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EXHIBITS 366 and 367 on file with the subcommittee

EXHIBIT No. 368

THE ATTORNEY GENERAL OF OKLAHOMA,
Oklahoma City, Okla., March 25, 1947.

GRAND RIVER DAM AUTHORITY,

Box 112, Vinita, Oklahoma.

(Attention Mr. Q. B. Boydstun, general counsel.)

GENTLEMEN: The Attorney General acknowledges receipt of your letter which is in part as follows:

"The Grand River Dam Authority is contemplating issuing its revenue bonds in the aggregate principal amount of $3,000,000 for the following purposes, to wit: "1. For the purchase or construction of transmission lines, substations, and facilities as improvements to and extensions of the present existing facilities of the Authority and for the acquisition of lands and rights-of-way necessary or convenient for the Authority's use in connection with said improvements and extensions. "2. (a) For the purchase of a steam generating plant, transmission lines, and substations from the War Assets Administration, an agency of the Federal Government, to be added as improvements to the Authority's existing facilities; or "(b) For the purchasing of steam-generating machinery and equipment from the War Assets Administration, an agency of the Federal Government, and for the acquisition of such other machinery and equipment as may be necessary for the construction of a steam-generating plant when added to such machinery and equipment purchased from the War Assets Administration, and for the acquisition or construction of transmission lines and substations and for the acquisition of lands and rights-of-way necessary or convenient for the Authority's use in this connection.

"The Authority, pursuant to the authority of Section 870, Title 82, Oklahoma Statutes Annotated, as amended, and other related sections of the Act creating the Authority, created an issue of its revenue bonds known as 'Grand River Dam Authority 22% Bonds,' in the aggregate principal amount of $25,000,000. This issue was created pursuant to a Trust Indenture dated as of January 1, 1946, between the Grand River Dam Authority and The First National Bank and Trust Company of Tulsa, as Trustee. This Indenture provides, among other things, that bonds may be issued in such series and as may, from time to time, be determined, subject to the provisions of the Indenture; that the bonds of the respective series may vary substantially only with respect to dates and dates of maturity. Said Indenture provides for the issuance of bonds to be known as 'Series A Bonds and of said Series A Bonds the aggregate principal amount of $14,000,000,000 has been issued, which are now outstanding and in the hands of the United States. Of said Series A Bonds there remains unissued an aggregate principal amount of $1,000,000.

"Said Indenture further provides for the issuance of bonds not to exceed $10,000,000 in aggregate principal amount, which bonds are designated in said Indenture as 'Additional Obligations' to finance 'the cost of constructing, purchasing, leasing or otherwise acquiring, or the cost of improving or extending, reservoirs, dams, power plants (hydro or steam), systems and facilities for the transmission and distribution of electric energy (including, in the case of acquisition of any thereof, the acquisition of incidental properties, materials, supplies, receivable, or other assets) necessary or desirable for the efficient operations of the System, as may then be authorized by applicable law (such dams, power plants, systems, and facilities being herein sometimes called 'Additional Facilities'

* * *

"The Authority now proposes to issue bonds out of the $10,000,000 designated as 'Additional Obligations' for the purposes hereinabove set forth as '1' and '2'. "The Authority now proposes to build some transmission lines, extending its system in order to connect with R. E. A. systems, cities, and towns, and a portion of this expansion and extension program is to acquire from the Rural Electrification Administration some lands and rights-of-way, properties, and materials. The Authority is also endeavoring to acquire the steam-generating plant at the Oklahoma Ordnance Works. This plant has been declared to be surplus property and the War Assets Administration has the same for disposal. We may be able to buy this plant intact, but it is possible that we will have to purchase it 'piecemeal'. In other words, the plant may be dismantled and, in that case, the

1948.

Year

EXHIBIT No. 369

TABLE I.—Grand River Dam project-power sales per year without steam plant

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TABLE II.-Grand River Dam project-Pay out test without steam plant

Year

Total power sales kw.-hrs.

Average rate

firm, second

sales

mills-kw.-hrs. Revenue power Other revenue, Total revenue

Estimated

average year

rentals, etc.

operating

ary and dump

expense

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kw.-hrs. per year

TABLE III.—Grand River Dam project—power sales per year—with O. O. W. steam plant—present generating capacity

Year

Present sale of

power to present customers connected kw.-hrs. per year

Sale to utilities

firm power
51⁄2 mills per
kw.-hr. kw.-
hrs. per year

Sale to utilities

average sec-
ondary power
21⁄2 mills per

kw.-hr..

Sale to utilities

average dump power 1 mill per kw.-hr.

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1 From Hydro alone. "Additional energy firmed up by steam.

Same from 1951 on, unless more steam or hydro capacity added.

TABLE IV.-Grand River Dam project-pay-out test with O. O. W. steam plant purchased, at $3,500,000

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1

CLYDE T. ELLIS,

EXHIBIT No. 370

TILTON, MO., 2, 315P.

Executive Mgr., National Rural Elec. Co-op. Assn.,

1711 Connecticut Ave., Northwest:

Missouri Rural Electric Cooperatives representation over 100,000 farm families request you to appear before War Assets Subcommittee of House Executive Expenditure Committee and urge that the committee favor the sale of Choteau, Oklahoma, ordnance plant generator to the Grand River Dam Authority. Missouri electric cooperatives are very short of power and are having voltage trouble and some of them must depend on Grand River Dam Authority for adequate power supplies in the future. Shortage of power together with absence of Federal power in the area is delaying construction to rural consumers and causing excessive wholesale power prices in this area.

JACK H. NEEDY,

President Mo. State Rural Electrification Association.

EXHIBIT No. 370-A

JACKSONVILLE, ARK., 2, 235P.

CLYDE T. ELLIS,

Executive Mgr., National Rural Electric Co-op. Association,

1711 Conn. Ave., Wash., D. C.:

The Arkansas rural electric cooperatives serving 60,000 farm families are very anxious that Oklahoma Grand River Dam Authority be permitted to purchase steam generator from ordnance plant located in Choteau, Oklahoma. Some of our systems are depending on Grand River Authority for more power than it will have to sell, unless it is able to firm up its hydro capacity. We ask you to appear before the committee that is holding a hearing on this matter and ask the committee to use its influence to sell the generator to Grand River Authority. ARK. STATE ELECTRIC Co-op, U. E. MOORE, President.

CLYDE T. ELLIS,

EXHIBIT No. 370-B

A. KMA. 722-NL-PD, OKLAHOMA CITY, OKLA. 1.

Executive Manager, National Rural Electric Cooperative Association,
1711 Northwest Connecticut Ave., Wash., D. C.:

Under date of November 21 Senator Elmer Thomas advised the Oklahoma Statewide Electric Cooperative in connection with the sale of the Choteau power plant, “I have done what I could to assist the G. R. D. A. Authorities in their negotiations for this plant in the hope that it may be retained as a power plant at its present location to serve the consumers of our State with as much electricity as it can develop. I further have hopes that the plant will be sold to the G. R. D. A. and thereafter used in conjunction with the power that is being developed at the Grand River Dam." As the voice of 52,000 farm families in Oklahoma we emphatically urge the Rizley committee to do whatever is necessary to consumate the sale of the Choteau power generating plant to the Grand River Dam Authority. Choteau's facilities should be permanently available as a source of energy to the rural electric cooperatives of Oklahoma and adjacent States. The Choteau plant was built by the people and paid for by the people to be used during the war and was never owned by any private interests. No private power company, therefore, has any claim on it whatsoever and it should remain in the property of the people to serve the people. This plant constitutes our only source of cheap, dependable power in that it makes firm power available from the Grand River Dam in much larger quantities. We feel that our people are entitled to purchase this power without buying it through any middleman and are depending upon the Rizley committee to see that this is made possible. This viewpoint reflects the unanimous opinion of the Oklahoma Statewide in committee assembled in Oklahoma City on this date.

CLARENCE REEDS,

President, Oklahoma Statewide Electric Cooperative.

EXHIBIT 370-C

CLYDE T. ELLIS,

Executive Mgr., National Rural Elec. Co-op. Assn.,

1711 Conn. Ave. NW., Wash., D. C.:

Would like for you to appear before House Expenditure Committee and urge Oklahoma ordnance plant generator to be sold to Oklahoma Grand River Dam Authority in interest of better power supply at more reasonable rates for our electric cooperative systems in southeast Kansas.

J. B. BEELER,

Pres., Kansas Federation of Electric Cooperatives.

EXHIBIT No. 371

SOUTHWESTERN GAS AND ELECTRIC COMPANY,

Shreveport, Louisiana, October 29, 1947.

MEMORANDUM TO THE HONORABLE Wright Patman, M. C., FIRST DISTRICT OF TEXAS, HOUSE OF REPRESENTATIVES ON SITUATION AT KARNACK, TEXAS There is a very serious shortage of electric power and energy all over the United States. Many places next summer will have to curtail their power customers. In the area in your district in Texas, in Shreveport, and the area which we serve in Arkansas, we will barely scrape by next year if everything runs, provided we are able to obtain from the Oklahoma companies the 15,000 kilowatts which they are under contract to supply to us. Our load this summer was some 25,000 kilowatts more than the maximum peak which we carried during the war, and there is no end in sight to the requirements of new customers coming to our lines daily.

The Longhorn Ordnance Works at Karnack, Texas, was put on the reserve list of plants by the Government, and is being held in readiness to be reconditioned and put into immediate production of TNT should another emergency present itself. In its present status, no part of this plant can be sold to anyone. There is, however, in the Longhorn Ordnance Works plant at Karnack a steam-generating plant used for purpose of generating processed steam for the manufacture of TNT during the war. There is no power-generating equipment at Karnack as Southwestern Gas and Electric Company supplied all power requirements of this plant.

We have taken steps to lease the boiler plant at Karnack from the Government with a thirty-day cancellation clause in the proposed lease, allowing the Government to recover this plant from us on thirty days' notice. We have also contracted on the assurance of Army Engineers that this lease would not meet any objections in Washington to purchase some $150,000 worth of second-hand equipment, which we propose to install in this plant at a cost to us for the total installation of more than a half million dollars. The lease was sent to Washington on October 3, 1947, going to Office of Chief of Engineers.

On October 17, 1947, we had not heard anything from this lease and upon taking the matter up with the Office of Engineers, and telling them of the seriousness of our situation down here, they made a search and found the papers, approved them and sent them that same day to Ordnance Department.

Again these papers became lost (?) and when we started searching for them again this morning we found a telegram has been received by the Ordnance Department from your office stating that Panola-Harrison Electric Cooperative, Inc., wants the matter held up so they can make a proposition to purchase or lease this plant.

The Panola-Harrison Electric Cooperative, Inc., is now buying power and energy from our company under a contract which binds us to deliver all power and energy required by it to serve its customers, both present and prospective, for a period of twenty years from January 1, 1945. It would be impossible for this Cooperative to obtain generating equipment to install in this plant before 1949. This steam plant is only 200 pounds pressure and is not suitable for operation with modern equipment. If the cooperative desires to break its contract with us and put in their own generating equipment, they have a perfect right to do so and by placing their orders for this equipment at the present time, they could get in operation some time in 1950. A delay of even two or three weeks to our plans at Karnack will mean that there will be a definite shortage of power and

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