BOARD02022

• Board Meeting Date: 3/11/1959
• Description: Minutes
• Board Meetings - Doc Type: Meeting

.1 <Stl 4

MR. BARNARD, SR. :

formulated what we may have to do in the
way of increasing energy rates at Hoover
which we know can be done by the Project
Adjustment Act of '41 in order-to meet
payout schedules and the answer we sought
was was this feasible, could we stay within
the framework of economic rate structures
at Hoover and still meet their payout
schedule with curtailment.

I

As I say, I hesitate to quote precise
figures because we have made some slight
changes in the cost of thermal stations laid
down in southern California which effect its
break even cost but if I may I will refer to
just one paragraph in Mr. McClellan's study
which is more or less the meat of this thing
in which he states that the analysis .of cost
of substitute fuels producing energy in south-
ern California steam stations indicates that
the cost of firm energy from Boulder Canyon
Project after the rates for firm energy have
been adjusted to compensate for curtailment
of energy generated due to withholding water
to fill Glen Canyon Reservoir would still be.
from - and the figures here are subject to
a slight adjustment - I think perhaps we can
say that they will still be within a margin
of break even of six tenths of a mill to 1.8
mills per kilowatt hour below the cost of
substitute energy generated in the southern
California steam electric stations. This is
the answer that we hoped to achieve; that we
can still show feasibility for adjusting
rates at Hoover and not come up above anything
that might be feasible for them to pay.

It appears now perhaps we can still up
the rates, meet payout schedules with what-
ever curtailment we must effect to fill Glen
and still have their rates from .6 to l.B
mills per kilowatt hour below the cost of
laying down substitute stations in southern
California. I would like to defer, just with
that statement, this morning."

"I was anxious for the Board to have
that general result - that the contention
of California to the effect that they can't
increase these rates sufficiently and stay
within competitive limits is just plain hooey,
if you will pardon the expression.

I