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COLORADO RIVER STORAGE PROJECT 13 . Also suggested was the use of an efficiency factor of 78 percent in computing Hoover basic firm energy, From such a computation, there would theu be subtracted the energy actually generated at Hoover adjusted to an efficiency factor of 83 percent. The resulting answer would be considered as the deficiency in firm energy. The difference between this proposal and the explanation of our present proposal contained in the January 8, 1960, memorandum is the use of 78-percent efficiency on one side of the formula and 83 percent on the other. Our present proposal uses 83 percent on both sides. There are, of course, several ways in which the combinations of contract firm, basic firm, and actual generation could be arranged, We have tested five combinations ranging from the a,bove suggestion, which tends to minimize the deficiency, to use of the difference between actual generation and contract firm, which tends to maximize the deficiency. Again, in the interest of a practical solution, we do not believe it appropriate to adopt a formula which would result in either extreme. We intend to maintain the proposal as now eXplained in the January 18, 1960, memorandum; i,e., use of 83 percent on both sides of the formula, . Prin?iple 5 of the' draft of general principles a.nd criteria left to the dlscretlOn of the Secretary the method of makmg the allowance for Hoover diminution, The choice was between delivering energy or making monetary pl\yments to the affected Hoover power contractors. It was contemplated. that under the choice of delivering energy two courses miO'ht be followed: (1) Deliveryof energy generated at Federal powerplants, and (2) PUl'chase' of energy generated at plants owned by others and delivered to the contractors. Consequently under either choice there might be a requirement for money. This would be particularly so during the period Lake Powell is filling prior to installation of generators or the obtaining of dead storage in the lake. Although not so stated in the draft principles themselves, the memorandum of January 18, 1960, contemplated, as an operatinl'; cost, using moneys from the upper Colorado River Basin fund, estabtished by the Act of April 11, 1956 (70 Stat, 105), to the extent necessary, It is to the use of this fund that the upper basin directs its main crit~cism. As we understand it the concern of the upper basin is twofold; first, it feels that use of the upper basin fund for pUl'chase of energy to replace Hoover diminution carries with it a responsibility on the upper basin for energy deficiency at Hoover, a responsibility it cate- gorically disclaims; and secondly, it is concerned that use of the upper basin fund in the manner contemplated might adversely affect avail- ability of power revenues to aid in repayment of the costs of partici- pating projects. In no way does the Bureau or the Secretary, by proposing to use the upper basin fund for the purchase of energy for Hoover replacement, intend to declare or; infer any responsibility on the upper basin for deficiency in energy generation at Hoovcr. Contemplation of the use of that fund for'this purpose is based solely upon, and exercise of, departmental respdnsibility in operating a project under its jurisdiction, The second concern of the upper basin goes to a situation which conceivably could develop if water flows less than average are experi- 95968-63-2 .