OCR Text |
Show application of such rate schedules to the capacity of the electric facilities of the project) of the cost of producing and transmitting such electric energy, including the amortization of the capital investment allocated to power over a reasonable period of years. The Secretary of the Interior has interpreted the marketing provision given above as requiring rates which will return to the Treasury that part of the cost of such multiple-purpose projects which is allocated to power, plus the investment in transmission facilities. Interest on the cost of the power investment is figured at a rate equal to the average cost of money to the United States. This rate is approximately 2^2 percent. The power investment is amortized over a reasonable period of years, not to exceed the reasonable life of the facility in question, and the length of time varies with the particular structure involved. This period does not exceed 50 years at the pres- ent time. The Bonneville Power Administration, how- ever, operates under two systems of reimburse- ment. The repayment provisions applicable to the Bonneville Dam and the BPA transmission system are distinguished from those applicable to the Columbia Basin Project. The pay-out sched- ule for the former, governed by the Bonneville Act, requires payments to the Treasury in amounts necessary to cover all expenses of opera- tion, maintenance, and administration, interest at 2*/s> percent per annum on the unamortized balance of the allocated power investment, and amortization of the Federal investment allocated to power, including replacements, on a 50-year basis. In the case of the Columbia Basin Project, the pay-out plan is governed by the Reclamation Project Act of 1939. The Memorandum of Understanding for this project provides that power shall pay the Reclamation Fund, for the project account, an amount equal to the expenses of operating- and maintaining the dam, power plant, and appurtenant works exclusive of the portion allocated to irrigation pumping power, but inclusive of the portion of the joint costs allo- cated in accordance with the FPC system of ac- counts to irrigation generally; the costs of the dam, power plant, and appurtenant works except the portion allocated to irrigation purposes; the costs allocated to future downstream river regu- lation; the costs allocated to irrigation, but in excess of the repayment ability of the water users; and 3 percent interest on the unamortized bal- ance of the construction cost allocated to com- mercial power. In the case of the Tennessee Valley Authority, the reimbursement provisions are more general. Among other things it can retain a portion of its revenues for operating and emergency purposes. In fact, it was not until the enactment of the Government Corporations Appropriation Act of 1948 that a minimum required repayment was established. Under the provisions of the 1948 act, TVA must pay into the Treasury from net power pro- ceeds a total of not less than $87,059,810 during the period ending June 30, 1958, and an equiva- lent amount during each succeeding 10-year period until an aggregate of $348,239,240 has been paid. The act also requires new invest- ments in power facilities to be repaid over a period not to exceed 40 years after the year in which such facilities come into operation. In these provisions there is no reference to any specified rate of interest, either for rate-making purposes or repayments to the Treasury, although the authorizing statute states the purpose of mak- ing the power projects self-supporting and self- liquidating. The Boulder Canyon project (Hoover Dam) is completely self-supporting and self-liquidating. The Secretary of the Interior must make charges for electric energy for the period June 1, 1937, to May 31, 1987, sufficient, with other revenues from the project, to provide for the following: (a) Cost of operation and maintenance; (b) re- placements during the period; (c) repayment with interest, currently at 3 percent, of the ad- vances made prior to June 1, 1937, for construc- tion of the Hoover Dam and power plant, less $25,000,000 allocated to flood control and repay- able after 50 years without interest; (d) such portion of the advances made after June 1, 1937, as would be payable prior to 1987; and (e) annual payments of $300,000 each to the 72 |