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<br />Mr. Pi ke: The Arizona Power Authority obtains from Colorado River <br />hydro-electric sources for transmission over the USBR - Arizona <br />transmission system the following amounts of power and energy: <br /> <br />(1) From Davis on a delivered basis: 45,775 kw and the <br />proportionate share of the total energy generated at Davis. <br /> <br /> <br />(2) From Hoover on a generated basis: The output of Arizona's <br />Units A3 and A4 or 165, 000 kw nameplate rating plus an additional <br />20,000 kw during Arizona's high load season under an interchange <br />agreement with the Colorado River Commission of Nevada and <br />17.6259% of the total scheduled firm energy. <br /> <br />As a result of the unprecedented low inflow into Lake Mead in 1953 <br />and particularly 1954. forecasts of the Office of River Control and the <br />decision to reduce the Hoover firm energy to an amount equal to 88% of <br />the scheduled firm, the Arizona Power Authority is now in a rather serious <br />situation from the standpoint of meeting its obligations with its contractors. <br /> <br />Steam generated energy is available in Arizona as a consequence of <br />new units placed in operation in Central Arizona and the Arizona Power <br />Authority is now purchasing such energy at an off-season and off-peak <br />cost which though reasonable is approximately twice the increment cost <br />of Colorado River energy. This additional cost is being pas sed on to <br />Arizona Power Authority contractors who have no other source of supply. <br />The shortage in Hoover energy available to the Authority on a delivered <br />basis amounts to some 80,000,000 kwh. In addition to purchasing off-season <br />and off-peak steam energy for use in Arizona, the Arizona Power Authority <br />is purchasing such energy for transmission to the Colorado Commission of <br />Nevada to meet the Southern Nevada deficit. <br /> <br /> <br />More serious for the Arizona Power Authority than the shortage in <br />energy available from Hoover is the shortage in kilowatt capacity that will <br />occur in the spring of 1955 and each spring thereafter until an improvement <br />in precipitation occurs on the Colorado River Watershed. This will be due <br />to low lake elevations and consequent low heads on the Hoover units. <br /> <br />Based on the present forecasts and estimates, the Arizona Power <br />Authority may experience a kilowatt shortage in March 1955 of up to as <br />much as 14 000 kw which will require the purchase of the' expensive <br />steam kilowatts from Arizona sources to make up the deficit. If the <br />subnormal precipitation conditions on the Colorado River watershed <br />continue, this spring shortage in kilowatt capacity available to the <br />Authority will be greater and in subsequent years. <br /> <br />The Authority is also worried about the low head conditions at <br />Hoover from the standpoint of increased pitting from cavitation in the <br /> <br />- 21 - <br />