December 5, 1975
Page 38928
Mr. STENNIS. Mr. President, I want to yield time to the Senator from Maine.
But first, I want to say that no project has ever been reviewed more thoroughly over the years than the Dickey-Lincoln project in New England. We are encouraged now that the people up there have gotten together. The committee has unanimously recommended these funds for the project to continue the preconstruction planning.
Now, I yield 7½ minutes to the Senator from Maine.
Mr. MUSKIE. I thank my good friend from Mississippi.
Mr. President, I have worked and fought for this project since 1961. The distinguished Senator from Massachusetts tells us that in the last year he has learned some new facts about this project.
I listened to him closely. I have not heard a thing that has not been used against this project by the power companies of New England for most of the last 10 years.
Mr. President, in the short time available to me I could not go into all of the implications of what the distinguished Senator has said. But let me say this: This project is the product of 3 years of intensive study and development by the Department of the Interior under a direction from President Kennedy in 1961. When it was finally proposed to the Congress, it had a benefit-cost ratio which was more favorable than 75 percent of the power projects ever built by the U.S. Government in this country.
Interestingly, of the 170 that had been built prior to that time, not one had ever been built north of the Mason-Dixon Line and east of the Mississippi River. We were the one area of the country which was not given the benefit of public power as a test of private power and as an opportunity to develop our region.
This one stood up as against 75 percent of all those that had been built before.
The Senator from Massachusetts minimizes the impact of this project.
This project is not going to rebuild all of New England. No one ever suggested that. But this project, when built, will provide 10 percent of the peaking power for all of New England. Anyone who knows power knows that peaking power is the most expensive kind of power. It is ideally served by hydroelectric plants — not nuclear, not coal, not oil, but hydro. This is the biggest undeveloped hydro site in the Northeast, if not in the country.
As to cost, this project will repay its cost to the Treasury in 50 years. This project meets all the requirements of existing law that have ever been applied to any other hydroelectric project with respect to interest rates, payback, and every other standard. The Senate has approved this every year for the past 10 years. We have been blocked in the House. By whom? By the power companies. And when the power companies finally pulled off because the price of oil finally convinced them that they needed it, then we have a new group coming in, the environmentalists.
So what did we do? We delayed the project and promised to produce an environmental impact statement to settle those questions.
That is what this money is all about.
But they are not content with that. They do not want the facts. They do not want the facts on the environmental implications. On economic feasibility, the project has met the test for 10 years. On the environmental questions we are asking the Congress of the United States to give us the chance to make the case because the project from an energy point of view is deserving.
No, the Senator from Massachusetts has not produced anything new in the statement presented to the Senate. I have heard that stuff for 10 years. It has not been sound before and it is not sound today.
Mr. President, I ask unanimous consent to have printed in the RECORD a fact sheet concerning this matter and comments on an article by Richard Saltonstall, Jr.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
DICKEY-LINCOLN SCHOOL LAKES, MAINE
FACTSHEET
I. GENESIS
Dickey-Lincoln School Lakes evolved as a result of a study of the Development of Tidal Power at Passamaquoddy, a system of tidal bays studied since 1919 by both private and public engineers. The most comprehensive report was that completed by the International Joint Commission in April 1961 after 3 years of study and a cost of $3 million. The Commission concluded that the project was not economically feasible under the then existing conditions. At the request of President John F. Kennedy, the Commission report was reviewed to determine if the project was feasible in view of the advanced engineering techniques and prevailing economic conditions. In July 1963, a report was submitted to the President, which concluded that application of a different use-concepts of power coupled with advanced engineering techniques would result in a favorable report.
On July 16, 1963, the President directed the Departments of Interior and Army to make additional studies to supplement the July 1963 report. An Army-Interior Advisory Board on Passamaquoddy and Upper Saint John river was formed. Interior performed power studies, power transmission, marketing benefits and other economic aspects. The Corps of Engineers developed the physical components of the project.
The Study Committee completed its evaluation in August 1964, and submitted its report to the Secretary of the Interior. Recommendations included: early authorization of the Passamaquoddy Tidal Project and Upper Saint John River Developments and early construction of the project to develop low cost firm power for Maine and peaking power for the remainder of New England.
The Secretary of the Interior submitted a report on 9 July 1965 to President Johnson summarizing the August 1964 report. Subsequent to August 1964, a review updated 4 power benefits. The power rates were reduced due to larger, more economical developments by the power industry since previous analyses. The reduction caused benefit-to-cost ratio for the Passamaquoddy Power Project to fall below unity (86 to 1). The benefit-to-cost ratio for Dickey-Lincoln School Lakes was a sound 1.81 to 1.
One recommendation included in the July 1965 report approved by President Johnson was:
"Immediate authorization, funding, and construction of the Dickey and Lincoln School projects on the Saint John River and their associated transmission system. Construction would be contingent upon completion of necessary arrangements with the Canadian government. This would also have the immediate and major by-product of preserving the famed Allagash River in Maine, one of the few remaining wild rivers east of the Mississippi River."
The Dickey-Lincoln School Lakes Project was authorized by the 1965 Flood Control Act Public Law 89–298, dated 27 October 1965 substantially in accordance with the plans included in the August 1964 report.
II. PROJECT DESCRIPTION
A. Physical Characteristics
Dickey Dam is located on the Upper Saint John River immediately above its confluence with the Allagash River near the Town of Dickey and 28 miles above Ft. Kent in Aroostook County, Maine. The dam would be an earthfill structure impounding a reservoir with gross storage capacity of 7.7 million acre-feet for power, flood control and recreation. The reservoir area would total 86,000 acres at maximum pool elevation of 910 feet mean sea level (msl). Three dikes would be located in saddle areas along the reservoir perimeter to prevent overflow into adjacent watersheds.
Dickey Dam would have a total length of 10,600 feet and a maximum height of 335 fee above streambed. Its outlet works consist of a 26-foot diameter concrete lined tunnel, 2,130 feet long. The power facilities includes eight generating units at 95,000 Kilowatts (KW) for a total installed capacity of 760,000 KW. The project would be operated for peaking power purposes.
Lincoln School Dam is located on the Upper Saint John River, 11 miles downstream from Dickey Dam. It provides for an earthfill dam impounding a reservoir with useful storage capacity of 24,000 acre-feet for purposes of regulating discharges from for Dickey Dam and for power generation. Its reservoir would encompass 2,150 acres at its maximum pool elevation of 610 feet msl.
Lincoln School Dam would be 1600 feet long and have a maximum height of 85 feet. Its power facilities consist of two units at 35,000 KW each for a total installed capacity of 70,000 KW. The project would be operated a base load power plant.
The construction cost for the dams and appurtenances totals $428.0 million based on 1 January 1975 price levels.
B. Operational Characteristics
The project would be operated principally as a peaking power plant. In this role the project would not be a high energy producing (i.e Kilowatt-hours) facility. A peaking power project is designed to operate for short periods of time to meet daily peak demands. It has quick starting capability and provides spinning reserve for load protection. Typical peaking plants are hydroelectric projects — both conventional and pumped storage — and gas turbine units. On the other hand, base load power is provided by large efficient fossil fueled or nuclear steam plants which operate virtually continuously and as a result are high energy producing installations.
However, these latter plants are not suitable for peaking use and load protection because of economic and operating considerations. The 1970 National Power Survey published by the Federal Power Commission notes that the current trend towards construction of very large fossil-fueled and nuclear steam electric base load units has increased the need for plants designed specifically for meeting daily peak demands.
In addition to its reliability, a hydroelectric facility has a lower operating cost than alternative power sources because it does not rely upon costly fuels. Water is a continuous and clean source of power. Beyond the economic aspects, there would also be an annual savings in natural resources. To produce an equivalent amount of electrical energy, fuel consumption — dependent upon the type of alternate — would total 1.7 million barrels of oil or 600,000 tons of coal, or 9.2 billion cubic feet of gas.
C. Generating Time
The operation of Dickey Dam's power facilities is very flexible and can vary on any given day to meet a specific peak demand. The project is capable of generating to full capacity about 2½ hours per day for seven days a week or 3½ hours daily for five days a week. During periods of peak demand the generating time could be increased to seven hours per day, seven days per week if desired.
The Lincoln School re-regulating dam can normally operate 10 hours per day seven days per week. When the Dickey project operates 7 hours per day, the Lincoln project is capable of generating energy 24 hours per day. In the event of an electrical blackout, the project is capable of generating electricity for a continuous period of up to 35 days. Under normal operating conditions, the project will generate energy 12 months per year.
D. Construction Period
Construction of the project, including all necessary land acquisition, will require approximately 7½ years. Initial power-on-line would be scheduled 6½ years after initiation of construction and total power-on-line would be realized one year later.
III. PROJECT ECONOMICS
A. General
The project’s average annual benefits are currently estimated as follows:
(1 January 1975 Price Levels):
Benefit: Amount
Power $52,798,000
Flood control 77, 000
Area redevelopment 983,000
Recreation 1,250,000
Total benefits 55,108,000
The average annual cost of the project reflecting amortization of the initial investment and annual operation and maintenance cost totals $21,138,000. This results in a benefit-to-cost ratio of 2.6 to 1.
1. Power
As noted, power would be the principal benefit realized through construction of the Dickey- Lincoln School Lakes Project. On-site annual power generation of 1.2 billion kilowatt hours would result from the total installed capacity of 830,000 KW. Additional power generation of 350 million kilowatt hours would also be gained by downstream Canadian power plants due to regulated flows from Lincoln School Lake of which 50% would be allocated to the United States.
The peaking power output from the project would provide an estimated 10% of the New England peaking power generation required in the mid-1980's.
2. Flood Control
The flood control benefit results from elimination of flood damages below the project site. Fort Kent, located about 28 miles below Dickey Dam, has experienced ten floods during the past 47 years of record. The most recent floods occurred in May 1961, May 1969, April 1973 and May 1974. The May 1974 floodstages exceeded the record flood of April 1973 and caused damages estimated at $3.0 million. These losses would be prevented by the project. In view of the uncertain status of Dickey-Lincoln School Lakes and the recurring flood problem at Ft. Kent, a small local protection project has been formulated under Section 205 of the 1948 Flood Control Act, as amended, that would provide some degree of protection to the Town of Ft. Kent. The proposed dike and pumping station would protect to a 100 year frequency flood level and would be limited principally to the commercial center of Ft. Kent. The proposal is presently under review by the office of the Governor of Maine.
Dickey-Lincoln School Lakes would provide full protection to the Ft. Kent area.
3. Redevelopment
The Area Redevelopment benefit represents the effect of added employment resulting from the project. The Dickey-Lincoln School Project is located in the part of Aroostook County which is classified as a Title IV (1) Economic Development Area denoting an area of substantial and persistent unemployment. Numerous employment opportunities would arise and the associated wages related to project construction and future operation and maintenance would result in substantial relief to the economically depressed area.
4. Recreation
The recreation benefit is a preliminary estimate of general recreation, hunting and fishing use developed at the close of earlier preconstruction planning activity. As presently envisioned limited facilities such as camp-sites, comfort stations and boat launching ramps would be provided. A preliminary recreational master plan will be developed — in conjunction with appropriate State and Federal agencies — in the early stages of current preconstruction planning effort.
B. Economic Analyses
The justification for authorization of all Corps of Engineers' projects is measured in terms of the benefit-to-cost ratio. The economic analysis used to develop this yardstick is based on standards prescribed by Senate Document No. 97, 87th Congress, entitled Policies, Standards and Procedures in the Formulation, Evaluation and Review of Plans for Use and Development of Water and Related Land Resources. Total project benefits for Dickey-Lincoln School Lakes are comprised of at-market power, total downstream energy, flood control, recreation and area redevelopment type benefits. The power benefits for Dickey-Lincoln School Lakes are equated to the cost of privately-financed equivalent alternative sources of power. The unit power values, furnished by the Federal Power Commission, are based on gas turbines for that portion of project power expected to be marketed in the Boston area for peaking purposes and a base load fossil fuel steam plant as an alternative for that portion to be marketed in Maine.
The project cost is evaluated on an annual basis reflecting amortization of the investment and annual operation and maintenance expenses. The cost has been increased to provide for the transmission of power by adding 50 percent of the annual cost of a line between the project and Boston. It has been assumed that the remaining one-half of the annual cost will be derived from the wheeling by others of off-peak power. The interest rate used in the economic evaluation is 3¼% and the period of analysis is 100 years. Attached as Table I is a summary of the economic analysis.
The 3¼% interest rate used in the economic analysis has been the subject of considerable discussion. Accordingly, an explanation of the derivation of this rate is appropriate. The interest rate is in accordance with a Water Resources Council (WRC) regulation implemented in December 1968. This regulation revised the method of computing the interest rate as previously outlined in SD 97. The regulation permitted an exception, however, for those projects already authorized such as Dickey-Lincoln School Lakes which was authorized in 1965. The exception noted that if an appropriate non-Federal agency provided— prior to 31 December 1969 — satisfactory assurances that requirements of local cooperation associated with the project would be met, then the previous interest rate would be retained. At Dickey-Lincoln School Lakes, local cooperation would be required for the cost sharing of recreational facilities. Assurances were received from the Governor of Maine by letter, dated 24 February 1969, that the non-Federal requirements would be fulfilled at the appropriate time. As a result, the interest rate was retained at 3¼%.
The WRC subsequently established new principles and standards for water resource planning effective in October 1973. A section of these new standards includes the provision for increasing the interest rate to 6⅞ %. However, the Water Resources Development Act of 1974, enacted by the Congress on 7 March 1974, includes a section which requires that interest rates used for water resource projects be consistent with the implementation of the December 1968 WRC regulation. Accordingly, the 3¼ % interest rate remains firm for Dickey-Lincoln School Lakes. As a point of interest if the project were evaluated on a 6⅞ % interest rate, it remains justified with a 1.3 to 1 ratio.
The Corps of Engineers also uses a procedure referred to as an "economic efficiency test" to comprehensively evaluate proper resource development. The objective of an ideal system operation is to meet area power demands at least cost to consumers. Therefore the least costly addition to a region's capacity could be considered as a yardstick for purposes of making a decision regarding such additions. The "economic efficiency test" provides for such a determination. Basically the test provides for a comparison of the costs of providing an equivalent amount of power from the most feasible alternative likely to develop in the absence of the project, evaluated on a basis comparable with the determination of the Federal project costs (with respect to interest rate, i.e. 3¼%, taxes and insurance). The Corps "economic efficiency test" indicates that the annual at-market charge for Dickey-Lincoln School Lakes power amounts to $21,138,000 while alternative equivalent power charges amount to $42,759,000. This results in a ratio of 2.0 to 1 in favor of Dickey-Lincoln School Lakes. This means that even if private utilities could obtain financing equivalent to the Federal rate, water resource benefits could be provided by Dickey-Lincoln School at half the cost of the private utility alternatives. The attached Table II illustrates the economic efficiency test.
[Tables omitted]
C. Repayment Analysis
The above analyses are used to define the economic worth of the project. The financial value of power, however, is determined through the repayment analysis. Marketing of electric power from Federal projects is the basic responsibility of the Secretary of Interior as authorized by Section 5 of the 1944 Flood Control Act. Repayment rates must be sufficient to recover costs of power production and transmission including annual operation and maintenance expenses. The total investment allocated to power must be repaid over a reasonable period of years. As a matter of administration policy, this period has been specified as 50 years. On 29 January 1970, the Secretary of Interior, under his administrative discretion to establish power rates, instituted new criteria for determining interest rates for repayment purposes for projects not yet under construction. The current interest rate used for Dickey-Lincoln School Lakes repayment under this revised criteria is 6⅛%. The resulting analysis shows that power from Dickey-Lincoln School Lakes could be marketed at 30.98 mills/Kwh as compared to 40.90 mills/ Kwh for the private alternatives. On an annual basis this represents a savings of about $12.4 million.
The difference between the economic analyses previously described and the repayment analysis warrants further clarification. This has caused a considerable amount of misunderstanding and misinterpretation. The economic analyses — both for the benefit-to-cost ratio determination and the "economic efficiency test" — are economic parameters measuring a project's worth. These analyses are not unique to Dickey-Lincoln School Lakes. The benefit-to-cost ratio is employed universally by the Corps in measuring a project's economic justification. The "economic efficiency test" is also universally used by the Corps in conjunction with projects having generation of electric power as a project purpose. The economic analyses utilize a 3¼% interest rate and 100-year period of evaluation. On the other hand, the repayment analysis — which will ultimately be computed by the Department of Interior — is a financial analysis which determines the appropriate charge at which power costs must be marketed to return the total annual investment allocated to power. For this analysis an interest rate of 6⅛ % and a 50-year repayment period are used.
IV. ENVIRONMENTAL STUDIES
A. General
Detailed data essential to a comprehensive environmental evaluation consistent with the National Environmental Policy Act of 1969 (NEPA) have not been developed for Dickey-Lincoln School Lakes. Preconstruction planning was terminated in the fall of 1967, prior to passage of NEPA, and not resumed until later 1974. Environmental studies and preparation of an Environmental Impact Statement will receive priority attention now that design activity is resumed. A final Environmental Impact Statement must be on file with the Council on Environmental Quality prior to initiating any land acquisition or construction.
Members of this Division had a series of meetings with the Bureau of Outdoor Recreation, the U.S. Fish and Wildlife Service, the Maine Division of Inland Fisheries and Game, and the Maine State Park and Recreation Commission during 1967 prior to termination of design. The objective of the meetings was to determine the impact of the project on recreation and conservation as well as determining what input would be provided by each group. All parties realized the need for detailed studies before final determination could be made. Coordination is now being reestablished with these agencies to evaluate the project's environmental impact.
An initial activity in environmental studies is the preparation of a scope-of-work for the Environmental Impact Statement. The scope-of-work will be the plan of action for developing a comprehensive Environmental Impact Statement. It will identify all significant environmental, social and economic impacts induced by the project and recommend methodology for measuring and evaluating these impacts. A contract with a private environmental engineering firm is currently underway to accomplish this task.
B. Project Effect on the Allagash River
Construction of the Dickey-Lincoln School project will have no adverse effect on the Allagash River. The project should, in fact, effectively supplement the valuable waterway. The Dickey Dam site is located on the Upper Saint John River immediately above its confluence with the Allagash River. Consequently, the impoundment would have no effect on its outstanding free flowing characteristics.
The lake created by the project totaling some 88,000 acres would complement the Allagash environs by furnishing a balanced resource to this upper region of Maine — for example providing lake fishing as opposed to the stream fishing of the Allagash. The project would also serve to alleviate some of the present heavy use being experienced along the Allagash — a use which could ultimately be detrimental to its wilderness appeal.
C. Effect of Reservoir Drawdown
The North Pacific Division of the Corps of Engineers conducted computer simulation studies for this office in 1966 which identified the extent of reservoir fluctuation. The operational characteristics of the project were analyzed by continuous simulation using 30 years of record.
During the period of June to October, the lake surface would drop about three to four feet depending upon whether it was a hydrologically wet or dry year. The average daily drop in the pool would approximate one inch. The lake elevation at the start of the recreation season would be a function of the hydrologic conditions. For an average year, the pool elevation would be at 905.0 mean sea level (msl) in June. This is five feet below the maximum power pool elevation of 910.0 msl. At summer's end the pool would be about four feet lower, as previously noted, or nine feet below the maximum pool elevation.
Much has been written about the so-called "bathtub ring" effect due to drawdown. Based on the average year, the exposed area would total 4,000 acres (El. 905.0 msl) at the beginning of the recreational season and 8,000 acres (El. 901.0 msl) in October. The maximum drawdown, i.e. lowest lake elevation, in any given year would occur in March. The maximum drawdown periods occur during the winter months when heavy snow cover typical to the area exists. From an environmental viewpoint, this snow cover would effectively cover the exposed areas.
of adding pumped storage.
An analysis was also accomplished to reflect the most severe drawdown condition during the 30 years of record. This study indicated that the power pool would be lowered to El. 871 ft. msl only once during the 30-year period — again occurring in March. This event, with an approximate 3% chance of occurrence, would expose some 31,000 acres although the terrain would have a significant snow cover as previously described.
Computer simulation studies will be updated during the current preconstruction planning activities and will utilize 42 years of hydrologic record.
V. MARKETING OF POWER
The concept developed during the earlier studies envisioned the marketing of 725,000 KW of Dickey-Lincoln School Lakes output as peaking power to the Boston, Mass. area and the remaining 105,000 KW principally as base load power in the Maine market. This marketing concept will be reviewed by the Department of Interior.
The Department of Interior is vested with the responsibility of marketing the electric power from Dickey-Lincoln School Lakes per authority of Section 5 of the 1944 Flood Control Act. This Section states that power will be sold in such a manner as to encourage the most widespread use thereof at the lowest possible rates consistent with sound business practices. Section 5 further states that preference in the sale of power and energy is to be given to public and cooperative power interests.
It will not be known how much power — if any — will be available to private utilities until Interior finalizes its marketing plans. Historically, the Department of Interior has not proceeded with definitive marketing and transmission plans until construction of the project is under way and the power-on-line date is capable of being met with some degree of certainty. Prior to that time, their studies are of sufficient depth to determine marketability and evaluate the financial feasibility of the power installation.
The existence of the New England Pool (NEPOOL) — comprised of the major utilities within New England — provides an effective vehicle through which Dickey-Lincoln School Lakes output could be utilized to the mutual benefit of New England. A report dated November 21, 1974 submitted to the New England Planning Committee of NEPOOL stated that, "the Dickey project capacity would be fully effective capacity to the interconnected New England system if it were dispatched in a peaking assignment during the 1985-1986 power year. The enormous storage reservoir makes it possible to use Dickey with maximum flexibility. It can run at full capacity whenever it is needed and can sustain that power level for the duration of any peak that the system experiences. It makes an ideal source of reserve with quick response, a fact that is most valuable to have as an option open to those responsible for load dispatching."
VI. CURRENT RATES
Planning and design, previously terminated in late 1967 due to lack of funds, was resumed in the fall of 1974 with the allocation, of $800,000 in Fiscal Year 1975 (July 1974 through June 1975) funds. The only work accomplished in the interim was the annual updating of project costs and benefits. Construction costs were escalated using selective cost indices for specific work items. The power benefits have been updated annually by the Federal Power Commission.
Efforts are now underway and/or resumed on the following preconstruction planning elements:
Preparation of a scope-of-work for an Environmental Impact Statement.
Hydrology and Hydraulic Studies.
Hydropower Studies including feasibility of adding pumped storage.
Water Quality Studies.
Preliminary Planning of Recreational Facilities.
Preliminary Real Estate Planning.
Surveying and Mapping of Construction Sites.
Construction Materials Explorations and Testing.
General Layout and Design Activity.
Highway Relocation Studies.
Seismic Studies.
Coordination will be established with appropriate Federal, State and local agencies and Canadian interests as preconstruction planning progresses. Construction features has been updated by a
private engineering firm experienced in hydroelectric facility design and construction.
This update, supplemented with updated cost estimates for land and minor construction features prepared by this Division, constitutes the current project cost estimate.
[Table omitted]
In addition the Corps of Engineers has requested and the Appropriations Committee has approved $650,000 for an Environmental Impact Statement and additional preconstruction planning and engineering studies on the transmission corridors. These funds and additional funds for preconstruction tests and engineering bring the level of appropriation for fiscal year 1976 and the transition quarter to $2,110,000 and $435,000 respectively.
CRITICAL TARGET DATES
Draft environment impact statement, June 1976.
Revised general design memorandum, June 1976.
Final environmental impact statement on file with CEQ, April 1977.
Earliest construction start, April 1978.
Clearing.
Highway relocations
Diversion tunnel
Earliest power on-line based on construction authority fiscal year 1978, March 1984.
Project completion based on construction authority fiscal year 1978, March 1985.
COMMENTS ON ARTICLE BY RICHARD SALTONSTALL, JR.
Subject: Dickey-Lincoln School Lakes, Maine.
Reference: Article written by Richard Saltonstall, Jr. placed in Congressional Record (pp. 16208-16210) by Hon. Silvio O. Conte on 22 May 1975.
Responses: The following responses are presented to specific issues cited in the referenced article. The location of issues within the Congressional Record are noted by page number, column and paragraph for ready reference.
P. 16209, 1ST COLUMN, 1ST FULL PARAGRAPH
Issue : Dickey Dam Bigger than Aswan Dam...
Response: They are comparable in size. Based on statistics included in the 1973 World Register of Dams, the Aswan High Dam has a maximum height of 364 feet, is approximately 12,500 feet long at its crest, and has an embankment fill quantity of about 54 million cubic yards. The Dickey Dam would have maximum height of 335 feet, a crest length of 10,600 feet and a total embankment quantity of about 61 million cubic yards.
P. 16209, 1ST COLUMN, 1ST FULL PARAGRAPH
Issue: "Power proposal that ultimately may cost over $800 million"
Response: The projected cost of the project is simply a matter of conjecture. Based on 1 January 1975 price levels the estimated total project cost is $572 million comprised of $428 million for the dam and appurtenances and $144 million for transmission. If this cost were to be projected to the estimated construction period at prevailing rates of escalation the total amount could approximate $800 million. However, it's important to note that the same economic forces that would influence the project's construction cost would similarly affect the cost of privately- financed alternatives which are a measure of the project's benefit. Dickey-Lincoln School Lakes, however, would not be subject to the availability of expensive fuels for future operation. For example, since design activity was terminated in 1967, the project cost has increased 96% due to escalation. During the same period the annual power benefit — measured in terms of the most feasible privately-financed alternatives — has increased over 170%. The benefit-to-cost ratio has increased over this period from 1.9 to l to 2.6 to1.
It's also significant to note that hydroelectric sites normally have high initial construction costs in relation to other alternatives. However, the annual operation and maintenance expenses are significantly lower. For example, as noted earlier, the project is not dependent upon costly fuel for its operation. Water is a continuous free and clean source of power.
From the viewpoint of ultimate Federal project costs, all expenditures allocated to power are reimbursable through user charges. Of the total project cost, including transmission, of $572 million the net ultimate expenditure to the Federal government would be $17 million.
Issue: Marketing aspects of project's power output namely 725 MW to southern New England and 105 MW to Maine preference customers "mostly Federal installations and municipalities".
Response: Marketing of power from Dickey-Lincoln School Lakes will be accomplished by the Department of Interior under authority of the 1944 Flood Control Act. This act provides that power will be sold in such a manner as to encourage the most widespread use thereof at the lowest possible rates consistent with sound business practices. Preference in the sale of power and energy is to be given to public and cooperative power interests which in turn is delivered to all customers served by these respective power interests. Any power required by Federal installations would be purchased from these cooperatives.
The marketing concept cited is based on studies conducted by the Department of Interior during the mid-1960's. In conjunction with current preconstruction planning, the DOI has been requested to restudy and update the marketing aspect to reflect prevailing conditions.
SAME REFERENCE AS PRECEDING
Issue: "Dickey-Lincoln's total yearly output of 1.1 billion kilowatt hours is actually less than the generating capacity of a small fossil-fuel plant and is only around 1½ percent of New England's yearly consumption of 64 billion kilowatt hours."
Response: This statement measures the value of the project in terms of its energy producing capability, i.e. kilowatt hours. This is not an equitable comparison. The project is designed as a peaking power plant and not a base load plant. Any large power system is composed of a blend of various plants, each having a particular fit within the system. Continuous or base load power demands are met by nuclear power plants or fossil fuel units. These facilities are designed to achieve their maximum economy by being operated almost continuously. As a result, they are high energy producing installations. However, these same plants are not suitable for meeting short duration peak power demands typical to a power system because of economic and operating constraints. Peak power demands are met principally by hydroelectric facilities — both conventional and pumped storage — or by gas turbine units. By design, they are not high energy producing facilities because of the relatively short operating periods. Projects such as Dickey-Lincoln School are specifically used to provide quick starting, reliable and economic power essential to meeting daily peak demands and to provide ready reserve for system load protection. The value of large peak power plants to the New England system is evidenced in the private sector by the construction of the large Northfield Mountain and Bear Swamp pumped storage projects.
SAME REFERENCE AS PRECEDING
Issue: ". . . peaking periods last as long as six hours. So other facilities will be needed during the 3½ hours when Dickey-Lincoln has no additional peaking capacity."
Response: Dickey-Lincoln School Lakes is operationally very flexible. For instance, Dickey Dam could generate to full capacity an average of 2½ hours per day, seven days per week; or 3½ hours daily, five days per week. The operating period can vary at any given time depending upon the specific daily power demand. During months of peak demand the average generating time could be increased to 7 hours per day, 7 days per week if desired. In the event of an electrical black-out, the project is capable of generating electricity for a continuous period of up to 35 days. This flexibility and its instant start-up capability are very positive characteristics for any power system.
However, there is no single project that can meet extended peak power periods in a large region. Rather it takes a combination of plants acting integrally in a system to assure that power demands are met with reliability and economy. Dickey-Lincoln School Lakes is the most economical addition to such a system.
P. 16209, 1ST COLUMN, LAST PARAGRAPH
Issue: Study of alternatives.
Response: The Environmental Impact Statement for Dickey-Lincoln School Lakes will include an evaluation of alternatives to the project.
P. 16209, 2ND COLUMN, LAST PARAGRAPH
Issue: "The 2.5 cents Corps' figure does not take into account cost increases and inflationthat have affected Dickey-Lincoln during the past ten years whereas the 3.4 cents..."
Response: Not accurate. Both values were based on the same cost reference date. The 2.5 cents represented the amount per kilowatt-hour that would be charged users to repay all project costs allocated to power. The repayment analysis was based on estimated project cost as of 1 January 1974. The 3.4 cents value represented the composite cost for privately-financed alternatives to the project — namely gas turbines for that portion of project power to be marketed in the Boston area and a fossil fuel unit for that to be marketed in Maine. The costs for the alternatives were based on the same 1 January 1974 price level. The latest update based on 1 January 1975 price levels — for both the Federal project and the private's alternatives — resulted in a value of 3.1 cents for Dickey-Lincoln School Lakes as compared to 4.1 cents for the alternatives. This represents a $12.4 million annual savings.
P. 16209, 3RD COLUMN, 2ND FULL PARAGRAPH
Issue: "floods of the last two years prompted this office to proceed with plans for a dike system to protect Fort Kent for less than two million dollars, excluding compensation for the land, or about .0025 percent of the dam cost."
Response: Fort Kent has experienced thee serious floods since termination of Dickey-Lincoln School design activity in 1967. As a result of a request from local interests in 1971, a small local flood control project has been formulated to provide some degree of protection to the community. The protection however, is limited. It would extend only to the 100-year flood level and is confined chiefly to the commercial center of Fort Kent. Other areas would remain flood prone. Dickey-Lincoln School Lakes on the other hand would provide total protection to all flood prone areas in Fort Kent and protection at other downstream locations within the basin.
(The dike proposal is currently under review by the Maine Governor's Office. The latter is evaluating the feasibility of relocating the town's commercial center as a more desirable alternative.)
SAME REFERENCE AS PRECEDING
Issue: ". . the dubious appeal of a lake whose shoreline is a mudflat much of the time because of the rising and falling of the power pool."
Response: Computer simulation studies were conducted in 1966 which identified the extent of reservoir fluctuation. The operational characteristics of the project were analyzed by continuous simulation using 30 years of record. During the period of June to October, the lake surface would drop about three to four feet depending upon whether it was a hydrologically wet or dry year. The average daily drop in the pool would approximate one inch. The lake elevation at the start of the recreation season would be a function of the hydrologic conditions. For an average year, the pool elevation would be at 905.0 mean sea level (msl) in June. This is five feet below the maximum power pool elevation of 910.0 msl. At summer's end, the pool would be about four feet lower, as previously noted, or nine feet below the maximum pool elevation.
Based on the average year, the exposed area of shoreline would total 4,000 acres (El. 905.0 msl) at the beginning of the recreational season and 8,000 acres (El. 901.0 nisi) in October. The maximum drawdown, i.e. lowest lake elevation, in any given year would occur in March. The maximum drawdown periods occur during the winter months when heavy snow cover typical to the area exists.(The average annual snowfall in the Fort Kent area totals 101.4 inches.) From an environmental viewpoint, this snow cover would effectively cover the exposed areas.
Computer simulation studies will be updated during the current preconstruction planning activities and will utilize 42 years of hydrological record.
SAME REFERENCE AS PRECEDING
Issue: "Moreover while touting the possibilities of reservoir recreation, the Corps has not put a value on the camping, canoeing and fishing and activities that already are associated with the free flowing river and are growing each year."
Response: The Corps has not yet had the opportunity to evaluate the recreational impact of the project site. Only very preliminary conceptual studies were being developed when all project activity was terminated. in 1967. With the recent resumption of preconstruction planning and the associated development of the Environmental Impact Statement, the recreational aspects of the project will be evaluated. The analysis will be based on with and without the project conditions thereby reflecting negative as well as positive impacts.
P.12609, 3RD COLUMN, 3RD FULL PARAGRAPH
Issue: Deboullie Mountain as source of borrow.
Response: During the earlier design activity in 1966-67, Deboullie Mt. was identified as a readily apparent potential source for select rock slope protection for the dam and for concrete aggregate. About 670,000 cubic yards were required (equivalent to an area of 600 feet long x 600 feet wide x 50 feet deep). However, being aware of the potential adverse environmental impact, the Corps is currently studying other possible sources of suitable rock material through the use of aerial geologic structure techniques. Based on results to date, it appears alternative rock borrow sources may be available closer to the project site.
SAME REFERENCE AS PRECEDING
Issue: "Dickey-Lincoln will encompass 110,000 acres of the North Woods."
Response: Maine is the most heavily forested state in the Nation with 90 percent or 17.7 million acres of its land area in forest land. Over 95 percent of the forested area or 16.9 million acres is classified as commercial forest land. Aroostook County — within which Dickey-Lincoln School is located — has the greatest amount of commercial forest land totaling 3.8 million acres or 22 percent of the state total. The land required for the project would represent less than 3% of the commercial woodland available in Aroostook County.
Issue: Reservoir.. . "will isolate from the rest of Maine and the U.S. another 200,000 acres of producing timberland."
Response: Corps' personnel have met with representatives of timber management companies to discuss the project and its effect upon their operations. Access to the referenced 200,000 acres can be provided across the Big Black and Shields Branch Rivers adjacent to Canada but within the United States. Although travel distance would be increased, ready access with a road network extending to Maine market areas is available. Access to Canada, which is a major marketing area for the timber, will not be affected.
P. 18209,COLUMN 3, LAST PARAGRAPH
Issue: Validity of past observations relative to fishlife habitat.
Response: Based on coordination with State and Federal agencies since resumption of current preconstruction planning activity, it is apparent that there is a paucity of reliable information on the fish habitat in the upper Saint John River. In conjunction with the preparation of an Environmental Impact Statement, field studies will be conducted to provide a reasonable assessment of the location, extent and type of habitat. Water quality studies of the proposed impoundment are also underway which will aid in defining the post project conditions. Until this data is developed and analyzed, the existing conditions and probable changes due to the project cannot be stated with any degree of validity.
P. 18210,COLUMN 1, 1ST FULL PARAGRAPH
Issue: "State biologists singled out some 34 deer yards in the upper region"
Response: An assessment of existing deeryards and the project's impact will be developed for the Environmental Impact Statement. Studies have been initiated utilizing aerial photography techniques to identify location of deeryards. The U.S. Fish & Wildlife Service prepared a report in 1968 which identified deeryards. However, since then timber harvesting has been very active within the project area. Undoubtedly changes have resulted in deeryard locations. The Service will update its report to reflect results of current studies.
SAME REFERENCE AS PRECEDING
Issue: "a reservoir fluctuating in size from 89,000 to 55,000 acres, etc."
Response: The reservoir area behind Dickey Dam at maximum power pool totals 86,000 acres. Based on past computer simulation studies encompassing 30 years of record, the most severe drawdown condition decreased the pool size to 55,000 acres but occurred only once in the 30-year period of record. Accordingly, an event of this magnitude has a 3% chance of occurrence.
P. 18210,1ST COLUMN, 2ND FULL PARAGRAPH, FIRST HALF
Issue: "In January the U.S. General Accounting Office published a report saying that the Corps of Engineers consistently misled the public by exaggerating the benefits of hydroelectric projects throughout the nation."
Response: Representatives of the General Accounting Office have indicated that no such report was published by that agency. A GAO report was published 20 September 1974, titled "Improvements needed in making Benefit-Cost Analysis for Water Resources Projects," which discussed methods used by each of several Federal agencies in water resources economic analysis. Recommendations were made to improve procedures, but the Corps was not cited for "misleading the public."
P. 16210,1ST COLUMN, 2ND FULL PARAGRAPH, LAST HALF
Issue: "While the GAO has not yet released specific information on Dickey-Lincoln, at least two researchers have produced carefully documented studies. They are Rosemary M. Manning and Bowdoin's Rick Freeman. Both pointed out a major flaw in the Corps' method of arriving at a 2.6 benefit to cost ratio."
Response: We are not aware of a major flaw in computation of the 2.6 benefit to cost ratio. It may be that Ms. Manning and Mr. Freeman are referring to the utilization of an interest rate of 3¼% in developing the B/C ratio of 2.6. However, use of the 3¼% interest rate in analyzing the project economics is authorized by Section 80(b) of the Water Resources Development Act of 1974 (PL 93-251) . Utilization of the currently prescribed interest rate of 5⅞ % yields a 1.54 B/ C ratio.
P. 16210, COLUMN 1, LAST PARAGRAPH
Issue: ".... the Corp's basic data is seven years old. The original price tag of $356 million already has grown to over $500 million, etc."
Response: Since termination of project activity in 1967, and in the absence of further funding, the project cost estimate has been updated annually utilizing selected cost indices. The value of $356 million reflects the estimated cost of the dams and appurtenant structures, excluding transmission, based on 1 January 1974 price levels. (Escalated from $218 million in 1967.) In view of the long layoff in project activity and the critical comments relative to the adequacy of the Corps' estimate, an independent review of major construction features was conducted by Stone & Webster Engineering Co.— an internationally known firm. The current estimate of $428 million, based on 1 January 1975 price levels, incorporates the results of the Stone & Webster review. If the Corps had escalated its prior estimate (1 July 1974 price levels) of $388 million to 1 January 1975 prices using its application of cost indices, the estimate would have been $435 million. Accordingly, the independent review of the cost estimate resulted in a value within 2% of the Corps' projection.
SAME REFERENCE AS PRECEDING
Issue: "If recommended discount rate of 6⅞ % is applied to Dickey-Lincoln and realistic construction costs are taken into account, says Freeman, the project is hardly justified.... "
Response: In addition to the authorized interest rate of 3¼ %, the project economics based on 1 January 1975 price levels have also been computed on the basis of 6⅞ %. The resulting benefit-to-cost ratio is 1.3 to 1.
P. 16210,COLUMN 2, 1ST FULL PARAGRAPH
Issue: The $60,000 flood control benefit. "It only holds up if the dam is the least expensive way of obtaining protection."
Response: The flood control benefit (0.14% of the total project benefits) results from the multiple purpose use of the dams. Adequate storage within the large impoundment will be available each Spring to control flood runoff, which also serves to recharge the power pool. The costs allocated to flood control through multiple use of the project are less than any single purpose flood control project which would provide equivalent protection.
P. 16210,COLUMN 2
Issue: Discussion of power alternatives.
Response: The Federal Power Commission defines the most feasible power alternatives. In their analysis the Commission evaluates all potential equivalent sources of power. While some alternatives may be realizing limited success, none appear to provide an immediate solution to any of the problems facing the utility industry today. The alternatives cited, e.g. solar, windmills, forest wastes, solid wastes are in the experimental stage. Until reliable data can be developed on the economic feasibility, the operational characteristics, the size of development and the associated environmental impacts of these alternatives no realistic comparison can be made.
P. 16210,COLUMN 3, 2ND FULL PARAGRAPH
Issue: "Energy losses over long transmission distances also will run upward of ten percent."
Response: The power benefits for Dickey-Lincoln School Lakes reflect transmission line losses ranging from 5 to 10 percent.
General response: The article typifies the nature of opposition focusing on the project. The various issues raised — especially with respect to environmental aspects — can only be answered through continued project planning and preparation of an Environmental Impact Statement. The remoteness of the project area has resulted in a sparse amount of factual baseline data relating to its environmental resources. Continuation of planning will permit development of valuable baseline information and provide for a logical process through which the impacts of the project proposal can be objectively evaluated.
Mr. RIBICOFF. Will the Senator yield?
Mr. MUSKIE I yield to my good friend from Connecticut.
Mr. RIBICOFF. Mr. President, the actions of the public utility companies during the last two decades against Dickey-Lincoln has been one of the national scandals in lobbying against the public interest. Coming from the State of Connecticut as Governor and U.S. Senator, I have always recognized the contribution that Dickey-Lincoln could make to all of the New England States. I commend the distinguished Senator from Mississippi for including this money for this project, and I support the Senator from Maine completely.
Mr. MUSKIE. I thank my good friend.
I yield to my colleague from Maine, who has been a staunch supporter, if I may.
Mr. STENNIS. Yes. I yield 7½ minutes to the Senator.
Mr. HATHAWAY. I thank the Senator for yielding. There is little that I can add to what my colleagues from the State of Maine and the State of Connecticut have already said. It seems to me that it is a very inappropriate time for us to be trying to knock out a source of energy other than oil and gas, or any other fossil fuels. We are looking for new sources of energy. Hydroelectric projects have been built all over this country for many, many years. This one has a benefit-cost ratio of 2.6 to 1, which is $2.60 for every $1 that the taxpayers are investing. That is better than 50 percent of all of the hydroelectric projects that have ever been built.
It seems even more ridiculous to be trying to knock out this project at this particular time when, as my colleague from Maine has said, this money is primarily for the environmental impact statement which is going to determine whether or not this particular project is causing any environmental damage and for that reason should not be built.
I thank the chairman for yielding to me.
Mr. President, I ask unanimous consent that rebuttal to testimony of the Friends of the St. John before the Public Works Appropriations Subcommittee on Dickey-Lincoln be printed in the
RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
REBUTTAL TO TESTIMONY OF THE FRIENDS OF THE ST. JOHN BEFORE THE HOUSE PUBLIC WORKS APPROPRIATIONS SUBCOMMITTEE DICKEY-LINCOLN LAKES HYDROELECTRIC PROJECT
In its budget request for Fiscal Year 1976, the Army Corps of Engineers has included a request of $1,060,000 for continued preconstruction planning of the Dickey-Lincoln Lakes Hydroelectric Project. Originally authorized and funded in the mid 1960's, Dickey-Lincoln received some $2,154,000 in preconstruction funding through 1967, and then was not funded again until the FY 1975 appropriation of $800,000. With passage of the National Environmental Policy Act in the years intervening since authorization of Dickey-Lincoln, the project must have a full environmental impact statement prior to construction in order to comply with NEPA. The Army Corps contracted out for the preliminary scope of review for the environmental impact statement this past winter with FY 75 funds. Over two-thirds of the money requested for FY 1976 will be spent on completion of a draft environmental impact statement, along with other necessary preconstruction planning which must be done.
Several environmental groups have opposed funding for Dickey-Lincoln and are represented by a coalition known as Friends of the St. John. Although opposing the project primarily on environmental grounds, the Friends of the St. John this year testified that they did not want funding continued for completion of the environmental impact statement, a seemingly contradictory position. The group presented their views to the House Subcommittee in the form of a rebuttal to proponent's arguments for continuation of Dickey-Lincoln funding. The Friends' rebuttal makes the following main points:
1. Dickey-Lincoln's contribution to New England's energy needs will be minimal.
2. Construction of Dickey-Lincoln will not provide "immediate economic relief" to Maine.
3. Dickey-Lincoln is not necessary for flood control and will be too long in coming.
4. Maine people do not want public power and the savings to consumers of power from Dickey- Lincoln will be minimal in comparison with the cost of electricity for all of New England consumers.
5. Dickey-Lincoln will "destroy finally and irrevocably the last major wilderness river left in New England."
6. Dickey-Lincoln is not the most economically viable alternative.
I. ELECTRICAL GENERATING CONTRIBUTION OF DICKEY-LINCOLN
Even the most avid supporters of the Dickey-Lincoln hydroelectric project would agree with the Friends statement that the project will not be a "near-term solution to New England's energy problem." Dickey-Lincoln will, however, be capable of generating approximately 10 per cent of New England's peaking needs projected for the mid 1980's, as well as providing baseload power both directly and indirectly through downstream benefits for northern New England. The NEPOOL-NEPLAN semi-annual load and capacity report of October, 1973, estimated the need for peaking capacity in 1988 at 20 per cent of the projected total generating capacity which will be needed. On this basis, there is a projected need for approximately 7,000 megawatts of peaking power, of which Dickey-Lincoln can supply 725 megawatts, just over 10 per cent of the total.
Even if the need for peaking power should flatten out to some extent as a result of changed utility rate structures, as the Friends maintain, the need for peaking capacity will not be eliminated unless there is a drastic reversal of our present lifestyle, or strict regulation of energy use. To imply that the need for peaking capacity can be ended by changing our utility rate structures is misleading and unrealistic.
Although Dickey-Lincoln, as is common with hydroelectric projects, is primarily a peaking facility, it will also contribute to the area's base load needs. Of the nearly 1.2 billion KWH to be generated annually by Dickey-Lincoln, approximately 872 million KWH will be base load power. This represents approximately 7 to 8 per cent of the electricity consumed in all of the State of Maine in 1974. Additionally, downstream benefits for Canadian powerplants will be split between the U.S. and Canada, with some 175 million KWH of base load power accruing annually to the United States.
Finally, Dickey-Lincoln has the advantage over other sources of peaking power, such as pumped storage facilities, in being a self-sustaining source of energy, non-polluting, and not requiring any outside source of power for generation.
II. DICKEY-LINCOLN AND EMPLOYMENT
The Friends argue that Dickey-Lincoln will not provide any substantial or immediate economic relief in terms of employment for the State of Maine. There is no doubt that the primary employment opportunities on Dickey-Lincoln will not begin until construction starts, so there are no immediate employment benefits involved in this year's funding of the project. The Fort Kent labor market area, however, in April, 1975, had an unemployment rate of 18.8 percent. The area of Aroostook County where Dickey- Lincoln is located has been classified as a Title IV Economic Development area — an area of substantial and persistent unemployment — since 1966. The unemployment and concomitant economic problems of this area of northern Maine historically have been far more severe than the total unemployment and economic picture for the entire State. Assuming this pattern continues, the impact of building Dickey-Lincoln on unemployment in the surrounding area will be substantial even a few years from now. Seen in this context, the figures which the Friends of the St. John use showing the effect of building Dickey-Lincoln on the entire State's unemployment rate are not relevant, and are misleading.
III. FLOOD CONTROL
In May of 1974, flooding of the St. John River resulted in over 3 million dollars worth of damage to the Fort Kent, Maine, area. The previous April, similar flooding resulted in over 1 million dollars worth of damage to this same area. Dickey-Lincoln, while not an immediate solution to the flooding problems, does represent the best long-term flood protection for both Fort Kent and the St. John Valley. The dike, which the Army Corps of Engineers has proposed, is to be an interim measure only, and would protect only the commercial center of Fort Kent, Maine. It is not being put forth as an alternative to Dickey-Lincoln, rather it is a temporary solution to protect this Fort Kent area pending construction of Dickey-Lincoln.
IV. PUBLIC POWER
The Friends of the St. John do not deny that the construction of Dickey-Lincoln will result in savings to New England consumers , of some $11.7 million in their electricity bills. For consumers who have seen up to 200 per cent increases in their energy bills over the past two years, any savings will not be deemed to be insignificant. A comparison of dollar figures which the Friends put forth — of the total savings to consumers compared to the total cost of electricity for all New England consumers — does not reflect the real savings which the consumers who are actually sharing in power generated from Dickey-Lincoln will receive. Nor does it reflect the fact that Dickey-Lincoln's power source will not be subject to uncontrollable price increases as is 90 per cent of New England's residual fuel oil which is imported, nor is there any future supply problem since Dickey is a self renewing source of electricity.
The argument that Maine voters did not approve the referendum to create a Public Power Authority in Maine two years ago is not relevant to the merits of Dickey-Lincoln. There were several and complex reasons for the defeat of this referendum, including a heavily financed campaign against the referendum by the private utility companies, and the vote was not one on the merits of the Dickey-Lincoln project itself.
V. ENVIRONMENTAL IMPACT OF DICKEY-LINCOLN
It should be emphasized again that this year's budget request for Dickey-Lincoln is largely to finance the formulation and drafting of an Environmental Impact Statement for the Dickey- Lincoln project. Dickey-Lincoln was authorized prior to passage of the National Environmental Protection Act, and no full scale EIS was previously done on the project. This past year, the Army Corps of Engineers contracted out to a private firm in Cambridge, Massachusetts, for a review of the scope necessary for a complete Environmental Impact Statement. That plan of study for the EIS will be completed by the end of this month, June, and the Army Corps of Engineers would be able to complete a draft Environmental Impact statement by August 1976, if funding is continued in fiscal year 1976. Public comment and hearings will be held on this draft statement, and all comments must be considered and answered prior to issuance of a final statement. The Friends of the St. John, then, are arguing the Dickey-Lincoln should be stopped on environmental grounds, prior to the time when the data and issues have been looked at, discussed thoroughly and alternatives and means of mitigating any adverse impacts thoroughly investigated.There is no doubt that Dickey-Lincoln will have an impact on the ecology and environment of the St. John River; that environment, however, is not limited to the brook fishing, the canoeing, and the deer.
The contention that Dickey-Lincoln will destroy the last major wilderness river left in New England also ignores the history of Dickey-Lincoln. The project originally would have affected the Allagash River and was relocated above the Allagash to preserve that area in its present state.
The question as to whether this area of the St. John River will be "finally and irrevocably" destroyed by the changes which Dickey-Lincoln will effect is subject to debate. A lake will be created, and the downstream flow of the river evened out, changing the river as to white-water canoeing. It should be noted, however, at present the duration of the canoeing opportunities are rather limited. Generally canoe trips should not be planned before June, and canoeists in July and August should prepare for the possibility of a dry river bed.
The loss of brook trout fishing in the tributaries of the St. John River is a possible impact which the EIS will be examining. Stocking of the lake area which will be created has been suggested, and other alternatives will undoubtedly be forthcoming in the EIS.
The flooding which will be done by the dams at Dickey and Lincoln does indeed involve some 89,000 acres of land. It should be noted however, that this represents less than ½ of 1 per cent of Maine's forested land. This statistic puts this acreage somewhat in perspective.
Additionally, the "bathtub" effect of the lake’s fluctuation has been much discussed. The Friends refer to the fluctuation up and down of the lake of some 25 feet per year. This figure of 25 feet is the maximum fluctuation to be expected. Further, it is not an up and down fluctuation in the sense of tide or a change that occurs on a daily or weekly basis. Rather, it is a very gradual draw-down of the lake during the dry months of summer, fall and winter, at a rate of perhaps an inch or two a day. At the time of the maximum drawdown in the winter months and March, the exposed acreage will be covered by snowfall in this area of northern Maine. The spring thaw will then precede the next drawdown cycle which will follow the rise in the water level. This up and down fluctuation, then, is a very gradual one and its visibility dependent on the steepness of the lake's bank. The implications of this fluctuation will be thoroughly investigated in the EIS.
VI. ECONOMIC FEASIBILITY OF DICKEY-LINCOLN
The benefit/cost analysis for Dickey-Lincoln has been a subject of great controversy because of the legally authorized discount rate which is used. This discount rate is the same as was used originally — three and one-quarter per cent. Using this rate, Dickey-Lincoln presently has a benefit cost ratio of 2.6 to 1. Even using a discount rate of 6 and 7/8 per cent, a rate above that
currently in use, Dickey-Lincoln is still economically justified — with a B/C ratio of 1.3
to 1.
As the Friends point out, however, the ratio itself is not the point. Under the analysis used in funding other comparable public works projects, Dickey-Lincoln is economically justified. It should be pointed out that all government spending is not required to undergo such a rigorous economic analysis — programs requiring the outright expenditure of federal funds with no paycheck over time are authorized and require much larger federal investments.
The economic justification must also be seen in the context of the payback which will be realized over time. In a fifty year period, it is estimated that the total federal contribution will be only 3 per cent, with 97 per cent of the federal cost reimbursed.
Accepting that Dickey-Lincoln is justified under the economic analysis applied to all similar projects, the Friends make the argument that the money which will be spent on Dickey-Lincoln could produce more immediate savings in energy use and pollution control by spending the equivalent amount on waste water treatment systems, solid waste and recycling centers, and rail upgrading. These projects are, of course, all valuable and worthy of support. However, none of these projects, with the possible exception of home insulation, will provide immediate savings, as they too have a lead time prior to becoming operational. For example, the lead time for a waste water treatment plant may vary from 30 months to 7 or 8 years, depending upon the complexity and size of the project. Additionally, diverting the Dickey-Lincoln funds to these projects will spread these monies so thinly as to be of minimal value. For example, the amount estimated to be needed for complete upgrading of the rail system nationwide varies from 4 to 7 billion dollars, with a projected need of some 3 billion dollars in the Northeast alone. Finally it should be noted that none of the alternative projects which the Friends suggest are comparable to Dickey-Lincoln in the results which they will achieve. They will not provide peaking power for the Northeast region, nor will they solve the flooding problems of the St. John River Valley. The alternatives suggested, then, while worthy of consideration on their own merits, beg the question as to the merits of Dickey-Lincoln.
CONCLUSION
In summary, if constructed, Dickey-Lincoln will be capable of making a significant contribution to New England's peaking power needs, as well as provide 372 million KWH of baseload power annually, and some 175 million KWH of electricity from down-stream benefits. Additionally, it will provide long-term and complete flood protection to the St. John River valley, most significantly to the Fort Kent area, which has been subject to recurrent, devastating spring floods.
The lake which will be created will provide recreational opportunities, albeit of a different nature than those now existing in the area to be flooded. These opportunities, however, will diversify the types of recreation now available in this area of northern Maine, and be accessible to a greater number of people than those now existing. Construction of the project will be of benefit in redevelopment of this chronically economically depressed area of Northern Maine.
The Dickey-Lincoln project is undeniably a large undertaking and will have a significant impact on this area of Northern Maine where it will be constructed. Argument as to whether each of these impacts is totally desirable may never be resolved to everyone's satisfaction. However, we do not yet have all the data and the information necessary to making as objective an evaluation of the enviromnental impacts as will be possible. As the Friends concede, it is difficult to be against the funding of an Environmental Impact Statement which will determine just what all the impacts of the Dickey-Lincoln project will be, their magnitude, and the ways of mitigating any impact which might be adverse. Grant the funding request for FY 1976 for Dickey-Lincoln will result in this thorough evaluation of the impacts of Dickey-Lincoln and allow the environmental debate to take place on a more solid and complete factual basis. It is ironic that the groups who are most concerned about possible adverse environmental impacts of Dickey-Lincoln prefer to cut off debate prior to a rigorous examination of those impacts, their implications and investigation of the need and means to mitigate these impacts.
Mr. GRAVEL. Mr. President, will the Senator yield to me for a brief moment?
Mr. STENNIS. I yield.
Mr. GRAVEL. Last year was the first year that I brought to the Senate the bill for water resources.
The point I wish to make is that this cost-benefit ratio is much better than most of the projects we all voted for last year which we passed and which were of a similar nature. If we look around the country and spot the areas of the Nation which enjoyed the cheapest energy rates, we will find it is the Northwest and parts of the Central Southeast. That is, of course, because of the hydro dependency. In an era when we are trying to make ourselves independent, it would not seem wise to obviously atrophy the possibilities of expanding the major type of renewable energy resource we have in this country today, and that is hydro. That is just to let the water come through the penstock and generate power.
The reason why we use it for peaking is because it is so horrendously expensive to use any other form of energy production for peaking. With respect to oil or gas generators, it takes too long to get the turbines going. With respect to a dam, all you do is open the gates, then, zappo, you have the turbines turning immediately and producing its power.
Based on my own knowledge of the projects in my short tenure as chairman of the committee, I am not prejudging the environmental statement, but coming forth with the kind of cost-benefit ratio, this will offer you fine qualities in the State of Maine.
Mr. BROOKE. Mr. President, how much time do I have remaining?
The PRESIDING OFFICER. The Senator has 2 minutes remaining.
Mr. BROOKE. Mr. President, I would just like to point out to the Senator from Alaska that this cost-benefit ratio is obtained by using a 3¼ percent borrowing rate, without any built-in inflation at all, and not providing for any profit.
Mr. MUSKIE. Mr. President, will the Senator yield?
Mr. BROOKE. On your time, yes. I only have a minute left.
Mr. MUSKIE. I would say the rates for this project are completely consistent with those that apply to any other project authorized at the same time, under the laws and regulations established, and that is clear in the RECORD.
Mr. BROOKE. I can understand. the Senator's strong feeling about this. As I say, I once supported it myself.
The fact is that here we are eventually to spend a billion dollars for two dams in Maine
Mr. MUSKIE. Will the Senator tell me where he gets that estimate of $1 billion. I have never seen any such estimate.
Mr. BROOKE. We have the cost estimate and will make it available. They are analyses of the Corps of Engineers studies which take into account such factors as inflation, delays, and interest rates.
Mr. MUSKIE. You should not use figures you cannot support.
Mr. BROOKE. I can support the figure.
Mr. MUSKIE. Then why have you not done so?
Mr. BROOKE. The chief problem is that the dam will not do the job it has been claimed that it will do. That is the whole reason for this amendment. I wish that there were more time to debate it. We had only 20 minutes, 10 minutes to a side. We are not getting what we are paying for in this Dickey-Lincoln Dam, and it would be a great mistake for us to build it. It will not give us employment; it will not get electricity at a cheap cost for the people of New England; and I think it is farcical to proceed with this ill-conceived, massive project.
Mr. President, the senior Senator from Maine has argued that this dam would supply 10 percent of New England peaking power.
Analysis of the Corps of Engineers own study shows this not to be true. The facts are:
Dickey-Lincoln will meet less than 1 percent of New England's electricity needs, measured in kilowatt-hours, by the time it is finished. Yet, the proponents argue, this is not so relevant because Dickey-Lincoln is a peaking unit and therefore contributes to meeting a more important need: meeting peak demands. This argument is spurious, however, for the following reasons:
First. New England's peak summer demand lasts from about 11 a.m. to 5 p.m. Therefore, Dickey-Lincoln will not reduce the need for installing any peaking units. This only effect will be to allow some of these peaking units to be turned off for 2½ hours per day.
Second. Dickey-Lincoln as a base-loaded unit — that is, running 24 hours each day — would eliminate the need for 1.9 million barrels of oil per year. As a peaking unit it would eliminate the need for 2.5 million barrels of oil per year, because peaking units are less efficient than base-loaded units. Therefore, the only difference to New England between running the dams as a peaking unit, as opposed to a base-loaded unit, would be a savings of 600,000 barrels of oil per year.
Third. Since New England utilities currently burn around 90 million barrels of oil per year, the total "savings" of 600,000 barrels is only 0.7 percent, a tiny amount and one that will become progressively less important with time.
The inescapable conclusion is that, even as a peaking unit, Dickey-Lincoln will have a negligible effect on New England's electricity needs.
Despite claims of cheap power, savings to consumers would be minimal, if there are savings at all. This point is very much in dispute. The answer depends very much on what assumptions you make in comparing this scheme with alternative power sources.
The $11.7 million in savings claimed is based on the ridiculous assumption that there will be no escalation of labor and materials costs above January 1974 levels through the period of construction which lasts until after 1983.
If there should be cost overruns for the dams, the price advantage of Dickey-Lincoln power would vanish. In addition,the 2.5 cents per KWH estimate for Dickey-Lincoln power assumes substantial subsidies from Federal, State, and local taxpayers. Because this would be a Federal project, it would be exempt from taxes. Dickey-Lincoln power would actually be very expensive.
The only reason why the price of electricity from it has a chance of being lower than the price of electricity from alternative sources is because some of its cost would show up on our tax bill.
The Senator from Maine has argued, and some of my colleagues have joined him in arguing, that the cost-benefit ratio of this project is particularly favorable. This is the crux of our dispute.
Because of the strength of the dam-builder's lobby in Congress, the Army Corps of Engineers is permitted to use a borrowing rate of 3¼ percent to calculatethe annual "cost" for the benefit-cost ratio. On the other hand, they use a borrowing rate of 8¾ percent to judge the cost of the alternative which they do not want to see come to pass. They also build taxes into the cost of the power from the fossil fuel alternative, while the federally financed dams would produce power "tax free" — meaning taxpayer subsidized. If the corps had to use the 8¾ percent borrowing rate in figuring the annual "cost" of the dams, this number would jump from $17.7 million to $46.8 million or more than the alternative.
Furthermore, the fossil fuel alternatives like coal fired plants are cheaper than Dickey-Lincoln when both are compared at 8¾ percent. The corps, however,figured the dam at 3¼ percent and the fossil fuel alternative at 8¾ percent. So comparable assumptions were not used. Accepting doubtful cost estimates of corps of $356 million for the dams and $61.5 million for transmission we have:
[Table omitted]
Finally, some of those opposing this amendment have implied that utilities take the same position as have I. The supporters are describing the position of the power companies years ago.
Although some of the electric companies in the Northeast have been against the Dickey-Lincoln project in the past, many are now reversing their previous leanings. Now, they are on the same side as Senator MUSKIE has taken. Northeast Utilities, the largest private utility in New England favors funding and continuation of the planning phase of Dickey-Lincoln. This is a change from its position over the past 7 years. The New England Electric System, the second-largest utility, has also modified its opposition.
On the other side, opposing the dam, there is a wide collection of Maine groups, New England groups, and national groups. Among these are: Maine Natural Resources Council, American Rivers Conservation Council, Massachusetts Forest and Park Association, American Canoe Association, Appalachian Mountain Club, Penobscot Paddle and Chowder Society, Northeast Audubon Society, Old Colony Sportsmen Association, Environmental Policy Center, Friends of the Earth, National Wildlife Federation, Sierra Club, Wilderness Society, American League of Anglers, TroutUnlimited, Union of Concerned Scientists, and the Massachusetts Audubon Society.
And most telling of all, 11 members of the small New England congressional delegation took the same position as have I and opposed the funding for this useless study project in the House of Representatives this fall. These opponents of Dickey-Lincoln included one Congressman from Maine. Mr. President, I certainly hope the Senate will begin to reconsider this project in the months ahead as have so many of my colleagues in the House.
I ask for the yeas and nays, Mr. President.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
Mr. STENNIS. Mr. President, I will not detain the Senate. I am authorized to speak for the Senator from Oregon, and say that he is opposed to this amendment and lends his support to the project.
I yield back such time as I have remaining.
Mr. KENNEDY. Mr. President, I would like to comment briefly on the reasons for my support of the preconstruction planning funds for the Dickey-Lincoln hydroelectric project in the Public Works Appropriations bill we are considering tonight.
The Dickey-Lincoln project, if it is demonstrated to be economically and environmentally sound, holds great promise for the New England area. It would provide us with our first indigenous source of power; it would provide us with our first source of public power; it would provide a yardstick against which to measure the efficiency and performance of the private electric utilities.
For New England as a region, it would provide 10 to 20 percent of our peaking power requirements. Massachusetts, presently expected to receive 61 percent of the power generated by Dickey-Lincoln, would receive electric power valued at $34 million a year.
Mr. President, the importance to New England of new sources of electric power to reduce our dependence on residual oil and to lower our energy costs which are now 35 percent above that of any region of the country, has been well documented. We need to find out whether the promise of Dickey-Lincoln can be realized.
Therefore, I support the position so articulately presented by Senator MUSKIE and Senator HATHAWAY. The $2.5 million included in the Public Works Appropriation will allow the Corps of Engineers to complete project design and planning studies, marketing and transmission studies, and the very important environmental impact statement.
When the studies provided for in this appropriation are completed, I will give them careful study prior to making any decision on appropriations for construction, as, I am certain, will all my distinguished colleagues. Tonight we vote on the funding required to give us the information we need to make an intelligent decision on this project — a project which holds such great potential for consumers of electric power in Massachusetts and New England.
The PRESIDING OFFICER. The question is on agreeing to the amendment of the Senator from Massachusetts
On this question, the yeas and days have been ordered, and the clerk will call the roll.
[Roll call vote tally omitted]
The result was announced— yeas 13, nays 73, as follows:
So Mr. BROOKE's amendment was rejected.
Mr. MUSKIE. Mr. President, I move to reconsider the vote by which the amendment was rejected.
Mr. HATHAWAY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. STENNIS. Mr. President, I know of no other amendments and I now ask for the third reading of the bill.
The PRESIDING OFFICER. The bill is open to further amendment. If there be no further amendment to be proposed, the question is on the engrossment of the amendments and the third reading of the bill.
The amendments were ordered to be engrossed and the bill to be read a third time.
The bill was read the third time.
Mr. MUSKIE. Mr. President, H.R. 8122, the public works/energy research appropriations bill provides nearly $7.5 billion in funds for the Corps of Engineers and the Bureau of Reclamation, the Federal Power Commission and the Nuclear Regulatory Commission, the Power Administrations of the Department of Interior, the Energy Research and Development Administration, and several miscellaneous agencies.
As reported from the Appropriations Committee the bill is consistent with the second concurrent resolution.
Most of the funds in this bill are classified in function 300, the natural resources, environment, and energy category. In this function the budget resolution provides funds sufficient to cover regular appropriations bills such as this one as well as authorizing bills not yet enacted that will require funding in fiscal year 1976.
Mr. President, I support this measure and commend the distinguished floor manager of the bill, Senator STENNIS, for reporting a bill that provides needed funds yet stays within the budget resolution.