Plus $1.00 per KVA per month of transformer capacity required in excess of 10 KVA. PAYMENT Bills for electric service are due and payable within ten (10) days from date of bill. CONTRACT PERIOD All contracts under this schedule shall be for a minimum period of 30 days and thereafter until terminated, where service is no longer required, on 3 days notice. MULTI-FAMILY DWELLINGS Where one meter serves more than a single dwelling unit the blocks of the rate will be multiplied by the number of dwelling units served, as more fully set forth in the Residential Rules and Regulations. RULES AND REGULATIONS Service supplied under this schedule is subject to the terms and conditions set forth in the Company's Rules and Regulations on file with The Public Utilities Commission of the State of Colorado. $2.00 .044 .030 .022 2.00 ייכיי Available in all territory supplied with electric service by the Company in Rate Areas II through V as identified on sheets numbered 10 through 13. APPLICABILITY Applicable to General Farm Service. Generally a farm shall be as defined by the U.S. Dept. of Commerce, Bureau of Census, 1.e., each place operating as a unit of 10 or more acres from which the annual sale of agricultural products totals $50 or more, as well as each place operating as a unit of less than 10 acres from which the annual, sale of agricultural products totals $250 or more, Not applicable to standby, auxiliary or resale service. Plus $1.00 per KVA per month of transformer capacity required in excess of 10 KVA. PAYMENT Bills for electric service are due and payable within ten (10) days from date of bill. CONTRACT PERIOD All contracts under this schedule shall be for a minimum period of 30 days and thereafter until terminated, where service is no longer required, on 3 days notice. COMPANY RATE Territory Rate No. Urban 17 Fringe 42 Rural 67 The CHAIRMAN. I will now call on Mr. Nelson Lee Smith. Do you want to file your full statement for the record, and then summarize it? Mr. SMITH. I certainly do, and I will attempt to avoid any repetition of the previous witnesses' testimony in consonance with your wishes. The CHAIRMAN. Thank you very much. Mr. POAGE. May I just comment. In view of the apparent length of time that this is going to take with 51 witnesses here representing the power companies, with some statements running some 46 pages in length, may I simply call attention to the original hearings on this REA bill which was conducted on March 12, 13, and 14, in 1936, before the Committee on Interstate and Foreign Commerce, with Mr. Sam Rayburn serving as chairman of that committee; at those hearings there were three witnesses who were heard, Morris L. Cooke, the Administrator of the Rural Electrification Administration, the Honorable James G. Scrugham, a Representative from Nevada, and the Honorable John E. Rankin who was allowed to insert his statement in the record but was not given the opportunity to testify before the committee. The CHAIRMAN. How many pages of testimony were there? Mr. POAGE. There are 103 pages in all with the insertions and the tables, and the like. The CHAIRMAN. How much was the length of the testimony, about a page and a half? Mr. POAGE. It was more than that, but much of it was inserted. Mr. POAGE. Yes. Mr. TEAGUE of California. Will you yield for this observation. Lengthier and more careful hearings, had they been held, maybe we would have had a better bill. Mr. POAGE. These people now argue that that bill was and is pretty good-Mr. Person said that a minute ago that it was fine. The CHAIRMAN. All right, Mr. Smith. STATEMENT OF NELSON LEE SMITH, PROFESSOR OF BUSINESS, GRADUATE SCHOOL OF BUSINESS, COLUMBIA UNIVERSITY, NEW YORK, N.Y. Mr. SMITH. Mr. Chairman and members of the committee, my statement is not in such length as Congressman Poage has suggested, and I ask that the attachments thereto be made a part of the record. My name is Nelson Lee Smith; my address is Post Office Box 603, Madison, Conn. I appear before you on behalf of the Edison Electric Institute in opposition to H.R. 14000 and H.R. 14837. QUALIFICATIONS By way of background, let me say that my professional education and experience is as an economist. I graduated from Dartmouth College with an A.B. degree in 1921, received an M.C.S. from its Amos Tuck School of Administration and Finance in 1922, and earned the Ph. D. from the University of Michigan in 1928. Throughout most of my adult life-whether as a teacher, a public servant, or in the world. of business—I have been primarily concerned with the economic aspects of the interrelationships between Government and business, particularly as they involve the regulated transportation agencies and public utilities. From 1921 to 1937 I served on the faculties of Dartmouth and Michigan-the latter from 1922 to 1924-advancing to the rank of professor of economics at Dartmouth, where I was responsible for courses in the above-mentioned areas. From 1929 to 1931 I was a member of the New England Governors' Railroad Committee, created to advise them regarding the probable impacts of various possible railway acquisitions and consolidations then under consideration upon the transportation needs and economic welfare of the six New Egland States. In 1933 I was appointed to the New Hampshire Public Service Commission, serving as its chairman from 1934 to 1941. During this period, I was president of the New England Association of Utilities Commissioners, 1935-36, and president of the National Association of Railroad and Utilities Commissioners, 1938-39. In 1941 I became Chairman of the Board of Investigation and Research established under the Transportation Act of 1940 to carry forward certain of the studies initiated by the Federal Coordinator of Transportation. I was appointed a member of the Federal Power Commission in 1943 and continued in that post until 1955, serving as the Commission's elected Chairman from 1947 to 1950. From 1955 to 1961 I was a vice president of American Airlines, Inc., my duties relating to economic planning generally and more particularly to corporate policies and procedures regarding regulatory matters. In 1960 and 1961 I was a member of the committee on industry, trade, and transportation of the New York Chamber of Commerce, and since 1960 have been a member of the advisory committee to the New York State Office of Transportation. Since 1962 I have been professor of business at the Columbia University Graduate School of Business, where I teach courses concerning business policy and business in a mixed economy-the latter devoting substantial attention to business-government interrelationships. I am coauthor-with Bruce W. Knight-of a two-volume text entitled "Economics," published by the Ronald Press, New York, 1929 and 1930, and author of "The Fair Rate of Return in Public Utility Regulation," a 1928 economic prize essay published in Houghton Mifflin Co., Boston, 1932. In addition I have written numerous articles which have appeared in various economic and business journals. Recently I was retained by the Edison Electric Institute to make an independent and objective analysis of the need for and impacts of H.R. 14000 and H.R. 14837. It is upon the basis of this study, and my experience generally, that my testimony is based. My conclusion is that the proposed legislation is from an economic viewpoint neither necessary nor desirable, for reasons which I shall develop in the balance of this statement. AN OVERVIEW OF THE RURAL ELECTRIFICATION PROGRAM, 1935 TO DATE At the outset I should like to emphasize my long-standing and continuing empathy with the purposes of the rural electrification program as originally conceived. When the program was initiated in 1935 less than 11 percent of the farms in this country had central station electric service. This figure and others similar to it relating to farms and percentage of farms electrified comes from data in my exhibit 1 which is a compilation by States of the number of farms then electrified for the selected years 1935, 1940, 1950, and 1965, all based on 1 See appendix, exhibit 1. figures from the Department of Agriculture REA release. The desirability of greatly extending such service, both to increase agricultural efficiency and productivity and to raise the standards of rural life, was generally recognized alike by farm organizations and their leaders, enlightened electric utility managements, and public officials. In various parts of the United States efforts were afoot to promote the extension of rural lines and the increased use of electricity on the farm. In New Hampshire, for example, during my years as chairman of the Public Service Commission we surveyed the situation and its potentials in cooperation with the Grange, the Farm Bureau Federation, the Extension Service of the State university and the leading electric utilities serving the State, and we actively encouraged them in the substantial liberalization of the terms under which rural extensions would be made. The result, as I recall it, was that about 65 percent of our farms were served prior to the formation of the first electric cooperative in the State under the aegis of the Rural Electrification Administration (hereinafter referred to as REA). But, despite the progress which was being made in many areas, it was apparent that more was required if a massive nationwide assault on the problem were to be mounted. During the Great Depression farm incomes had fallen to low levels and utility earnings had likewise declined; Federal assistance was deemed appropriate. Consequently, as a part of the emergency relief program, in 1935 it was proposed to allocate $100 million for rural electrification, to be administered by the REA created by Executive order. A year later the objectives, parameters, and administrative implementation of the program of Federal assistance were formalized by the Congress in the Rural Electrification Act of 1936.3 Except for the establishment of the fixed 2-percent interest rate on loans to REA borrowers in 1944* and the inclusion of rural telephone service in 1949,5 the basic philosophy and framework of this program has continued without congressional modification until the present time. 6 KEY FEATURES OF CONGRESSIONAL POLICY It would serve no useful purpose for me to burden this expert body with a laborious review of all the details of either the legislation or the very considerable progress of rural electrification since its enactment. There are, however, certain key features of the congressional policy, as embodied in the terms of the act and in its legislative history, which I must stress before your honorable committee because they seem to me so essential to the basic concepts of the entire program that their abandonment or substantial modification-as proposed, or at least permitted, under the pending bills—could so drastically change its character and direction as to seriously undermine its economic soundness and acceptability. In broad terms, they are: (1) The fundamental and limited purpose of the program, which was to extend the benefits of central station electric service as broadly 2 Executive Order 7037, May 11, 1935. 349 Stat. 1363, 7 U.S. Code, ch. 31, approved May 20, 1936. 458 Stat. 739, approved Sept. 21, 1944. 563 Stat. 948, approved Oct. 28, 1949. Rural Electrification Act of 1936, with amendments as approved to Oct. 23, 1962, U.S. Code. Title 7, ch. 31. |