Representative WOLVERTON. Do these last four mentioned dams give any value for flood-control purposes? Mr. WOODWARD. Yes, sir; I think that they all have. Representative WOLVERTON. Then, when you are figuring the total moneys expended by the T. V. A. at $407,000,000 and you only allot. $99,000,000 to flood control, you are not giving a true picture of the amount of flood control that you obtained, are you? Mr. WOODWARD. The flood control from those dams comes in that second figure. Representative WOLVERTON. Very well; then we come to that in a minute. Now, taking the Norris Dam, at which you say $2,600,000 was fixed as the flood-control cost of that dam, what were the items that were particularly ascribed to flood control that made up that cost of $2,600,000? I don't mean a detail statement, right down to the last dollar or last penny; I mean in a general way, what does that cover? Mr. WOODWARD. I think that that is the figure in our allocation of the three-plant system, and it is discussed in this printed report at some length. In general, it is based on the fact that there is an upper layer in the reservoir that is useful for flood control, but has no use for navigation or power. Representative WOLVERTON. Did you figure how high the dam should be for flood-control purposes and allocate the cost of such to flood control, and all above it to something else? Mr. WOODWARD. This report is so complicated that I can't carry it all in my head, and I may be a little slow in finding the explanations. Representative WOLVERTON. Take what time you need to get it accurate. Mr. WOODWARD. I can read you the explanation of it in this printed report if that will be useful. Representative WOLVERTON. What page is it? Mr. WOODWARD. On page 24. Representative WOLVERTON. Could you summarize it for us, or explain it so that we would understand it? Mr. WOODWARD. I will try to condense it as I read it. It is under the heading "Direct Investments for Flood Control." Representative WOLVERTON. Does it say how much storage capacity? COST ESTIMATES FOR NORRIS DAM Mr. WOODWARD. The direct charge for flood control at Norris project may be considered as the difference between the cost of the multipleuse project as constructed and the estimated project cost if constructed for navigation and power only. Now, in order to arrive at the figure, we had to make up an estimate of what a lower dam that would provide the navigation and power, but not provide the flood control-how much less it would cost and then we took the difference. We often call that difference the "incremental cost," meaning by it, increment that has been added to the other costs in order to include flood control. It is not called the "incremental cost" here but I think that that is a good word for it, this difference. Now, it becomes a little abstruse at that point, because you have to take two estimates of the cost and take the difference, to say that is what you pay extra in order to include flood control, and that is a direct increase, and at least flood control costs that much. That is this direct cost, and then we add to that a part of the common costs. Representative WOLVERTON. Now let me see if I can understand that difference, in a different way. How much did you estimate a dam at Norris would cost for floodcontrol purposes? Mr. WOODWARD. We never computed. That is another place in the report. We made an estimate of the cost of a dam at the Norris site for flood control only. We assumed, for the purpose of this estimate, we took an estimate for a dam with the top of the gates at elevation 1,034 which is the existing top of the gates, but that dam has considerably more storage capacity than we are estimating or claiming for the present Norris Dam. Representative WOLVERTON. Do I understand you to say that a dam for flood control only was estimated to require a height at the gates of 1,034 feet? Mr. WOODWARD. No, we thought it could be lower, but we did not go through the work of making a detailed estimate for that lower dam. We already had an estimate, I think, for this. Of course, we had the existing costs of the dam at 1,034, and then we assumed that a lower dam would cost in proportion as the storage was reduced. Representative WOLVERTON. How much lower dam? Mr. WOODWARD. I would have to use the volume curve to find out how much lower it would be. I can tell approximately-the top would have been about 1,020-the top of the gates then. Representative WOLVERTON. What is the top of the gates at the present time? Mr. WOODWARD. 1,034. Representative WOLVERTON. What is the top of the dam? Mr. WOODWARD. Well, about 1,060 up to 1,061. People don't agree as to what they call the "top of the dam." I think that we are using as the official top of the dam the height of the pavement in the center of the roadway across the top of the dam, and, if I remember correctly, that is about 1,061. Representative WOLVERTON. Why was the difference between 1,020 and 1,061 added to the dam? Mr. WOODWARD. Part of it was for flood storage, that would be under complete or 100 percent control, and another part was for flood storage that would be only partially controlled, like Mr. Kurtz's proposed flood storage-that is, if it is used there will be some water escaping at the same time that that flood-control storage is used. Representative WOLVERTON. If it was necessary, according to your answer as now given, to have this addition of 1,060, why did you estimate on one of 1,020 then? Mr. WOODWARD. For flood control alone? Representative WOLVERTON. Yes. Mr. WOODWARD. That would be the top of the gates, and there would be 30 or 40 feet ahead of that. Representative WOLVERTON. So that we won't have any misunderstanding, what is your estimate for a dam at Norris for flood control only, and how high a dam does it contemplate? Mr. WOODWARD. The estimate is $21,372,000. Representative WOLVERTON. $21,372,000? Representative WOLVERTON. What height dam did those figures contemplate? Mr. WOODWARD. The height is not given here. I could find it out from some curves, because it was computed without knowing the height. It was computed by multiplying 2,020,000 acre-feet of floodcontrol storage under perfect control by the cost per acre-foot, and $10.58 was used for that cost per acre-foot. Representative WOLVERTON. What was the total cost of the dam at Norris? Mr. WOODWARD. The actual dam or this one that is computed? Mr. WOODWARD. The cost of the dam and the reservoir, trying to leave out all transmission and switch yards, and leaving out certain things that were associated with Norris Reservoir but which we say are not a necessary part of the dam and reservoir for the three main purposes, when we make those adjustments, then the total cost that we are using is $31,532,120. Chairman DONAHEY. That is your answer? Mr. WOODWARD. Yes. Chairman DONAHEY. We will recess for 5 minutes, promptly. (Whereupon there was a recess.) Chairman DONAHEY. We will proceed with the examination of the witness. Representative WOLVERTON. The last figure that you gave the committee was $31,522,120. Is that the entire cost of Norris Dam and Reservoir, as a completed project? Mr. WOODWARD. That is not the entire cost of the whole project, what might be called the Norris project. Representative WOLVERTON. What does that thirty-one-million-odd dollars represent? Mr. WOODWARD. As nearly as I can now recall, it represents the entire cost of the dam structure as actually built for the three purposes of navigation, flood control, and the production of power. Representative WOLVERTON. Does that include the reservoir lands? Mr. WOODWARD. It includes reservoir lands, and the necessary adjustments in connection with those lands, like highways and railroads, and small towns. Representative WOLVERTON. When we speak of the Norris project, what is the outside cost of it? Mr. WOODWARD. I will have to look it up. There is rather a large deduction made for the salvage value of the town of Norris, which, of course, originally is called a part of the project, and in all of our computations of the final cost we deduct that town of Norris, or the salvage value of it, half the value. On the bottom of page 21 of this allocation report the total expenditures in connection with the Norris project is given as $37,257,000. That includes some estimated items, because not all the land has yet been settled for, and it is subject to a little uncertainty on account of that. Representative WOLVERTON. Very well. Now, we have the total cost of Norris at about $37,000,000, and, according to your testimony, it would seem only $2,600,000 of that had been made chargeable to flood control. Mr. WOODWARD. May I interpolate that nearly $6,000,000 has been deducted from that as salvage value of other things, like machinery, things removed, that is, not quite $6,000,000 has been deducted from the figure that I gave you in order to obtain what we call the cost of Norris Dam to be allocated. Now, as to your question Representative WOLVERTON. The feature that I am interested in and which I am trying to ascertain, is when you have fixed $99,000.COO out of a total estimated present and future expense of $407,000 000, you have only given $99,000,000 of it to flood control, which is in most instances emphasized as one of the most important features of this act. I am interested in knowing how you get $99,000,000 out of $407,000,000. Up to the present time you have testified that there are two headings under which that $99,000,000 is made up. One is of $34,763,000 plus and the other one of about $65,000,000 plus. Now, as to the former, I assume that deals with completed projects, or moneys already expended on projects, is that right? Mr. WOODWARD. The $33,000,000? Representative WOLVERTON. Yes. Mr. WOODWARD. No, sir; some of that has not been spent at all. That includes the projects planned but not yet built; for example, a certain part of that is for the Coulters Shoals project, and we haven't yet received any money to build that, and a very large part of it is for the Gilbertsville project, and we have received almost nothing so far toward building that. Representative WOLVERTON. Then, what I am interested in, and I only go to this item because I realize we are taking an awful lot of time to get what I know could be just handed to us without any difficulty, and that is that Norris Dam had cost $37,000,000 only $2,600,000 of it has been charged to flood control, under the figures that you have presented here today, having a total of $99,000,000. Mr. WOODWARD. That is not the total cost of Norris that is charged to flood control. Representative WOLVERTON. What is the total? Mr. WOODWARD. We have not computed that nor shown that in this report. Representative WOLVERTON. Then will you tell me what it is? Mr. WOODWARD. And I could make some kind of estimate but we have no official estimate of that sort, and it might be Representative WOLVERTON. Will you tell me how and from whom this committee can ascertain how much of the cost, not only of Norris, but of each of these dams, is chargeable to flood control? Mr. WOODWARD. We have made no publication of that by separate dams. This report puts the three dams together for the purpose of distributing those costs, and allocating those costs. Representative WOLVERTON. Then do I understand that you have made no accurate estimate of what has been spent or what is to be spent on any of these dams but have taken figures for three dams and on a basis of percentages, or some other basis, have fixed the amount that then will be expended on these other dams for flood control? Mr. WOODWARD. In general, that is the process. Representative WOLVERTON. That is nothing but a pure guess, then, is it? I thought that you had testified that each dam is different, and now if you take three dams, and figure out what it might have been as to those three and then say, "Well, we will apply the same percentages all along the line, and give this committee percentages," I don't see how we have any accurate basis on which we can figure. Mr. WOODWARD. We did not do it by using percentages; we computed the percentages after we had the results, and that is how those percentages were made. Representative WOLVERTON. That is what I have asked for. I have asked with respect to the seven dams, how did you fix the price of those dams, or the amount that had been expended, plus the amount that is to be expended. Mr. WOODWARD. As I have said before, we have not computed it, trying to show it for each dam separately from the others. Now, if I may explain why, a little bit, I will try. Perhaps it isn't an adequate explanation, but suppose we were considering power, Norris Dam, by using some of the water stored in Norris Reservoir, Norris Dam not only produces power at the dam but it very much increases power that can be produced at Wheeler Dam and at Wilson Dam. Then the question arises, in talking about the power that results from Norris Dam, if it is actually produced in the power house at Wheeler, 300 miles away, should that be used in figuring the cost of power at Wilson Dam or the cost of power at Norris Dam. SYSTEM USED FOR COMPUTATIONS We couldn't find any way that seemed satisfactory to try to separate that power and say that it should be credited-if you wish to use that language-to Wilson Dam, or credited to Norris Dam, and therefore the system that we have used for the computation has been to put the dams together and compute the total power that comes out of the three dams and then try to make a cost to power as if in a sense they were one dam. The same thing happens to some degree to navigation and probably less to flood control. We could have separated them with flood control, I think, satisfactorily, if we could have separated the other elements, but we couldn't find any way that seemed reasonable to do, and so we gave up that method. May I add another statement about this report? For at least 3 years I suppose I was connected with calculations which are finally summed up in this report, and for the last year before it was finished we worked rather intensively. I gave lots of time to it. Now, it is a formidable report, 40 printed pages, and in the first half of it we tried hard to describe it and discuss, we made a sincere effort to give much consideration to every person's views that had ever suggested any, various economists in various journals and publications in the last 5 years had written papers on this subject, and various engineers had expressed opinions, and we tried to find every method that anybody suggested and consider it and we tried to name them all here, and describe them briefly, as clearly as we could. Most of the methods we rejected, and we found one or two that were almost identical and we tried those carefully, and we finally took 115943-39-pt. 11-35 |