Imperial Valley press., 1936-06-10
Continued from Page y


Directors Charles Morrow asked
If the company ever had considered
renting the distribution system to
the district at a sum approXimating
per cent for their investment for
standby facilities. Chairman Evan
T Hewes supplemented Morrow's
suggestion by inouiring if the COM
pany had discussed leasing the dis
tribution system to the district on
an annual basis with an option to
buy at appraised value. West re
piled that any suggestions would
have to be studied before a reply
could be made.
Hewes then asked If the proposal
was not intended as an interruption
o. the districts power development
program. West in reply pointed out
that if the district was in control
Of the system for a period of years
while at the same time the districts
system was extended, thepower COM
pany would be in no shape TO de
liver power to consumers. NJ. j.
Dowd, district chief engineer. then
inquired what would happen to the
district system if the power COM
pany controlled it for a similar per-
iod West explained that the dis
trict would have an option to take
over the whole system at the end
OF the period proposed.
Would the power company dis
pose OF the district standby power
plant at Brawley under the terms
OF the compromise proposals." was
the next question placed by Hewes.
West replied that the competitive
situation would be eliminated under
the proposed plan, but that a division
of earning would be arranged.
In other words" HeweS inter
posed. your proposal would turn
the district TO the status it occupied
before it launched its power devel-
opment program"
West replied TO the effect that
since the district would share in
the earnings from the power zone
or district, there could be no extern
sion of the competitive situation.
II such extension was considered
by the district, he concluded, the
proposals might just as well be for
gotten. West also remarked that
the power company would save
nothing by dropping out Of the
picture but could protect its in
vestment by taking its chance on
q competitive basis with the dis
triot.
Rose at this point remarked that
the power company could save all
on its investment if il would con-
slider The lease with option to pur-
chase.
Claims Competition Costly
In his letter. West estimated that
present cost for operation and main
tenance by the Conpeny in the
valley amounts to approximately
100000 year and suggested that if
there should be two competing sys-
TENS. one operated by the district
ard the other by the power COM
ny interest and depreciation on
$1,000, 600 for standby plant, trans
mission and distribution lines by
the district, over and above the
proposed hydro development. at to
per cent would total an additional
s400,000 to S500,000 a year. which
he Contended, would mean higher
rates in the valley and less than
a fair return 10 the district.
We earnestly believe these loss
es can be avoided and that for
period of years the Imperial Irri-
gation district can obtain more
profit in working OUT a plan for
distributing power over our exist
ing lines and using our existing or
ganization" he said, and we also
believe that under a plan of this
kind rates to consumers will be less
than if two competitive systems
are operated"
II commenting on the different
features of the company's proposal,
which he compared with the Wash
ington plan. where rates are based
upon cost of service and automati-
cally reduced when earnings in
crease, West stated that company
studies for operation of the plan
eoii'tii4pldIeu JildI IIle COIlSJI uCtlOI
Of Plant No. 3 on the All American
canal will be completed and ready
for operation by the time water is
available.
District TO Serve Self
He suggested that the district
reserve such part of the power out
put OF the canal plant as may be
required for purely district purposes,
such as operation of dredges, pump
ING OF water TO higher levels for