Mr. POAGE. I wonder if you could go a little further in discussing how you plan to secure complete area coverage. To me it is one of the most difficult problems that confronts us. I am not offering this by any way of criticism, but, frankly, I do not know the answer.

I wonder if you could give this committee the answers as to how you are going to reach the thin areas.

There are areas in my State, and I know there are areas in every State, where the demand for electricity is not great enough in any given area, there are not enough people there, and they do not have enough income to make it profitable to extend the lines to them.

Mr. ALBERT. The first and second objectives on page 1 are pretty hard to reconcile in thinly populated areas.

Mr. POAGE. That is exctly the point. I agree with the objectives laid out by the Administrator. I think most of us agree with them.

I realize, as you say, the difficulty of reconciling the two objectives. I wonder if you would not go into that a little further and tell us just what you have in mind, because we realize that we have reached a point where most of the profitable territory has been served. I do not mean there is none left, but most of it has been served and most of the territory you will serve from here on out will be thin territory, rather unprofitable territory.

Mr. ANDRESEN. Will you yield? I notice that in the State of Texas, in the illustration here, that 86.9 percent of the farmers are receiving service. It seems to me that is pretty good.

Mr. POAGE. It is good. We are not criticizing it at all, but we realize that he has served those where the territories are most remunerative, just as the private power companies have.

Mr. WICKARD. I ought to say that quite naturally we have gone into areas where the population usually is more dense and where the power supplies were not a critical item.

Much of that territory that has remained until recent years to be served is in the Great Plains territory and in some of the mountainous areas and other places where the terrain makes construction difficult and, perhaps, makes farm income relatively low. However, as I said, we are now rapidly approaching the time when we can say that electric service has been made available to every rural community in the Nation. We have done that in several ways.

Of course, one of the factors that has been taken into consideration is that it is not the number of people that live in the area; it is the amount of electricity that the people in the area will consume, which determines whether or not the return will be sufficient to amortize the loans. In other words, much of the State of Texas where we have a very thin density of population, we do have large ranches which consume a lot of electricity per ranch. That helps to make up for the lack of return which you might have in a more densely populated area.

Then, too, we have been getting these power costs down all of the years, and getting new sources of power.

Mr. POAGE. Do you anticipate that you can keep getting the power costs down? Private utilities have apparently assumed that they have reached a point below which they cannot reduce their power costs, because they are asking for additional rates. Every city in my section of the country is getting requests from power companies to increase their rates.

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Do you assume that you can continue to reduce the power costs? Mr. WICKARD. Maybe I had better put that on a relative basis, that is, we have a general price rise on everything and I expect it may be impossible to hold or reduce the present power costs, but as one of the charts shows here, the trend has been coming down all of the time. With increased usage and more diversity and a better source of power, much available from public dams, and with newer methods and techniques that we have for extending service, we have a hope that we can continue to lower this cost to the consumer.

You

Our cost to the consumer has been going down even more rapidly than our wholesale power costs, because we have increased use. get more use out of your facilities.

We have not found a very large area in the country yet where, if we refine the application and do enough studying, that we cannot extend electric service into the area on a self-liquidating basis. That is much different from what we saw 10 or even perhaps 5 years ago, because of some of the factors I mentioned.

Sometimes we have to reduce the application. We have to cut out some of the territory. Usually we do that because we would like to get a little more experience to see how much electricity people in the territory will use.

Sometimes there will be some new development in the territory that we know about, but we would like to be more positive just what it will mean so far as the use of electricity is concerned.

There may be a few isolated ranches in a pocket in a mountain, or something like that, where it will be impossible to extend the service to-I think these are relatively small in number.

Mr. POAGE. There are two different problems, then, as I understand it, in that connection.

In the first place, just looking at this map without any reflection on any State, you see the State of Nevada which has relatively low coverage, 67 percent. The reason in that State is obviously not lack of income, because Nevada has the highest per capita income of any State in the Union, as I recall-the reason is the sparsity of population and the long distances between the individual consumers and the excessive cost that is involved in supplying any one individual.

Then if you will turn in the other direction, I look at the State of Mississippi which has a very low per capita income. The coverage there is low, 57.7 percent. That, obviously, is not due to the sparsity of population, because the population is rather dense.

Mr. WICKARD. That is right.

Mr. POAGE. It is due to the fact that a great many people simply do not have enough income to pay for electricity. And you are faced then with the proposition of getting down the costs, getting down construction costs in Nevada and getting down the power costs, primarily, in Mississippi, are you not?

Mr. WICKARD. We have power-cost problems in both States. There are not very many generating facilities in Nevada and we have to bring the power into Nevada from outside sources.

You might be interested to know, in passing, that we have now before us an application for a loan to serve the residents of southwestern Nevada, near the Death Valley area, which must be one of the thinnest areas in the country, so far as population is concerned. There are certain factors in that, however. A lot of new mines have