believe that the authorization and construction of this project would provide a basis for economic re covery from these conditions.

I am thoroughly convinced that the economic benefits that would be derived from this project would have a profound effect upon a large percentage of the people of McCreary and surrounding counties for decades to come in this depressed area of southeastern Kentucky and Tennessee.

This project can be justified in the public interest and would do much to stimulate the economy of this area by creating much-needed jobs immediately and new jobs in the future through the growing demand for outdoor recreation, water resources development, power and expansion of private business and investment locally.

The benefit-cost ratio, as Senator Cooper mentioned, is 1.8 to 1, which is considered to be very favorable.

In closing, I would like to present for the record and for this committee's consideration a statement prepared by Mr. Paul Hughes, chairman of the East Lake Cumberland Development Council, Inc., Somerset, Ky., home of our senior Senator, the Honorable John Sherman Cooper, supporting this project.

Also, Prof. C. W. Hume from Whitley City and McCreary County is here to make a short statement and to have a larger statement included in the record.

Mr. JONES. Without objection, the statements will be included in the record.

Mr. CARTER. Thank you, sir.

Again let me express my sincere appreciation to the chairman and members of this committee for the privilege of being heard on this project, and I trust that the committee will give the testimony presented here today due and thoughtful consideration and report this project in this bill. It would mean so much to our depressed region, as well as the entire State of Kentucky.

Mr. JONES. Thank you, sir.

(The full text of Mr. Hughes' statement follows:)

STATEMENT OF PAUL HUGHES, CHAIRMAN, EAST LAKE CUMBERLAND AREA DEVELOP

MENT COUNCIL, INC.

The East Lake Cumberland Area Development Council, which is an organization of local citizens in four counties of the Appalachian section of southeast Kentucky, appreciates this opportunity to present the desires and needs of its broad representative membership before this committee. We also ask that you consider the seriousness of this opportunity to give meaningful assistance to thousands of individuals in an area of economic depression and extreme underdeveloped resources. No greater request can be made of this committee than that of protecting the economic interest and fulfilling the needs of our people from vested and selfish interests which have appeared in opposition to this project in the past.

In previous hearings you have heard presented the technical justification of this project and it has been shown to meet all the economic criteria as prescribed by Congress. There is no question concerning the repayment of every dime of the investment that will be made by the U.S. Government and still provide recovery to the economy of an area of long standing depression.

A consideration of importance is the generation of opportunities for private enterprise investments in industrial and service facilities, etc., which will provide continuing stability to the local economy, once this broad economic base is provided by developing the natural resources of the area.

Let us cite the committee some of these shocking and deplorable examples of poverty and need of the people, which you can help correct by this authorization to develop the people's water resources: Kentucky's Fifth Congressional District, which covers the project area, has the second lowest median income ($2,085) in the United States, 6.9 years median education level of people 25 years and older;