Negotiations are currently in progress with Appalachian Power Company, Virginia Power Company, Carolina Power & Light Company, and preference entities within their service areas to implement the Kerr-Philpott Power Marketing Policy. These negotiations are expected to add some 48 new preference customers.

This concludes my statement, Mr. Chairman, and I would be happy to answer any questions that you may have.

BIOGRAPHICAL SKETCH

BARRY C. GEISINGER

Harry C. Geisinger became the fifth Administrator of the Southeastern Power Administration on November 30, 1981, having been appointed to that post by U. S. Secretary of Energy James B. Edwards.

Retablished in 1950, the Southeastern Power Administration markata federal hydroelectric power produced at Corps of Engineers' constructed projects in the States of Georgia, Florida, Alabama, Mississippi, North Carolina, South Carolina, Kentucky, Tennessee, West Virginia, and Virginia. Based in Elberton, Georgia, Southeastern presently markets powaz produced at 22 multiple-purpose projects with installed capacity of 3,092 aegawatta.

Prior to his appointment, Geisinger owned Geisinger Advertising and
Public Relations in Atlanta. He has also served as president of Carbon
Suals, Incorporated, in Atlanta, and as president of Uniway of
Last Tyanessee, Incorporated, in Blountville, Tennessee,

Gnisinger served in the Georgia House of Representatives from 1968 through 1974 and was minority whip from 1970-1974.

He received an associate of arts degree at Lincoln College in 1958 and later studied business administration at the University of Cincinnati. He arvad in the U. S. Navy from 1953-1957.

Born in Cincinnati, Ohio, in 1932, he is married to the former
Patricia Virginia Capdau of New Orleans. The couple has three

children and reside in Dunwoody, Georgia, where Mr. Geisinger has been active in community and youth activities.

REPAYMENT REFORM

Chairman HATFIELD. Thank you very much.

The Senator from North Dakota, do you have any questions?
Senator BURDICK. No questions.

Chairman HATFIELD. We have a number of questions which we will submit for the record. I would like to just ask one question at this time, Mr. Geisinger. What impact would the proposed repayment reform have on Southeastern power rates?

Mr. GEISINGER. The impact on the wholesale rates would be about a 10-percent increase.

Chairman HATFIELD. How much?

Mr. GEISINGER. Ten percent, on wholesale rates.

Chairman HATFIELD. How would this affect the consumer as far as rate increases?

Mr. GEISINGER. Well, when you consider that we serve 2 percent of the total load in the Southeast and 6 percent of our preference customers' load, it would factor out to almost no increase at all.

ADDITIONAL PREPARED QUESTIONS FOR THE RECORD

Chairman HATFIELD. Thank you very much.

The subcommittee has some additional prepared questions which will be included in the record for your response.

[The questions and answers follow:]

QUESTIONS SUBMITTED BY CHAIRMAN HATFIELD

Southeastern Power Administration (SEPA)

Question: What accounts for the $6.8 million increase in Purchase Power and Wheeling requirements?

Answer: The increase is primarily due to increased costs to be paid to the Georgia Power Company. Wheeling charges to transmit power to preference customers in the Southern Company service area are handled, to the extent possible, by net billing. Since capacity sales to Georgia Power Company will be insufficient to fully net bill the charges for transmission services provided by that Company, more funds are requested to pay the Company. In addition, there are increased costs due to final implementation of the power marketing policy in the eastern portion of Georgia-Alabama System and some general increases in transmission costs in other systems.

Question: What impact will the proposed repayment changes have on Southeastern's rates?

Answer: Southeastern's wholesale rates will increase by approximately $13 million or 10 percent due to the proposed repayment changes.

Question: What portion of your available power is not sold as peaking power?

Answer: Southeastern's power is scheduled by the operating utility in each of its service areas so as to best fit the operating utility's needs. Since all of Southeastern's power is hydro power, and the most efficient use of hydro power is as peaking power with fossil or nuclear generation supplying the base load needs, all of Southeastern's power is used to meet peak hour needs except for several low head projects where lack of storage capacity at time of surplus water conditions, and navigation releases, require operating the projects during off peak hours.

Question: Why does the justification narrative imply that SEPA is not in full compliance with the law?

Answer: While the law specifies that SEPA give preference in the sale of its power to public bodies and cooperatives, SEPA has not been able to market all elements of its power to preference customers in the past. Power not sold to the preference customers was sold to the utilities who perform wheeling services for SEPA. Now, however, due to preference customer load growth and a shift in the power rate structures in the area, preference customers are able to fit all of SEPA's peaking power into their load curves and use the power both physically and economically. For these reasons, SEPA's new written policies for its several systems anticipate that in the future all power will be sold to preference customers with no sales to the investor owned utilities who now provide the transmission services.

Question: Are any of your sales to non-preference utilities? Please explain.

Answer: All of Southeastern's sales are to preference customers except for a temporary sale of capacity without energy to the operating companies of the Southern Company (Georgia Power Company, Alabama Power Company, Mississippi Power Company, and Gulf Power Company) and sales to Florida Power Corporation of small quantities of energy when generation is in excess of load factor for the capacity sold to preference customers in the

company service area.

The contracts with the operating companies of the Southern Company provide that the sale of capacity to the companies will be decreased periodically between now and June 1991 when the sale of capacity will be terminated and all of Southeastern's capacity will be marketed to preference customers.