EXHIBIT AI

CHART IV

AVERAGE COST PER KWH OF ENERGY PURCHASED BY REA BORROWERS

FROM ALL SUPPLIERS, BY STATES

FISCAL YEAR ENDED JUNE 30, 1952

EXHIBIT AK

Traditional policy

1. Power requirements of preference customers supplied as required with power increments available to meet load growth.

2. Wholesale rate to preference customer based on actual power used.

3. Wholesale firm power sold to power companies on withdrawable basis only.

4. Strong Federal policy aimed to secure congressional authorization of additional Federal generation and transmission facilities.

5. Government allowed minimum of 1 mil per kilowatt-hour to power companies and G. and Ꭲ . cooperatives alike for wheeling charges on firm power.

6. Government generally pur

chased maximum economical quantities of thermal energy to make maximum quantities of firm power available to preference customers.

7. Rates for Government power designed to pay out project and provide yardstick against which to measure rates and practices of private companies.

8. Government assumed primary responsibility for comprehensive development of river basins on multiple purpose basis.

New rules

Government will not, during term of contract, increase power delivery rate to meet load growth of preference customers.

Wholesale rate to preference customer based on contract demand.

Wholesale firm power sold to power companies on nonwithdrawable 20-year basis.

Specific formalized policy absolving the Government of all "utility" responsibility and all responsibility to provide added electric service when needed.

Government allows power companies maximum of 1 mill per kilowatt-hour for wheeling firm power but may allow G. and T. cooperatives considerably less than 1 mill per kilowatt-hour for similar service. Purchases of thermal energy will be minimized. This will generally reduce the firm energy available from the project and increase peaking capacity.

Government will decrease differential between its rates and and rates of private companies by raising Federal rates.

Private companies are encouraged to build any project or portion of project which they are willing to undertake.

Effect on cooperatives

Cooperative must choose between contracting for more power than it needs to protect its future supply or exhaust its quota of Federal power in a short time. If cooperative tries to contract for more than its minimum requirements, it must pay a ratepenalty. No power increments can be made available to cooperatives to meet load growth unless such increments are initially reserved at extra cost. Cooperatives must look to highcost thermal generation at from two to three times present Federal rates for additional sources of power and energy.

Would financially penalize G. and T. cooperatives which would desire new arrangement.

Increases potential benefits to power companies and reduces potential benefits to preferred customers.

Will raise rates of Federal power and increase operating costs of cooperatives.

Power companies will build most profitable projects and thereby disrupt comprehensive basin development plans, raise cost of Federal power, and retain for themselves the benefits which belong to the people.