HD 9685 CONTENTS Aandahl, Hon. Fred, Assistant Secretary of the Interior. Davis, Hon. Clarence A., Solicitor, Department of the Interior__ Ellis, Clyde T., Executive Manager, National Rural Electric Cooper- Radin, Alex, General Manager, American Public Power Association__ Parta POWER POLICY THURSDAY, JANUARY 21, 1954 UNITED STATES SENATE, SUBCOMMITTEE ON MONOPOLY AND ANTITRUST Washington, D. C. The subcommittee met at 10 a. m., pursuant to recess, in room 424, Senate Office Building, Senator William Langer (chairman) presiding. Present: Senators Langer, Dirksen, Kilgore, and Kefauver. Present also: Senators Murray and Symington. Wayne H. Smithey, professional staff member. The CHAIRMAN. The committee will come to order. Mr. SMITHEY. Mr. Chairman, at an earlier date in the hearings you indicated to Mr. Aandahl, the Assistant Secretary of the Interior, that he would be given an opportunity to present in full his explanation and statement on the new marketing criteria and power policy of the Department of the Interior which was issued in September. Mr. Aandahl is here now for that purpose, and I understand that he has a prepared statement. Is that true, sir? Mr. AANDAHL. The statement that we have is prepared by the Solicitor and I would like to have him present it. Mr. SMITHEY. Mr. Aandahl, since the last hearing conducted by the committee, the Department has issued an explanation or an expanded statement of the criteria, I believe. Is that true? Mr. AANDAHL. That is correct. Mr. SMITHEY. Do you have a copy of that to submit for the record? Mr AANDAHL Yes, sir. Mr. SMITHEY. May that be received and marked "Exhibit 13?” The CHAIRMAN. Yes. Mr. AANDAHL. Incidentally, the new words are underlined in red pencil on this particular copy. It is my personal copy. (Exhibit 13 is as follows:) EXHIBIT 13 To: Secretary of the Interior. DEPARTMENT OF THE INTerior, BUREAU OF RECLAMATION, From: Acting Commissioner of Reclamation. For clarity and more detailed explanation, article 7 of this criteria dated September 10, 1953, is hereby expanded. This completely replaces article 7 of the criteria. 7. The available power will be disposed of in the following priority of consideration: (a) Present power commitments, (b) Requests of customers which can be served from present facilities and arrangements, and (c) requests for power requiring new facilities or arrangements. (a) The existing contracts of all preference customers and of those nonpreference customers that serve communities which by long use have become dependent on such power, to the extent requested by the customer, will be amended to extend the term thereof in accordance with item 1 of these marketing criteria, i. e., a maximum of 20 years from the present time, and to eliminate, if included therein, the option of the United States to withdraw power for service to other customers, and to eliminate all control except a requirement that nonpreference utilities pass savings on to the ultimate customer. (b) Remaining available power will be allocated to fulfill the requests of first (i) preference type customers and next (ii) nonpreference type customers for power for use in areas covered by and which can be supplied from Bureau of Reclamation transmission lines, existing or under construction, or by existing wheeling arrange ments. (i) Power available but not needed until a later time by preference customers will be reserved for them as a class by selling it under short-term interim contracts under which it can be recaptured for the preference of customers at the termination of such contract. (ii) Power should not be sold under this category until it is clearly apparent that it is in excess of the needs of the preference customers. If there is a question, it should be sold under a short-term interim contract. For the purpose of this section, modifications of present wheeling contracts to cover new points of delivery on wheeling contractor's power system and additional wheeling arrangements with others will be considered as "existing wheeling arrangements," so long as the service area is not generally extended. The extent of eastern division service area is described as Montana east of the Continental Divide, all of North and South Dakota, Nebraska east of the 101° meridian, Iowa west of the 941⁄2° meridian, and Minnesota west of a line on the 941⁄2° meridian from the southern boundary of the State to the 46° parallel and thence northwesterly to the northern boundary of the State at the 962° meridian. In all negotiations great care should be taken to avoid placing excess power under contract to a point where the minimum annual capacity charge provisions become burdensome. If existing contracts are changed to avoid burdensome minimum charges, such contractors will have first choice for new power or power held in reserve for preference customers. In all negotiations existing contracts will be recognized as in full force and effect and they will be administered under their stated terms and conditions unless it is mutually agreed to change them. Applications received subsequent to January 1, 1954, will be as closely associated with the first round of contract negotiations as possible and processed expeditiously. Power hereunder not contracted for within a reasonable period following its proffer will be available for allocation elsewhere. (c) Any power remaining after fulfilling the requirements under items (a) and (b) above will be available for disposal in extended areas over transmission facilities to be constructed by the Bureau or by new wheeling arrangements to first (i) preference type customers and next to (ii) nonpreference type customers, in a manner similar to that outlined in (b) above. It will be the objective to dispose of power available in this category so that the use of power will be within an area considered to be within a reasonable transmission distance from the point of generation. Approved: December 11, 1953 H. F. MCPHAIL, FRED G. AANDAHL, Mr. SMITHEY. I believe you stated earlier that Mr. Davis had a statement to make for the Department? Mr. AANDAHL. Yes, sir. Mr. SMITHEY. Mr. Davis, would you care to come forward so that you would be closer to the reporter? Mr. DAVIS. Yes. |