For the purposes of benefit-cost analysis, the staff is of the opinion that the power benefits attributable to the Glen Canyon and Echo Park projects should be based on the cost of equivalent amounts of power from modern privately financed steam-electric plants and on Federal financing of the hydroelectric transmission facilities. On this basis the at-market value of Glen Canyon power is 6.9 mills per kilowatt-hour, and of Echo Park, 7.7 mills. Using these values the annual power benefits from the Glen Canyon and Echo Park projects are estimated to be about $26,300,000 and about $7,850,000 respectively. The report of your Department does not contain information necessary for the staff to advise the Commission with respect to the proposed allocation of costs to irrigation and to power. Assuming the division of costs of the two projects to be as shown in your report, and using transmission costs as estimated by the Commission staff, the investment cost for power at Glen Canyon would be $304,605,000, and at Echo Park, $111,423,000. These figures compare with $371 million and $128,400,000, respectively, given in your report. Using the above staff estimates of power costs, amortizing the investments in 50 years with interest at 2.5 percent, and using operation, maintenance, and replacement charges as estimated by the staff, the total annual cost of the Glen Canyon power development, including transmission, would be $15,074,000, and of the Echo Park power development, $5,540,000. On the basis of the above staff estimates of benefits and costs the benefit-cost ratio for the Glen Canyon power development is 1.74 and for the Echo Park power development, 1.42. If it be assumed that the alternate source of power supply would be wholly federally financed steam-electric power, a situation that is most unlikely, these benefit-cost ratios would be substantially reduced although these power developments would still appear to be economically justified. The Commission in commenting upon your revised report has directed its attention to the power features of the Echo Park and Glen Canyon projects as recommended by you. It is observed that your Department has considered several alternatives for the Echo Park project because of its encroachment on the Dinosaur National Monument, but that in your opinion no adequate substitute for the Echo Park project has been found because of the increased evaporation which will take place from the greater surface areas of the alternative reservoirs. Sufficient data are not available to the Commission and its staff to permit them to weigh the relative merits of the Echo Park project and its alternatives in terms of their relation to the Dinosaur National Monument. In addition to authorization of the Echo Park and Glen Canyon projects, your revised report recommends authorization of 13 participating reclamation and power projects. It is stated in your report that the benefit-cost ratios for these participating projects all exceed unity under present conditions, but substantiating data are not presented to permit the Commission staff to reach conclusions with respect to the power features of these projects. The Commission appreciates the opportunity to review and to comment on your revised report. Sincerely yours, JEROME K. KUYKENDALL, Chairman. LETTER OF MARCH 23, 1954, FROM THE DEPARTMENT OF AGRI CULTURE DEPARTMENT OF AGRICULTURE, OFFICE OF THE SECRETARY, Washington, D. C., March 23, 1954. The honorable the SECRETARY OF THE INTERIOR. DEAR MR. SECRETARY: This is in reply to Acting Reclamation Commissioner H. F. McPhail's letter of December 15, 1953, transmitting and inviting comments on your supplemental report on the Colorado River storage project and participating projects, upper Colorado River Basin, October 1953. This supplemental report modifies the original report dated December 1950, upon which this Department commented on May 28, 1951. As now proposed, the report seeks authorization for the Glen Canyon and Echo Park Dams and interconnecting electric transmission facilities as initial units of the Colorado River storage project and for 13 initial participating projects at a total cost of $1,134,643,000. As the detailed plans for the works called for in the supplemental report are developed, close cooperation between the field offices of the Forest Service and of the Bureau of Reclamation should be maintained so that roads and other installations relating to the Colorado River storage projects can be developed in such a way as to make maximum contribution to the protection and utilization of national forest resources. Where services afforded by national forest facilities, improvements, or routes of access may be eliminated or impaired by reason of the installation of any features of this project, such facilities should be replaced by the Bureau of Reclamation to the extent feasible. When definite project planning for the central Utah project gets underway, we offer the cooperation of the Forest Service to participate with the Bureau of Reclamation in working out ways and means of coordinating the development with the high Uinta primitive area on the Wasatch and Ashley National Forests. The supplemental and regional director's reports raised the question of watershed management in relation to the life and operation of the project. The original project report points out that one-half billion dollars (including interest) will be expended for the purpose of providing storage space for sediment coming off the watersheds. Approximately one-half the total reservoir storage space to be provided is for the purpose of storing sediment during the first 200 years of the life of the project. In this connection, paragraph 16 of the supplemental report makes reference to an upper Colorado River development fund. The $1 million annually provided for would be used for studies and investigations relating to the development, conservation and utilization of the waters of the upper Colorado River Basin. *** Inasmuch as problems of development, conservation and utilization of waters involve agricultural uses of land and irrigation techniques, some provision might well be made for allocating an appropriate portion of this fund for studies and investigations in these fields. Paragraph 22 of the supplemental report states: As the increased use of the Green River water increases its salinity, the Echo Park Reservoir will permit mixing it with relatively pure waters of the Yampa. This recognition of the problem of increasing salinity gives rise to the recommendation that this problem be given further serious study. The supplemental report indicates an incremental analysis of the power production of the nine units of the storage project. This is in accordance with a generally accepted principle. We note the statement that the benefit-cost ratios of the initial participating projects all exceed unity as computed in accordance with present Bureau of Reclamation practice. This practice includes the use of secondary benefits. This Department's position on the use of secondary benefits has been made clear in comments on other reports. We appreciate the opportunity to review this report dealing with water storage in this area of critical water supply. Sincerely yours, E. T. BENSON, Secretary. LETTER OF APRIL 5, 1954, FROM THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Hon. DOUGLAS MCKAY, PUBLIC HEALTH SERVICE, Washington 25, D. C., April 5, 1954. Department of the Interior, Washington 25, D. C. DEAR MR. SECRETARY: Pursuant to the policies and procedures established by the Federal Interagency River Basin Committee, we have reviewed the Department of the Interior's Supplemental Report on the Colorado River Storage Project and Participating Projects, Upper Colorado River Basin, Ariz., Colo., N. Mex., Utah, and Wyo. Our letter of March 27, 1951, contained the comments of this Department on the proposed project. These comments are still considered to be pertinent. We have no further comments to offer. The opportunity to review this supplemental report is appreciated. Sincerely yours, M. D. HOLLIS, Chief Sanitary Engineering Officer, PHS, SECRETARY'S LETTER OF JANUARY 15, 1954, TO THE PRESIDENT DEPARTMENT OF THE INTERIOR, (Through: The Bureau of the Budget.) The PRESIDENT, The White House. MY DEAR MR. PRESIDENT: The States of the upper division of the Colorado River Basin have now advised me of their present official positions in regard to development of the upper Colorado River Basin. I am submitting herewith as a supplement to my report of December 10, 1953, their statements and my comments thereon. The State of Colorado, in connection with the physical plan of development, agrees with the plan contained in the report, but asks that further study be given to the La Plata and San Miguel participating projects. Colorado also asks, as conditions precedent to Colorado approval of the report, that provision be made therein, or in the authorizing legislation, for the following: (a) Inclusion of the Cross Mountain unit within the initial authorization; (b) Inclusion in the initial authorization of approximately 3 million acre-feet of total new storage on the Colorado River and its tributaries above Grand Junction, Colo., a substantial portion thereof to be located on the upper reaches of the Gunnison River. Colorado also gives its approval to the city of Denver's Blue River transmountain diversion as a participating project subject to the establishment, by litigation or otherwise, of the legal availability of water for such diversion and to a showing of its feasibility in other necessary respects. The Bureau of Reclamation already has the La Plata and San Miguel projects under investigation and we recognize the urgent need to develop the water supplies of the area. That the Cross Mountain unit is a feasible development is shown by the supplemental report. Although we did not recommend its authorization in the supplemental report, we would have no objection to its authorization as a part of the storage plan in addition to the Echo Park and Glen Canyon units without which Cross Mountain would supply only a limited amount of firm power. There are several reservoir sites available which might meet condition (b) above and there would appear to be opportunity to secure the storage capacity desired by Colorado. Detailed study may well show the listed sites, or others, as feasible. We would have no objection to a conditional authorization of any or all of these reservoirs and would undertake the investigations necessary to determine feasibility as rapidly as the fund situation would permit. It would be our intention, of course, to recommend construction of those units if they are found feasible. Denver's Blue River transmountain diversion proposal, insofar as we are aware, is basically a matter of seeking Federal financing of a plan to be carried forward by the city. Litigation affecting the use of Blue River water is now pending. The feasibility of such a diversion depends, among other things, on the outcome of this litigation or on some alternative thereto which satisfactorily protects the Colorado-Big Thompson project. When a firm and detailed proposal is received, we will be glad to review it and if satisfactory from all aspects make suitable recommendations. It may well be that arrangements would result such that the proposal could be recommended as a participating project. The State of New Mexico supports our recommendation for including Navaho Dam and Reservoir as the first unit of the Shiprock Division to be constructed but feels that the San Juan-Chama project must be authorized concurrently in order that coordinated authorization and operation can be assured. The bills which have been introduced in the Congress to authorize the Colorado River storage project and participating projects include authorization of the San Juan-Chama project on the same basis as the Shiprock-South San Juan or Navaho project. The Department of the Interior is willing to support conditional authorization of the San Juan-Chama project on this basis, in order that coordination of the two projects can be assured. The Bureau of Reclamation and the Bureau of Indian Affairs of this Department, acting under instructions from this office, are already working jointly toward the completion of coordinated reports on these projects. The State of New Mexico also hopes that the La Plata unit of the Animas-La Plata project can be included for early consideration among the participating projects of the Colorado River storage project. Investigations by the Bureau of Reclamation of this unit will continue toward the end of finding a project which can be recommended. The State of Utah endorses the supplemental report and asks that the Gooseberry project be included as one of the participating projects to be constructed in the initial phase. The Bureau of Reclamation has completed a report on the Gooseberry project which is now under consideration in this Department and will be transmitted to the States for their views and recommendations shortly. A copy of the report on the project is being made available to the Bureau of the Budget for study. The State of Wyoming makes no objection to the supplemental report. Wyoming concurs with the inclusion of the several participating projects in Wyoming selected for initial construction and suggests that the advance planning studies for the Seedskadee project should include further study of the possibility of project storage at the Kendall site to increase the project acreage and of the possibility of including high-diversion dam at the Fontenelle site in lieu of the low-diversion dam, diversion canal, and Green River siphon. As pointed out in the supplemental report, the Department anticipates modification of individual projects or units at the time appropriations are sought, if such appears to be necessary in the light of any additional information and economic studies that have been completed. We will be glad to accommodate the suggestions of the State of Wyoming in carrying out the detailed planning for the Seedskadee project. Copies of the comments of the aforementioned States of the upper division are enclosed. Comments of the other States of the basin which are not so directly affected and of the Federal agencies have not yet been received but they will be forwarded as soon as they are received. Sincerely yours, RALPH A. TUDOR, Acting Secretary of the Interior. LETTERS OF JANUARY 4 AND 15, 1954, FROM THE STATE OF MY DEAR MR. DEXHEIMER: I am enclosing with this note an extract from the minutes of the Colorado Water Conservation Board 45515-54 |