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Los Angelos - September 8, 1963 H u . A . , SEP MgttQBaMPUKS j ^53 V | The problem of obtaining an adequate water supply^-^ f o r the Lae Vegas area insofar as the source of the water Is concerned is a simple one. The present underground source has bees developed to the point where not only have the maximum rates of production been reached, but because of the constantly declining water levels in the wells it is very probable that the rates of production will now begin to decline. The only other source where an adequate supply can be obtained is Labe Mead. For a privately owned utility to go to Labe Mead for additional water Involves many complications. In the first place, there is the question of whether a privately owned utility would have the right to take water frea Labs Mead. This possibly could be worked out but certainly net as simply as has been done in the case of the proposed Water District. In the second place, the private utility la order to finance the project would have to show earnings in order to service the bonds whloh would have to be sold for that purpose, the earnings history of LVLftWCo. have certainly not been such as to make the purchase of bonds attractive to investors. Added to this is, of course, the extravagant use and wastage of water In the area which can not be prevented due to the State Law prohibiting the installation of water meters. Xn order for a private utility to obtain the funds necessary for the development of a Lake Mead eouree it would firet be necessary to in effect guarantee earnings whloh would be adequate to meet operating expense# and to amortise the Investment. This could only be done by some sort of finding by the State Utility Commission setting a schedule of rates which would become effective when Labe Mead water was made available and which would supply the necessary income. It is doubtful whether the Utility Commission would or could follow this procedure. The past history of LVL&WCo.'* efforts to obtain adjustments in rates is the best Indication of this. Xn the second place, it would be necessary to either get the State Law prohibiting the Installation of water meters