Plan of development, Central Valley Basin report, 1949-Continued Pumping canal connections, Sacramento River to Folsom-Newman and Ione-Mendota Distribution systems, drains, and relift pumps.. East Side Upper San Joaquin Valley: Madera Canal (existing) (built B/R). Kern-Maricopa Canal. Mendota Pool-Tulare Basin Canal. Additional canals, distribution systems, drains, lift and groundwater pumps, spreading works, and interchanges.. $22, 400, 000 6,700,000 11,500,000 64,600,000 9,600,000 5, 000, 000 3,600,000 2, 000, 000 69, 000, 000 28, 400, 000 56, 100, 000 15,500,000 17,300,000 2,600,000 36,900,000 8,900,000 6,700,000 60, 900, 000 20, 000, 000 2,800,000 59, 000, 000 20, 000, 000 529, 500, 000 19, 400, 000 15, 900, 000 2, 000, 000 3, 000, 000 3,500,000 11, 500,000 7,500,000 1,700,000 13, 000, 000 5, 000, 000 5,500,000 Oroville afterbay. Elbow afterbay.. New Colgate.. New Bullards bar. Narrows (new). Garden Bar. American River and Lower San Joaquin Valley: Folsom River (built B/R). Folsom canal.. 5,500,000 4,500,000 3,500,000 7,500,000 4,000,000 500,000 4,500,000 2,000,000 1,500,000 2,500,000 2,300,000 1,500,000 3, 000, 000 1,500,000 3,500,000 3,300,000 700,000 139,800,000 26, 200, 000 48,500,000 74,700,000 175,200,000 Indexed total.. 389,700,000 27, 000, 000 15, 000, 000 1,810, 800, 000 2.65 to 1 4,800, 000, 000 NOTE. See financial analyses inserted after p. 31 and p. 63 for actual costs of existing and authorized Central Valley project features. Mr. ROGERS of Texas. Now, one other question. You are familiar with the NAWAPA proposal? Mr. DOMINY. Yes, as near familiar as anyone can be with a project of that magnitude at this stage of its discussion, sir. Mr. ROGERS of Texas. Let me ask you this. When you make the plans for these projects like this, in carrying out your previous plans and thoughts and as I understand it, NAWAPA was certainly not in the mind of anyone in 1940-do you try to work these in so that if such a thing as a NAWAPA project would be developed that this would fit in as an integral part of this plan? Mr. DOMINY. Yes, indeed. For instance, with all of the storage and conduits that we have here, if NAWAPA should come into being sometime, we might by exchange accept water from NAWAPA in the northern end of this system and move all this water further south. It might be the cheapest way to get it further south, you see. Projects like that would be integrated into the system, just as we do on all of our projects. Mr. ROGERS of Texas. Now, the NAWAFA project or proposal, not to oversimplify it, anticipates the taking of water from as far as the Yukon and placing it in areas from where actually waste water will eventually go to the Great Lakes and into the Gulf of Mexico? Mr. DOMINY. That is correct. They have an intercontinental look in that proposal. They would have a huge reservoir in the intermountain trench. It would be the biggest manmade reservoir that has ever been visualized, and certainly bigger than anything we have now. And there are now some pretty large manmade reservoirs in the world. But this would dwarf anything that has been built heretofore. And that would be the regulating and equalizing structure. And from that you could take water off to the Great Lakes, or move it on down into the Columbia and from the Columbia on south into California and on as far out as Mexico. Mr. ROGERS of Texas. And on down the Mississippi or down through the Great Lakes? Mr. DOMINY. Yes. That is the kind of water that they would release. Mr. ROGERS of Texas. And that project could cost somewhat over $100 million; would it not? Mr. DOMINY. Yes; indeed it would. And it would take a good many years to plan and to engineer it, let alone construct it. Mr. ROGERS of Texas. Mr. Skubitz, any further questions? Mr. SKUBITZ. Mr. Dominy, how many acres would be brought under irrigation? Mr. DOMINY. A little over 400,000 acres would be served with a firm water supply. Mr. SKUBITZ. Is this new acreage? Mr. DOMINY. No; the majority of it has already been irrigated with inadequate supplies of water from both streams and ground water Sources. Mr. SKUBITZ. Now, let me ask this: What charge will you makeper acre-foot for irrigation in the Foresthill area? Mr. DOMINY. On the Foresthill we would supply the water in the pipeline at $2.50 an acre-foot. The farmer would have to pay his own distribution system costs. Mr. SKUBITZ. How much will you charge in Folsom South? Mr. DOMINY. In Folsom South we will sell it canalside, in the main canal, at $2.75 an acre-foot. Then in addition to that, of course, the farmer has to pick up the cost of the distribution system. Mr. SKUBITZ. That is on both projects? Mr. DOMINY. That is right. So this $2.75 doesn't mean much until you know the rest of the cost, to see what the farmer has to pay. For example, his total cost on the Folsom South canal, when he goes out and irrigates the field will be about $19.27 an acre for each acre he irrigates. Mr. SKUBITZ. How much? Mr. DOMINY. $19.27. We have projects that are served out of the Central Valley where the cost to the farmer runs as high as $65 an acre, because of the additional pumping or the cost of the distribution system and the operation and maintenance costs. And we have used what we call the postage stamp rate-at-canalside, keeping the water as cheap as we can and still pay out the project, because we know these added costs that he has to pay. Mr. SKUBITZ. What about municipal and industrial water in the Foresthill area? Mr. DOMINY. In the Foresthill area they are going to pay $85 an acre-foot for it, for municipal and industrial. And as the irrigation water is converted to municipal and industrial purposes over the years the revenues will increase. Mr. SKUBITZ. How much is it going to be on Folsom South? Mr. DOMINY. On Folsom South we have a municipal and industrial rate of $14 an acre-foot canalside. Mr. SKUBITZ. Why the difference? Mr. DOMINY. The reason is the cost to provide it, it costs us more to provide it in the Foresthill service area, and in the case of municipal and industrial water we don't have any Mr. SKUBITZ. Will people pay that much for it? Mr. DOMINY. We think they will, because the alternate is that you can't develop the area. Mr. SKUBITZ. How much are they paying for it in the area right now? Mr. JOHNSON. We are now paying $280, with a limited supply available. Mr. ROGERS of Texas. If the gentleman would yield further, is that for municipal and industrial? Mr. JOHNSON. Yes. Mr. ROGERS of Texas. And is that treated water? Mr. JOHNSON. Treated somewhat. They have a small Mr. ROGERS of Texas. We are talking about the $80 an acre-foot water; is that treated? Mr. DOMINY. Let me get that straight. I think I gave you the wrong answer. I was thinking you asked me about the Folsom-Malby when you get the $32 an acre-foot. Let me give you all three of them so that we will have the record straight. The Folsom South Canal, irrigation will be $2.75 an acre-foot canalside. And this will repay about 62 percent of the irrigation allocation. The balance would be paid by power revenues. The municipal and industrial rate, Folsom South Canal, will be $14 an acre-foot for municipal and industrial water. And this repays a hundred percent of the cost of the allocation to municipal and industrial water. And then on the Foresthill Divide the irrigation rate is $2.50 per acre-foot. The irrigation water revenues only pay 13 percent of the cost, and the power revenues pick up the balance. But that is a very small irrigation project, and we expect all that to convert to municipal and industrial in a reasonably short period of time. The municipal and industrial rate will be $85 an acre-foot, which would pay 100 percent of the cost. On the Folsom-Malby section there is no irrigation service at all; it is all municipal and industrial. That will be sold at $32 an acre-foot and pays a hundred percent of the cost. Mr. SKUBITZ. Is there any relationship between the amount you charge for municipal and industrial water and the cost benefit ratio that you establish for these projects? Mr. DOMINY. No. Actually, the benefits are computed as to what it would cost to provide the service from an alternative source for comparable service. Mr. SKUBITZ. The benefits would be municipal water, isn't that correct? Mr. DOMINY. That is right. Mr. SKUBITZ. Why is it you charge $1.85 for the water and you come out with a cost-benefit ratio of 1.9 to 1, and in the other you charge $14 for municipal water and you come out with 3.79 to 1? Mr. DOMINY. I have my expert on benefit-cost ratio, Mr. McCarthy, and I will ask him to answer you. Mr. MCCARTHY. There is a relationship between benefits. We figure the benefits Mr. SKUBITZ. You don't agree with Mr. Dominy? Mr. MCCARTHY. I have to explain a point. There is a relationship; the benefits do not control. But the benefits for a unit-say, the Foresthill Divide unit-are used in allocating the costs of that unit. We allocate the costs between municipal and industrial water supply and irrigation. That gives us a cost of municipal and industrial water supply service. Then we determine the rate to pay that out as the rate that is required for 50 years at 31% percent interest. The amount of cost that is allocated to municipal and industrial water supply-will always be somewhere below the benefits, because you are taking advantage of a multiple-purpose project and allocating joint costs between various functions. Now, on the Folsom-Malby unit, we followed the same procedure. But the unit costs of the Folsom-Malby unit are much lower than they are for the Foresthill Divide unit, and therefore we get a different rate for municipal and industrial water supply. But, in each case, it is the allocated costs that we pay out in 50 years at the 3% percent. And that determines the rate for any specific unit. Mr. SKUBITZ. I have one more question. On page 10 of your statement, Mr. Dominy, I notice that the total nonreimbursible is $48 million. Now, that is 11 percent of the cost of the project. Is that high, low, or average? Mr. DOMINY. Well, it comes out almost exactly on average. The $4.5 billion investment in reclamation which is already on the books as a capital investment comes out between 89 and 90 percent reimbursable. So, this one is just about on average; and, it is also an average for the Central Valley project. Mr. SKUBITZ. That is all, Mr. Chairman. Mr. ROGERS of Texas. Do you have any questions, Mr. Aspinall? Mr. DOMINY. It has been a pleasure, sir. Mr. ROGERS of Texas. Mr. Irvine Sprague, Deputy Director of Finance, State of California, representing Governor Brown, and Mr. Ralph M. Brody, Chairman of the California Water Commission. I presume that you would want to testify together. Is that right? Mr. SPRAGUE. That is correct. Mr. ROGERS of Texas. You may proceed. STATEMENT OF IRVINE H. SPRAGUE, DEPUTY DIRECTOR OF FINANCE, STATE OF CALIFORNIA, REPRESENTING GOVERNOR BROWN Mr. SPRAGUE. My name is Irvine H. Sprague. I am deputy director of finance of the State of California, and I am here today to represent Governor Brown. Mr. Chairman, it is good to see you flanked by good California members of the committee-Congressman Johnson on your left and Congressman Reinecke on your right. And we appreciate the interest of the chairman, Mr. Aspinall, in sitting in on these hearings also. You have already had the benefit of the expert technical witnesses from the Department: Secretary Udall, Mr. Dominy, Mr. McCarthy, and Mr. Pafford. I wouldn't presume to go into that area of testimony. I will be followed by witnesses, a selected small group from the State of California, who will emphasize the community interest in the project. And my sole purpose in being here today is to emphasize to the committee the interest of the Governor of California and the people of California in this project. The Governor himself wished to testify here personally, and I tried to work it out with Mr. McFarland, but because of schedule difficulties it could not be arranged. But that was his original intention. Although this is primarily a reclamation project with major power benefits, the Auburn-Folsom project has real significance to California in the areas of fish and wildlife, recreation, and very much so in the area of flood control. Because of the trend of all of the other statements, the Governor's testimony goes primarily to the problem of flood control. That is very fresh in our minds in California, because of the winter disasters. |
