064688982.Pdf

THE METRO R DISTRICT 33

MAILINGADDRESS POSTOFFICE BOX 54153 LOS ANGELES, CALIF. 90054 OFFICE OF PHONE624.9261 GENERALCOUNSEL April 10, 1967 AREACODE 213 FILED by order of the Board of D~rectcrs of The Me~ropo~ftan Vkd.~r D~r~ct Board of Directors ~ ~, , 0~ .)3uL~ern.u, ~ The Metropolitan Water District of SouthernCalifornia tsi~e~gh&d...AP.R i.jL :1i67 B u i 1 d i n g .±‘~-~-~ Execu~ve Gentlemen: Secretary

Report on Colorado River Basin ProjectLegislation

During the week of March 13, 1967 the Subcommittee on Irrigation and Reclamation of the House Committee on Interior and InsularAffairs held four days of publichearings in Washington, D.C. on legislation that would authorize a Colorado River Basin Project (CRBP), including the CentralArizonaProject (c1P), and establish a National Water Commission. The GeneralCounsel de scribed this legislation in detail to your Board in letters dated February 13 and March 10, 1967, copies of which were sent to all Directors. The HydrographicEngineer, two members of the Legal staff, and the LegislativeRepresentative in Washington, D.C., attended the hearings on behalf of Metropolitan.

The Subcommittee is not expected to take any formal action on the bills until next month. The SenateSubcommittee on

Water and Power of the Committee on Interior and InsularAffairs has set hearings on Colorado River Basin Projectlegislation for the week of May 1, 1967 in Washington, D.C.

The Subcommitteereceivedtestimony from representatives of each of the Colorado River Basin states, the Secretary of the Interior, the Department of Water and Power of the City of Los Angeles,conservationistorganizations, and variousindividuals. A synopsis of this testimony is attached.

The majority of the materialsubmittedduring the hear ings had previously been submitted to the Subcommitteeduring hearings on this same type of legislation, held in 1965 and 1966. The GeneralCounselreportedthosehearings in letters to your Board dated September 13, 1965 and June 13, 1966, copies of which were sent to all Directors.

Board of Directors — Page Two

New materialcovered at the recenthearingsinvolved alternative power proposals by the Secretary of the Interior and the Department of Water and Power of the City of Los.Angeles.

.The Secretary’sproposal would substitute a $92 million prepaidpurchase of thermal power for pumpingwaterto.Central Arizona, in place of new Colorado Riverhydropowerdevelopments at Bridge and MarbleCanyons. The Secretarywouldpurchase this power from a steam—electric plant that would be built, owned and operated by non—federalutilitiesassociated with WesternEnergy Supply and TransmissionAssociates (WEST),probably in Northeastern Arizona. The staff is currentlyattempting to accumulatesufficient information to adequatelyreview this proposal.

The City’spumpedstoragehydropowerproposal for Hualapai (BridgeCanyon) Dam represented the major new development of. the hearings. This proposal would more than triple the generating capacity of. the proposedHualapaipowerplant,raising it from 1500 megawatts, to 5000 megawatts by utilizing a combinedhydro—pumped storagepeakingplant incorporatingreversible pump turbines. In addition, the Federalinvestment could be reduced about 50 percent if the power plant and transmission lines were financed by non— federalutilities. However, the City’stestimonyemphasized that authorization was necessarywithin the next ten to twelvemonths in order to realize the economies of scale available by orderly integration with other plannedcapacities and transmissionfacili ties. Prelimina~ryreview by Metropolitan’s staff indicates that thetCity’sproposal would be more feasible than the Bureau of Reclamation’soriginal BridgeCanyonproposal. On April 5, 1967, the Colorado River Board of Californiaadopted a resolution, attachedhereto, supporting the City’sproposal.

Subsequent to the hearings, the Eel River Association sub mitted a. statement for the hearingsrecordrequesting the Committee to considerCalifornia’s North Coast as the initial source of water to be developed to offset the prospectiveshortages in the Lower Colorado River Basin. Similarproposals had been urged during the hearings by Wyoming, Utah and Arizona, and, on April 4, Utah’s Senator Moss introduced a new Colorado River Basin Project bill (S. 1409) that would authorize a feasibilityreport for a project to import 4.5 maf from California’s North Coast, 2 maf for uses enroute and 2.5 maf for satisfaction of the MexicanWater Treaty and Lower Basin losses.

Because of the significance of this proposal to Cali fornia, the CaliforniaAdvisoryCommittee on WesternStates Water Planning has scheduled a publichearing in Sacramento on April 18, to collect and coordinatevarious views within the State. Since this proposalinvolvesMetropolitan’sinterest in both the..State Water Plan and the ColoradoRiver, it appearsdesirable that Met ropolitananalyze it closelywith a view to presenting a statement at the April 18 hearing. Board of Directors — Page Three

A Federalexport of water from California’s North Coast (e.g., Eel, Kiamath and TrinityWatersheds) might involve a con flict with the obligation of the State of California to develop water from those sources to maintain the suppliesrequired for servicing the existingwater contracts,includingMetropolitan, which the State has entered into pursuant to the authority of the Burns—Porter Act. In view of this possibility, it may also be desirable that Metropolitanpresent a statement at the forthcoming Senatehearingsregarding this provision of Senator Moss’ bill.

Another new development in the hearings was a renewal of the conflictbetweenArizona and California over protection for California’sexistingworks against the CPJ~P when water supply shortagesoccur. In the previous two hearingsbefore the House Subcommittee,Arizona had agreed to an annualprotection of 4.4 maf for Californiaagainst the C2~P. In the recenthearings, how ever, Arizonaopposed a 4.4 maf Californiaprotection,arguing that such a protection puts too much of the burden of augmenting the Colorado River water supply on Arizona, and observing that such shortages should not occur until the 1990’s.

Efforts to resolve the conflict over protecting Cali fornia’sexisting uses have developed in several areas. Some of the compromiseproposals that have been informallyproposed are: (1) reduceCalifornia’sprotection to 3.850 maf and supply Met ropolitan with an additional 0.550 maf of exchangewater from California’s North Coast; (2) divide the risks of shortage so that the C~P bears the first~0.400 maf of shortage, and California and the C2~P bear the next 0.400 maf of shortageequa1~1y; and (3) terminateCalifornia’s 4.4 maf protection after 35 years.

In addition to their opposition to a 4.4 maf protection for California’sexisting uses, Arizona also urged increasing the size of the CAP aqueduct to 3000 cfs (2.0 maf annualcapacity). The Bureau of Reclamation’soriginal CAP proposalprovided only for an 1800 cfs (1.2 maf) aqueduct, and SenatorKuchel and Congress man Hosmer have retained this limitation in their respectivebills, S. 861 and H.R. 6271. ChairmanAspinall and the Secretary of the Interior have proposed an increase to 2500 cfs (1.6 maf). Recent studies by the Colorado River Board of Californiaindicate that an increase of the CAP aqueduct to 2500 cfs might be detrimental to California and Metropolitan.

One item of major interest to Metropolitan that was not discussed in detail at the hearings was the use of the Hoover power revenueswhichwould accrue after the costs of that facility have been repaid in 1987. Since those revenues will be provided by powerusers in SouthernCalifornia, it appearshighlyunfair that they be used to subsidize the CAP. Californiaagreedduring Board of Directors — Page Four

last year’snegotiationsonH.R. 4671 to utilize these revenues in conjunction with those from the proposedHualapai and MarbleCanyon Dams to financeaugmentation of the Lower.~Colorado River Basin’s water supply. However, if the Congress does not authorizeeither Hualapai or MarbleCanyonDams, Metropolitanshould urge pro visionsprotectingHoover power revenues from use by the CP~P.

An additionalelement that developedduring the hear ings was a generalretrenchment on the types of Colorado River water augmentationstudies that would be authorized. Arizona and the Secretary have both abandonedspecificwater importationstudies and ChairmanAspinall has downgraded the studies in his bill from feasibilitystudies to reconnaissancestudies. Arizona’ssoften ing on specificimportationstudiesappearsparticularlydangerous in view of her attempts to increase the size of the CM’ aqueduct and her refusal to honor the California 4.4 maf protectionagree ment.

Because of the rapid pace of developments on this legisla tion, and the vagaries of Congressionalfeelings on California’s 4.4 maf protection,Hualapai Dam, and importationstudies, it is suggested that your Board follow this matter with particular at— tentionthe next few. weeks, This office will continue to audit these~matters,including the forthcomingSenatehearings and t~ie April 18 CaliforniaAdvisoryCommitteehearing, and will report developments to your Board.

Very trulyyours, /9

Charles C. Cooper, GeneralCounsel RESOLUTION

COLORADO RU7ER BOARD OF CALIFORNIA

April 5, 1967

The ColoradoRiver Board supports such amend ment of the pendingColorado River bills now before the

Congress of the United States as may be necessary to

permit the full exploration and development of the hydro

pumped storagepeakingplant for Hualapai Dam and Reser

voir at BridgeCanyon, with an installedcapacity of 5

millionkilowatts. This project was proposed by the

Department of Water and Power of the City of Los Angeles

on March 17, 1967, in HearingsBefore the Subcommittee on

Irrigation and Reclamation of the House Interior and

InsularAffairsCommittee. The Board endorses the prin

ciples of the Department’sproposal, which will help to

optimizehydroelectric power development as well as to

improve the rec~ationalpotential of the area and will

expeditepassage of the pendinglegislation. Synopsis of Hearings

Colorado River Basin Project

and

NationalWater Commission Bills

Before the

Committee on Interior and InsularAffairs

of the

House of Representatives

March 13, 14, 16 and 17, 1967 California

California’sposition was presented by SenatorKuchel, DWR DirectorGianelli (in behalf of GovernorReagan),Special AssistantAttorneyGeneralNorthcutt Ely and CRB ChairmanRaymond Runimonds. In addition, Mr. Floyd Goss, AssistantGeneralManager of the Department of Water and Power of the City of Los Angeles, submitted a new proposal for Hualapai Dam hydropowerdevelopment. The ImperialIrrigationDistrictsubmitted a statementconcerning water salvage in the All—AmericanCanal, and the Eel River Flood Control and Water ConservationAssociationsubmitted a statement urging the consideration of California’s North Coast “as the initialsource of water to be developed to offsetprospective shortages in the Lower Colorado River Basin.”

Arizona

Arizona’sposition was presentedjointly by Congressmen Udall, Rhodes and SteigeralthoughGovernorWilliams, who did not attend the hearings,submitted a separatestatement. These state ments differed from California’sprimarily over the 4.4 maf protection for California’sexisting uses and the type of regional studiesrequired to protect the ColoradoRiver’s water supply.

Congressman Udall urged the passage of his bill, H.R. 9, which does not provide any water shortageprotection for Cali fornia’sexisting uses or specific water importationstudies. It increases the size of the CAP Aqueduct to 3000 cfs (2.0 maf), from the originallyproposed 1800 cfs (1.2 maf) and the 2500 cfs (1.6 maf) provided in CongressmanAspinall’s H.R. 3300. In addition to the CAP, it would authorizeHualapai Dam, a Lower Basin Development Fund integratingHoover Dam power revenues with the CAP and Hualapai Dam, a NationalWater Commission, and recognition that the MexicanWaterTreaty is a nationalobligation. It also includes a directive to the Secretary of the Interior to “investi gate means of providing, at the expense of the FederalGovernment, sufficientwater from sourcesoutside the Colorado River Basin, to satisfy the MexicanWater Treaty.” Mr. Udall stated that this provisionwoul.d include“studies of the export of water from NorthernCalifornia to the Colorado River and SouthernCalifornia.” He requested that the NationalWater Commission bill be amended to include a study priority for the Colorado River Basin.

Mr. Udall objected to California’s 4.4 maf protection because it “wouldplace on Arizona the whole incentive and burden of augmenting the Riverbefore the ‘crunch’ of the 1990’s.” He commented that he feels that specificwater importationstudies —2— cannot be authorizedconcurrentlybecause of the political oppo sition of the PacificNorthwest. He observed that California is “seekingapproval and authorization of additionalfederal reclamationprojects and otherprograms to augmentwater supplies both in Southern and NorthernCalifornia” and specifically mentionedMetropolitan’sdesalinatjonbills. He stated that Arizona “will not sit idly by while these projectsreceive priority and funding” over the CAP.

GovernorWilliams’statementrecognizes the desirability of a Federal CAP over a State CAP, but advises that Arizona’s legislation has developed a State CAP plan utilizingState-developed hydroelectricpower revenues, and that the ArizonaInterstateStream Commission is preparing an alternative State CAP plan that would not requirehydroelectricrevenues.

Administration

Secretary of the InteriorUdall, AssistantSecretary Holum, ReclamationCommissionerDominy,SolicitorWeinberg and members of their staffspresented the Administration’s $719 millionproject (5. 1019), which includes a new proposal to substitute a 400-megawatt, $92 millionthermalpowerpurchasing agreement for CAP pumping in place of Colorado Riverhydropower development. The GeneralCounseldescribed this proposal in detail in his February 13 letter to your Board and it is discussedfurther under the “Power”Section of this synopsis.

The Secretary also specificallyendorsed the National Water Commissionbill, and two of the five Upper Basinprojects proposed by ChairmanAspinall. He urged deferral of Hualapai Dam pendingreview by the proposedNationalWater Commission, a moratorium on FPC jur±sdiction over that site, and an extension of the Grand CanyonNational park to includeMarbleCanyon. He stated that the Administrationwould not object to a 4.4 maf annualprotection for California and that the Administration’s CAP cost-benefitstudies had in fact assumed the CAP would be cut back to provideCalifornia that protection. He also stated that the Administrationwould not object to the proposed]~eve1opment Fund, reservoiroperatingcriteria, or other intra—basinprovisions in CongressmanAspinall’s H.R. 3300.

Except for CongressmanSaylor and the PacificNorthwest Congressmen, the Subcommitteeappearedunreceptive to the Adminis tration’s new proposal.

Colorado

Colorado’sGovernor Love testified in support of Chair man Aspinall’s H.R. 3300 and against the Administration’s new proposal and CongressmanUdall’s H.R. 9. He stated that unless some type of agreement is reached.among the Colorado River Basin states on the Upper BasinMexicanWater Treatyobligation, similar to that included in H.R. 3300, Coloradowould institute suit in the UnitedStatesSupreme Court to obtain a judicial determination of that obligation. He also stated that —3—

Colorado has modified its position to recommend the elimination of MarbleCanyon Dam and the substitution of a reconnaissance study in lieu of a feasibility study on the importproblem, but is unable to make furtherconcessions. He asked that “some meaningful, timely study be made looking to the augmentation of the Colorado River and that the provisions for such a study be authorized as a part of, or concurrently with, legislation to authorize the Colorado River Basin Project.”

Utah

Senator Moss, who presentedUtah’sposition on behalf of GovernorRampton, stated that Utah can support the CAP only if the authorizationincludes both a “legislativecommitment” for a study of importingwater from sourcesoutside the Colorado River Basin, and equitablereservoiroperatingcriteria. He added that “Utah believes that it is still logical to look to the North CoastalStreams of the State of California as the first stage of import.” He also suggested that importedwater should be creditedequally to the Upper and Lower Basins. Senator Moss urged authorization of a high Hualapai Dam, partici pation of Utah’s Dixie Project in the proposedDevelopment Fund, nonreilubursability of all of the Dixie Project’sseparable and joint costs allocated to Recreation and Fish and Wildlife Enhancement, and planningpriority for the Ute Indian Unit of the central Utah Project.

Wyoming

GovernorHathaway and SenatorHansenstated that Wyoming opposedauthorization of the CAP unless a project to importenough water to relieve the Colorado River Basin of the MexicanWater Treatyobligation were authorized at the same time. They explained that the water should be imported “from the surplus of Northern Californiastreams”, and that such an importationproject could be authorizedwithoutprior studiesbecausenormaleconomicfeasibility requirements would be nullified since the MexicanWater Treaty deliveries are a Federalobligation.

Furthermore, they stated that Wyomingwould not support the CAP unless it also included“sufficientrevenue—producing features to assureadequatefinancing of an importationproject”, a reconnaissance study of all possibleadditionalsources of augmenting the Colorado Riverwater supply, a limitation of Cali fornia’s 4.4 maf protection to thirtyyears, and deferral of three of the five Upper Basinprojectsproposed by CongressmanAspinall —4—

until a MexicanWater Treatyobligationimportationproject is completed. They suggested that the augmentationstudies be performed by a “WesternWater Commission” rather than a National Water Commission if the Northwestobjected to a study by the existingFederal water agencies.

New Mexico

Mr. Claude Mann, Legal adviser to the New MexicoInter state StreamCommission,presented his State’s views on behalf of the State Engineer, Mr. S. E. Reynolds. Mr. Mann stated that New Mexicosupportsauthorization of the CAP including the Hooker Dam and reservoir unit in New Mexico. He also stated that “New Mexicorecognizes the desirability of a compromise on the issue of power dams on the ColoradoRiver” and does not object to deferring the authorization of Hualapai Dam if the Congress can devise other means of financing and furnishinglow—costpumping power for the CAP. He added, however, that New Mexicowould preferauthorization of Hualapai Dam concurrently with the CAP authorization. He also indicated that the NationalWater Com missionshould be given specialColorado River augmentation study directions.

Nevada

Mr. Pat Head, Administrator of the Colorado River Commission of Nevada,presentedNevada’sposition on behalf of GovernorLaxalt. Mr. Head stated that Nevadasupports the CAP and the other provisions of CongressmanAspinall’s H.R. 3300. He urged that the Colorado River Basin Project and National Water Commissionbills be cross—referenced, and that the Colorado River Basin augmentation studyprovisions of H.R. 3300 be added to the NationalWater Commission bill. He also urged authoriza tion of Hualapai Dam and the inclusion of a provision to continue the annual$300,000“in—lieu—of—taxes”payments from Hoover Power Revenues to each of the States of Nevada and Arizonaindefinitely after 1987. Under existing law those payments would terminate in 1987.

Power

Mr. Floyd Goss, AssistantManager of the Los Angeles Department of Water and Power submitted a new proposal for the —5—

Hualapai Dam power plant, that would increase its capacity from 1500 megawatts, to 5000 megawatts by converting it to a coinbina— tion hydropower-pumpedstoragepeakingfacility. In addition he suggested that non-Federalutilitiesfinance the power plant and transmissionfacilities, thus reducing the Federalinvestment fifty percent, from $540 million to $254 million. He stated that the non—Federalutilities could consequentlyintegrateHualapai Power into their respectivesystems more effectively and indicated that the Department of Water and Power would seriouslyconsider investing about $100 million for 1000 megawatts. He urged authorization of Hualapai Dam within a year in order to take ad vantage of economiesresulting from combiningHualapai Dam transmissionplanning with current DWP planning for transmission facilities from the proposed Four Cornerscoal—firedthermal powerplants.

Secretary Udall proposed that the CAP utilizethermal power in place of hydropower for its pumpingrequirements. He recommended that the FederalGovernmentcontract with some of the non-Federalutilitiesassociated with WesternEnergySupply and TransmissionAssociates (WEST) for 400 megawatts of capacity at a proposedcoal—firedthermalplant at Page, Arizona by means of a $92 millionprepaidpower purchase. He stated that the CAP would require 400 megawatts for pumping if its aqueduct were sized at 2500 cfs (1.6 maf). He estimated that CAP pumping energy rates would be set at three mills per kilowatt—hour for pumpingirrigationwater and five mills per kilowatt-hour for pumpingmunicipal and industrialwater, and that surplus power and energy could be marketed by the CAP at five mills per kilowatt—hour.

Messrs. Alan Carlin and Laurence Moss, members of the Sierra Club, testified as privatecitizensagainstfurther Colo rado Riverhydropowerdevelopmentbetween Lake Mead and Glen Canyon on economicgrounds. They citednuclearpower alternatives and attacked the Administration’scost—benefitestimates.

Conservationists

Mr. ThomasKimball,ExecutiveDirector of the National WildlifeFederationtestified that although his organization preferred the Administration’s CAP thermal power alternative, a high Hualapai Dam should be authorized if Congressrejects the Administration’sproposal. CongressmanUdall’sexamination revealed the interestingstatistic that the NationalWildlife Federation’smembership is about two million, while the Sierra Club’smembership is something less than 50,000. —6—

Representatives of the Sierra Club, the Isaac Walton League, the National Parks Association, the WildernessSociety, and the Colorado Space CoordinatingCounciltestifiedagainst the authorization of any dams on the Colorado Riverbetween Lake Mead and Glen Canyon, and againstauthorization of Hooker Dam reservoir in New Mexico. Mr. Brower of the Sierra Club presented some questionable data on Colorado River reservoirssilting characteristics. Mr. Raushenbush of the National Parks Association presented data indicating that the Development Fund would obtain more revenues by borrowing $100 million now at 3—1/4 percent and reinvesting it at 5 percent. He stated that by 2047 the fund wouldaccumulate $1.75 billion as against $1.33 billion if both Marble and Hualapai Dams were built. economics of the CentralArizonaProlect

Mr. Carl Chañn of Tucson,appearing as a privatecitizen, presentedinterestingtestimonyattacking the economicfeasibility of the CAP, citing a recentarticle in the current issue of the ArizonaReview,published by the College of Business & Public Administration of the University of Arizona,byWilliamMartin and RobertYoung, entitled “The Economics of Arizona’s Water Problem”. He stated that Arizona’sfarmers will pay less for pumpedwater ($15 per acre—foot for a 500-foot lift) than for CAP water ($17.83 per acre—foot,includingdistributioncosts). He also stated that - Arizona’seconomicallyrecoverablegroundwater reserves have been estimated at 600 maf, enough to last at least 171 years at the present rate of overdraft. He noted that the Phoenix City Manager indicated to the ArizonaLegislature in February, 1967 that Phoenix has plenty of $2 per acre—footwater available for its municipal and industrialrequirements and is not interested in the CAP’S $55 per acre—footmunicipal and industrialwater. Mr. chafin also noted the City of Tucson now uses only 55,000acre—feetannually. He suggested that Arizonaabandon the CAP and substitute a WesternArizonaProject to divert500,000acre—feet from the Colorado River to irrigate100,000 acres along the River.

Representatives of the Colorado Space CoordinatingCouncil also objected to the CAP unless its construction was financed by CentralArizona. They estimated that the Administration’sproposed interest—freefinancingprogramwould represent a loss to the United StatesTreasury of about $676 million over the fifty—yearpayout period, and submitted a table indicating that of that amount Cali fornia’s loss would be $56 million. They noted that the costs of the Colorado River StorageProject have alreadyexceededproject estimates by $352.2million,representing a 40 percentincrease.

Indians

A representative of the Navajo Tribe of Indianstestified that the Tribe opposes any hydroelectricstructuresbetween Lake Mead and Glen Canyon. —2— cannot be authorizedconcurrentlybecause of the political oppo sition of the PacificNorthwest. He observed that California is “seekingapproval and authorization of additionalfederal reclamationprojects and otherprograms to augmentwater supplies both in Southern and NorthernCalifornia” and specifically mentionedMetropolitan’sdesalinatjonbills. He stated that Arizona “will not sit idly by while these projectsreceive priority and funding” over the CAP.