Resolved, That the directors of the Beech River Watershed Development Authority respectfully request and urge favorable action by the House and Senate Appropriations Committees on funds requested for beginning construction of these works in 1963. Adopted April 28, 1962. BEECH RIVER WATERSHED DEVELOPMENT FUNDS FOR NORMAL PROGRAM EXPENSES Senator HILL. All right, Mr. Chairman, you may proceed. Mr. WAGNER. Another major item in this budget is $10,766,000 for our normal program expenses, navigation and flood control operations, fertilizer research and demonstrations, and so forth. These are programs with which you are familiar. Senator HILL. They are about the same as they have been over the past several years? Mr. WAGNER. Generally the same character of work. These are the principal items in this $35,071,000 appropriation request. POWER PROGRAM In addition to the use of appropriations, of course, the construction and operation necessary to the continuance of our power program will be carried out. This requires $300,764,000 which will be obtained from power proceeds and the proceeds from the sale of bonds. Senator HILL. None of that will come out of the Federal Treasury, none of that is in the appropriation, is that right? Mr. WAGNER. That is correct. The $300,764,000 is all derived from power proceeds and proceeds from the sale of revenue bonds. PAYMENT INTO FEDERAL TREASURY Senator HILL. How much will you pay into the Federal Treasury this year? Mr. WAGNER. In fiscal year 1963 the payment will be $48.5 million. Senator HILL. $48.5 million. Mr. WAGNER. Yes, sir. SEASONAL EXCHANGE OF POWER Now, there is one recent development in this power field that I think you might like to hear a little about. We have just completed arrangements with power suppliers adjoining TVA on the southwest for a rather large seasonal exchange of power. This is an arrangement which will help to hold down power costs in both areas, and we believe that it is a real economy and a real spur to the continuing effectiveness of low-cost power. If you would like to hear something about that, I would like to ask Mr. Wessenauer to describe it in a little more detail and then answer any questions. Senator HILL. I think that I have the picture myself, but I think it would be good for the record for Mr. Wessenauer to make a state ment. All right, Mr. Wessenauer. Mr. WESSENAUER. Senator, the situation existing in the TVA system is that we have a large wintertime load primarily resulting from the extensive use of electricity for heating. In the southwest, the power companies have a rather large summertime load as a result of extensive air conditioning in that area. That means that in the summertime TVA has capacity not being used and in the southwest they have capacity in the wintertime not being used. This suggested that advantages to both could be obtained by TVA supplying power to companies to the southwest of us in the summertime from our temporary excess capacity and to get power back from the companies in the wintertime when they have temporary excess capacity. The effect of that is to enable each group, TVA and the southwestern companies, to reduce the amount of generating capacity which each would otherwise have to provide. The agreement with the companies provides for the eventual exchange of about a million and a half kilowatts of power, TVA delivering that amount in the summertime, and the companies delivering to TVA a similar amount in the wintertime. Except for an initial period, there is no exchange of money, simply exchanges of equal amounts of power. CONSTRUCTION OF TRANSMISSION LINES The arrangement will involve, however, some expenditures in order to bring it about, and we plan and the companies plan to establish new points of interchange by the construction of some extra highvoltage transmission lines. Those TVA will build will be 500,000-volt lines. The highest voltage on the TVA system thus far is 161,000 volts, but in order to exchange these large amounts of power every season, we will be building lines to Memphis and to West Point, Miss., at the higher voltages, and the companies in turn will build lines to those points from their systems. We think these arrangements will, as Mr. Wagner indicated, be very advantageous to the TVA area in that they will reduce our costs and make, in effect, more nearly full use of our existing capacity, and they should do the same thing for the companies to the southwest. Senator HILL. It would be mutually advantageous to both parties? Mr. WESSENAUER. That is correct. INCREASED POWER CAPACITY Senator HILL. What percent of your power, productive capacity, is this million and a half which you speak of? Mr. WESSENAUER. Well, at the present time we have about 12 million kilowatts, and by the time a million and a half kilowatts will be exchanged, we will have about 15 million kilowatts, so it will be about 10 percent. Senator HILL. You think you would like to add anything on that? Mr. WESSENAUER. I think you can realize, Senator, it avoids for us the building of a million and a half kilowatts of generating capacity which corresponds to the Kingston steamplant on which we spent nearly $200 million. We will have to expend some money for transmission, however. Senator HILL. But the transmission would not be anything comparable in cost to the building of that new steamplant, would it? Mr. WESSENAUER. No, sir. TRANSMISSION COSTS Senator HILL. Is there any estimate of what the transmission costs would be? Mr. WESSENAUER. We do not have all the detailed designs so I do not have a figure. Senator HILL. I see. But those costs will come out of your power revenues anyway? Mr. WESSENAUER. That is correct. Senator HILL. It wouldn't be appropriated out of the Treasury? Mr. WESSENAUER. No, sir; it would come out of power revenue and the issuance of bonds. EXPENDITURES FROM NONPOWER PROCEEDS Mr. WAGNER. Mr. Chairman, the only other thing I would like to mention is that in addition to the figures in the budget which I have given to you, there is a total of $28,745,000 to be expended from nonpower proceeds. This is largely from receipts from the sale of fertilizer to be used in the operation of the fertilizer program, and for certain reimbursable services: construction of a bridge across Pickwick Dam to be reimbursed by the Bureau of Public Roads; certain reimbursable mapping services Senator HILL. Mapping, did you say? Mr. WAGNER. Mapping, yes, sir. Senator HILL. Who reimburses you for that? Mr. WAGNER. The Army Map Service and the U.S. Geological Sur vey. Senator HILL. The Geological Survey. Mr. WAGNER. Yes, sir. Then another item is to help with the construction and operation of the experimental gas-cooled reactor at Oak Ridge in which we are cooperating with the Atomic Energy Commission. Senator HILL. You would be reimbursed there by the Atomic Energy Commission? Mr. WAGNER. Yes, sir; that is correct. TOTAL BUDGET PROGRAM These figures together make a total budget program of $364,580,000. This completes what I would like to say about the budget and about the program. We will, of course, be glad to answer any questions that you may have. First let me ask Mr. Jones if he has anything to add. Senator HILL. Mr. Jones, is there anything you would like to add? Mr. JONES. Nothing, Senator, unless there are questions. Senator HILL. Of that total figure of $300 million, only $35,071, 000 Mr. WAGNER. That is correct. Senator HILL (continuing). Is to be appropriated out of the Treasury? Mr. WAGNER. That is correct. HOUSE ACTION Senator HILL. And the House allowed you the full budget estimate; isn't that right? Mr. WAGNER. That is correct. Senator HILL. Anything anybody else would like to add? Anything you would like to add, sir? Mr. VAN MOL. No, sir. Senator HILL. Nothing else then, Mr. Chairman? Mr. WAGNER. I have nothing further, Senator. Senator HILL. Mr. Wessenauer, anything you would like to add? Mr. WESSENAUER. No, sir. Senator HILL. Miss Owen? PLANT FOOD CONTENT IN FERTILIZERS Senator HILL. Again, I tell you the story that you told us of the progress you made in improving the plant food content of fertilizer is certainly a tremendously gratifying story which shows how you proved out the case for TVA in this whole field of fertilizer and fertilizer demonstrations. You have done a good job and that is very, very fine. As you go over the record, where you cite these different expenditures, such as your Melton Hill Dam and your Wheeler Dam and the lock at Wheeler Dam and the lock at Guntersville Dam I wish you would make sure that you put in how much money has been expended up to date, you see. Mr. WAGNER. Yes, sir. Senator HILL. So we will have that in the record. Also the date when the lock would come into operation. Mr. WAGNER. We will be glad to supply that: yes, sir. Senator HILL. All right. I certainly want to thank you very, very much. This has been a most informative and, as I say, a most gratifying presentation. Mr. WAGNER. Thank you, Senator. It has been a pleasure to be here with you. BUREAU OF RECLAMATION OROVILLE DAM AND SONORA-KEYSTONE UNIT OF CENTRAL VALLEY PROJECT Chairman HAYDEN. Senator Engle of California has written to me with reference to the Oroville Dam and the Sonora-Keystone unit of the Central Valley project. Since the hearings on the civil functions portion of this bill and the hearing on the reclamation part of the bill have been printed, I will ask to have the letter and enclosure inserted into this record. Senator HILL. Without objection the matter will be inserted into the record. (The information referred to follows:) Hon. CARL HAYDEN, Chairman, Senate Appropriations Committee, U.S. SENATE, COMMITTEE OF COMMERCE, August 24, 1962. DEAR MR. CHAIRMAN: I had the privilege of testifying previously before your committee on both the Corps of Engineers budget on May 16 and the Bureau of Reclamation budget on May 28. For convenience copy of my statements are attached. I should like now to supplement this testimony with respect to two items, in consideration of the public works appropriations bill as passed by the House. The House reduced the budget request for Oroville Dam in California from $15 to $14 million, justifying the cut by an interest rate calculation based on the respective costs of money to the Federal and State governments (p. 38 of H. Rept. No. 2223). In my judgment, Mr. Chairman, the Bureau of the Budget's reasoning for using the 32-percent rate rather than a 2%-percent rate as proposed by the House committee, is sound-simply because the original Oroville cost allocation was determined that way in the first place. I respectfully request that the budget amount of $15 million be restored. The other item I wish to mention is the "Reclamation" appropriation for investigation of the Sonora-Keystone unit of the Central Valley project in Tuolumne and Calaveras Counties. This investigation needs to be expedited and expanded to include upstream areas in Calaveras County because of its close relation to the New Melones project of the Corps of Engineers on the lower Stanislaus River. I enclose a copy of a letter from Acting Commissioner N. B. Bennett, Jr., of the Bureau of Reclamation, which explains the situation. I request that the Sonora-Keystone item be increased from $161.000 to $211,000. Thank you again for your sympathetic consideration of this program. With kindest regards. Sincerely yours, Hon. JOHN J. MCFALL CLAIR ENGLE, U.S. Senator. DEPARTMENT OF THE INTERIOR, BUREAU OF RECLAMATION, Washington, D.C., June 20, 1962. House of Representatives, Washington, D.C. DEAR MR. MCFALL: This is in response to your telephone request of June 18, 1962, for information in regard to the investigation of the Sonora-Keystone unit of the Central Valley project and the possibility of expanding the scope of that study to include upstream areas in the Stanislaus River Basin and the adjoining Calaveras County. You requested we advise you as to the amount of funds required in fiscal year 1963 to accomplish this. The primary purpose of the Sonora-Keystone unit is to develop a plan for providing water service to the portion of Tuolumne County Water District No. 2 that is located between the Stanislaus and Tuolumne Rivers in the vicinity of the town of Sonora. This investigation was initiated this fiscal year with funds inserted by the Congress in the 1962 Public Works Appropriation Act. The |