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Show Pursuant to the Boulder Canyon Act, an agency contract was entered into whereby the city of Los Angeles and the Southern California Edison Co. operate and maintain the generating equipment. All energy is sold as falling water. Principal power contractors are Los Angeles, the Metropolitan Water District of Southern California, the Cali- fornia-Nevada Power Co., and the Southern Cali- fornia Edison Co. Arizona and Nevada each have the right to buy and dispose of 18 percent of the power. Although the power generating equipment was installed and is owned by the Federal Government, operation of the power plant is by Los Angeles for the public agencies and by the Southern California Edison Co. for itself and the California-Nevada Power Co. The power purchase contracts contemplated complete amortization of the investment in the dam and power plant with interest in 50 years,15 the payment of a certain percentage of revenues to Arizona and Nevada in lieu of taxation, and the accumulation of a surplus which would be used in research for further development of the river. The situation at the Parker Dam power project is also of interest. To provide a forebay from which the Metropolitan Water District of Southern Cali- fornia could pump water into its Colorado River aqueduct for delivery to the southern California coast area, funds were advanced by the district for design and construction of Parker Dam by the Bureau of Reclamation. The structures are located on the Colorado River 155 miles downstream from Hoover Dam. Authorization of the Parker Dam Project is contained in the River and Harbor Act of 1935.16 Under the agreement between the United States and the Metropolitan Water District for the con- struction and operation of Parker Dam and Power Plant, the entire cost of the dam and reservoir was borne by the district and the cost of the power plant was shared by the district and the United States. The United States retains one-half of the power privileges, responsibility for operating the power plant, and control of all water passing the dam. The United States has the exclusive use and benefit of two of the four 30,000-kilowatt generating units and has arranged with, the district for the use of "Twenty-five million dollars of the 173.9 million capi- tal cost was allocated to flood control, and is deferred for repayment without interest until June 1, 1987. "Act of August 30, 1935, § 2, 49 Stat. 1028. its two units until December 13, 1952, at which time the district will assume its right to the exclusive use of its units. So far as is known, arrangements at Hoover and Parker Dams have worked satisfactorily. The situ- ation at Hoover Dam, however, results in there being three operating agencies (with two operating the power plant) undoubtedly with some added costs of operation above probable costs under one- agency operation. However, the added costs are small compared to total project costs. In contrast to the situation at Hoover Dam, operation of the Parker Dam Project is by the Bureau of Reclama- tion alone. It is reported, apart from consideration of the question of power plant operation at Hoover Dam, that advantages of competition have derived from the fact that Los Angeles and the Southern Cali- fornia Edison Co. both obtain power from the project. While these utilities do not operate com- petitively in the same areas their market areas are contiguous and the competition has been in attract- ing manufacturing plants and other larger power consumers to their systems. Choice of agency for operating future electric power plants in the basin will be influenced by at least three major considerations: (1) Hydroelectric power generally will be developed in connection with projects for other purposes, importantly irri- gation. (2) Efficient comprehensive development will demand coordinated hydraulic and electrical operations as soon as the score or more of great works are completed on the Colorado and its tribu- taries. (3) As in other major parts of the country, low electricity rates are to be encouraged because of their influence upon industrial development and home comfort. In the Colorado, however, there are further regional reasons for interest in low rates; they may influence the feasibility of increased water supplies. (See problem C-10.) Low rates are most easily achieved in large system operation. These condi- tions appear most likely to be met by a basin-wide public system. Conclusions Municipalities and electric utilities have partici- pated with the Federal Government in the opera- tion of Federal projects in the basin insofar as the power features are concerned. It is certain, how- ever, that under a situation like that at Hoover Dam where several agencies have responsibilities for 397 |
