DEPARTMENT OF THE INTERIOR-Continued Comparison of fiscal year 1962 programs with fiscal year 1963 programs annual definite appropriations-Continued Total, Bonneville Power Administration. Southeastern Power Administration: Operation and maintenance: Southwestern Power Administration: Construction: New construction and additions. 1 Transferred to "Operating expenses, Public Buildings Service," General Services Administration (75 Stat, 353). 2 Includes $750,000 in H. Doc. 422. * Includes $550,000 in H. Doc. 477. Includes reduction of $6,884,000 in H. Doc. 422. Includes $4,023,000 in H. Dóc. 422 and $750,000 in H. Doc. 431. GENERAL STATEMENT Chairman HAYDEN. Secretary Udall is going to make the opening statement for the Department. Secretary UDALL. Yes, sir. Charman HAYDEN. We will be glad to hear from you. Secretary UDALL. Thank you very much, Mr. Chairman. And may I say it has not been the practice in the past, at least the recent past, for the Secretary himself to appear on this particular appropriation bill. I did appear on the House side. There were some important broad policy considerations that I thought it was important to discuss with the members of the committee; and I am appearing here today. I intend to make it a practice, unless the committee does not want to hear me, to at least discuss briefly some of the broad policy questions that are involved in the appropriations request. Chairman HAYDEN. I think that is a good thing to do. I also congratulate the chairman of the committee on the announcement I read yesterday; glad to see that he has his usual vigor and spryness and he is ready, along with Senator Young, for the campaign this year. Chairman HAYDEN. Thank you. Secretary UDALL. I will file my statement with the committee. I will read most of it, if I may, because the points are made rather succinctly. I appreciate the opportunity to present the programs of the Department of the Interior which look to the conservation, utilization, and development of our water and land resources. 1963 BUDGET ESTIMATE The budget estimates for fiscal year 1963 for the Bureau of Reclamation and the three power marketing administrations-Bonneville, Southwestern, and Southeastern-are in the amount of $394,684,000, and which represent an increase, as the chairman has just said, of $84,439,329 over current year appropriations. This Nation has always arisen to meet emergencies but quite often with high cost and waste where we have not looked sufficiently ahead. Our abundant resources have at times made it easy to give inadequate attention to future needs. Today we face several decisions which will affect the use of the Nation's resources. I plan to confine my remarks to some major aspects of the Department's activities and not burden you with a great amount of detail. ITEMS UNDER DISCUSSION Some of the things I would like to discuss with you are: 1. The use of wasting steam energy at the Hanford reactor in the State of Washington. 2. Pumped back storage facilities to create additional peak power on existing projects and thereby increase the revenue to the Government from existing facilities. 3. Interconnection of the Nation's power systems, both public and private, which will reduce capital investment by making more efficient use of both systems. 4. Because of its special importance, I want to give you detailed information about the negotiations the Department has been carrying on regarding transmission lines on the Colorado River storage project. In recognition of their significance I would like to mention, without further amplification in this statement, two programs-one in which the Department of the Interior has a primary responsibility and one in which it does not-but both in which all Americans have a great interest. I refer to the conversion of sea and brackish water to fresh water and the purification of streams that are becoming more and more polluted. INCREASED DEVELOPMENT OF WATER RESOURCES I want to give special emphasis to the need for increasing the supply of developed water resources, particularly throughout the arid Western States. The issue in many of these States is finding adequate supplies of water for municipal and industrial use. Too often controversies over agricultural use and farm surpluses have detracted from the importance of reclamation water supplies in the West. You are quite well aware of the leadtime necessary to bring these projects from an appropriation to an operating stage. For example, construction on California's Central Valley project started in 1935; it was about 1952, however, before water was delivered in the canals in the San Joaquin Valley. I highlight these pressing problems and would like to speak about each in a little more detail. HANFORD REACTOR Construction of the new production reactor at Hanford, Wash., authorized in 1958, is nearing completion and will be used for the manufacture of plutonium. At an additional cost-a rather large cost, I might add; $25 million-the reactor has been designed and built so that electric power can be generated during the dual purpose stage of operation from waste steam which will be produced while plutonium is being made. Last year the Atomic Energy Commission requested authority for appropriations needed to add the electrical generation facilities. While the Senate approved AEC's request, the House of Representatives did not. During the present session of Congress the AEC has not renewed its request for Federal construction of the steam turbine and generator facilities. UTILIZATION OF WASTED STEAM ENERGY In order to utilize the large quantity of steam energy which would otherwise be wasted and to make use of the dual purpose features of the reactor, the Washington Public Power Supply System (WPPSS) has proposed to AEC-and negotiations are underway right nowthat it will provide the necessary funds to construct and operate the generating facilities. The WPPSS is composed of 16 public utility districts of the State of Washington. Other public agencies and cooperatives have indicated an interest in participating with WPPSS in this proposal. COST COMPARISON WITH PRESENT RATE Chairman HAYDEN. Can that power be produced at a lower price than is now being paid for power from the Columbia River dams? Secretary UDALL. Well, the proposal-and the reason I bring this up is that this is an important policy decision, and you will undoubtedly want to go into some of the details with Mr. Luce, the Administrator, Bonneville Power Administration, when he is here. This project, in terms as a steam facility, would firm up the Bonneville system, and in terms of their projected future needs, this is going to be very vital; it would fill a big gap that they are going to have in the Bonneville system. And it would be anticipated, of course, that this power would be sold and marketed through the Bonneville system, and we would hope it would be marketed at the regular Bonneville rate of 2 mills at 100 percent load factor. So that is what is contemplated. Chairman HAYDEN. Would it be used in the nature of standby power; that is, for peak loads and such as that? FIRM POWER TO BE GENERATED Secretary UDALL. No; this would be firm power. In fact, the importance of Hanford in having this steam facility is that it would provide a source of firm power that is very much needed and will fill a very big gap in the Bonneville needs in the future. Chairman HAYDEN. Well, the committee can inquire into that. Senator YOUNG. What did you say about the costs when compared to Columbia power? ARRANGEMENT WITH BONNEVILLE AND PUBLIC POWER Secretary UDALL. Well, as you know, in the Bonneville system they have one rate; they have a postage stamp rate. It is anticipated this would be--and the reason I call it to your attention, I know you want to go into it with Mr. Luce--will be a three-cornered arrangement. The public power groups that have made this proposal would enter into a contract with the Atomic Energy Commission, and they would, by bonding, provide the money, build the generating facility, and use the steam. This would have an advantage to the Government, of course. It would have an advantage to them. They then would enter into a contract with the Bonneville system to purchase the output of the plant, and that would be marketed to them, and the surplus to others through the Bonneville system. And we would hope that it could be marketed at the Bonneville rate so that we are not talking about-if the plan works out properlyany increase in the rate. TERMS OF PUBLIC POWER PROPOSAL Under the proposal, WPPSS would deliver the entire nonfirm output of the Hanford powerplant into the Bonneville Power Administration grid. Backup from the Columbia River power system results in the creation of new firm power which would be needed in the area. In return for supplying BPA with the energy output of Hanford, Bonne ville would supply the participating utilities with an amount of firm power equivalent under BPA's rate schedules to the annual operating and capital costs of the Hanford powerplant. There is the explanation. Under this exchange arrangement no appropriations would be needed for the purchase of power. At such time as the generating facilities are fully amortized the United States would have an option to acquire them without cost or at any time before their unamortized cost. We do not propose to sign contracts until we are assured that this proposal is economically feasible and we have consulted fully with the respective Appropriations Committees. PUMPED STORAGE We propose to continue studies toward development of pumped storage peaking plants and have requested $150,000 in the Bureau of Reclamation budget. I might say that Doug Wright, Southwestern Power Administrator here, is one of our top authorities and top people on this subject. USE OF OFFPEAK ENERGY FOR PUMPING This is the technique that uses offpeak electrical energy to pump water to higher elevations for subsequent release for the generation of power and energy to meet system peaks. This will increase the value of our water resources, and would be a fine instrument of conservation, in my opinion. Reconnaissance investigations are proceeding in the marketing area of the Bureau of Reclamation, the Southwestern Power Administration, and the Southeastern Power Administration, but not within the area of the Bonneville Power Administration since peaking power from conventional hydroelectric sources can meet the peaking power requirements through about 1980. Sites within the marketing area of the Bureau of Reclamation and within the SPA area offer great promise at this time. The latter studies are being made in cooperation with the Corps of Engineers. Two feasibility investigations are underway, Senator Wash and Elephant Butte-Jose Canyon. Others will be started immediately upon completion of the reconnaissance studies ahould they prove favorable as presently expected. INTERCONNECTION STUDIES ON FEDERALLY SERVED REGIONS Under the directive of the President and with funds provided in our current appropriations, we have initiated studies on the feasibility of extra high voltage interconnections between regions served by Federal power marketing agencies. We are requesting funds in this budget to advance this important program. These studies offer more efficient and effective means for the development of resources and for transmitting electricity and will result in lower cost power to homes and industries. We have completed the study on the proposed Pacific Northwest-Pacific Southwest intertie. This study establishes a landmark in that we find direct-current transmission makes possible the economic transmission of energy between points as much as 2,000 miles apart. |