it is practically impossible to determine the amount used at any given time. The Niagara Falls Hydraulic Power & Manufacturing Co. estimates that 660 cubic feet per second is at times required for this purpose. If it be determined that water used for sluicing ice must be included in the amount covered by the permit, the mid-winter electrical output of this company will be still further curtailed. 14. The maximum output of this company during the week preceding that in which the examination was made was 64,800 horsepower, while the average of the maximum weekly loads since October, 1905, was 73,000 horsepower. 15. The company in its statement includes a list of contracts for furnishing power in which the optional amounts aggregate 167,000 horsepower. Of this amount 102,550 horsepower has been called and is now in use. These contracts cover the output of both this plant and that of the Canadian Niagara Power Co. The amount called for represents the sum of the maximum amounts of power used by their tenants. These peak loads never occur simultaneously, and the actual peak electrical load generated up to date by the American and Canadian plants combined has been about 85,000 horsepower. 16. The books of this company show an investment in power plant of $13,500,000. This amount is largely in excess of what it would cost to reproduce it, as it is evident from the investments now being made on the Canadian side. It is also evident from the estimate of $7,000,000 given as the amount required to increase the capacity of the plant to the statutory limit-that is, 200,000 effective horsepower. This large investment, $135 per horsepower developed, is partly accounted for by the fact that this company was the pioneer in this method of utilizing the power of Niagara Falls, but it can not fairly be said to be due to investments made with the object of doubling the capacity of the plant. The intake is probably larger than necessary for the development of 100,000 horsepower, but the rest of the plant was designed for that amount. Notwithstanding this large investment, the books of the company show that its net earnings, after paying interest on its bonded debt and all oher fixed charges, now amount to 9 per cent on its outstanding capital stock of over $4,000,000. 17. This company is entitled by reason of its contracts to the fullest consideration that is now possible under the law-i. e., a permit for the diversion of 8,600 cubic feet per second. Such a permit will practically limit the company to its present output and will not allow any growth, but if this company is allowed to receive from the Canadian Niagara Power Co. the amount recommended, 60,000 electrical horsepower, the normal development of the two companies considered as one will not be seriously interfered with. The Niagara Falls Hydraulic Power & Manufacturing Co. 18. This company was chartered under the laws of the State of New York in 1878, and subsequently, by an act of the Legislature of the State of New York, known as chapter 968, laws of 1896, its rights were confirmed. In this confirmatory act the company was limited and restricted to the use of "such quantity of water as may be drawn by means of the hydraulic canal of said company when enlarged through its entire length to a width of 100 feet and to a depth and slope sufficient to carry at all times a maximum uniform depth of 14 feet of water." This limitation is more or less indefinite, but the capacity of such a channel has been computed to be 9,500 cubic feet per second without material diminution of the head. 19. The canal leaves the Niagara River about 1 mile above the Falls and extends through the city to a point about one-half mile below the Falls, where the power houses of the company are situated. 20. It is being widened and deepened to the maximum authorized dimensions. The widening down to the water surface has been completed, except at two points where work is now in progress. A great deal of work has also been done toward giving it a uniform depth of 14 feet throughout the width of 100 feet, but this work has not been completed. 21. The company disposes of its power in three ways. First, it sells water to six corporations, who develop power with their own machines. This water is used under heads varying from 50 to 125 feet, with an average head, considering the quantities used at each elevation, of about 90 feet, or less than one-half of the maximum effective head. The amount of water so furnished is computed to be 1,332 cubic feet per second. In power house No. 2 (No. 1 being obsolete), . situated on the river bank at the foot of the bluff, the company develops 32,000 mechanical horsepower, using for the purpose 2,011 cubic feet of water per second under an effective head of 200 feet. Of this amount 27,368 mechanical horsepower are sold to customers, who convert it into electrical power by the use of generators attached to the power company's turbines. The remaining power developed in power house No. 2 is converted into and sold as electrical power. For several years past the company has been engaged in the further development of its water power, and now has under construction a fore bay capable of furnishing sufficient water, when the canal has been widened and deepened to the extent authorized by law, to develop practically 100,000 additional horsepower. As stated above, much of the necessary enlargement work on the canal has been completed, the greater part of the excavation for the power house itself has been completed, the fore bay is under construction, and intakes leading to the penstocks, with their corresponding gates and valves, are being installed for the complete development. Of the amount to be developed in power house No. 3, 36,000 horsepower is for use of the Pittsburgh Reduction Co., a contract for its sale having been entered into on the 20th day of November, 1905. For developing this amount there will be required about 2,400 cubic feet of water per second. As the conditions laid down by the act of Congress have been complied with so far as this additional development is concerned, it is recommended that the necessary permit be issued. In the statement furnished by the company as to the water now in use there is included 660 cubic feet per second for sluicing débris and ice. It is questionable whether this amount should be included in that for which a permit is considered to be necessary. Such use is intermittent, and it is practically impossible to determine the amount used at any given time. If the diversion of water for this purpose does not require a permit, this company is entitled under the law to a permit for 5,743 cubic feet per second, being the amount now actually in use and contracted to be used in factories in process of construction. If the water used for sluicing ice and débris must be included the permit should be for 6,403 cubic feet per second. 22. The settlement of this question will not affect the Niagara Falls Hydraulic Power & Manufacturing Co., but will affect the output of the Niagara Falls Power Co. 23. The investment represented by the plant of the Niagara Falls Hydraulic Power & Manufacturing Co. is $5,600,000. This includes $1,400,000 expended or obligated for work on the canal and in connection with power house No. 3. It is estimated that $1.500,000 additional will be required for completing the canal and power house No. 3. 24. While the granting of a permit to this company for the diversion of 6,400 cubic feet per second will enable it to meet its contract obligations, it will not permit it to take the full advantage of the investment already made nor allow for any growth. The investment that will be rendered useless is roughly estimated at $290,000 for the canal and $360,000 for power house No. 3. Industries using water for water purposes derived from Erie Canal at or near Lockport, N. Y., and at Medina, N. Y. 25. In 1826 the State of New York leased to Richard Kennedy and Junius H. Hatch so much of the waters of the Erie Canal as could be spared from the canal at the head of the locks at Lockport at an annual rental of $200. The lease referred to was perpetual and in 1856 it, or the principal part of the rights under it, came into the hands of the Lockport Hydraulic Co., which has since then operated the lease. The lease provides that the water so used shall be discharged into the lower level at such place and in such manner as the State canal commissioners shall from time to time deem most advisable for the security of the canal and for the convenience of the navigation thereon. 26. In an investigation of this matter made in July by the secretary of the American section of the International Waterways Commission it was developed that the arrangement of tunnels in Market Street near Exchange Street was such that the water drawn from the hydraulic race could find its outlet either into the canal or through the culvert to the mill pond and eventually down Eighteenmile Creek, thus making it impossible to determine what portion of the water supplied to these mills is permanently diverted from the canal, though it is understood that as a rule it is all returned to the canal. In the application filed with the Secretary of War by the Lockport Hydraulic Co. the amount of water used by its tenants and delivered to the lower level is stated to be approximately 500 cubic feet per second, whereas Mr. Henry A. Van Alstyne. New York State engineer and surveyor, is authority for the statement that 350 cubic feet per second is the amount taken from the upper level and returned to the lower level of the canal. In a subsequent letter from the attorney for the Lockport Hydraulic Co. it is learned that the amount named in the application represents the maximum quantities covered by the company's leases, and further that it includes the amount of water required to operate the machinery of the Holly Manufacturing Co.'s plant not now in actual operation, but which was used for more than 20 years prior to 1904, and which then developed 150 horsepower. 27. In addition to the industries which obtain their water through the Lockport Hydraulic Co. there are a number of large manufacturing plants being operated at the city of Lockport by power produced from the surplus water of the canal spilled from the canal below the locks and used successively in the progress of the water down the channel of Eighteenmile Creek. The use of the water spilled from the lower level of the canal is not covered by any contract with the State of New York, and it is understood that the State of New York derives no revenue from it. Furthermore the State engineer and surveyor, Mr. Henry A. Van Alstyne, protests against the granting of any permit by the United States to parties using water spilled from the canal, on the ground that it will impose an obligation on the State of New York to furnish the amount of water covered by the permit, an obligation which does not now exist. 28. To supply losses due to evaporation and leakage it will probably be necessary under any circumstances to pass a certain amount of water around the locks from the upper level to the lower level, so that the amount so transferred does not appear to have any particular bearing on the subject of this investigation. The real question to be determined is the amount of water that is taken from the canal for power purposes and not returned thereto. 29. Reliable gaugings made under the direction of the State engineer and surveyor of the State of New York show that the average amount of water flowing eastward in the Erie Canal in the rock cut at the city of Lockport above all points of diversion of water for power is 805 cubic feet per second, and that the flow in the canal below the locks at Lockport and below all points where water is diverted for power or other purposes is 612 cubic feet per second, so that there is diverted from the canal in the city of Lockport 193 cubic feet per second. This includes both the water diverted for power and the water passing over the canal spillway. 30. As all water used at Lockport, whether permanently diverted from the canal or whether transferred from one level to a lower level of the same canal, is brought from Lake Erie in a waterway constructed and paid for entirely by the State of New York, it would seem that any permit granted by the United States for the diversion of water from the Erie Canal should be granted not to the individual users, but rather to the State of New York. The same principle is followed in the case of the Niagara Falls Power Co. and the Niagara Falls Hydraulic Power & Manufacturing Co., each of which owns its intake canal and has tenants taking water therefrom, though the permit is granted for the full amount to the owner of the intake canal. 31. Conflicting information has been received concerning the amount of Lake Erie water that is taken from the Erie Canal by the spillway and gates at Medina, N. Y. Mr. Franchot, the superintendent of public works, State of New York, stated, under date of July 17, that he believed the amount of water fed into the canal from Oak Orchard Creek and Genesee River was practically equal to the amount abstracted from the canal, while Mr. Bond, the chairman of the advisory board of consulting engineers, State of New York, is authority for the statement that the Oak Orchard feeder supplies in low years only 10 cubic feet per second, while the amount abstracted is about 175 cubic feet per second. Assuming the latter information to be more nearly correct, the maximum amount of Lake Erie water diverted from the canal at this point is 165 cubic feet per second. The total amount of Lake Erie water that is permanently diverted from the Erie Canal at times of minimum flow in the feeder is therefore 193 plus 165, or 358 cubic feet per second, and it is recommended that a permit for this amount be issued to the State of New York. 28305-12- -15 32. If it be determined that the amount of water occasionally used for sluicing débris and ice must be included in any permits that are granted, the interested parties are, in my opinion, entitled under the law to permits for diversion as follows: Cubic feet per second. Niagara Falls Hydraulic Power & Manufacturing Co. in greater detail than is 6, 403 358 33. Descriptions of the power plants of the Niagara Falls Power Co. and the Niagara Falls Hydraulic Power & Manufacturing Co. in greater detail than is given in the body of the report are appended hereto, marked Appendix K and Appendix L. They were prepared by Mr. Earl Wheeler, electrical engineer, who assisted in the examination. Very respectfully, Brig. Gen. A. MACKENZIE, CHARLES W. KUTZ, Captain, Corps of Engineers. Chief of Engineers, U. S. A. REPORTS UPON THE EXISTING WATER-POWER SITUATION AT NIAGARA FALLS, SO FAR AS CONCERNS THE CANADIAN POWER COMPANIES AND THEIR ASSOCIATED TRANSMISSION COMPANIES-REPORT BY THE AMERICAN MEMBERS OF THE INTERNA TIONAL WATERWAYS COMMISSION. INTERNATIONAL WATERWAYS COMMISSION, OFFICE OF AMERICAN SECTION, Mr. SECRETARY: The American members of the International Waterways Commission have examined the report dated August 15, 1906, by Capt. Charles W. Kutz, Corps of Engineers, United States Army, upon the subject of permits to the power companies at Niagara Falls, referred to them by your indorsement of September 5. They have the honor to return it herewith, and to submit in connection therewith the following remarks: In our report,' dated March 19, 1906, we stated that the works projected on the American side at Niagara Falls would produce 342,000 horsepower, besides a small amount on the Erie Canal, and would consume about 28,000 cubic feet of water per second, while those projected on the Canadian side would produce 432.000 horsepower, besides a small amount on the Welland Canal, and would consume about 36,000 cubic feet of water per second. We thought that the amount on the American side could be reduced to 242,000 horsepower, using 18,500 cubic feet of water per second, without inflicting undue hardship upon invested capital, but we doubted the expediency of attempting to withdraw the other rights acquired by the power companies at Niagara Falls. These views were adopted by Congress with qualifications. In the act approved June 29, 1906, the amount of water to be diverted on the American side was cut down to 15,600 cubic feet per second in the first instance, but with the provision that additional amounts may be diverted after an interval of not less than six months if it be found that that can be done without detriment to Niagara Falls or the river. The amount of power to be generated on the Canadian side was cut down from 423,000 to 350,000 horsepower, the control of Congress in the matter arising from the fact that a very large percentage of the Canadian output must, under present conditions, find a market in the United States. Under no circumstances is the total to be increased, but the amount which may be transmitted to the United States is to be diminished as the amount consumed in Canada shall increase. In this sliding scale a limit is fixed which divides the permits into two kinds, one of which may possibly be expected to have somewhat more permanency than the other, viz, permits to transmit electrical power from Canada into the United States to the aggregate amount of 160,000 horsepower, and revocable permits for the transmission of additional electrical power to the extent just indicated. It appears to us that this distinction was 1 Printed in Senate Document No. 242, Fifty-ninth Congress, first session. made for the purpose of giving a little more assurance of permanency to certain of the permits than it was possible to give to all of them and not for the purpose of trying an experiment as to the effect upon the Falls of the diversion of a quantity of water so indefinite in amount. This view seems confirmed by the fact that the maximum amount allowed on the Canadian side, 350,000 horsepower, is about 83 per cent of the amount mentioned in the report, 423,000 horsepower, while the amount allowed on the American side, 15,600 cubic feet per second, is about 84 per cent of that mentioned in the report, the percentage of reduction thus being practically the same in the two cases. We see no reason why revocable permits for the transmission of power from Canada into the United States, additional to the 160,000 horsepower first to be authorized, should not be issued without delay if application for such permits be received. The law provides for the issuance by the Secretary of War of four kinds of permits, viz: 1. Permits to divert water from the Niagara River on the American side to an aggregate amount not exceeding 15,600 cubic feet per second. 2. Revocable permits to direct additional water from the Niagara River on the American side to such amount, if any, as shall not injure the river as a navigable stream or as a boundary stream and shall not injure the scenic grandeur of Niagara Falls, but no such permits shall be issued until approximately the 15,600 cubic feet per second mentioned above shall have been diverted for a period of not less than six months. 3. Permits to transmit electrical power from Canada into the United States to the aggregate amount of 160,000 horsepower. 4. Revocable permits for the transmission of additional electrical power from Canada into the United States, but in no case shall the amount included in such permits, together with the 160,000 horsepower mentioned above and the amount generated and used in Canada, exceed 350,000 horsepower. Applications have been received for permits of the first and third kinds, but in this report Capt. Kutz confines himself to a consideration of those relating to the transmission of power from Canada into the United States, deferring to a future report all that concerns the diversion of water on the American side. He defers also a consideration of the question of granting transmission permits for amounts additional to the first 160,000 horsepower, expressing the opinion that it is "the intent of the law to delay the issue of such permits until it is known what appreciable effect, if any, will be produced on the Falls by the diversion of the amount of water that will be used under the first limitation." As above stated, we do not concur in that opinion, but the fact that no applications have been received for permits of this kind is sufficient reason for not discussing them at this time. Applications for the transmission of power have been received from four companies, including the International Railway Co., whose rights under Canadian law to transmit power to the United States are in dispute and whose claims are small compared with those of the other companies. Capt. Kutz recommends that no permit be issued to that company at this time, but that 2,500 horsepower be reserved for the present in order that it may be possible to grant the company a permit for that amount hereafter should the controversy over its rights under the Canadian laws be decided in its favor. In that recommendation we concur. There will remain 157,000 horsepower to be divided among the three remaining applicants. These applicants are the American transmission companies, but their interests are identical with those of the Canadian companies from whom they derive power and must be considered in connection therewith. They are: 1. Niagara, Lockport & Ontario Co., taking power from the Ontario Power Co., applying for 90,000 horsepower. 2. Electrical Transmission Co., taking power from the Electrical Development Co., applying for 62,500 horsepower. 3. Niagara Falls Power Co., taking power from the Canadian Niagara Power Co., applying for 121,500 horsepower. The application of the Niagara Falls Power Co. is for 11,500 horsepower more than the capacity of the works from which it is to derive power when completed as designed. The other companies ask for one-half the capacity of the works furnishing the power when completed as designed. The total amount asked for is 274,000 horsepower. Capt. Kutz has spared no pains in the collection of all the facts which have a bearing upon the question of how the available amount shall be divided |