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Show operation, such operation cannot be as efficient or as economical as one-agency operation, particularly of the power plant. For future operations, particularly the compelling features of efficiency inherent in well-integrated, comprehensive development of the basin, estab- lishment of the publicly owned electric power sys- tem centered on the new projects should be favor- ably considered. However, in the establishment of such a system, due regard should be taken for the maintenance of competitive systems in the adjacent areas of the region. 5. The Place of a Tooled Account and the Use of Power Revenues and the Interest Component in Comprehensive River Basin Development The Problem Pooling of costs and revenues of Federal power developments for purposes of power planning and administration, and extent to which such power revenues, including the interest component, should be used to assist in payment of reimbursable irriga- tion costs. The Situation Six Federal hydroelectric plants and one now under construction in the Colorado River Basin have an aggregate installed capacity of 1.4 mil- lion kilowatts. These Federal projects constitute about 92 percent of the total hydroelectric devel- opment in the basin. There are potentialities for future construction of 81 other plants with an aggregates installation of about 5 million kilowatts. Because of their size and relationship to the total basin pro>gram, these facilities will be constructed by the Federal Government, to a large extent in connection with irrigation. These projects will be scattered over the entire basin from Wyoming to the Mexican border and will be connected with transmission lines for coordinated electrical opera- tion. Coordinated hydraulic operation also is planned. Few of the projects will be capable of independent operation. They generally will be interdependent and operated within a system. Power from individual projects will lose its iden- tity by the time it is commingled in the transmission system and is delivered to market. Even certain costs wiO not be identifiable with individual projects. Federal hydroelectric power projects in the basin have been built generally on the basis of individual project authorization, although where practicable to do so, they have been interconnected to permit the coordination and mingling of power. How- ever, rates must be so established for each project that the separate costs may be recovered. Accounts must be kept individually of project costs and of the purchase, interchange, and sale of power in each case. This procedure is not efficient. At present, Federal power developments are con- centrated in the lower basin in southern Nevada and in Arizona and California. It is to be expected that power developments in the upper basin will tend to be integrated with the Pacific Northwest and the westerly Missouri Basin power pools, and that those in the southerly region will continue to be integrated with the Arizona and southern California power systems. Existing irrigation projects and potential projects are in general similarly concentrated in the north- erly and southerly areas. Increasingly it is being found that new irrigation water users are unable to repay the Federal Government the cost of irriga- tion water supply, especially within the 40-year statutory period. The Solicitor of the Department of the Interior has interpreted reclamation law to permit the use of the interest component17 of power revenues from a project combining power and irrigation to help repay irrigation costs. It has been proposed to use a basin account, rather than an individual project account, to make use of all basin power revenues to assist all irrigation projects to be constructed, whether or not the irri- gation features have any power directly associated with them. The use of a basin account for the administra- tion of power projects and for the transmission and ^distribution of power and the establishment of power rates has been accepted by many informed people in the basin. In contrast, the use of the interest component of power revenues in the repay- ment of irrigation costs beyond the ability of water users to repay has become a matter of controversy. 17 By law interest must be included in the power rate of power produced by facilities on any Federal irrigation project. According to opinions of the Solicitor of the Department of the Interior, under present law the interest component is assignable to the repayment of that part of the estimated project cost allocable to irrigation in the same project, and beyond the ability of the water users to pay. 398 |
