WSP10622

• File Number: 8220.100.50
• Description: CRSP - Power
• Basin: Colorado Mainstem
• Date: 11/15/1960
• Author: Engineering Comm.
• Title: Revenue Requirements of Colorado River Storage Project Transmission System
• Water Supply Pro - Doc Type: Publication

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November 22, 1960

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The Honorable Fred Seaton
Secretary of the Interior
Hashington, D. C,

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Dear Mr. Secretary:

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Attached you wi 11 find a report entit led "Revenue Requirements
of Colorado River Storage Project Transmission System" prepared by the
Engineering Committee of Colorado River Basin Consumers Power, Inc, and
approved by the Board of Directors of that organization at a meeting
held in Albuquerque, New Mexico, on November 21, 1960.

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This report brings up to date our previous comments to the
Commissioner of the Bureau of Reclamation dated August 1, 1960, in the
light of the latest available information, including the Bureau of
Reclamation's estimates of the cost of the all-Federal "Yardstick System",
and its estimates of the cost of the Federal portion of the combination
system, the savings available to all concerned through the opportunities
for interconnection in the Four Corners area, and the utilities' latest
statement of wheeling charges.

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The attached report demonstrates that the desired criteria
previously set out in House Committee Report No. 1087, 84th Congress
and letter from E. O. Larson, Director of Region 4, Bureau of Reclamation,
January 19, 1960,cannot be met by adopting the utilities' proposal without
raising consumer power rates to the extent of at least $492 million over the
100-year study period. This difference could be increased by as much as
$167 million, or a total difference in power rates of $659 million, by
recognizing wheeling revenues for energy displaced or interchanged over
Bureau transmission lines.

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These extra costs, which storage project consumers would bear
if the utilities wheeling offers are accepted, result even though the
utilities current wheeling offers are lower than their April 1960 offers.

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Integration of major generation at Four Corners with the
Storage Project system is assured, so investment and the cost of operation
and losses associated with the system proposed in your May 18 "Yardstick"
announcement are reduced. A similar and equally important savings is made
by Arizona Public Service Company through the opportunity to interconnect
with the Storage Project system,

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It must be emphasized here that these savings result whether
the utilities' proposal is accepted or not.

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The attached report treats rather extensively the impact on
federal and local tax revenues under the utility proposal. I wish to quote
here only three short excerpts:

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