Page 9

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Page 9
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How Boulder Dam will refinance Colorado River Project : statement to Congressional Colorado River Commission regarding present and probable future power demands, power supply and cost per K.W.H. for Southern California
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http://digital.library.unlv.edu/u?/dig,8
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Would Electric Utilities Be Justified in Entering Into Firm Contracts for Power, on Definite Terms, to Be Delivered Ten Years Hence? 1. The provision of the proposed Boulder Canyon legislation that the Secretary shall secure firm contracts for power prior to the expenditure of any funds for construction insures the reimbursement to the federal government of its investment; the approval of such contract, on the part of an electric utility, by the State Railroad Commission of California, would seem to protect the utility by insuring allowance in rates to cover the annual cost to the utility of the contract during its life. 2. The construction by electric utilities of large hydro-electric projects, such as have been and are being constructed in California in the Sierra Nevada Mountains, commits the utility to such investment which it seems is tantamount to a power purchase contract at a definite price over a term of years equal to the natural life of a hydro-electric generating system thus constructed. A large part of the investment in hydro-electric power in California would have to be written off were these plants required to compete with large modern steam electric units at the present price of oil, yet this is not being done nor contemplated under regulation of rates. 3. The individual plants of some of these hydro-electric projects are so closely related physically that the utility is practically committed to complete the whole project in order to fully benefit by early capital investments; and this means actual expenditure ten years or even a longer period in advance, which is partially idle investment meantime. This would be conspicuously true if private capital constructed a project on the Lower Colorado River, including a great dam requiring years for construction, and a further period for the complete utilization of the power possibilities. 4. Private electric utilities furnish electric service practically throughout the section contiguous to the proposed Boulder Canyon project excepting in Los Angeles and Pasadena. It is not the practice of such utilities to allow large blocks of power to be turned loose in the territory, and, it seems, this would be particularly true with respect to power from the Boulder Canyon project with the City of Los Angeles contracting for a full measure of its allotment and the people of this section realizing the great advantage of cheapness and stability of power costs over long periods, and also realizing the enormous benefit in wealth and prosperity which would result from the support and consummation of the Boulder Canyon project. =========================================================================================================== TABLE NO. 10 Cost of Boulder Canyon Power at Boulder Canyon, Without Revenue From Water Bureau of Power and Light,City of Los Angeles, Calif., October, 1928 _____________________________________________________________________________________________________ Investment-— Original Swing- Segregating Johnson Estimate Interest Investment cost 550-foot dam................$ 41,500,000 $ 55,000,000 Power plant at dam @ 55% L. F............... 31,500,000 35,000,000 All-American Canal.......................... 31,000,000 35,000,000 Interest during construction .............. 21,000,000 .......... ______________ _____________ Total ....................................$ 125,000,000 $ 125,000,000 35-Year 41-Year Charges—- Amortization Amortization Interest.................................... 4.000% 4.000% Amortization................................ 1.358% 1.000% ______ ______ Total.................................. 5.358% 5.000% Yearly Costs—- Interest and amortization...................$ 6,697,000 $ 6,250,000 Operation plant ($500,000) and dam ($200,000) 700,000 700,000 Operation All-American Canal................. 500,000 500,000 Depreciation on plant @ 3/4%................. 262,500 262,500 ___________ _____________ Total annual charges...................$ 8,160,000 $ 7,712,500 Mills per Kw-h. at Boulder Canyon (3,600,000,000 Kw-h. per year @ 55%)(1,000,000 H. P. capacity at Boulder Canyon)............... 2.26 2.14 Cost of Boulder Canyon Power at Boulder Canyon With Proposed Allowance for Revenue from Water $1,500,000 revenue per year from sale of water Total annual charges against power.....$ 6,660,000 $6,212,000 Mills per Kw-h. at Boulder Canyon....... 1.85 1.73 ============================================================================================================== TABLE NO. 11 ITEMIZED COST OF SUBSTITUTE STEAM PLANT Estimate of Steam Electric Generating Plants, Transmission Lines and Receiving Stations Capable of Providing for 664,000 Kilowatts of Load at 78 Per Cent Power Factor Divided Between Three Central Distributing Points in the Metropolitan Area. 1. Steam plant of 700,000 kilowatts, standard rating at 90% power factor, including equipment for delivery to transmission lines at 132,000 volts.................................................... $58,131,000.00 2. Three 132,000-volt transmission lines of two circuits each, averaging 15 miles in length, together with right-of-way.................. 4,500,000.00 3. Three central receiving stations, including 210,000 K. V. A. capacity of synchronous condensers distributed between the three, and step-down transformers from 132,000 to 33,000 volts........ 10,409,000.00 ______________ Total..................................................................... $73,040,000.00 Cost per K. W delivered load.................................................. $110.00 per K. W. Cost per K. W. manufacturing rating........................................... 104.30 per K. W. ======================================================================================================= CONTENTS Letter of Transmittal............................... 2 The Project Contemplated.............................. 2 Location and Character of Power Market................ 2 Power Demand Affected by Amount and Cost of Supply.... 3 Reliability of Former Power Demand Estimates.......... 3 Source of Power and Other Data........................ 3 The Tabular and Graphic Data Submitted................ 3 Absorption of Boulder Canyon Power by the Market...... 3 Economic Aspects of the Boulder Canyon Project as Affecting Southern California..... 4 Comparison Between Costs of Boulder Canyon Power with Steam Auxiliary; a Substitute Steam Electric Supply and Other Sources..... 4 Would Electric Utilities Be Justified in Entering Into Firm Contracts for Power on Definite Terms, to Be Delivered Ten Years Hence?..... 9 TABLES Table No. 1 — Growth of Population in the City of Los Angeles................................ 2 2 — Population Growth of Large American Cities..................................... 3 3 — Growth in Building Permits, Bank Clearings, Postoffice Receipts and Manufactured Products of the City of Los Angeles, California...... 3 3-A — Kilowatt Hours per Capita per Year of United States Cities, Exclusive of Energy for Electric Railways............................... 3 4 — Estimated Growth in Electric Power Requirements for the City of Los Angeles...................................................... 4 5 — Estimated Growth in Electric Power Requirements for Southern California................................................... 4 6 — Estimated Growth in Electric Power Requirements for the State of California................................................... 5 6-A — Installed and Peak Horsepower of Southern California. Including Energy for Electric Railways........................................ 5 6-B — Electrical Horsepower Installed in California as of December 31. From Annual Reports Filed with the Railroad Commission......... 6 6-C — Electrical Horsepower Installed in California as of December 31. From Annual Reports Filed with the Railroad Commission..... 6 6-D — Electrical Horsepower Installed in California as of December 31. From Annual Reports Filed with the Railroad Commission..... 7 6-E — Electrical Horsepower Installed in California as of December 31. From Annual Reports Filed with the Railroad Commission........ 7 7 — Cost of Boulder Canyon Power with Peak Steam Service and Standby............... 8 8 — Explanation of Calculations for Items 9, 11 and 13, on Table 7-A..................... 8 9 — Cost of Providing for 664,000 Kw. Demand from Steam Plant Substitute for Boulder Canyon Power.................. 8 10 — Cost of Boulder Canyon Power at Boulder Canyon, Without Revenue from Water....... 9 11 — Itemized Cost of Substitute Steam Plant.... 9 CHARTS Absorption of Boulder Canyon Power Development by Power Market of Southern California..... 10 CHART A—Los Angeles Electric Power Load Curve ................................ 11 CHART B—Growth in Population of the City of Los Angeles ............................ 12 CHART C—Population Growth of the City of Los Angeles Compared with Growth in Other Large Cities .................................. 13 CHART D—Estimated Growth in Population of Los Angeles, Southern California and State of California ........................... 14 CHART E—Estimated Growth in Kilowatt-Hours per Year Required by Railways for City of Los Angeles and Southern California....... 15 CHART F—Estimated Growth in Kilowatt-Hours per Capita per Year for City of Los Angeles, Southern California and State of California., 16 CHART G—Estimated Growth of Kilowatt-Hours per Year, Including Railways, for Los Angeles. Southern California and State of California. . 17 CHART H—Estimated Growth of Average Load in Kilowatts, Including Railways, for Los Angeles, Southern California and State of California.. 18 CHART I—Estimated Growth in Peak Load in Kilowatts, Including Railways, for Los Angeles, Southern California and State of California. . 19 CHART J—Estimated growth of Average Load in Horsepower, Including Railways, for Los Angeles, Southern California and State of California............................... 19 CHART K—Estimated Growth of Peak Load in Horsepower, Including Railways, for Los Angeles, Southern California and State of California .............................. 21 CHART L—Growth in Building Permits, Bank Clearings Postoffice Receipts and Manufac-tured Products for the City of Los Angeles. . . 22 CHART M—Kilowatt-Hours per Capita per Year, Excluding Railways, for Los Angeles, Detroit, Chicago and Boston...................... 23 CHART N—Installed Horsepower and Peak Horsepower for Southern California.............. 24 Page 9

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