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<br />I <br /> <br />I <br /> <br />MR. SPARKS: That is 2 percent of the sales tax. The complicating <br />factor is this court decision that occurred here two days ago relating <br />to the School Financing Act. That has thrown everyone for a loss. How <br />it is going to impact upon our bill, I don't know. I don't think it <br />will at this time. <br /> <br />Mr. Chairman, the last subject I have to report upon is a rather complex <br />and difficult matter, an emergency matter that has arisen in connection <br />with the operation of the Colorado River. Mr. GOslin is here, the <br />executive director of the Commission. He called a special meeting of <br />the Commission toge'ther this last week to discuss a proposal by the <br />Department of Energy and the Bureau of Reclamation concerning the opera- <br />tion of Glen Canyon Dam. They are having problems with the firm power <br />contracts entered into out of Glen Canyon Dam as well as Hoover Dam. <br />But somehow or other, I didn't realize what deep trouble we have in. <br />connection with those power contracts. <br /> <br />As a result, we were told that in Order to satisfy. the firm power <br />contracts in the future from Glen Canyon, Dam, there would have to be a <br />release of between 10.2 million and 10.5 MAF of water a year. <br /> <br />The reason that this situation came about is that back in the days when <br />we negotiated the power contracts, the Bureau of Reclamation was under- <br />standably anxious to produce the maximum amount of power in order to <br />benefit the Basin Fund. That is the fund that we are building the <br />Animas-La Plata and the Dolores and these other projects out of. so <br />they were anxious to keep that fund in a healthy condition. <br /> <br />Well, somehow or other, unknown to most of us, they sold far mOre power <br />than Our power plants can produce. We actually have power plants at <br />Curecanti, Flaming Gorge, and Glen Canyon. The thinking was that'when <br />they were short on the firm power contracts, they would buy power on the <br />private market to supplement power that could not be' generated at the <br />hydro plants. . But at that time they were thinking that they could buy <br />power for three or fOur mills per kwh. Mind you, we started selling it <br />from the Storage Project at six mills a kwh. So if you could buy power <br />for anything less than six, you made a profit on it. <br /> <br />Well, they figured that because of the vast netWOrk that they could buy <br />the power. They were wrong. So what we find today is that we are buy- <br />ing power for 40 mills and selling it for six and a half. What an <br />operation: We suddenly find that the Basin Fund is in the red. Natu- <br />rally it would be. <br /> <br />So there are two alternatives--they either want to go to congress and , <br />get another 20 or $30 million--I: forget--a huge figure, all of which will <br />be charged to the Upper Basin Fund, I presume. They have already spent <br />all the money we have in the Upper Basin Fund to buy power. <br /> <br />It is an extremely bad situation. If the upper Basin Fund continues to <br />go multimillion dollars in debt, then there is no way that we can argue <br />that we can build projects. So it is a very critical situation to us. <br />It is unthinkable that the federal government ever got in this condition. <br />But when you look at the federal government as a whole, I guess you can <br />understand it. (Laughter.) <br /> <br />-39- <br />