GENERATING EQUIPMENT INSTALLATIONS

Mr. WIGGLESWORTH. Is this a proper place to discuss the matter of new generators, Mr. Chairman.

Mr. BLANDFORD. I think it is quite appropriate here.

Mr. WOODRUM. Very well.

Mr. BLANDFORD. I think Mr. Glaeser could be helpful to the committee in answering questions relating to generator installation.

Mr. WIGGLESWORTH. You have set forth on page 7 of your justification the generating equipment installed or in the process of installation, for which commitments ånd expenditures will have been made prior to the fiscal year 1939. Now how much over and above that are you asking for this purpose?

Mr. WOODRUM. Did you get the question, Mr. Ager?

Mr. AGER. I am sorry, I did not.

Mr. WUGGLESWORTH. Will you turn to page 7 of the justification, and the right hand side of the page?

Mr. AGER. Yes, I have that.

Mr. WIGGLESWORTH. I see five items of generating equipment installed and in the process of installation by the authority for which commitments and expenditures will have been made prior to the fiscal year 1939.

Mr. AGER. Yes.

Mr. WIGGLESWORTH. You state, then, in conjunction with the 184,000 kilowatts installed capacity at Wilson Dam amount to 522,000 kilowatts installed and under construction.

Mr. AGER. Yes.

Mr. WIGGLESWORTH. In addition to that in 1939, you are asking for three more items, as I understand it, at Guntersville, Chickamauga, and Hiwassee.

Mr. AGER. We have on that, for example, the two units, at Chickamauga, shown on the upper portion of that page. We have ordered the turbines this year and will order the generators next year. The actual items that we have scheduled under our 1939 contract authorization will, I think reveal to you what we have in our budget for 1939 in the way of new commitments on this equipment. We have at Guntersville one turbine and one generator, and certain other items, totaling $1,210,000.

For Chickamauga we have one turbine for the third unit, and three generators for Chickamauga, this equipment and other electrical equipment make a total of $3,345,000 for Chickamauga, or a grand total of $4,555,000, of which the $555,000 will represent actual payments on these contracts in the fiscal year 1939.

On the Hiwassee unit, for the fiscal year 1939, we are not proposing to order any equipment.

We will prepare for that equipment in the 1939 excavation expenditures but the order for that equipment will not come until the 1940 Budget.

Mr. BLANDFORD. This schedule, Mr. Wigglesworth, which is related to our dam-construction schedule, is based on what we feel is a careful estimate of the market for the utilization of this water energy. Of course this sale of power has an important relationship, to the revenue side of the Budget.

Mr. WIGGLESWORTH. Now we have 522,000 kilowatts installed and under construction.

Mr. AGER. Yes.

Mr. WIGGLESWORTH. And will if we allow these additional items under the request for 1939

Mr. AGER (interposing). Taking into account the total program we will have a total, when all of those installations have been made, a total installed capacity of 697,000 kilowatts.

Mr. WIGGLESWORTH. Now what is the ultimate installed capacity? Mr. BLANDFORD. Will you answer, Mr. Glaeser?

Mr. AGER. I can answer that question. The ultimate installed capacity is 1,922,000 kilowatts; that is on all projects in the program. Mr. WIGGLESWORTH. What is the present demand, firm and secondary?

Mr. GLAESER. You want me to answer in terms of existing demand? Mr. WIGGLESWORTH. Yes.

Mr. GALESER. The existing demand, without taking into account the contracts that we can expect to serve?

Mr. WIGGLESWORTH. Yes.

Mr. GLAESER. The present demand, as of the end of the fiscal yearthis is based on peak demand-the measurement for that year was 214,000 kilowatts.

Mr. WIGGLESWORTH. For the fiscal year 1937.

Mr. GLAESER. 1937; the peak demand did not come exactly at the end of the year.

Mr. WIGGLESWORTH. What is the estimated demand for the current fiscal year?

Mr. GLAESER. For 1938 which would then include sales to additional customers under contract but not now being served, we estimate that the total demand would be 215,500 kilowatts.

Mr. WIGGLESWORTH. Have you any estimate

Mr. GLAESER. May I finish?

Mr. WIGGLESWORTH. Yes.

Mr. GLAESER. And this makes allowance for a minimum reserve; we have a reserve of 50,000 kilowatts, the largest unit on the system, which we have assumed for that purpose. So that in 1938 we should be prepared with a minimum capacity of 215,500 kilowatts in order to fulfill our contractual requirements.

Now I can give you the details of this if you desire it, Mr. Chairman.
Mr. WOODRUM. You may just put that statement in.

Mr. WIGGLESWORTH. Yes, just put that in, if you have it.
Mr. GLAESER. Yes.

(The material referred to follows:)

Tentative estimate of possible T. V. A. system requirements and capacity available, by fiscal years

Kilo- Per- Kilo- Per- Kilo- Per- Kilo- Per- Kilo- Per-
watts cent
cent watts cent watts cent watts cent

watts

50,000

50,000

165, 500 100.0 290,000 100.0 425,000 100.0 510, 500 100.0 578,000 100.0 50,000

50,000

60,000

Estimated Tennessee Valley Authority system load-Kilowatts by fiscal years

Estimated Tennessee Valley Authority system load-Kilowatts by fiscal years—Con.

BASIS OF ESTIMATING FUTURE DEMANDS

Mr. WIGGLESWORTH. What is the basis on which you estimate the increase in demand for the years ahead? You have given us a table which shows installed capacity, firm power capacity, firm and secondary demand, actual and projected to the end of 1941.

Mr. GLAESER. Well, looking ahead now to the years 1939, 1940, 1941, and 1942, we have analyzed our existing load into the following components. And I will put those details in the record, Mr. Chairman. Mr. WOODRUM. Yes.

Mr. GLAESER. First, the municipal contracts which we are now serving. We have estimated, for each year, from 1938 to 1942, the increase in that load.

Next, we have taken the municipal contractors which are not now served, that is, municipalities who have contracted with us but are

not yet taking service, and we have forecast, year by year, the increase that they might take, or our judgment of what will be taken.

In the third category we have taken the cooperatives now served and gone through this same process with them.

Mr. WIGGLESWORTH. How can you form any accurate estimate as to what that increase will be?

Mr. GLAESER. On the basis of experience of utility companies, generally; not only general experience throughout the country, but also particular experience in the area served, and our experience with these

same contractors.

Mr. WIGGLESWORTH. Well, take the year 1941: What percent of the municipalities or cooperatives or of industry, in the territory, does the estimated firm and secondary demand represent?

Mr. GLAESER. I think this table, with the addition of some percentages, will answer that question.

Mr. WIGGLESWORTH. Will you supply both the number and the percent?

Mr. GLAESER. Yes; both. I have here the amount, but I can supply the percentages for the record as well.

Mr. WIGGLESWORTH. Have you made similar computations, covering each year, as you have gone along?

Mr. GLAESER. For this increase?

Mr. WIGGLESWORTH. Looking ahead.

Mr. GLAESER. Yes.

Mr. WIGGLESWORTH. Did you have a similar estimate for 1937 and 1938 and so on?

Mr. GLAESER. Well, of course, when you come to 1937, we have the actual figures.

Mr. WIGGLESWORTH. In advance, did you make a similar prophecy? Mr. WOODRUM. A forecast?

Mr. WIGGLESWORTH. A forecast.

Mr. GLAESER. Yes; we did. For instance, with the industrial contractors: Our load for 1938, we estimated would be 41,500 kilowatts for actual contractual commitment which we have to meet. These are very definite figures, as to what we must provide for, and that also will be included in the present estimate.

Mr. WIGGLESWORTH. Comparing your estimates for 1937 or 1938 made in 1933, how do the results compare with your estimates? Mr. GLAESER. These estimates were not made in 1933. Mr. WIGGLESWORTH. When were they made?

Mr. GLAESER. They were made now on the basis of existing contracts; that is what I meant. That is a much firmer basis. And we did have, of course, the experience of existing contractors already being served.

Mr. WIGGLEWSORTH. The estimate for 1941: On what basis was that made?

Mr. GLAESER. For the industrial contracts?

Mr. WIGGLESWORTH. Is that total based on your commitments? Mr. GLAESER. That is based on commitments which were made, contractual commitments over a 20-year contract period where the load pick-up is within the first 5 years.

Mr. WIGGLESWORTH. I am not asking for that detail. Have you estimated your total firm and secondary demand for the year 1941 on the basis which you have just given me?