RAPID AMORTIZATION IN REGULATED INDUSTRIES WEDNESDAY, MAY 29, 1957 UNITED STATES SENATE, SUBCOMMITTEE ON ANTITRUST AND MONOPOLY, Washington, D. C. The subcommittee met, pursuant to recess, at 10: 40 a. m., in room 424, Senate Office Building, Senator Estes Kefauver presiding. Present: Senators Kefauver (chairman), O'Mahoney, Wiley, and Dirksen. Also present: Senators Carroll and Watkins; Paul Rand Dixon, counsel and staff director; Dr. John M. Blair, chief economist; Carlile Bolton-Smith, counsel to Senator Wiley; Peter Chumbris, counsel for the minority; Jerry O'Callaghan, legislative assistant to Senator O'Mahoney; George Arnold, administrative assistant to Senator Wiley; Ray Cole, investigator; Philip Layton and George Clifford, attorneys; and Dr. E. Wayles Browne, Jr., economist. Senator KEFAUVER. The committee will come to order. (Discussion off the record.) Senator KEFAUVER. Before we start with Mr. Seaton, a report and a letter have been received, which I think should be included with other documents in the record. This is particularly for Mr. Seaton's attention, since he may want to testify in connection with them during his testimony. First of all, let me again read from a memo which was placed in the record when Mr. Gray was testifying. The first item relates to a speech by Mr. Roach, president of Idaho Power, before the New York Society of Security Analysts. All of this information bears on the completion date of the Oxbow project of the Idaho Power Co. This statement quotes a Journal of Commerce article on remarks Mr. Roach made in his speech, saying that present plans call for Oxbow to be finished in 1961. The second item was from the testimony of Mr. R. P. Parry, attorney for Idaho Power Co., before the Interior Committee, March 7, 1956, in which he listed the completion date of Oxbow as August 1961. And, third, was a pamphlet entitled "The 1956 Advance Program' of the Bonneville Power Administration, put out by the Department of Interior, in which are listed Oxbow service dates of April 1961; May 1961; July 1961; August 1961. Those, I take it, are the dates in which various generators would come on the line. (The document above referred to is as follows:) 1. Statement by T. E. Roach before the New York Society of Security Analysts.-The Journal of Commerce, May 16, 1957, contains an article stating that Mr. T. E. Roach delivered a talk, presumably on May 15, 1957, before the New York Society of Security Analysts in which, among other things, he was quoted as saying that: "While the first of the three low dams on the Snake River, namely, the one at Brownlee, will be completed in 1958, present plans call for Oxbow to be finished in 1961 ***" 2. Statement of R. P. Parry, attorney for Idaho Power Co., before Senate Interior Committee, March 7, 1956.—In testimony in March of this year before the Senate Interior Committee, Mr. R. P. Parry, attorney for Idaho Power Co., put into the record a table, appearing on page 259, which lists the scheduled power resources used in that general area. There appears the following information: 3. 1956 Advance Program of Bonneville Power Administration.-The Bonneville Power Administration of the United States Department of the Interior issued a report entitled "1956 Advance Program." The report is a general survey of the power supply and demand situation in that area. Appendix table 5 of that report is entitled "Generator Installation Schedule Northwest Utilities Other Than United States Columbia River Power System, August 1, 1956.” The information while less current than that cited above is in more detail in that it breaks down the expansion projects by date of generator installation. As will be noted from the relevant sections of the table, cited below, the earliest date at which any of the four generators at Oxbow is to be installed in April 1961. Generator installation schedule, Northwest utilities other than United States Columbia River power system, Aug. 1, 1956 Senator KEFAUVER. Now, to the new material. Today I received a report from the Federal Power Commission, prepared by Mr. Robert Hall, engineer, and Mr. Wilfrid A. Froggatt, engineer-in-charge, licensed projects work, giving the results of their on-the-ground inspection of the work done in the month of March 1957, which I will order to be printed in the record. As to Oxbow, it says that work was limited to preliminary operations, mainly building of roads, work on existing tunnels, removal of obsolete power development, and foundation investigation. The relocation section of the Brownlee-Oxbow Road was estimated to be 60-percent complete at the end of the month. The cost to date of the Oxbow project was estimated by the engineers at $1,867,000. Mr. Kuykendall is coming up on Friday, and I asked the staff to see if any of the engineers who have actually seen the work can be ready and available. (The material from the Federal Power Commission, above referred to, is as follows:) FEDERAL POWER COMMISSION, SAN FRANCISCO REGIONAL OFFICE BROWNLEE PROJECT No. 1971, IDAHO POWER Co., LICENSEE CONSTRUCTION REPORT No. 16 FOR THE MONTH OF MARCH 1957 This report covers the construction progress on the Brownlee development, located on the Snake River, Idaho. An inspection of the project works was made on March 27, 1957, by Mr. Wilfrid A. Froggatt. Field-inspection report dated April 4, 1957, copies of which were transmitted to the Chief, Bureau of Power, supplements data given in this report. Attached to this report are bar charts for Oxbow Dam and for Brownlee Dam for the period ending March 31, 1957, statements of project costs, and 18 representative photographs. GENERAL STATEMENT OF PROGRESS * Brownlee Snake River floodwaters subsided rapidly from the peak of over 65,000 cubic feet per second in February to less than 30,000 cubic feet per second during the latter part of March. Weather conditions throughout the month were generally good, although normal spring rains hampered operations slightly. During the first week, high excavation and other operations, except core fill, continued as in February. Penstock tunnel drilling began during the second week. Headings were started for all four tunnels from the lower ends. The catmounted drill jumbo, carrying 10 drifters on 3 levels, proved very satisfactory. An electric Williams mucker is being used at present in combination with a dozer which has a rock rake on the rear. By the end of March, a total of 405 lineal feet had been driven, with a daily average for 3 shifts of 35 feet. Excavation for the intake channel resumed this month. Some 67,000 cubic yards of rock were removed. Part of this was used in construction of a haul road from intake to a river-level dumping point for random rock. Excavation in the upper spillway totaled 69,000 cubic yards of rock for the month. Most of this material was used in fills for access and haul roads on the Oregon abutment. Powerhouse excavation continued at a reduced rate, due to tunnel operations in that area. Rock haul to the main dam included 78,000 cubic yards from the powerhouse and 9,000 from the tunnels. Oxbow Work was limited to preliminary operations; mainly, building of roads, work on existing tunnels, removal of obsolete power development, and foundation investigation. The relocation section of the Brownlee-Oxbow Road was estimated to be 60 percent complete at the end of the month. Manual labor.-The contractor's report for the month of February shows there were on the payroll an average of 538 men for the Brownlee project and 98 men for the Oxbow project during the month. 94133-57-pt. 1- -20 Project costs.-The total costs for the month of March and the total to date are: Brownlee.. Costs for March Costs to date $1,608, 004.99 $15, 887, 663. 56 1,867, 217. 14 The summaries, as well as a breakdown of these costs by FPC account numbers, are attached. Licensee has been including a copy of the concrete, soil, and aggregate tests made with their monthly construction reports. The tests indicate that the fill and concrete are according to the specification. The project is on or ahead of schedule and the flood did not affect the construction schedule. There have been no changes in plans reported during the month. During the engineer in charge, Licensed Projects Section, field inspection, he instructed licensee's representatives to file revised exhibits for the Brownlee project. This report was prepared from data obtained from licensee. Engineer in Charge, Licensed Projects Work. Senator KEFAUVER. Now, I have a letter of May 21, 1957, from Mr. Roach, in which he presents his statement of the work done on the various projects, which I will put in the record. This is for May 1957. It says that Oxbow preconstruction work has been completed, including operators' village and gravel processing plant for use in constructing all three dams. Initial construction work is under way. It states that Oxbow, 205 feet high, will nearly double the height of Bonneville Dam on the Columbia, and will be some 20 feet higher than Niagara Falls. This will be put in the record. (The document referred to, and accompanying letter of May 21, 1957, from the Idaho Power Co., are as follows:) Hon. ESTES KEFAUVER, United States Senate, Senate Office Building, Washington, D. C. IDAHO POWER CO., Boise, Idaho, May 21, 1957. DEAR SENATOR KEFAUVER: So that you may have before you current information regarding the hydroelectric construction program being carried rapidly forward by our company in conformity with Federal Power Commission License Order No. 283 of August 4, 1955, I am enclosing a news story of progress from the Weiser American of May 13, 1957. Enclosed also is a single sheet summary of the essential facts relating to these projects, which I hope may be of use to you. Cordially, T. E. ROACH. HELLS CANYON SUMMARY, MAY 1957 BACKGROUND The Supreme Court of the United States, on April 1, 1957, denied a petition to review the Idaho Power Co.'s FPC license for its 3-dam Snake River development. The United States court of appeals had |