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Because of restrictions imposed by the City of Los Angeles to avoid smog formation, the use of natural gas for electric generation is required eight months of the year. Gas supplied to the Los Angeles area has increased in cost from 25 to 36 cents per million Btu in the six years prior to 1961. Residual fuel oil cost has fluctuated considerably during this period and, more recently, has stabilized at about the same cost. For these reasons, a basic gas fuel cost of $0.36 per million Btu was adopted with standby provision for conversion to oil for the Los Angeles area. For other sites in the Pacific Southwest, coal is a cheaper source of energy when supplied from the Four Corners Area (New Mexico, Arizona, Utah and Colorado) by pipeline. This coal at 10,500 Btu per pound heating value is available for about $2.80 per ton at the mine. The cost of transporting the coal, based upon past experience, should be less than 4 mills per ton-mile. The cost per million Btu of coal delivered to four sites has been calculated to be: Phoenix, Arizona - 18.2 cents; Yuma, Arizona - 21 cents; San Diego, California - 23.4 cents, and Mecca, California - 21.9 cents; or an average cost of 21.1 cents per million Btu. The use of pipeline coal requires somewhat more energy than train-delivered coal, therefore the adjusted cost of coal used in this study was 23 cents per million Btu. (see Ref. 14). Each 150,000,000 gallon per day plant requires coal at a rate of 2,860,000 ton per year of Four Corners Coal. The economical transportation of coal is based upon the delivery of 8 to 10 X 106 tons per year. This would mean that three water plants should be located in the same area so that the demand for coal would justify this means of transport. -8-12-Epson Perfection 4870 Photo, 400 dpi, 8 bit, 14,702,592 byte