ML20237F173
| ML20237F173 | |
| Person / Time | |
|---|---|
| Site: | 05000307, 05000308 |
| Issue date: | 05/06/1968 |
| From: | Jensen J CALIFORNIA, STATE OF |
| To: | Seaborg G US ATOMIC ENERGY COMMISSION (AEC) |
| Shared Package | |
| ML20237E753 | List:
|
| References | |
| FOIA-87-712 NUDOCS 8712290411 | |
| Download: ML20237F173 (18) | |
Text
{{#Wiki_filter:. [w,~!v s A u. d..a.ce. f... YG W- -x % %. %p. nM m ;) THE METROPdOTAN WA_T.ER DISTRICT Pri '- @3&', OF'50UTHEItN -QALIFQRNIA M. 0 hi SUNSET BoULEVAltD LOS, ANGELES, CALIFORNIA [9 Henderson___ N OFFICE OF / M AIL 4NG ADORESS SCARD OF D6 RECTORS POST OFFsCE 801 S4 8 93
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- May 6, 1968 2
g5b.36'1 -3g The Honorable Glenn T. Seaborg Chairman , U. S. Atomic Energy Commission Washington, D. C. 20545 j.i
Dear Glenn:
I have read with great interest and concern your joint letter of April 23, 1968, signed by Secretary Stewart L. Udall and yourself, relative to the Bolsa Island Project. The letter was delivered during my absence from Los Angeles and was read aloud on April 25 before a special committee of our Board of Directors on nuclear power and desalting plants. On Thursday, April 25, 1968, in Congressman Holifield's office in Washington, I gave a lengthy verbal report of conditions. During this conversation, Congressman Hosmer said, " Joe, this isn't like the direct Joe Jensen I know. I can't tell what is on your mind." I confess today that I am still in that condition. I am in the process of turning many things over in my mind in order to satisfy myself that the District is doing the right thing. As yoti are aware, each of the participants in the Bolsa Island Project has between now and June 30, 1968, to make a decision as to whether or not to terminate for economic reasons. One of the items giving me great concern is that building a 150 mgd desalting plant means an expenditure for Metropolitan of some { $210 million in capital costs in addition to operation and main-tenance costs approximating $ 267 million during a thirty-year period. These are very substantial sums of money for the people of the Metropolitan Water District and it is essential that the spending of such amounts be fully justified. \\ Normally, when expenditures of this magni.tude are being 1 considered by a community, it is proper to have the question sub-mitted to the taxpayers for their consideration; the conventional B712290411 871222 -{py p q {'"L., / 'l PDR FOIA SCHADRA87-712 PDR.. 4
1 1 ,O <E MdnopouTAN wAnn oisTRicT O, 306 r ns tM CallacsNLA a e The Honorable Glenn T. Seaborg May 6, 1968 procedure is by voting on a bond issue. The program of Metropolitan at the time of the $850 million bond issue in 1966 did not include financing of the desalting project for at the time the bond elec- { tion was called, no decision had been reached on proceeding with the desalting project. The inwyers have stated that the statements we issued were so specific as to the spending of the money that we cannot divert bond proceeds to the desalting plant and forego construction of the f acilities included in the bond program sub-i mitted to and approved by the people, The District may use water and tax revenues to finance the desalting plant and it has about 556 million of so-called short term twelve year bonds that could be used to. help finance the plant. The use of the short term bonds is essentially a form of pay-as-you-go financing because the bonds must be paid back currently. While they do provide a means for smoothing out peaks of capital requirements, in general, they do not help meet the year to year financial problems. Therefore, to finance the desalting plant, the District must either rely on raising water i rates and tax rates sufficiently to finance the plant on a pay-as-you-go basis or it must have..,a second bond issue. Our Bond Consultant recommends very definite ~ly that there be a second bond issue to finance the desalting plant if it proceeds and to reduce the pay-as-you-go financing of the other f acilities presently contemplated. This would require an election. ( 'L When the District entered into the Memorandum of Under- / standing with the Government in 1966, it expected to be able to finance the desalting plant on a pay-as-you-go basis without substantial increases in water rates and tax rates over and above those which'were contemplated.without the desalting plant. At 8 that time, the. District assumed that it could finance its con-struction with a 3-1/2% interest rate on its bonds, the State Water Project costs would not be substantially increased over those estimated, and the State's interest costs would not be sub-stantially increased. Today, only two years later, the District is faced with the f act that interest costs have risen f ar beyond our expectations and f ar beyond anything experienced for a long period of time. As a result, the District must pay at least 4-1/4% and possibly higher rather than 3-1/2% on its bonds. This change in interest cost will necessitate the District raising another $150 million between now and 1990 over and above the $302 million for distri-bution f acilities and the $126 million for desalting facilities e
1 1 i THE MITa0POUTAN WATER DISTRICT w mimn owvam The Honorable Glenn T. Seaborg May 6, 1968 we expected to raise on a pay-as-you-go financing basis. The escalation of the desalting plant and our own f acilities has produced another $150 million increase.during the same period. The State Water Project costs have substantially increased and our recent billing from the State indicates that between now and 1990, we will have to pay the State more than $220 million more than we contemplated in 1966. The State and District are facing further increases in their interest costs. There will be increases l in capital costs of the State and the District beyond those now . estimated. All of these costs will in turn result in increases in 'the annual payments by the District to the State and must be met by increasing water rates and tax rates. Finally, a new problem is forcing itself upon us. The State Water Project needs $64 million of additional funds in order to make delivery of water to Metropolitan in 1971 and 1972. This week a bill to furnish this money was voted down in the State Senate Finance Committee by a vote of 6 to 6. Obviously, the State Water Project must be completed, no matter What its cost may be. Until it is certain that the State is going to furnish the $64 million, Metropolitan must hold in reserve the $56 million of W Bonds which could be sold to complete the State project on time. Attached to this letter are statements of Metropolitan Directors Hans Doe and Frank Wheelock, indicating the kind of criticism now being openly expressed. e our Board 'of Directors is having to look very carefully' into our entile. financial prognAm in the light of changes that i l have occurred since August 1966. j During the weeks between now and June 30, our Directors will be examining their respective positions very carefully. Each Director will have to decide in his own 'cind What is best for Metropolitan. Whether we should proceed, whether the project II should be shelved for a period of time, or whether it should be j authorized on a more modest scale are possible alternative courses of action that may be explored. To reiterate points raised last week in Washington, our Directors are.well aware of the importance of sea water desalting and of the intense interest in this project all over the world. These factors have to be balanced against the problem of r..aking larger' than anticipated capital expenditure commitments in a period l of rapidly rising inflation. i
..: c. j , s, l += >1 E METROPOLITAN WATER DISTRICT ] e, secusam cmeoanu - The Honorable Glenn T. Seaborg _ May 6,.'1968 .In any event, _please be assured that'every effort will be made to have all facets of the problem fully = explored in open debate'so that a decision as to Metropolitan's course of. action ' will be made. For your informati*onf I' have written a letter identical-to this to Secretary Udall.. very.truly yours, s.. Js h Jensen-h rman En, closures W e ,i, t Y , o d f',' s s. ,..,s e s e i g O g e i e' e e O 9 e e h_m._______
) i April 26, 1968 STATEMENT ON PROPOSED MWD BOLSA ISLAND DESALTING PLANT PREPARED BY HANS H. DOE a Several years ago when MWD's staff and board were taking steps which led to our serious involvement in the desalt-ing project, conditions were different from those which now obtain in several significant respects. During the years which have elapsed, construction of the Feather River Project has progressed according to schedule. Today the state is making delivery of water in Kern County on schedule. Every month that passes without serious disruption of plans of the State Department of Water Resources increases the probability that Feather River water will be delivered to .l MWD on time by 1971. j i ' In'~ earlier planning, the desalting plant was proposed to be- ] gin delivery of water by 1972. At that time, the date of first delivery of Feather River water was much more specu-lative than now, and the desalted water supply could then , be looked upon as a cushion during the period of shortage anticipated if the state program were delayed. This condition has changed. MWD water deliveries have 'been smaller than forecast. State construction proceeds on time. Local basin water supply is in better supply than was fore- , cast earlier. Today we who are dependent on MWD cfor water can view our water supply picture with considerable confidence, - and there is 'now n'o need for wat,er from a desalting ~ plant. MWD with its dol'orado River and P R P supplies now has available sufficient water to carry us well past 1990, with-out a desalter. The point is, from a water supply standpoint, MWD does not 3 now need an additional supply and will not~need one until j after 1990. Another factor _which undoubtedly influenced the decision to pursue the desalting pgoject was the need for " low-cost nuclear elect,ric power in Southern California..This was,a major force. N. s
.j During the past months the cost of the Bolsa project has skyrocketed from $444 million to $765 million. Not only has the cost of product water increased, but product power has become very much more costly. We have been advised that the Bolsa Project is no longer competitive with other available projects. The plain fact is that the privately owned utilities can produce power at less cost elsewhere. Bolsa for them is uneconomical. , At best, Bolsa now appears to have economic value, if any, only to the Department of Water and Power of the City of Los Angeles. .-. The point here is that construction of Bolsa now will not mean cheaper power for Southavn California. Those are two of the important conditions which have changed radically since our MWD Board undertook to pursue the project. third, and very important additional factor, is the tre-A acudnua anneease in estimated costs of the State project and our own distribution system program. These vast in- .cresees will require large increases in our K4D tax rate ,-and our water rate schedule. To add the additional burden of paying for a desalting plant is not warranted. Sechtel and our staff have presented new esticates of the cost of the desalting plant as follows: Cost of product desalted water at Diemer - $191.40 per 8 acre foot. ,n.c l lSee \\ , Footnote) .i After deducting all Federal " contributions", EWD's re-maining costs total $139.19 per acre foot. If the plant should prove dependable, and assuming that it would in fact deliver 50,000 acre feet of water annually for its 30-year lif e, the average annual cost to MWD would be: 'See ' Footnote) 50,000 acre feet x $139.19 equals $7 million for 30 years equals $210 million. Those are _ costs to MWD after deducting so-called " Federal Contributions" of over $40 million. e
7 ~ ' ' ~ n,, (Incidentally, while MWD's estimated cost has escalated + 70% - the Federal pledge has remained constant. v.5 0 is now expected to carry a much larger share of'the load, and the U.S.A. a comparably smaller share. ~; sh suld 5 also be noted, perhaps, that while A.E.C. 's fundd appear dependable, the larger portion of the Federal "contr.1 u-(o n tion" is still subject toyeppropriation to the Department of the Interior, by Congress. Perhaps it should also be oh notetl that Congress, despite,its contractual obligation to e California in the case of Oroville Dam, has refused to j appropriate its full share, as per that ecntract.) ,} g Since the desalting project, if built, would be expected to produce 50,000 acre feet of water annually, it seems only fair to credit to the project tha cost of the same amount of water from another source. To buy 50,000 acre feet of water from the Feather River Project, at incremental cost, would cost Metropolitan i less than $20 per acre foot. a b s 50,000 acre feet x $20 equals $1 million Q o If we deduct that $1 million from the $7 million annual / cost of the desalted water at Diemer, the re aining average net cost to MWD is $6 million per year for 30 years. 30 years total equala 30 x $6 million - equals $180 million. It has been claimed that the desalted water has greater ~ value than the less pure water from FRP, and that a d; - sof tening bredit should be assessed. .i < Staff informs me that FRP water will obviate necessity for { softeners at D$emer and their construction is not now con-templated. l It seems to me, therefore,"that so far as MWD As concerned, there is no " greater value - the fact is, of churse, that there is no thought. of se.111ng the desalted rater at a pre-mium, so there 11 no extra value to MWD. s 'I So we have an extra _ cost to' MWD for unit No.1 only of the desalting plant of $6 million per year for 30 years or $180 million. The sole remaining reason for the expenditure of this $180 million, since it is not required as a source of water,,*in 1 E-J
G },' .q y , y3 % a, ' - -- + ~ ~y ' t +. ,s ^ l. l 4 .g' a J. to improve the desalting art, and'to show the world thhi, ,O> MUD is pursuing' every avenue, leading to additional water, f '. for reasons political.. 3, q j s. a First let us examine the probable : 11mits of what we can ~ 's hope to accomplish in:the way. of increasing efficiency L, ? av and thus reduce the cost of. desalted. ocean water. .r Within the'past few weeks, Mr. Floyd Dominy, U.S. -Recia-q mation Commissioner, has presented some L forecasta of, y 'g ( desalting costs to be expected by 1990. t 4 He forecast costs of water and power reduced toll /4'of our present estimates for Bolsa. 1& tis reduttion would come from-(1) Use of breeder' reactors. IhAveinquiied'iflNf breeder reactors would be compatible with reactors plant.ed for Bolsa Island. The answer is "No".- In other words,.co take advantage of breeder reactor technology we would-3 either have to build on another site, or replace the first reactors. ~ 4 (2) He forecast great, improvement in desalter design including "Bromley type vertical ~ ' tube design". I have inquired. if our desalter, if built, could be modi-fied to incorporate the Bromley proposals. The answer is' i s "No". It would be necessary to junk our plant and rebuild,,, I have asked leading authorities this question. ~"If MWD builds the Bol.sa Island Plant, as proposed,.what do you consider,the maximum increase in efficiency that might result from its construction.and operation?" ~ s.- Answer "Probably not over 20%." I have asked "What la the maximum theoretical.advancage that could.be expected from 3 successful'Bromley development?" Answer "Something less than 20%." So if we were to be' fortunate and achieved 100% of all the hoped for improvement resulting from our $180 million expend-iture for R & D the cost of water from such improved plant at Diemor, would still be 80% of $191.40 or $15312 per acre foot. To take advantage of the Bromley concept, if it proves practical, would call for construction of a new plant o,f ' e
v s.
- ,1 new design with cost of water reduced, hopefully, to the 1cyc1 of about 80% of $153.12 or $122 50 at Diemer.
Further reduction based on improvements in reactor tech-nology could be accomplished only building a new island - or junking p.vosently planned reactors. i These goals seem to me. to b'e not exciting enough to warrant our spending $180 million of our taxpayers or, water buyers money. (Construction of additional capacity to expand production to $150 million gallons per day is estimated to result in very slightly lower average unit cost of desalted water, ~ but vastly higher net cost and (loss) to Metropolitan.) 3111 Farquhar said to me one day recently, "Why can't you be cons _tructive,instead of purely negative in this. matter?" Bill Farquhar is, and for many years has been, my very good friend. I like and admire him. He has done excellent and valuable work. ~ It hurts me to be critical of this project into which he has poured so much work. I hava' thought and thought of Bill's exhortation, to be constructive, and I have tried - and have arrived at -several conclusions. (1) The plant, as presently proposed, dm the cir.- cumstances now obtaining, is not justifiable. In the best interest of FMD we should, in compliance with our contract' -declare that we will not proceed with the new project.',j (2) The money which we and others have invested will not have been lost, for (a) We have learned a great deal which is of value. (b) We now know we can produce an island site when, and if, it becomes neces-sary to have one. ,j; (c), Perhaps most important, based on 'the education we have bought, I believe that MWD can and should play a lead-ing and important role in desalting technology improvement over'the years to come. t
9 j' j i j Here is Bill's constructive thought. MWD Board should name a new permanent standing committee, 1 a " committee for desalting and nuclear power. Adequate staff should-be assigned to the committee and sufficient funds budgeted for its operation. Obviously, its first chairman should be William Parquhar. ' Its purpose to be "to continue to assemble data relative ] to' desalting and nuclear power from all availab3e sources, j "To investigate possibility of designing and constructing and operating a 17 million gallon per day desalting plant. (The proposed Bolsa Island 50 mgd unit would have been i made up of three such 17 mgd units), to further the art." "To recommend to the Board of MWD, from time to time, projects in these fields that would improve the present state of the art." "To keep MWD in the forefront of development in desalting so that MUD will be ready to build a plant __or plants when , an additional water source becomes necessarv." These are proper activities for MWD, and can be implemented for a small fraction of the cost to MWD of building the pro-posed plant at Bolsa Island. I hope the committee on desalting, and the board, wi31 give careful consideration to this constructive proposal. e FOOTNOTE.-," On April 25, 1968 staff provided a study entitled " Annual cash flow analysis of Bolsa Island Sea Water Desalting Project as used for water pricing purposes. First phase only." This study which does not include cost of interest on funds i deriving from the General Fund, indicates a." cost" of pro-i ject water at Die er, of $89 39 per acre foot. This means that if we subsidize the project with interest free money interest which our taxpayers still will have to pay) the {new cost" of the desalting project would be: 8 e /
f i. 1 50,000 acre feet x $89.39 equals $4,500,000 per year or 30 years x $89.39 equals $135 s million.. t " NOTE: All. figures used above are taken from latest. Metropolitan Water ' District staff re d -are easily subject to verification." ports an + en e .r...- 'i-- e O e a .S ' 1.<' .s j i S** , *p. *, e e 9 e 4 ~ 9 y 8 4 4 a. O g o 4 s g e e ___.___.--._____-.2.
l f. L L .: :..l [ ...-) \\ c REMARKS OF DIRECTOR FRANK H. WHEELOCK AT FIETIMG OF SPECIAL ADVISORY COMMITTEE ON NUCLEAR POWER AND DEUAhTING PLANT APRIL 25, 1968 1 l At the April Board meeting, we unanimously approved delaying the building of the Foothill Fceder and ordered the construc-tion of the Rialto R.'each. Thin action was dictated by the need to conserve our_ capital funds, e.ven though water deli-veries through the East Branch wil'1. cost nearly $5 00 per acre foot more than water we take from the West Branch. i Now, we are deeply involved in a plan to build a desaltin5 plant which will dissipate a sizable amount of our shrink-ing capital and incur a continuing loss 1n water cost dollars q .for many years to come.. If it was sensible and necessary to conserve _ capital by post-poning the Foothill Feeder and speeding the building of the Rialto Reach with a continuing $5 00 an acre foot higher cost, why do we plan to squander so large an amount of capital to generate more water at a time we will be hard pressed to fi-nance, or much less use, the water which will be flooding south to us over our large and expensive State system,' which system we pay for whether we use it or not. ~ .-Next, I would like to call attention to the recent ruling by the District's Bond Counsel, Mr. J.W. Beebe, on our respon- - sibility to adopt a financially conservative _ program pf, construction, and this irrespective of the suit brought against MWD by the Chino Basin Municipal Water District. Our fihancial consultant, Mr. Francis Bowen, has recommended that we conserve our "W" bonds, and that such bonds be saved 4 for emergen.c-ie,s., Assemblyman ~ Patrick McGee has introduced into the State Legis lature a bill t.o eliminate the MWD, and turn its functions 1 over to the State Department of Water Resources.. ~ I Last, but by no means least, we have recently gone through two Assembly Water Committee hearings regarding MWD practices (hopefully they appear to be heading toward a happy conclu-1 sion - except for those constituent municipali~ ies with multiplo directors) - only because Assemblyman Carley Porter, the committee's chairman, is from the XWD area. More impor-tant, however, Mr. Porter is the =ost knowledgeable man on California water problems in our political spectrum. j
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f s 1, [i Certainly with the four warnings previously centioned in these remarks, we must continue to move carefully in the District's future planning and financing. This present time of greatest local, state, national and even international stress on our economy coincides with similar conditions in MWD. Not only is this true in our capital expenditures on construction,,but also in the District's future operating costs. Let us remember that the presently planned desalting facility vill come onstream during 1974. This will be a few years after state water is available in quantities that we will be hard pressed to use or even pay for. Yet,,we are planning this desalting plant with expenditures of many, many millions of dollars. The impact of, state wcter capital costs plus chose costs incurred as a result of our own distribution system will be -reflected in both higher taxes and higher water prices. We are told we can finance this plan. Certainly, however, no mature businessman would borrow money on extended credit at higher interest rates to build a facility for producing a product in over-supply, and at a greater cost than the ' competition. Let us examine the statement, "We will improve the state of the art." Certainly, the most vocal advocate of the Bolsa Desalting plant would not suggest that a 50,000 acre feet ,per year plant producing water approaching 50p per thousand gallons is any great improvement in technology. s Much has been said of the benefits of the desalting plant other than~ technology. Let us look at two of them. m (1) "It will protect MWD customers in case of an outage in either the Colorado or State system. May I suggest that an outage in the desalting plant is' much more probable l than in eithe r of the two larger systems. It should be realized, however, that a 50,000. acre feet per year plant would pro-duce but 3% of the District's needs in 1974, the year of said plant's completion. (2) "It will greatly improve water quality." Zero TDS water will be delivered only to the Diemer Plant, and only those areas
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i i served by this MWD facility will benefit. Assuming that-500,000 acre feet of colorado River water. entering-the Diemer plant is - mixed with 50,000 acre. feet of zero TDS- ' water, -the effluent quality will improve only from 712 to 647 parts per sillion. This is certainly not.a significant improve-ment. In closing, I urge the elimination' of the desalting plant from our construction program and financing schedule until time in its inimitable way permits us to view in much better perspective the effect of such a plant on water prices and-taxe.s. ,:. - 5. ' .i 1 )
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l i i ea, 'k W - UNITED STATES ' h.b F DEPARTMENT OF THE INTERIOR ~.a.. OFFICE OF THE SECRETARY q 'd WASHINGTON, D.C. 20240 APR'2 3.1968
Dear Joe:
The national importance of the Bolsa Island. project has been stated on numerous occasions, including the recent a ceremony on November'20, 1967, ivhen weiwere privileged ? to represent the U.~S. Government in executing:the. contract for this project with the Metropolitan Water District. Many5 important representatives of' government j and industry'have on'these occasions consistently shared j our. belief'that the Bolsa Island project had great poten-tial for the future benefit of man and'his use of the arid regions'of the world. I By a fortunato_ set of circumstances;this important. demon-stration'of large-scaleLnuclear desaltingLwill take place in a region characterizedLby its history of successful participation in bold ventures-andJwhereza great _ potential for the near-term application of.the resulting technology exists. In addition.to demonstrating the technology 1and economics of large-scale desalting-using nuclear energy. as a future alternative source of fresh' water for Southern California and other water short ' areas, -the project exem- ] plifies the cooperative ~ spirit of public and private power
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-l and water organizations that has been so' instrumental in the development of-Southern California. At the time of the signing ceremony,.we looked with satisfaction at the significant-accomplishment of having- { negotiated. mutually agreeable contracts between all-parties, and were anxious to direct our energies toward the design and construction of the plant. -Unfortunately, i delays.have occurred which, in combination _with others i factors, have resulted in a significant increase.in the capital cost of the project. This_ increase:is, appro-l .priately, of major concern to all of. the participants. However, our own evaluation of,the causes andtimplications i of these cost increases, and recent discussions within the d Administration and with members of-the_ Congress, reconfirm j j. the high priority _which has been given the project and our j i l i i i. f e i
I j l ~ ) l i determination to see the project proceed expeditiously. We believe that many of the reasons for proceeding with the project at this time are even more compelling than when the project was first proposed and that your evalu-l i ations will lead to the same conclusions. The most recent figures which have been developed and approved by all project participants show that the capital cost for the total project is estimated to be $765 million. l This figure has been compared to the original capital cost estimate of $444 million which was availabic from the l feasibility study. These two figures, however, are not directly comparable. '.'he figure $444 million is a cost based on 1965 prices with no allowance for escalation, l while the recent estimate includes not only escalation l i l applied to a stretched out schedule, but also contains greater contingencies and other factors which were developed since the first feasibility studies were made. MWD's share of this $321 million increase is approximately $90 million. Since more than $40 million in escalation was foreseen, as for example in the letter of May 23, l 1966, from General Manager R. A. Skinner to the Board of l Direc to rs, the actual increase to MWD appears to be approximately $50 million for the full plant.
- Moreover, the results of advanced technology and construction I
techniques which certainly will be available for the second phase desalting plant can be expected to reduce the present estimate of the cost of the desalting plant. In addition to the increase in capital cost, we are also ,) concerned that appropriate unit water costs be used in l any evaluation of this project. We believe the unit
- l water cost of $190 per acre foot which has been reported to your Board is misleading, and any comparison of it with the $88 per acre foot which was indicated in the initial feasibility studies would be inappropriate.
First, the estimate pertains to Phase I only and assumes i that the second 100 mgd phase will never be constructed. i The concept of phasing the construction of the desalting plant was introduced by' MWD in order to reduce its early capital investment. It was always recognized that the i cost of water from the first phase plant, burdened by e -
1 I v amortizing the capital cost of facilities related to the second phase plant, would be an inappropriate figure for evaluating desalting as a future source of water. A substantial reduction of approximately $50 per acre foot in the unit water costs is antici-pated when the second phase of the plant is built because of the full utilization of all of the plant components. Second, even if the $190 figure were a true cost figure for the. first phase plant, it does not take into account the ef fect of the Government's assistance, which will reduce the cost of water to MWD by approximately $52 per acre foot. We also understand that a further reduction in the unit cost of water may be effected by some of the financing t procedures being contemplated for the project by MWD. Notwithstanding the inportant considerations of costs, it is. cur belief that the basic premise upon which this program was initiated is still applicable and i I in fact is becoming increasingly urgent. The importance of the project to California, the nation and the world is clearly recognized. The combination of the initiative of Metropolitan and the utilities - public and private, the cooperative efforts by the Department of the Interior and the Atomic Energy Commission, the support of the State and of local bodies, as well as the backing of the general public, has thus far been unprecedented. l From the standpoint of the Federal Government, the high priority and attention which the Administration, the Congress, and our two agencies have given to the I successful accomplishment of this project have been, and, in our judgment continue to be, wholly appropriate and deserving. We strongly believe that the future must be faced with a dedicated determination by all j the participants to persevere and to solve the various problems generated by a project of this magnitude. 'We respectfully request'that you present these views l l to your fellow Directors at their next meeting and 1 l 4 l 1 I ~ ,l
1 s ) J l J j strongly urge you to adopt'a resolution at the next. . meeting of.your Board; af firming Metropolitan's decision to proceed with. the project. We are, confident that this action' will be quickly followed by a sir _ilar' step by the. Utilities so that the work involved in' building the world's first large-dual-purpose-nuclear electric generating and desalting . plant etn proceed, i Sincerely yours C/ / c h) 0 m, Chairmar., U. S. Ato Sep*etary of the Interior, Energy Commission Mr. Joseph Jensen Chairman, Board of Directors J The Metropolitan Water District: of Southern. California P. O. Box 54153 Los Angeles, California 90054 cc: W. W. Butler I Vice Chairman, Board of Directors ) William C. Farquhar I Chairman, - Special Advisory Committee H. J. Mills General Manager 1 I ..l i _ _ _ _ _ - _}}