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<br />'.l'ti~ ,WALL l)'l'14jjj~'l'
<br />JOURNAL.
<br />
<br />12258
<br />
<br />The Revenue Runoff From Hoover Dam
<br />
<br />By TIIO.'\I,\S J. (;H,\ft"
<br />And 0..\\"10 "t.\~(TS
<br />Althou~h a r~\"tsl(mist school uf historv
<br />t.'mphu::iIZ~S Huhert HOQYE'r's putJlic ser-
<br />\'ice beror!;!' and .:liter his term In (h~ WhIte
<br />HClllse. tl) most .\mericJ.ris h~ is the tonsp.r.
<br />~'atl\'e presid~nt o\'erwhelmeu bv :lle :)tOC:':
<br />nllrkN Cr:.lSll or la~9. ellsuin~ ':vortrl,wlde
<br />O~presslOn :lnti the e!ector;.!.! ci'::ms:n:\ 0:
<br />F'rJnklill Rnoserelt.
<br />. In the American Southwest. however.
<br />Hoover is reme!11bert:'ct most (Ir~mJUcJlly
<br />for the rIlJSSlre strllcture bt';1.rmj{ hiS
<br />Harne, HO:JVN O:lm. In 192:':. SfcrC'tarv ot
<br />Commerce Hoo'..er. repi'eSel1:Hi~ the U.$.
<br />go\'ernmcnt. coax~d th~ SC"'('rl Cu!orJda
<br />Rh'er BJ~in stlte reprrscn:;.lt!\"CS into
<br />agreeing- on tl compact dimuJ]'{ n~hts to
<br />!.!S~ of the CO!;:>r<:!.do River's ',';iller b~{'..;('en
<br />the Upp~r and the Lower B:lSins. ..\ few
<br />j't!ars l;1ter. P:-esldent Hoover confirmed
<br />o:;Tf'emC'n[s amon!; the states and tl]e WJ'
<br />:tr'ancHlow~'r \ltl!i~:es at t~e SOlH!lW('st
<br />that s('n'l'd ~s thl! hJ:sis for cC:1S{r:lc~:an
<br />oi one of early :!Oth'Cl'ntl:l)' ,\m~rlc:l's
<br />~reJtl"st public ~\'orks. the 80ulder Cmyon
<br />Inow Houv~rl DJm,
<br />:-tow {Jne rlf the key a~rl:emC'nts ne!::'oti.
<br />:1~ed in I!no. lli;:c alloc:,H1ng- ;;r)".\'rr ~('n~r-
<br />:J.ted from HurJ'.'(>r D:.:.m. is up for renew in
<br />C(Jn~n's5,
<br />C~rta:l1ly those who've bpnrritl:d from
<br />Ine L'xtralJnllnan!:l cheap rowl'r It ha~ pro-
<br />dUCl'd lor Ii YI'Jrs have ;J, cn:cI;11 ~take In
<br />:he Ol.tcon\t~. ~o do olllers in t~c ~llllin'.\'l'st
<br />who Ill]s~rd tlie l1;Jrortullllr rJllrlll!: IIll' Dc-
<br />pn'ssloll tll nt,,~.)t1:1tC' for a ~har(" 01 ttlt'
<br />d;lm'S output Imt \'..ouJclll~:f' a cr:lCl': :it J
<br />bL'Ut'f cll';ll the ~l'COllll timt' arouOlJ. So llo
<br />the t:!x.p;IYt'rs (;1 tht' U,S. ',VIIU';l..' fClrl'l;(,':Ir~
<br />l1l:l(t~ thl' llIVt'~(ntt'llt ill thl" d:Jn! ,lIJcJ '.\M
<br />nllw tjwn thl' ~[rllctllrL'. tilL' '.III.I"....y OlllJ.lllt
<br />o( which CIJflun'ss ItlaV sOlln :ll!,j/':lh' at a
<br />pnrl' far Iklr",v Its 11IarKl'1 .::t!lll', AlIIl
<br />las!l~'. :i:1l do f'nnrnnn]('mJ!l~IS ',~'IUl 1'1'('1)'"
<br />IUZl' lIut It the (urn'llt plan'!o .11l(J~aw
<br />Hlltl\'t'r's powl'r on a 11011L'lImr:I'WI\'t.' el,st'
<br />rl:COH'ry b,ISIS l'i Sll.'T\ed IIltO 1.('10'. IIll'vlla'
<br />h!r lIll' ('nVlrfJnIlIr'fllu{ l!':l~ C:,,!nrJt:fJ ":I\"'r
<br />f:.l:-:.m and ;)\.:1 illllll(lIn~ :t!I':IS '.\111 sulk'r.
<br />It ]s tillS ("lllI';('r:;:t'ru:c UII'nVIlI,llnh'nl:l!'
<br />:sts, (:IXP:I;'-I'r ,l::rj Irt""l.:ntcr~:':\t"f'~lt';I~t:rj
<br />:.;rrlllps. ;tl:U ('....r!I:,I,.u Il'ltt'n,!.III".l\tclI:t'rs
<br />.,1 Hr~l\'l'r Fl'.I..'r ~!1.I( l'i t'::lr"~,:~'/l'l :l~I.~t.
<br />lr.~ ::]l' ~':):'Jllr flll.)\'t'r .1!~r'::I':'.s. TbISt'
<br />II'/wllt'l..nl') 'Il il''IJ\I'r !1.I.... ~u ~.1r ll,n.
<br />, :1"'." "Ii' ; ~,:I'r:rtr .1:1,1 t-:~.\'r'_"'/ ':":'.lrt'
<br />I' ,'::', .1:/,1 :::., ~"fU:". ,':,'1 Ir" 1'0' :,:~
<br />, I ~I' ')1 no';';::., lllt.: t1:\. t! .!.~\', :~l.it :~,I tlI
<br />. .:~ 1:.1::; ~~:','I~'J ;.;~.t .1::.:ln,
<br />\\n,Ilr'H'r ;:.IOI,I;:t.' H'~,',"r I) l:ll ,t",,1f
<br />'II.' ttl l:"l,:'..lt'r .1Ih.l t.:~l'.k l'.J~;:IIlS' .::~
<br />
<br />.....rul:;:llt !uni; ;.;~U, Jnl.l :r.\'lr ..:.((' r,u ;uc.(e
<br />
<br />cJny,)ns to preserve. But I1mlerpncin~ of
<br />Hoover Dam's power. ;1nd allocatin~ it to a
<br />chosen few. leads to a greater demand for
<br />electricity. wInch in turn will lead to the
<br />construction ot new power plants else.
<br />where that \\111 wreak fresh and unneces.'
<br />sary damage on the environment. A partic-
<br />I,;larly apt example involves th~ Modesro
<br />Irrl;ation Distm:t. a small. publicly owned
<br />utility in California. ~lodesto recently
<br />bought a share in a new coal.fired power"
<br />plant in ~ew .\Iexico, the transmission cor.
<br />rid or of which runs pght past Hoover'
<br />D;>.m. To meet future power and energy
<br />cem:1nd. ~[Lldcsto wants to build a huge
<br />d.:!m on the Tuolumne River. one at Cali.
<br />fOilun:s premIer white-water and trout-
<br />fishing streams. It would have no nee-d to
<br />invest in such l dam if it could shart' in
<br />Hoover's Qutout.
<br />As for the 'taxpayers, the proponents of
<br />a renewed Hoover ~iYeawnv argue thilt the
<br />costs of constructing HllO\'e"r D:tm ',vill soon
<br />ha',e been totJl1y recovered by the U,S.. so
<br />why should Washington prolit from its
<br />ownership of this facility'? Well. 1('11.11
<br />not/
<br />Although American taxpayers paid for
<br />construction of the dam (some of the asso.
<br />ciated gelleratin;: equipnwllt was fin:1nced
<br />by ~wo :JtHitiesJ. the U,S., to make the
<br />project attractive to the original power
<br />purchasers. a~reed that in the first 50
<br />}'ears of oper::l.t1on it would simply recover
<br />c:rpital and operating 'costs. The (e:illa is
<br />th:U an uncaptu!'t'd rl.turn 011 the t:\xpay-
<br />ers' UIVe::illllt>nt has alrc;ldy accrued to the
<br />project hrnetlcian~s. [n 1\.130,::)1 alone. a
<br />Cl.i~:ierv;Jtive estim~ti" of the subsidy ex- .
<br />ce~ds $900 millIOn, That rig-lire is based on
<br />l'1:tU the dilfcrenr.l' bN\\'l'l'n the price tile
<br />currellt Hoovt'r ;lllllttl'l'S will pay for the
<br />UJJn'$ Olllplll and till' lIIan,:'/IlJI cost of :1(,1.
<br /><led powt..!, I'JI' the SOlltht'rn CJ.I1(orlll;1 Ec..!i'
<br />son Co.. th~ tar;:~~t utility amon~ till' :lllot-
<br />tees. In a truly compt'tittve market, the
<br />governnwnt would l'i'c~iv(' full m:lI'~inal
<br />CO::it for its reSt1UrCl'S. which would be
<br />more likl' ~I.l) billion ;lbuv{" npt'rating- costs
<br />(or tlte 1!J$O'.!\7 p~rlou. \\'llatL'Vl'r rqlllty th~
<br />current allutll't.s llI:IY claim froOl lIavllll:
<br />COfltr:tct('d orl::ln:tl1y Lo ~Juy the dalll'S out-
<br />put. tht'Y ha~'l' nil"'" hl'l'lI mon.' tt\::n amply
<br />l'Ofll::>l'II~;lt('d.
<br />It I hI.' $UO:)lcJy COlltllllll'S :lU~r rile' l'xpi.
<br />r,lt:tlll lit t11~ 0(1:';111:11 i'1l1l{(ilc't pt.'rlCK.!. Its
<br />~IU ',I,'lll tu' t:';f'n 111M,' llllprt'~SI\'l'. JIi)1 In
<br />Int" llrst I'J ,"'ars III J II.'W Cmltr;lrt rWfI..ct,
<br />:'J"..'i.':ti. :nl.' ('Jr~n/ll" rl'\('lllll" !f) till.' Tff':t.
<br />~uIY lrllrn :"!!IO:': Iii,' !1O,wl"r ,It t'lI~t r:1:h,'r
<br />tn.JfI fII;.r.,J.:.t:t 'iJlut' Wlllllu hr mon' In:m 'J.S
<br />bllllf)n III l':t"'" cJr,Il,trs.
<br />
<br />Cun~tt'~s hJ.S lh" u(.i{'lOrllinlly 10 m~lkc;,t
<br />
<br />noticeable dent in the f~deral deficit. pro'
<br />vided on Iv that it is willing to se!! the
<br />power- fat what it is worth. The first ~O
<br />years 'of the subsidy may have been JL:sti.
<br />tied to encoura~e settlement of an under.
<br />populated. orin region: subsjdlzmg the
<br />next 30 years would be :.l pure gift from
<br />taxpayers throu-;hout tile U,S. forth~ bene.
<br />fit of a handful of wholesale power Cl.:stom.
<br />ers in parts or tllree Sauthwest~r:l states.
<br />
<br />Instead of competition, the bi!! of!ers
<br />bureaucratic allocation. The u.llccatiOIl it.
<br />self lacks any justiticaOon but hi::>~(Jric ac.
<br />cident. resultill~ ill arbitrary selection of
<br />project beneHc]ories: even tilt' nll.:ch m::t..
<br />ligned federal cuaHe:1sim; pro~ram pur-
<br />ports to consider supply and demancl.
<br />
<br />Instead at market-pricin~. illluuet's un-
<br />d~r the proposed le~isl:HlOll would rrceive
<br />PQwer from a 21st,c1..;'!ltury r~so1l!'ce :1.t a'
<br />Great D~[lreSSlOn priee, Sponsarr:d hy Rep.
<br />;\lorris Udall 10,. An?.I. chaIrman of the
<br />HlHl::ie [ntE'rlor Committ.ee. the bill pro-
<br />pOSE'S an allocation that subsidizes Los An-
<br />ge!e::i but excludes San Olega and San
<br />Fn.mcisco. and th~t expands "\riZOltl and
<br />Nevada's shar~s ot H0on'r ot:tPUI bllt reo
<br />jects any shJre at all for Utah, Sew ~[ex.
<br />ico or Colorado. Altholl~ll it purports to
<br />favor publicl~' owned utilities over prIvate
<br />onl'S. the bill gin's a larg-e sha;-e at HoiJ'
<br />ver's ouqJUt to two pI'ivatc utilities. while
<br />exc!udin:;: entirely otller pri\'ate. as wl'lI as
<br />;Jublic, utilities, The rationale for thL' lllll-
<br />low.cost pow('1' WIll bt'lIt>fit praJl'c~ consum.
<br />ers-breaks down wllt'n Ollt' rt'alil.l'S i11:lt
<br />othcr consumers. equally worthy, ~~t IlO
<br />sllch bl!llclit y~t stHI pay their s.h:m,' tIt
<br />taxes to the federal ;,:ol/ernment III lllal\E'
<br />1110' for tile lost rr\'(,lllIl' that n'sllllS Irl!Ol
<br />st'llin~ Hom'er output tno cheaply. '
<br />
<br />The Udall hill WIll soon conlt' It 1 tIll'
<br />floor 01 till' HOI1Sl'. havlll~ alr:....ldy hl't't'l.t'(j
<br />throu:.:h thi' St'n:ate. WhIle tt\r :\n7.1111.11l
<br />may nnt idl'lltll~' hllll:)l.'lI with Ht:rbt'r( HllU'
<br />vcr thE." [~lIlt'd prrsldt'llt. he and hIS allies
<br />enJoy a special \..:lllship with BOIlI/t'r U:c
<br />slH'cc~sl'ul d:1m pl'lll11O[er. Em'lrOnn1('lllal'
<br />ists. t:\:'(p:tYI'rs illU.l :1t1\'OC:ltCS of free' l'llh'r'
<br />pn$C'. on th~ o!l1t'r Itllld. have (':lll:)~' hI
<br />wallt a new 1'l'I:Jtltlll)hip,
<br />
<br />Mr, (,'fltl! i,,, 1/1' l/lfltnJ('" IUllt .\If.
<br />M'''t'II'' 1/111/1/1111/.\( fll/' the f:III'uIlIlIllntlrtl
<br />IkJntst' fU/lfI\ Hn~'dc.ll. ('fIlIJ.. UJJU'I',
<br />
<br />nun.\ y. ~L\RCII .1u. I')~~
<br />
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