Membership Corporation have unqualified support for the specific features of the Poage Bill H. R. 1400 which is now being studied by the House Agriculture Committee. As you undoubtedly know, with the tremendous decrease in farm population, those people left on the farms in Eastern North Carolina have become completely' dependent on adequate low cost electric service and mechanization for their livelihood. Therefore, in order for Tri-County Electric Membership Corporation to provide for the tremendous increase in load growth on our electric system and deal with the very great problem of obsolescence as the result of this load growth, as well as providing electrical service to congested areas developing on our system, it is imperative that we have access to long-range financing available at a cost that we can afford and consequently make these needed capital expenditures. With a density of only 4.7 members per mile of line on our system, and with the responsibility of furnishing comparable and adequate electrical service with other electrical suppliers within our service area, I am sure that you can see the need for the continued 2% interest rate for long term capital loans; and with our having to seek annual Congressional appropriations for this loan program and which is necessarily becoming larger with each Congressional session, I am sure that you can appreciate the need for a credit system which will eventually get the Federal government out of the business of financing rural electric and telephone cooperatives. I am sure that you realize that such are the provisions of H. R. 1400. I understand that hearings are to begin on H. R. 1400 on March 22, Consequently, we shall be very grateful if you will consider having our views included in the Journal of Proceedings. Very truly yours, TRI-COUNTY ELECTRIC MEMBERSHIP CORP., ROBERT S. HOLMES, Manager. FARMERS MUTUAL ELECTRIC CO., Hon. WILLIAM R. POAGE, Chairman, Agriculture Committee, U.S. House of Representatives, Washington, D.C. DEAR CONGRESSMAN POAGE: Farmers Mutual Electric Company is the oldest electric cooperative in Illinois. It serves 700 families and has about 270 miles of line. At the annual meeting of the cooperative on January 30, 1967, the attached resolution, entitled "Rural Electric Credit System," was unanimously adopted by the members. I would appreciate it if you would insert this letter and the attached resolution in the record of the hearings on H.R. 1400 and other identical bills. Very truly yours, GEROGE H. DODGE, President. RURAL ELECTRIC CREDIT SYSTEM Whereas, Farmers Mutual Electric Company and other electric cooperatives in Illinois were organized subsequent to the enactment of the Rural Electrification Act in 1936 for the express purpose of providing central station electric service to farms, residences and businesses in rural areas that were unable to obtain electric power at a reasonable price from any other source; and Whereas, since 1944, rural electric systems in Illinois and in the United States have received loans for capital improvements from the Rural Electrification Administration, amortized over a period of 35 years, at an interest rate of 2% with the condition that they must provide service to any person or business in their service area that desired it, even though such individual service was provided at a loss; and Whereas, a number of rural electric systems have, either now or in the foreseeable future, reached the place in their development where they can provide adequate service to their members at a reasonable cost without loans from the Rural Electrification Administration at an interest rate of 2%, if there is a financial institution from which they can obtain capital for required improvements; and Whereas, it would be difficult or impossible for most rural electric systems to obtain adequate financing for capital improvement from existing financial institutions; and Whereas, the rural electric systems desire to eventually obtain financing from non-government sources and rural electric leaders recognize that, because of their innate characteristics, it is not likely that such financing could be obtained from existing financial institutions; and Whereas, the rural electric systems caused an independent, objective study to be made on future financing of rural electric systems and, with the cooperation of the Rural Electrification Administration and others, formulated a plan, based on the study, similar to the Federal Farm Credit System, which provided for the establishment of a Bank for rural electric systems which, like the Federal Land Banks, the Intermediate Credit Banks and Banks for Cooperatives, will be initially capitalized with money furnished from the United States Government and over a period of years will pass from government ownership and control to ownership and control by the rural electric systems who are eligible to borrow from it; and Whereas, several bills to implement the plan were introduced into the 89th Congress and extensive hearings on the bills were held by both the Agriculture Committee of the U.S. House of Representatives and the Agriculture and Forestry Committee of the U.S. Senate. Now, therefore, be it resolved by the members of the Farmers Mutual Electric Company that the 90th Congress be urged to introduce and enact legislation providing for a bank for rural electric systems based on the plan developed by the rural electric systems, the Rural Electrification Administration and others and, that the Congress accept constructive amendments to bills introduced that are for the purpose of clarifying or strengthening them and that the Congress reject all non-constructive amendments. Hon. W. ROBERT POAGE, U.S. House of Representatives, House Office Building, Washington, D.C. RAPID CITY, S. DAK., March 21, 1967. The board of directors of our rural electric co-op under date of March, 1967 unanimously passed the following resolution in view of the urgent need for supplemental sources of capital for rural electric systems in addition to the present REA two percent thirty-five year loan program: Now therefore be it resolved that the board of directors of West River Electric Association hereby endorse resoultion J-8 unanimously adopted by members of NRECA at the REE 25th annual meeting held at San Francisco on February 23, 1967 and strongly urge your support of NRECA in hearing presently being held by the agricultural committee. We respectfully request that all members of the subcommittee on conservation and credit be advised of contents of this resolution. Respectfully yours, HAROLD BAUER, President, West River Electric Association. COLUMBIA RURAL ELECTRIC ASSOCIATION, INC., Hon. W. R. POAGE, Congressman, U.S. House of Representatives, DEAR MR. POAGE: This is in reference to the Rural Electric Supplemental Finance Bill which is to be subject to Committee Hearings on March 21-22-23 and April 4-5 and 6th, 1967. I represent the Board of Trustees and over 1000 members of the Columbia Rural Electric Ass'n. Inc.; an electric cooperative which is now financed thru the Rural Electrification Administration. That this cooperative and other electric cooperatives may continue to borrow monies on an organized basis in such quantities that will enable the electric cooperatives to have adequate funds for construction of lines to serve new consumers, improve existing lines to provide adequate service to new and existing consumers, and to further the development and improvement of living conditions in rural areas, we solicit your support and the support of the entire committee in securing favorable approval of the Rural Electric Supplemental Finance Bill. It is requested that this letter be taken into consideration and made a part of the record of the hearings of the committee. Very truly yours, COLUMBIA RURAL ELECTRIC ASSN., INC., Hon. W. R. POAGE, CARTERET-CRAVEN, ELECTRIC MEMBERSHIP CORP., Chairman, House Committee on Agriculture, DEAR MR. POAGE: Members of this rural electric cooperative unanimously adopted a resolution at their December 1966 Annual Meeting to support supplemental financing. They now feel more keenly than ever before that this is their electric system and they want to protect their hard earned gains in development of these areas. Commercial fishing is one of the principal industries here. Our lines may stretch ten miles without a single electric service to a point where a fishing village is located. Three small communities after receiving electric service have grown into incorporated municipalities due to their proximity to recreational and military areas. We are serving installations unheard of and undreamed of when the first REA Act was passed. Some of these are: a space tracking station where dependable rural electric service satisfies the demand for controlled temperatures where delicate instruments are housed; signal approach beacons for automatic pilot landings of military aircraft; a marine science laboratory where an investigation continues on seafoods with the objective of encouraging expanded landings of all species needed as processing resource and producing additional new products from the resource; a military auxiliary air field with a catapult launching device for flight trainees. The principal point we wish to make, Mr. Chairman, is that the investor owned utilities apparently insist that rural America as it was in 1930 is to be served by the rural electric cooperatives, but the dynamic modern day expansions and developments in science and industry are to be reserved for their segment of the industry. Well, this just is not happening. We are proud to say we serve every farm in our area without extra charges for building lines to the farms. Our people do have a feeling of ownership and pride. We want to be the mainspring in the growth and development of our area. We will need supplementary funds from the open market for this purpose. We are tired of the massive opposition from those who seek to keep our rural areas weak, our resources small, and our developmental efforts fruitless. We heartily support H.R. 1400 which will allow us to keep pace with the growth potential in rural areas. DEAR MR. PARTRIDGE: The farmers and the rural people in the northeast part of Missouri are very interested in the passage of Supplemental Financing Legislation in support of HR 1400. Rural electric cooperatives continue to grow and it will be very necessary for rural electric cooperatives to have this supplemental financing if they are to succeed and carry out the obligations of feeding the world. The helping hand of electricity is more important today than at any time in history. The shortage of manpower calls for more mechanized equipment to be driven electrically. It is most imperative that this legislation be passed this year. LEO R. HOEK, President of Board of Directors. NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION, Hon. ROBERT P. GRIFFIN, Washington, D.C. Washington, D.C., March 16, 1967. DEAR SIR: I have a favor to ask of you. Our electric cooperatives throughout the country are faced with a very grave situation. Due to the ever-increasing needs and demands of our member-owners for more power and extended services, we are faced with an ever-increasing need for capital. Government loans are our only source of capital, and are, naturally, limited. Therefore, we must find a new source of supply of these much needed funds for an adequate supply of capital. The efficiency of farm operations is in jeopardy. Full rural development and land values are dependent upon it. As a farmer myself, I am very much dependent upon rural electric co-op power for my business, as I have a cold-storage plant for my fruit, and for fruit raised by many of my neighbors in the area. We are constantly expanding our operation, and requiring more power. We are attempting through legislation to pass a supplemental financing bill which would give us a banking system, and we hope, the required additional capital we will be needing. The bills, as introduced this year, H.R. 1400, 1401, 1402, 3122, 3314, 6026, are all identical, and any one of them will help us to do the job. Would you please place these statements in the hearing record of the House Committee of Agriculture (Supplemental Financing for Rural Electric Cooperatives). Thank you. Yours truly, ELWYN E. OLMSTEAD, Ludington Mich. Hon. W. R. POAGE, TRI-COUNTY RURAL ELECTRIC CO-OPERATIVE, INC., Chairman, House Agricultural Committee, DEAR MR. CHAIRMAN: The board of directors of this cooperative, today approved the following resolution concerning the future financing of the Rural Electrification Administration loans to its borrowers. We wish that you would make this a part of the hearings on this proposed legislation. "Resolved, that the board of directors of the Tri-County Rural Electric Cooperative, Inc., Mansfield, Pennsylvania respectfully urge the House of Agricultural Committee to approve House bill HR 1400." I, L. D. Stevens, secretary of the Tri-County Rural Electric Cooperative, Inc., certify that this resolution was approved by the board of directors at its meeting held today, March 21, 1967. L. D. STEVENS, Secretary. SOUTH CENTRAL POWER CO., Re REA bank legislation. Congressman W. R. POAGE, House Agriculture Committee, House Office Building, Washington, D.C. GENTLEMEN: It is my understanding that 6 identical Bills, numbers 1400, 1401, 1402, 3121, 3314 and 6026 are before the Committee, and that hearings will be held in the near future on these bills. Without a doubt the well financed investor owned Power Company lobby will be out in force and will do everything in their power to prevent passage of this proposed legislation or to shoot this legislation full of restrictive provisions to the point where the resulting legislation will be practically worthless. The electric cooperatives are serving over 50% of the land area in the United States. Load density in this area for the most part (there are a few exceptions) is very low compared to the metropolitan, suburban and other highly developed areas served by the investor owned Power Companies. Even so the cooperatives are doing a magnificent job of serving these low density areas at rates only slightly higher on the average than investor owned company rates in the highly developed areas. In some cases the cooperative rates are the same or less than the company rates. If present trends such as population and GNP, increase, higher living standards, industrial deevlopment, air pollution in concentrated areas etc., continue (and short of devastating wars they most surely will) an ever-increasing percentage of power and energy requirements of the United States will develop within areas served by the Rural Electric Cooperatives. This means that the debt capital requirements of the REA Cooperative borrowers will increase substantially each year. A number of studies have attempted to forecast the probable debt capital needs for the next decade or so. In my opinion they are all too conservative. Our Cooperative, South Central Power Company, serves 30,000 consumers in a 3,400 square mile area; 8.82 consumers per square mile. Our total depreciated assets are about $20,000,000.00. Our capital requirements for 1967 will be about $1,500,000.00. Approximately one half of these requirements will be generated internally from depreciation reserves and retained margins. We must borrow the rest. Our own projections based upon past trends and our knowledge of the area indicates that our annual debt capital requirements will double within the next 10 years. During the past 30 years rural people have proven beyond any reasonable doubt, that by means of their consumer owned electric cooperatives they can provide for themselves and their neighbors, high quality electric service at reasonable rates. This is a fact all across the land, and in spite of relatively high investment required per KWH sold and time and distance involved in low consumer density areas. In addition these electric cooperative organizations are fast becoming a substantial factor in rural area development and the improvement of the rural economy. For these and related reasons the rural people; electric cooperative member owners, are not and never will be of a mind to surrender one of the most valuable assets they have ever owned to investor owned power companies, to "wall street", and other large financial interests. South Central can afford to and will be willing to pay more than 2% interest per annum on our future debt capital requirements. At the same time we know that many of the cooperatives must have the benefit of low cost (2%) money for many years to come. Therefore, after our present REA loan commitments are used, South Central Power Company is prepared to pay the "cost of money" rates which the proposed REA Bank will charge. We strongly urge the Committee to approve and recommend passage of this legislation as proposed. Very sincerely yours, DARWIN KINDLER, General Manager. BLUE EARTH-NICOLLET COOPERATIVE ELECTRIC ASSOCIATION, Hon. W. R. POAGE, Chairman, House Agriculture Committee, CHAIRMAN POAGE: We would like you and your committee to know that our board of directors and all of our people are whole-heartedly in support of supplemental financing for Rural Electric Cooperatives. We believe it is a must if we are to keep up with the rapid increase in demand for electric power. Getting money from REA is a slow process in that they must proceed cautiously so as to spread the available money in the most urgent cases as there is not 78-690-67-14 |