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Show Chapter 4 Tennessee Valley Authority Program: Costs and Benefits The Act of 1933 makes TVA the agency respon- sible for allocating costs of the multiple-purpose projects. The Authority was directed to ascertain what part of the cost of the Muscle Shoals Project and Norris Dam should be allocated and charged to flood control, navigation, fertilizer, national de- fense, and hydroelectric power. Reports on TVA Project Economics Seven allocation reports have been made. The first was concerned with the Wilson-Norris-Wheeler system; the most recent one with the system's 16 multiple-purpose projects in operation as of June 30, 1945. TVA methods and principles of alloca- tion are set out in the first allocation report.1 Wilson Dam is reported on a value basis rather than cost basis, and Hales Bar Dam is reported on an original cost basis. Recently the Federal Power Commission made an impartial and independent review of the TVA project allocations with the assistance of the Corps of Engineers and the General Accounting Office.2 The 16 multiple-purpose projects reviewed by the Federal Power Commission were Kentucky, Pick- wick, Wilson, Wheeler, Guntersville, Hales Bar, Chickamauga, Watts Bar3 Fort Loudoun, Hiwassee, Norris, Nottely, Chatuge, Cherokee, Douglas, and Fontana. Nine are on the main river between 'H. Doc. 709, 75th Cong., 3d sess (1938). * Federal Power Commission, Report on Review of Al- locations of Costs of the Multiple-Purpose Water Control System in the Tennessee River Basin, as Determined by the Tennessee Valley Authority and Approved by the President under the Provisions of the TVA Act of 1933, as Amended. Washington, D. C, mimeo., March 23, 1949. Statistical data in this chapter are from the FPC report, except as otherwise noted. Knoxville and Paducah and seven are on tribu- taries. At the time of review they provided the following physical benefits: (1) Their installed electric generating capacity was 1,537,200 kilowatts; the gross storage capacity was 20,145,500 acre-feet; and the allocated January 1 flood storage capacity 11,162,000 acre-feet. Additional generating capacity has since been installed in Fort Loudoun Dam, 64,000 kilowatts; Kentucky Dam, 64,000 kilowatts; Wilson, 100,800 kilowatts; Wheeler, 129,600; and Douglas, 30,000. On the date of review TVA also had 12 single- purpose hydroelectric plants with total capacity of 208,380 kilowatts, and 11 fuel plants totaling 426,700 kilowatts. All costs of these are charged directly to power. (2) A 9-foot navigation channel was and is maintained. Minimum channel width is 300 feet. Low water contributions from the system also in- crease the navigable depths on the Mississippi, re- ducing channel maintenance costs on that river. (3) Of the 12,930,600 acre-feet of controlled storage in the 16 multiple-purpose reservoirs, 11,- 162,000 acre-feet or 86.3 percent is available for flood storage at the beginning of the flood season. The primary benefited areas are at Chattanooga and on the lower Ohio and Mississippi Rivers. Methods of Allocation Many methods of joint cost allocation have been investigated by TVA. These include:3 •For full discussion and definition of these methods, see J. S. Ransmeier, The Tennessee Valley Authority, 1942, pp. 173-395. 739 |
