of our service people and civilians go into the millions each year and a goodly portion of that returns to this city. Why shouldn't it?

I, personally, am tired of hearing what a Godsend it is for Fairbanks that the military is here. We are an industry. A city lives by its industries so let's put the lid on the coffin and bury this corpse once and for all. We are part and parcel of this city. We don't want it any other way. I said once that there is no such thing as a barrier between "my base and your town," because it is "your base and my town." Only in unity can we hope to succeed in the venture of survival. Only with teamwork can we win the ball game.

We would like to offer that Anchorage is a part of the Federal governmental installations in the Anchorage community and that, by the same token, the Federal installations are a part of the city of Anchorage. Each has its responsibilities to the other. The city will continue to do its best in endeavoring to provide all the assets to our modern way of life that can be furnished by a municipal government. We are hopeful that the Congress and the responsible Federal Government officials will recognize the tremendous problems that face a city like Anchorage, and that our problems are somewhat your problems also. When they are solved, they result in mutual benefit. It is hoped that mutual responsibility will be recognized. Our suggestions and requests are not presented in a selfish vein but are presented in a spirit of creating a better community and a more attractive community in which the Federal Government will continue to provide services for the entire Nation, a community in which private enterprise will develop a more self-sustaining economy, and a community in which its people can take pride and enjoyment in living a more prosperous and fuller life here in Anchorage-making it a home base for all. That concludes the report, Mr. Chairman.

Mr. O'BRIEN. Mr. Chairman, may I say before we take a brief recess, I think the committee would congratulate these gentlemen for the thoroughness of their preparation, brevity and compactness of their statements. I am very sure you provided a very fine basis for the questioning that will follow.

Mr. BARTLETT. The committee will now stand in recess for 5 minutes.

(A short recess was taken.)

Mr. BARTLETT. The hearing will come to order.

The witnesses for the city please seat themselves by the table in the order in which you testified.

Mr. Abbott, do you have any questions to ask of the witnesses? Mr. ABBOTT. I have in mind several questions, Mr. Chairman. Leading off in view of the order of presentation, I thought it might be helpful on the power picture and so that we have it on the record if Mr. McFarland, our reclamation engineering consultant, addressed a few questions perhaps to Mr. McKinley.

Mr. MCFARLAND. Mr. McKinley, as I understood your statement, you are saying that the existing power capacity for all practical purposes has been absorbed or will be absorbed in the very near future and that we cannot start too soon in looking to the future development. Is that correct?

Mr. MCKINLEY. Yes, sir, that is right, by 1957 or 1958.

Mr. MCFARLAND. Also, as I understood your statement, so far as the city of Anchorage is concerned you have no plans for constructing additional power capacity to serve your future needs.

Mr. MCKINLEY. That is right.

Mr. MCFARLAND. So far as you know, there is no private power company that has any plans to serve your future power needs. Mr. McKINLEY. No, sir.

Mr. MCFARLAND. Or is interested in serving your power needs? Mr. MCKINLEY. No, sir, there is no plans for any private companies that we know of.

Mr. MCFARLAND. Is there any plan by any REA cooperative to serve needs in this area?

Mr. MCKINLEY. The needs of the area as regards their distribution system, yes. As pointed out in the presentation, they are presently investigating a site on the Kenai Peninsula at Cooper Lake, which we might be able to derive a small amount of power from in an emergency. But it is our understanding that the REA will not finance power development for municipalities.

Mr. MCFARLAND. I believe that your statement indicated that the Caribou development presently under study by the Bureau of Reclamation was the most likely potential power source.

Mr. MCKINLEY. If it proves to be feasible we look upon that as being the closest source of power in terms of time.

Mr. MCFARLAND. The city of Anchorage is favorable to the Bureau of Reclamation developing and disposal of electric power in this area? Mr. McKINLEY. Yes, sir, very definitely.

Mr. MCFARLAND. Mr. McKinley, your second recommendation relates to an extension of the amortization period which you say might reduce your power rate to a truly low power cost. I understood from your testimony that the Federal power from the existing Eklutna plant was at a lower rate than any previous power in this area. Is that correct?

Mr. MCKINLEY. That is correct. Our power used to cost us 22 cents from our own generation facilities. We now get it for between 10 and 11, depending on the quantity used.

Mr. MCFARLAND. 10 and 11 mills?

Mr. MCKINLEY. Yes, sir.

Mr. MCFARLAND. What did you have in mind as a truly low power cost?

Mr. MCKINLEY. For Alaska, if we could get power in the area, not at the bus bar or the plant but in the area, if we could get power for 6 or 7 mills it would be acceptable, I believe. I believe that would be about, all that we could expect. That is not truly low-cost power. Down in the order of 3 and 4 mills is more like it.

Mr. MCFARLAND. You realize, of course, though, Mr. McKinley, that 6- or 7-mill power is now considered low-cost power in the 48 States and with the higher cost of construction and so forth up here it would have to be a very favorable development for a possible rate in that neighborhood.

Mr. MCKINLEY. Yes. We are thinking in terms of projects such as Woods Canyon wherein an extremely low rate has been mentioned. Mr. MCFARLAND. What did you have in mind as to an amortization period? You understand that Eklutna rates are set up for a 50-year amortization.

Mr. MCKINLEY. Yes. 75 at least.

Mr. MCFARLAND. 75 years is approaching the economic life of a good portion of the machinery and plant equipment. So that you are approaching your longest justifiable amortization period.

Mr. McKINLEY. That is right.

Mr. MCFARLAND. Your recommendation is that the Bureau of Reclamation be put in the power generating business on a permanent basis. What did you mean by that statement?

Mr. MCKINLEY. At the present time as far as we know the only authorization that the Bureau has in Alaska is the authorization granted by House bill 3990, which grants them investigative powers for the investigation of possible sites and grants them a fixed amount each year and also further provides that they do not have to return any residue from that fixed amount each year back to the Treasury. They are able to accumulate anything that is not spent the previous year.

In

What we have in mind is to place the Bureau in the position that they will be an agency to investigate, develop, and wholesale the resultant power from all feasible sites to the needs of the area. other words, working in conjunction with the city they would determine what our rate of growth is and automatically proceed with the investigation of new sites far enough in advance so that we would be constantly assured of an adequate supply of low-cost power.

Mr. MCFARLAND. Then, let me say that your understanding of the legislation which passed last session of Congress, as a result of the efforts of your Delegate, Mr. Bartlett, your understanding of that is correct. What you have in mind, I would say, is something that legislation is different from any existing legislation applicable in the States and I think there will be a reluctance on the part of Congress to authorize continuing power development. In other words, what I am saying is that I think that each individual development will have to be authorized separately and upon its merits and upon the feasibility studies presented.

Mrs. GREEN. Could I interrupt at this point, along with the Bureau of Reclamation line of questioning? You made the statement, or I guess it was a recommendation, that all of the single power sites be developed under the Bureau of Reclamation and the multiple-purpose dams under the Corps of Engineers.

Mr. MCKINLEY. Yes.

Mrs. GREEN. Could you explain why that particular recommendation?

Mr. MCKINLEY. Mostly because that is usually the practice in the States, that multiple-purpose projects are usually developed by the corps.

Mrs. GREEN. I think of the Hells Canyon, which is a multiplepurpose project, Bureau of Reclamation project, and I wondered if there were reason peculiar to this area that would result in that recommendation.

Mr. MCKINLEY. No; I do not believe there are any reasons peculiar to the area. Our feeling is that there are three agencies in the area and it is our endeavor to attempt to get the development of hydro power needed by the area, and allocate the responsibility for those developments to the three agencies so that they would all be in.

Mr. DAWSON. Will the lady yield to me at that point?

Mrs. GREEN. Yes.

Mr. DAWSON. It is my understanding that the reverse would probably be true that the Army engineers would be developing what you consider your multipurpose dams here. The Army engineers build

The Bureau of

dams where there are flood control and hydro power. Reclamation builds dams when there is irrigation and hydro power. That is just a general rule. Now in your case up here where you have no irrigation your multipurpose dams would fall in the category for the Army engineers, flood control and hydro power; would they not? Mr. MCKINLEY. That is right. As was pointed out in the presentation, we used the flood control of the Knik River and suggested that that would be a logical project for the Corps of Engineers to develop. And when we refer to single-purpose dams or single-purpose projects, we refer to a purely hydro project which is, I imagine, not very prevalent in the States, there is usually irrigation tied up with it.

Mr. DAWSON. They are frowned on down there. Where you just get a hydro development alone, the Bureau of Reclamation going in to build a power dam without any irrigation or reclamation features connected with it, it is sort of out in left field for them.

Mr. MCKINLEY. That is right, and that is the point we want to put across to the Congress, is that in the States the Bureau undoubtedly would be competing with private enterprise in developing a singlepurpose hydro project for power alone, but in Alaska they are not. There is no private enterprise to develop that hydro power, therefore, we are looking to the logical agency of the Government that would construct it.

Mr. DAWSON. Of course, we have a lot of cases in the States, too where private enterprise cannot go in and will not go in and the Congress does not look very favorably on just a single-purpose dam for hydro power even though private people will not develop them.

Mr. MCFARLAND. For the record, Mr. Chairman, as I stated previously, that the Bureau of Reclamation is operating in Alaska because it has been designated by the Secretary of the Interior to do so and Alaska is not under the reclamation laws which govern the operations of the Bureau of Reclamation in the 17 Western States.

Mr. McKinley, your recommendation 4 interests me. You recommend that this committee assist in convincing the military that cooperation with the Bureau of Reclamation in an interchange, of energy and use of existing energy from Eklutna would be in the best interests of their economical operations.

I would like to know, is there an interconnection between the military generation which I understand is by steam generating plant and the Bureau of Reclamation's Eklutna hydro development?

Mr. MCKINLEY. Yes, sir; there is. All three major power agencies in the area are tied into the Anchorage substation which is the point of delivery of the Bureau of Reclamation.

Mr. MCFARLAND. What is the third?

Mr. MCKINLEY. Chugach Electric Association.

Mr. MCFARLAND. They are interconnected into something of a pool?

Mr. MCKINLEY. Yes, sir, but as yet there has been no success in arriving at an agreement with the military for maximum use of their generation capacity. They are just presently completing a 22,500kilowatt unit at Elmendorf. I believe the unit at Fort Richardson is about 18,000 or some such figure, making quite a substantial capacity of steam power on the 2 bases. There is a tie line between Richardson and Elmendorf and in turn a tie line from Elmendorf, from the Anchorage substation.

The economical operation we referred to is this: In the summertime their requirements for steam heat are low. It is not necessary to run those plants to very much capacity electricalwise in order to obtain the steam for heating purposes. Therefore, if they use energy from the Bureau which would be developed from water which is now running over the dam, when there is excess water they could get that energy at about 6 mills which is the dump energy rate. Then in the wintertime when everybody is drawing on Eklutna to the ultimate they would be able to augment the Eklutna supply by using the excess steam necessary to furnish heat in the generation.

Mr. ABBOTT. At that point, are you saying you do have the necessary lines for transmission if you had that interchange?

Mr. MCKINLEY. The necessary lines are there. All it needs is signatures on a piece of paper.

Mr. ABBOTT. So that locally you have a hydro plant, which is Eklutna, 2 thermal plants, 1 at the airbase and 1 at Richardson; is that correct?

Mr. MCKINLEY. And there is a third one, Chugach Electric.
Mr. ABBOTT. Is that thermal?

Mr. MCKINLEY. That is thermal also; yes, sir.

Mr. ABBOTT. And the city is not presently engaged in generating any steam energy; is that correct?

Mr. McKINLEY. No, sir; we have a standby diesel plant for peaking purposes only.

Mr. ABBOTT. You have hauled away your mobile naval plant.
Mr. MCKINLEY. Yes, sir.

Mr. MCFARLAND. Certainly what you stated is correct, that the most efficient operation is for the two to work together and any time you can use dump energy to replace the fuel needed to generate at the steam plant there will be a more economical operation.

Mr. Chairman, I think that is a point we might follow up on with later witnesses and in Washington.

Mr. BARTLETT. Mr. Dawson.

Before you proceed, Mr. Dawson, may I say I have just been informed we confront a situation, not the first situation, very probably not the last. It appears it will be advisable before the noon recess to hear testimony on mental health because of the impending departure of Mrs. Green. So after Mr. Dawson has concluded his query of Mr. McKinley, I wonder if it would be too much trouble for those who are before us now to come back this afternoon. Could you do that, Mayor Taylor and associates?

Mayor TAYLOR. Yes, sir.

Mr. BARTLETT. Except Mr. Shannon, because Mr. Shannon is also about to go south.

Mr. DAWSON. I will make mine very short. I would like to try a question out on Mr. McKinley. Coming from a reclamation State perhaps this might help me to give the answer to some of my opponents. The big expense you have up here toward constructing dams is the transportation of many materials from the States up here to make it possible.

Mr. MCKINLEY. Yes.

Mr. DAWSON. In view of that, do you not think we could just bring up a little hunk of uranium and put in a reactor here in the city of