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- Mr. RAKER. In the meantime? Professor DURAND. Yes. Mr. RAKER. When the Boulder Canyon Dam is completed and 600,000 horsepower is developed will these private individuals and concerns be put out of business?Professor DURAND. No; I take it they will not be put out of business, but there may be required some readjustment of rates. Mr. RAKER. Of course, that would be one of the things to be adjusted, but Mr. Hoover says that all of those things are now adjusted by commissions and, therefore, we do not have to worry about them, but if in the next 8 or 10 years there was a large development outside of Los Angeles by these private concerns and private individuals to supply the demand that is increasing all the time, I was wondering whether or not by the construction of the Boulder Canyon Dam they would thereby be put in the position that their property would be practically worthless? Mr. BARBOUR. Would not the developments in the other parts of the State result in the consumption of all that power? Even though Los Angeles did not use it other sections would be developing and thus result in a demand for more power in those sections.Mr. RAKER. I was trying to get the professor's view on that. Professor DURAND. My opinion as to that point is this: That there will possibly be required some careful consideration of rates on the part of the rate-making power at that period of time, but I do not foresee the putting out of business of any of these present or even immediately prospective power plants. I believe, furthermore, it is a fact that certain of these power companies are looking forward with considerable care to the projects which they propose undertaking in the immediate future, having an eye on the possibilities of the developments at Boulder Canyon Dam; they are, in other words, discounting to some extent the possible developments at Boulder Canyon Dam. To develop this thought in a little further detail, I should consider that by the time the Boulder Canyon project is ready for power service, the actual deficit or void awaiting to be filled will amount to one-third of the total output or more, and this without counting on more than the normal growth in present modes of power use. Additional or new industrial uses of hydropower, stimulated by favorable rates, will undoubtedly be planned for operation concident with the completion of the project. Among such uses mention may be made of irrigation pumping, mining and chemical industries and the electrification of railroads in the section within economic reach of this source of power. It is a matter of common knowledge that the Sante Fe Railroad is already manifesting an active interest in the possibilities of power from this source. Those new or extended uses, over and above what may be termed normal growth, will easily carry the total demand at the completion of the project to the amount of one-half or two-thirds the total output, as stated at an earlier point. This would leave say one-third of the output only, as reserve against future growth, an amount representing only a moderate provision against the future and certainly in nowise justifying the scrapping of any of the earlier existing plants. Furthermore there are certain areas served by these existing companies which would not so readily come within the scope of service from Boulder Canyon and normal growth within such areas would aid in furnishing an outlet for their power product. Again, it is common practice with power companies, as the time approaches for bringing in a new station or a new block of power, to allow the margin of reserve power (power capacity over and above that normally required and serving as an insurance against interruptions in service) to gradually decrease, thus diminishing the margin intended to secure reliability and continuity of service. This policy will undoubtedly be followed in the case of the Boulder Canyon project and all power companies will thus anticipate service from this source by a continuous decrease in the desirable margin of reserve power and in a correspondingly increased use of their steam plants. This is what was referred to a moment ago as an anticipation of or a discounting of the future with reference to the influence of Boulder Canyon on the general power situation. It thus results that a considerable block of the Boulder Canyon power, when brought in, may be considered as no more than restoring the proper margin of reserve power desirable in order to insure continuity and reliability of service.Taking these various considerations into account, it seems clear that there need be no apprehension that the advent of Boulder Canyon power will result in putting out of business the earlier and smaller plants. There will be use for all the hydro-power which we shall be able to develop. Mr. SMITH of Idaho. Do you know whether or not the city of Los Angeles is in a position or is inclined to make a proposition to the Government to take over and use a certain amount of this power in the event the Boulder Canyon Dam is constructed, so that we might have some idea as to when the Government will be reimbursed for its expenditure?
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