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lative repayment to $102,000,000 on a total repayable investment of $839,000,000, or 12 percent.


Timely rate increases have helped SWPA maintain its good financial stand

ing. The Deputy Secretary of Energy approved, on an interim basis, a one percent rate increase for SWPA's integrated system effective October 1, 1985, through September 30, 1989. Confirmation and final approval by the Federal .

Energy Regulatory Commission is pending.


Beginning in FY 1984, SWPA reported to this Committee its intention to convert Full Load Factor power contracts, scheduled to expire in FY 1985, FY 1986, and FY 1987, to 1200-hour per year peaking power contracts. These ongoing conversions reduce the Government's annual energy obligations, and result in a corresponding savings in appropriation requests estimated to be $2,200,000 for FY 1985, $4,500,000 for FY 1986, and $6,900,000 for FY 1987. SWPA has also converted a number of borderline contractual arrangements to allow customers to pay suppliers directly for energy previously paid by SWPA through appropriations. These new arrangements promise to reduce SWPA's appropriation needs by an estimated $1,900,000 for FY 1985, 87,200,000 for FY 1986, and $8,100,000 for FY 1987.

HYDROPOWER DEVELOPMENT SWPA, working closely with the U.S. Army Corps of Engineers, achieved a historic first by contracting with the Sam Rayburn Municipal Power Agency for the 100% non-Federal financing of the Town Bluff hydropower project in Southeast Texas. Other non-Federal entities have shown an interest in financially sponsoring other Federal hydroelectric projects in SWPA's service area. Potential development amounts to about one million kilowatts, which would be equivalent to 49% of SWPA's generating capability. Although there now is a power surplus in our service area, the additional hydroelectric generation now under consideration could be brought on line in time to meet projected regional energy needs in the early to mid 1990's.

TRANSMISSION UTILIZATION The Government's transmission system is extremely important, particularly in the manner in which it operates as part of the Southwest Power Pool, and is used by customers to transmit or wheel power. This sharing helps eliminate expensive duplication of facilities and thereby improves the economic condition of all parties. The constantly changing load patterns and economic exchanges of power do, however, require some modifications and additions to the Government's transmission facilities. As facility sharing continues, SWPA will explore arrangements to jointly finance modifications and additions to the Government's system. We are proceeding with this approach in the Southeast Missouri-Northeast Arkansas area and from Oklahoma through the Kansas area for possible north-south power exchanges with Western Area Power Admini

stration and other utilities.


During FY 1985, SWPA sold 277 miles of excess 138 and 69 kv transmission lines, along with several substations and switching stations, known collectively as the Western Loop. The sale to Western Farmers Electric Cooperative was for $9,300,000; the Government investment was $6,100,000. Another accomplishment in the area of facilities management was the moving of two maintenance units from leased facilities in Muskogee and Ada, Oklahoma, to SWPA owned buildings in Gore and Tupelo, Oklahoma. The savings in lease payments at the former locations will completely pay back construction expenses of the new structures in less than ten years.

In conclusion, Mr. Chairman, SWPA's budget proposal for FY 1987 provides for the continuance of a dynamic program at a stable funding level. We have taken significant steps to reduce appropriation requests. SWPA remains committed to operating in a businesslike manner and maintaining rates sufficient · to return all operating costs, along with the principal and interest associ

ated with the construction of power generation and transmission facilities, to

the U.S. Treasury. We appreciate the cooperation and recognition provided by the members of this Committee. I am privileged to serve as Administrator and work with your Committee, as well as with the customers and employees of the

Southwestern Power Administration.



Ronald H. Wilkerson was appointed Administrator of Southwestern Power Administration (SWPA) on July 29, 1984 by the Secretary of Energy.

Headquartered in Tulsa, Oklahoma, SWPA is a regional agency of the U.S. Department of Energy (DOE) with responsibility for marketing Federal hydroelectric power in Kansas, Missouri, Oklahoma, Arkansas, eastern Texas, and Louisiana. SWPA's wholesale customers are 10 generation and transmission cooperatives, 45 municipal electric systems, and three military installations.

As Administrator, Wilkerson is responsible for marketing the output of 23 Federal hydroelectric projects at the lowest possible cost while fully repaying the Federal investment with interest. These projects have installed capacity of 2,150,350 kilowatts and generate an average of 5.6 billion kilowatt-hours of energy annually. Sale of power produces revenue of approximately $100 million annually against a budget of $38 million.

with about 190 employees at five locations, SWPA operates and maintains 1,400 miles of transmission lines and 26 substations in addition to scheduling and dispatching the power.

Prior to his appointment, Wilkerson was Manager of the Upper Columbia Area for the Bonneville Power Administration (BPA), a regional power marketing agency under DOE in the Pacific Northwest. He was responsible for BPA activities in eastern Washington, northern Idaho, and western Montana.

Arriving at BPA in 1961, Wilkerson progressively held more responsible positions within that organization resulting in extensive experience and expertise in the areas of customer service, power marketing, and engineering. This included serving as BPA District Manager in Kalispell, Montana, as well as assignments in Idaho Falls, Idaho; Seattle and Walla Walla, Washington; and The Dalles and Portland, Oregon.

Wilkerson is a Registered Professional Engineer, a member of the Institute of Electrical and Electronic Engineers, and serves on the Board of Directors of the Southwest Power Pool. He has received numerous awards for special acts and performance. A native of Montana, he received his Electrical Engineering degree from Montana State University.

"Wilkerson and his wife, Sharon, have three sons and a daughter. January 1986

SALE OF EXCESS PROPERTY Chairman HATFIELD. Thank you, Mr. Wilkerson.

I noticed in your testimony that you indicated that you had sold some excess transmission lines in 1985 at a pretty handsome profit. Is that correct?

Mr. WILKERSON. That appears to be correct. That property was disposed of through the General Services Administration in accordance with the procedures that they have established, and it is my understanding that the original cost for those facilities was in the neighborhood of $6 million, and the selling price was in the neighborhood of $9 million.

Chairman HATFIELD. What is the replacement cost for that? What would that be approximately, do you know?

Mr. WILKERSON. I really am not familiar with that.
Chairman HATFIELD. Could you provide that for the record?

Mr. WILKERSON. I can supply that for the record. General Services
Administration, perhaps, will have that information for us.

(The information follows:)
The replacement value of the western loop was estimated to be $40 million.

Chairman HATFIELD. It is sort of a benchmark, is it, for other sales that you would hope to realize such profits from, Madam Secretary?

Miss FITZPATRICK. We have no position on that, Mr. Chairman. No, our guideline for the sale price of the PMA's is basically the outstanding unpaid Federal investment.

HARRY S. TRUMAN DAM, MO Chairman HATFIELD. Mr. Wilkerson, what is the status of the Harry S. Truman project?

Mr. WILKERSON. That project, as you know, Mr. Chairman and members of the committee, has been controversial, because it included a pumped storage feature which had an effect of killing fish. The project's construction is completed, with six units installed. The Corps of Engineers completed late last year some studies looking for alternative ways to resolve the fish problem and other environmental problems that they experienced downstream.

Currently, we are operating the project with four units, which is what the Corps of Engineers has allowed us, with operation at a higher level during power emergencies, if such should come along. The Corps of Engineers, we understand, is continuing to work toward the testing and eventual operation of all six units, and we are hoping that they will be successful in that. They are also continuing to seek ways of resolving the fish kill problem, and I am pleased that the Corps of Engineers is working toward the full planned capability of that project. But it isn't here yet.

ADDITIONAL PREPARED QUESTIONS FOR THE RECORD Chairman HATFIELD. I understand. Thank you. We will have other questions to submit to you for the record. (The questions and answers follow:]

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