The longest interruption was for a period of 24 hours. Other interruptions occurring in the month of February last extended over periods of 17 to 37 minutes. These interruptions, while reflecting no discredit on the admirable features of the construction of the system, indicate clearly that even with such liberal expenditures for all the best forms of security, a necessity exists for the addition of steam reserve stations, if continuity of service is, as it must naturally be, of prime importance. It should be borne in mind that the Niagara system, extensive though it is. is delivering only about 25,000 horse power, which would bear but a small relation and proportion to a State-owned system in New York, where our requirements are 2,500,000 horsepower, and that the necessity for steam auxiliary plants would be proportionately greater. A great point has been made in favor of the Hydro-Electric Power Commission plan in that it names an exceedingly low figure for domestic service. It is undoubtedly the fact that the fixing of this low rate has largely increased the use of electricity in dwellings of the humbler class and by occupants whose means permit only the most limited expenditure upon such conveniences, but such installations are apparently very unprofitable, the occupants, even though the price is low, exercising strict economy. The general tendency of municipal distribution under the auspices of the service of the Hydro-Electric Power Commission has been to attract to the municipal systema the class of smallest consumers. This process has undoubtedly been facilitated by the competing private corporations, who have found it to their financial advantage to divest their systems of the small and unremunerative customers. The process has been marked in the city of Ottawa, in Toronto, and in other cities upon the Niagara system. The effect is not only beneficial to competing private corporations, but particularly disadvantageous to municipal operations, on account of the nature of such service. forming as it does a substantial portion of the peak or maximum load, upon which the purchase of power by the municipalities is based. The process has been accelerated by the adoption of a system of rates for electric ervice formulated by the Hydro-Electric Power Commission, and adopted by the municipalities, which has the effect of affording to domestic consumers lower prices for energy than that which is required to be paid by the ordinary commercial consumer. In a number of instances investigated by the committee, higher prices per unit of energy were paid by stores and business consumers than by the occupants of small residences. The economic result of such methods is cumulatively disadvantageous to municipal financial operation, but the low rates paid by domestic consumers has undoubtedly been a large factor in creating a general feeling of popularity among the voters toward the operations of the Hydro-Electric Power Commission. The class of smallest consumers are naturally those least concerned in the burden of taxation, and are, therefore, most active in the promotion of governmental operation and expenditures. This has been shown in the elections which have been held upon the subject of the adoption of hydroelectric service in many of the communities of Ontario. The popularity of the hydroelectric plan which seems to pervade the Province of Ontario is apparently brought about by a general contentment with the situation, due largely to the lack of information as to the actual workings of the commission. The Hydro-Electric Power Commission in the year 1909 made its last public report. Since that time optimistic generalizations have apparently taken the place of complete and accurate data. It seems unfortunate that the exact status of a large business enterprise should be lost sight of in the maze of political expediences. The voter can not understand nor safely approve of the actions of any public board whose annual balance sheet is not before him. There was introduced in evidence before the committee the facts surrounding the development of electric power in that section of Canada centered about the city of Peterboro. This section is served by a privately owned corporation, which, however. is subject to the jurisdiction of the Railway Commission of Canada as to all questions affecting the rates charged consumers, and it was brought out that this privately owned corporation, subject to this governmental regulation, was actually serving the citizens of that district at lower rates than the average rates charged by municipalities supplied by the Niagara system of the Hydro-Electric Commission. Besides furnishing cheap power the company paid large sums for taxes to the various municipalities which it served, and the consideration is strongly suggested that in this case the citizens of Canada were faring better by governmental regulation than they were as a matter of fact by governmental competition. Another instance of the beneficial effects of governmental regulation is shown by the history of the Consumers Gas Co. of Toronto. It appears that this corporation is under governmental regulation by virtue of certain laws enacted amending its charter; that under this regulation it has given satisfactory service to the city of Toronto, has earned for this stockholders 10 per cent annually, and has succeeded in furnishing to its customers gas at 70 cents per 1,000 cubic feet, which, we are informed is as low as if not lower than the rate charged by any other gas company in the United States or Canada, notwithstanding that it purchases its coal subject to a duty of 53 cents a ton and pays 60 cents a ton freight fror bringing it from Niagara Falls to Toronto. This result has been brought about by statutory regulation under which the price of gas is automatically reduced 5 cents whenever a surplus has accumulated sufficient to warrant such reduction in the judgment of the city auditors. The attention of the committee has been called to the fact that under this arrangement the citizens of Toronto are procuring gas at a very low price; that there is no duplication of systems and no economic waste; and that this company pays its fair share of taxes. In case of governmental ownership all possibilities of revenue by means of taxes are removed and the burden upon the municipalities in general is proportionately greater. Governmental regulation can at all times take into consideration the question of taxes as an item of cost, and at the same time protect the public against the unjust and exorbitant rates often charged by our public-service corporations. We have considered the effect that the adoption of a plan by the State of New York similar to that of the Hydro-Electric Power Commission of Ontario would have upon existing companies. As the case now stands, all public-service corporations of this character are taxed not only upon their tangible property, but upon the intangible value of that asset which is termed its franchise. In case the State itself should engage in the business of selling power at cost to its citizens, it is apparent that the private company would be forced out of business, because in addition to having to meet the cost price fixed by the State in its operations, it would be obliged to share its proportion of the burdens of taxation as now imposed, and in effect would be helping to support its competitor. The result would be, therefore, that private public-service corporations of this character would be driven out of business. It is interesting to note that the electric lighting companies of the State of New York paid in taxes during the calendar year of 1912 approximately $3,000,000. The Rochester Railway & Lighting Co., the capital investement and operations of which are approximately the same size as those of the Hydro-Electric Power Commission Niagara system), paid in the year 1910 taxes to the extent of $120,000. In view of the ever increasing demands of Government, the problem of finance must be considered, and it is an item which should be borne in mind by the legislature in determining this problem of whether it should adopt a plan which would deprive the State of this source of revenue. Comparison is often made between the high rates charged in this county and the rates charged in localities served by the Hydro-Electric Power Commission. The item of taxes alone is an important factor in determining the cost of the generation of electricity. Testimony was introduced before the committee to show that the electric lighting companies in Gerater New York pay an amount in taxes greater than the amount they pay for coal. It is interesting to note the various items which enter into the cost of electric power. The large units of steam-driven plants at the present time are producing power at a cost of six-tenths of a cent per kilowatt-hour, and they pay thirty-five one hundredts of a cent per kilowatt-hour for taxes. The great cost of electricity is not in its production, but in the expense and losses incurred in its distribution and in the item of insurance which is necessary by way of reserve sources of supply and auxiliary plants to have absolute security of continuous service. According to the testimony produced before the committee, based upon the census of the United States, the estimated amounts of power of all classes (installation) in New York State was in 1910: For manufacturing. For transportation.. For lighting and heating. Horsepower. 1,997,000 2,029, 000 1, 415, 000 Thus there was a total installtion of 5,041,000 horsepower. Assuming an average load factor of 40 per cent, the daily consumption of power in the State is approximately 2,176,000 horsepower. Extensive tests have been made at the Seattle municipal hydro-electric plant to determine the amount of theoretical water horsepower at the penstock required to supply 1 electric horsepower at the point of utilization. The city of Seattle has a modern hydroelectric development of the most approved pattern, with a transmission line of only 19 miles. It was found that to furnish 1 electric horsepower at the point of utilization required 3.87 theoretical water horsepower at the penstock. It should always be borne in mind that there is a difference between theoretical water hosrepower and electric horsepower utilized. The wide difference between the two is made up from loss of efficiency in the transforming of the theoretical horsepower to electric horsepower by means of turbines and dynamos, the steppng-up of the current for transmission purposes, loss in transmission, retransformation to a voltage that can be utilized upon local distribution system, and the losses thereon. If we are to take these scientific facts as a basis, it will be seen that in order to supply the 2,176,000 horsepower daily concumed in the State of New York it would take a theoretical water horsepower of 8,421,000. We believe there is a widespread misconception of the quantity of undeveloped horsepower that is avilable and which can be brought into utilization by a proper plan of conservation. The large blocks of power possible of development are situated along our boundary rivers, the Niagara and St. Lawrence, and as we pointed out in our former report, the development of these possibilities ic complicated by international problems. Mr. Walter McCulloh, who served as consulting engineer to the State Water Supply Commission from July, 1907, until July, 1911, and who from 1907 was the chief engineer of the department in charge of the investigation sof the water powers and water storage possibilities of the State, rtestified before the committee as to the power possibilities along our boundary rivers. He pointed out that the 4,000, cubic feet per second, the diversion of which has not yet been assigned under the Burton Act of Congress, if utilized with the average efficiency of the power plants now existing at the Falls, would produce 61,500 horsepower: that the proposed developments along the St. Lawrence River lying wholly within the limits of New York State are at Waddington, where the Ogdens Island project makes possible 30,000 horsepower, and at Long Sault Island, 90,000 horsepower, making a projected development within the limits of the State on the St. Lawrence River of 120,000 horsepower; that in case of the development of the Long Sault Rapids in their entirety, which is estimated to produce 600,000 horsepower, the development of the 90,000 horsepower at Long Sault Island could not be made. A portion of this power would, of course, belong to the Dominion of Canada, and because of the difficulties involved from engineering and governmental standpoints. and its distance from an existing market, your committee believe that a plan for its development by the State at this time to be Utopian. The Conservation Commission (divison of inland waters), in its report for 1911, has summarized the water powers of the State possible of development as follows: A. Hydraulic power owned by State: 1. Canal waters. 2. Water power created at or near site of reservoir constructed to regulate stream flow. Horsepower. Horsepower. 85,000 84,000 3. Water powers belonging to the State through its ownership of river beds, banks, or riparian rights.... 93,700 262,700 B. Powers created by stream regulation at water power sites privately owned: 1. At power sites now undeveloped.. 68,600 2. At power sites now developed, based on stream regulation. 127,300 195,900 C. Undeveloped powers claimed to be privately owned through riparian rights or legislative grants: 1. St. Lawrence River (Long Sault). 500,000 75,000 145,000 83,000 77, 200 888, 200 Thus, the aggregate amount of power possible of development is estimated by the Conservation Commission at.. It should be borne in mind that Canada claims at least one-half of the power made possible by the Long Sault development, or.... Which would reduce the total above estimated to.. The balance (being claimed by private owners) of.. 1,346, 800 250,000 1, 196, 800 262,700 934, 100 It should also be borne in mind that many of the projects above outlined are deemed by engineers commercially impracticable under present conditions, owing to their remoteness from market and the large amount of capital investment required for their development. After again considering the whole problem, we believe: 1. That as far as the State owns water or water rights the same should be conserved and developed to the maximum point of commercial efficiency for the benefit of the people. 2. That no further grants of power privileges, water rights, or rights to water the ownership of which is clearly in the State should be granted except for limited periods, and then only upon adequate compensation being made to the State. 3. That the power made possible by surplus waters of the barge canal should be immediately developed by the State and should be utilized for the public use and benefit and for the increase of the public revenue. 4. That storage reservoirs should be constructed along our inland rivers, thereby creating a uniform flow and increasing the quantity of power developed, under a plan similar to that outlined in our report of 1912. 5. That there is no reason for changing the recommendations as to legislation which we made last year. We recommend the passage of Senate bill introductory No. 343, printed No. 1269, entitled "An act to amend the transportation corporations law in regard to water storage corporations," which was introduced in the legislature of 1912, and of senate bill introductory No. 342, printed No. 1273, entitled "An act to amend the conservation law in relation to water regulation and utilization," also introduced at the same session. Herewith the committee file the testimony taken before them and the various exhibits referred to therein. Respectfully submitted. T. HARVEY FERRIS, Chairman. JAMES J. HOEY. J. HENRY WALTERS. E. A. MERRITT, Jr. WAR DEPARTMENT, Washington, March 28, 1918. Hon. T. W. SIMS, Chairman Committee on Water Power, House of Representatives. MY DEAR SIR: Referring to your letter of the 13th instant, I have the honor to inclose, pursuant to your request, copy of a report made by Mr. F. C. Shenehon, an engineer under the War Industries Board, concerning the use of water power from the Government dam between Minneapolis and St. Paul, and also copies of reports of the District and Division Engineers on the subject, which will be found in the second and third indorsements on the copy of Mr. Shenehon's report. As the proposed installation will be capable of rendering a large service to the entire community, the Acting Chief of Engineers believes that the matter should be called to the attention of Congress for such action as may be in harmony with the general policy of that body. I concur in the Acting Chief of Engineers' view. Very respectfully, BENEDICT CROWELL, MEMORANDUM CONCERNING INSTALLATION OF HYDRAULIC AND ELECTRICAL EQUIPMENT AT HIGH DAM ON MISSISSIPPI RIVER BETWEEN MINNEAPOLIS AND ST. PAUL REQUESTED BY MR. DARLINGTON, OF THE WAR INDUSTRIES BOARD. 1. War contracts estimated as aggregating upward of $50,000,000 are under execution in or near Minneapolis, St. Paul, and Stillwater. Additional contracts are pending. A partial list of these contracts is given below. The aggregate power required in these war contracts is estimated as 17,000 horsepower, of which the Northern States Power Co. furnishes or is negotiating to furnish substantially 14,900 horsepower. 2. Partial list of War contracts: (a) Minneapolis Steel & Machinery Co. Contracts aggregating about $25,000,000 for gun carriages, shells, winches, and engines. It utilizes 2,680 electrical horsepower and requires 1,600 additional electrical horsepower. (b) Diamond Iron Works. Contracts for sawmill machinery for Emergency Fleet; uses 270 electrical horsepower. 53983-18-PT 4- -5 (c) Flour City Ornamental Iron Works. Contracts for castings, ship hardware, and miscellaneous iron work for Shipping Board; uses 270 electrical horsepower. (d) Wm. Bros. Contract for structural iron for Lake Ships for Fleet Corporation; has a steam plant of about 270 horsepower. (e) North Star Woolen Mills. Contract for blankets for Army and Navy. Waterpower plant; St. Anthony Falls; quantity of power unknown. (f) Wyman, Partridge & Co. Has completed a contract for Army coats, and will probably be awarded a second contract. Steam plant; about 200 horsepower. (9) Gas Traction Foundry Co. Contract for castings for Fleet Corporation, gun divi sion; uses 200 electrical horsepower. (h) Western Crucible Steel Co. Contracts for castings for Fleet Corporation; uses 800 electrical horsepower. (i) Butler Manufacturing Co. Contracts for gasoline tanks for motor traction department of Army; uses 70 electrical horsepower. ()) Northwestern Knitting Co. Contract for Army shirts; steam plant of about 100 horsepower. (k) Miscellaneous small contracts use about 1,000 electrical horsepower. (1) American Hoist & Derrick Co. Contracts for gun carriages, hoists, and derricks; steam plant of 1,610 electrical horsepower, but purchases this power from Northern States Power Co. about eight months of the year. (m) Stillwater-Twin City Forge & Foundry Co. Contracts for forgings and shells; will need 7,000 electrical horsepower. 3. To these clearly defined war contracts must be added those great power consumers the flour mills of Minneapolis and vicinity, including two mills in St. Paul and one in Stillwater, all under Federal control. 4. A partial statement of the power uses of the mills and sources of power follows. (a) Minneapolis flour mills use about 20,000 horsepower (roughly estimated) from the St. Anthony Falls Water Power Co. when water is available, and each mill has its own auxiliary steam plant. See (f). (b) Washburn-Crosby Co. obtains water power from St. Anthony Falls Water Power Co., has a steam auxiliary plant, and in addition obtains from Northern States Power Co. about 5,500 electrical horsepower. (c) The Pillsbury Flour Mills are similarly situated, and in addition use about 1,000 electrical horsepower. (d) Atkinson Flour Mill is similarly situated, and in addition uses about 335 electrical horsepower. (e) Flour mills outside of Minneapolis, but connected with this system, use about 6,700 electrical horsepower. (f) Other elevators under Federal control and flour mills in Minneapolis obtain from private steam plants about 10,000 horsepower. Add to these manufacturing needs the various power used for light, traction, nonwar manufacturing, and miscellaneous purposes of a city population of 600,000 people, and the coal consumed in a climate where zero weather temperatures are commonplace. 5. The region is rich in water power, but distant from coal supplies. The coal comes mostly from Lake Erie ports to Duluth, thence by rail to the Twin Cities, or by rail from the Illinois or other more distant coal fields. 6. The following developed water powers are in, near, or tributary to the Twin Cities: |