The $140-million mortgage, a loan from the U.S. Treasury, to build Hoover Dam will be paid in full today.
Residential and industrial users of electricity have been paying back the government $5.4 million a year at 3% interest over the last 50 years as part of their monthly utility bills.
"I wish we could burn the mortgage or find something to hit with a champagne bottle," said Blaine Hamann, assistant project manager of the dam for the U.S. Bureau of Reclamation, in an interview in his office at the dam's base.
Dedicated in 1935
When Hoover Dam was dedicated by President Franklin D. Roosevelt Sept. 30, 1935, it was the world's biggest and tallest--726.4 feet from the foundation rock to the roadway that stretches 1,244 feet across the Black Canyon of the Colorado River, straddling the boundary between Arizona and Nevada.
Although no longer the largest or the tallest, the 6-million-ton wall of concrete 30 miles southeast of Las Vegas is still a giant. It is 660 feet thick at the base and 45 feet thick at the top. Construction took five years, with an average of 3,500 workers--5,218 at the peak of activity. Ninety-six workers were killed in the process.
The dam provided an abundance of cheap electricity for California and the Southwest, and is credited with paving the way for much of the growth that has occurred in the last 50 years.
Curiously, paying off the mortgage will result in more expensive electricity for those who use Hoover Dam-generated power. Harvey Boyce, 45, spokesman for the Energy Department's Western Area Power Administration in Boulder City, said the annual cost of producing power at the dam will now immediately rise to $46 million from $16 million.
The major causes for surge in costs, Boyce said, are these:
- Payments will begin on a $25-million charge for flood-control work performed by the federal government when the dam was built, for which repayment was postponed until after the payoff of the mortgage.
- Annual payments must be made toward a $143.1-million project to increase the capacity of the dam's 17 eight-story-tall generators to 130 megawatts each from 100 megawatts. The project, begun in 1980, will continue until 1992.
- $10 million a year is needed to pay for the Central Arizona Project, the recently completed public works project supplying water to Phoenix. This portion will be paid exclusively by Arizona power users.
- $3 million annually will go toward maintenance of the river banks and other work to control salinity of Colorado River water crossing into Mexico.
Despite this near-tripling of costs at Hoover Dam, the impact on individual electric bills in California is expected to be minimal.
With $10 million of the increase being borne exclusively by Arizona users, that leaves $20 million a year to be absorbed by power users in California, Arizona and Nevada.
"Ultimately it may cost homeowners in Los Angeles a few cents a month more," said Ralph Carlson, power rates manager for the Los Angeles Department of Water and Power. The DWP receives 10% of its energy from Hoover Dam.
Wes Granger, contracts consultant for Southern California Edison Co., which receives only 4% of its energy from Hoover Dam, said it should not make a difference in billings to Edison Co. users. "Even with the increase in cost, Hoover Dam is still the cheapest power source available, one-tenth of the cost of our other energy sources."
Only Small Impact
Although the Metropolitan Water District receives 55% to 60% of the power it needs to pump water through the Colorado River Aqueduct, MWD spokesman Jay Malinowski estimated that the increased cost would amount to just a penny or two on a consumer's monthly water bill.
"It's spread out over so many people," he said. "We have 13 million customers in our service area."
The payoff of the mortgage is not the day's only milestone. Today also marks the end of the 50-year contract between the DWP and Southern California Edison Co. to operate the two power houses at the base of Hoover Dam, one on the Arizona side, the other on the Nevada side.
The Bureau of Reclamation, which from the beginning operated the dam but not the powerhouses, now takes over the powerhouses as well.
"It's sad to see our contract come to an end after all these years," said Jim Fuller, 57, supervisor of Edison's operation at the powerhouse. Edison has had a crew of 14 in charge of four of the 17 giant generators.
Some to Retire
DWP employed 50 workers in the other powerhouse.
One of them is Thomas E. Rowland, 58, who lived in Boulder City for 27 years and is now retiring.
Rowland has new cards printed for himself and his wife to replace his old DWP business cards. They say: "On the road. Jo and Tom Rowland." The Rowlands bought a 40-foot trailer and will leave shortly to tour the country, with special efforts planned to seek out dams and powerhouses.
The 50 DWP and 14 Edison Co. powerhouse workers had an opportunity to remain on the job under the new employer, but they stood to lose seniority and other benefits. Three DWP and three Edison workers are staying on. The rest are either retiring or being transferred to other locations.
The departure of the DWP workers has disrupted the lives of 50 other DWP employees living in company-owned housing in Boulder City. These workers, who hold jobs at a nearby switching station, at DWP-run microwave facilities and in warehouses and administrative headquarters, have been provided with rent-free homes. But that arrangement ends today, too.
Like a Pay Cut
DWP announced recently that the 50-year-old homes would now be available for rental to employees for $450 to $650 a month.
"It would be like taking a $650 cut in pay each month," said Dan Powers, 31, a DWP employee who has been living in a rent-free company home with his wife and two children for seven years.
He and others contend that the DWP is charging exorbitant prices so employees will move out and the DWP can get out of the housing business.
"This old house doesn't have air conditioning, central heating, garbage disposal, dishwasher, and its plumbing is antiquated," Powers said.
Like many of the DWP employees, Powers plans to move and rent or buy another home.