ENERGY AND WATER DEVELOPMENT TUESDAY, MARCH 2, 1982 U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, D.C. The subcommittee met at 2:06 p.m. in room S-128, the Capitol, Hon. Mark O. Hatfield (chairman) presiding. Present: Senators Hatfield and Mattingly. DEPARTMENT OF ENERGY FEDERAL POWER MARKETING ADMINISTRATIONS OPENING REMARKS Chairman HATFIELD. The meeting will come to order. The purpose of our hearing today is to receive testimony from the five Federal Power Marketing Administrations which are within the jurisdiction of the Energy and Water Development Subcommittee. We extend a welcome to the Administrators of these agencies and look forward to receiving your status reports and reviewing your fiscal year 1983 budget requests. Also, we welcome Joseph J. Tribble, Assistant Secretary for Conservation and Renewable Energy, and Dr. Daniel Ogden, Jr., Director of the Office of Power Marketing Coordination, as our first witnesses today. I believe this is an historic first, Mr. Secretary. I believe this is the first time since I have been a member of this committee that the Assistant Secretary has appeared to give testimony. We give you a special welcome on a precedent-breaking occasion. I would like to reaffirm the subcommittee's traditional view relative to the power marketing agencies. It is still our view that Congress established these entities as independent agencies and we hold the Administrators responsible for carrying out their programs in a businesslike manner. We expect the Department of Energy to assist and coordinate the activities, but not centrally direct or manage. Bonneville, in particular, is unique. Since 1974, the Bonneville Power Administration has been operated on a self-financing basis. It does not require any appropriations, but comes before the subcommittee for budget review. One year ago, Congress enacted legislation which greatly expanded Bonneville's responsibilities. In light of this action, it is crucial that we carefully review its budget requests and make sure that adequate resources are available to implement their new responsibilities. I refer specifically to the Northwest energy bill that presented Bonneville with these additional duties and functions. Secretary Tribble and Dr. Ogden, these comments are not directed to you personally. Over the years, the relative independence of these agencies has been emphasized on many occasions by this committee and we want to strengthen that relationship, regardless of whether the Department of Energy has coordinating responsibilities. We will receive your testimony first, Secretary Tribble, and then proceed with the Administrators of the Bonneville Power Administration, WAPA, Southwestern, Southeastern, and Alaska. By the way, Secretary Tribble, I believe we have a date sometime in the very near future, next month, if I am not mistaken, to discuss what is left of the solar and renewable energy budget. Mr. TRIBBLE. That's right. Chairman HATFIELD. I received the Solar Man of the Year Award yesterday, and I have to prove my validity of that in the coming years, so I just want to put you on notice. I don't want them to come back and ask me for a return of their reward. It is rather attractive and I would like to keep it on my shelf. We are most delighted to welcome you here in this historic meeting for the Assistant Secretary to appear. We have your full testimony. We will place it in the record as you have presented it. You may proceed to highlight or summarize it as you wish. STATEMENT OF JOSEPH J. TRIBBLE, ASSISTANT SECRETARY, CONSERVATION AND RENEWABLE ENERGY ACCOMPANIED BY DANIEL M. OGDEN, DIRECTOR, OFFICE OF POWER MARKETING COORDINATION INTRODUCTION OF WITNESSES Mr. TRIBBLE. Thank you very much, Mr. Chairman. I merely want to introduce the team here today. I am very proud of them. Robert J. Cross, the Administrator of the Alaska Power Administration; I believe you know this fellow on my left, Dr. Ogden. Chairman HATFIELD. Dr. Ogden, Mr. Cross as well. Mr. TRIBBLE. On my right, Peter Johnson, Administrator of Bonneville Power Administration. Chairman HATFIELD. Who is that? [Laughter.] Mr. TRIBBLE. I know you don't have anything to do with the Bonneville Power Administration. You can either blame or congratulate him. He deserves congratulations. Then Mr. Robert L. McPhail, Administrator of the Western Area Power Administration; Mr. Richard B. Risk, Administrator of the Southwestern Power Administration; and Harry C. Geisinger, Administrator of the Southeastern Power Administration. Chairman HATFIELD. We welcome each of you. Mr. TRIBBLE. The two gentlemen on the far right, Mr. Risk and Mr. Geisinger, are new to the committee this year. Mr. Risk served in the U.S. Air Force from 1963 through 1977, then became a senior public relations representative for the Getty Refining & Marketing Co. in Tulsa. Later, and until this appointment, he was manager of nuclear information for the Public Service Co. of Oklahoma. Mr. Geisinger had served in the U.S. Navy from 1953 to 1957 and worked in communications for Neisler Laboratories. He then served as a member of the Georgia House of Representatives from 1968 to 1974, and since then has been the owner and president of several businesses. We consider these operations to be highly successful. In fiscal year 1981, the Power Marketing Administrations sold 133 billion kilowatthours and expect to sell 134 billion kilowatt-hours in fiscal 1982. Gross revenues in fiscal 1981 were $1.3 billion and are expected to increase to $2.3 billion in 1982 and $2.9 billion in fiscal 1983. The fiscal 1983 budget request will allow us to continue this service in an efficient and businesslike manner. Our total request for fiscal 1983 of $256,647,000 does not include Bonneville's budget which will be financed from the power revenues and sale of bonds to the Treasury. Bonneville's budget for fiscal 1983 has net outlays of $265 million and contains a request for $1.25 billion in borrowing authority pursuant to the Pacific Northwest Electric Power Planning and Conservation Act. That concludes a synopsis of my testimony, Mr. Chairman. I will certainly be available to respond to questions either now or later. [The statement and biographical sketch follow:] STATEMENT OF JOSEPH J. TRIBBLE Mr. Chairman and members of the committee, I am Joseph J. Tribble, Assistant Secretary for Conservation and Renewable Energy in the Department of Energy. With me today are the Administrators of the four Power Administrations which require appropriations. They are: Robert J. Cross, Administrator, Alaska Power Administration; Harry C. Geisinger, Administrator, Southeastern Power Administration; Richard B. Risk, Administrator, Southwestern Power Administration; and Robert L. McPhail, Administrator, Western Area Power Administration. Peter T. Johnson, Administrator, Bonneville Power Administration, is also here today. As you know, Bonneville does not require appropriations but they do report to the committee for oversight purposes. Also here with me today is Dr. Daniel M. Ogden, Jr., Director of the Office of Power Marketing Coordination. As you know, Dr. Ogden's Office serves as the coordinator for common activities and the needs of all five Power Administrators and as staff to me on power marketing matters. Mr. Chairman, I would like to take a minute to introduce Messrs. Risk and Geisinger to the members of the committee. These two gentlemen have recently been appointed to their positions and are appearing before this committee for the first time. Mr. Risk served in the U.S. Air Force from 1963 to 1977, then became senior public relations representative for the Getty Refining & Marketing Co. in Tulsa, and was, until this appointment, manager of nuclear information for the Public Service Co. of Oklahoma. During this period he was granted leave of absence from the Public Service Co. to become executive director of Oklahomans for Energy and Jobs, a nonprofit, pro-energy advocacy citizens group. Mr. Geisinger served in the U.S. Navy from 1953 to 1957, and then worked in communications and for Neisler Laboratories, a subsidiary of Union Carbide. He then served as a member of the Georgia House of Representatives from 1968 to 1974. Since 1974, he has been owner and president of several businesses. We are pleased to have these able and experienced individuals with us at the Department of Energy. We are appearing before the committee today to seek authorization for appropriations to operate and maintain the four Power Administrations. As you know, legislation which governs the functions of our power marketing administrations establishes that: First, the Federal Government builds and operates multipurpose dams and generates electricity where it is economically and environmentally justified. Second, the Federal Government transmits its electric power over its own high-voltage transmission lines and sells the power wholesale to distribution utilities and certain large power users. Third, the Corps of Engineers and the Bureau of Reclamation operate the dams and generate the electricity. All of the Power Marketing Administrations, except Southeastern, transmit and sell the power. The Southeastern Power Administration owns no transmission lines and depends on public utilities to wheel the power. Fourth, in selling power the Power Marketing Administrations, according to law, give preference to publicly and cooperatively owned distribution systems. In the Bonneville service area, these preference benefits have been extended to the residential and small farm customers of investor-owned utilities. Fifth, the Power Marketing Administrations can sell power at uniform rates within their marketing areas. We considered these to be highly successful. In fiscal year 1981, the five Power Marketing Administrations sold 133 billion kilowatt-hours, and expect to sell 134 billion kilowatt-hours in fiscal year 1982. Gross revenues from those sales were $1.3 billion in fiscal year 1981 and are expected to increase to $2.3 billion in fiscal year 1982, and are anticipated to be $2.9 billion in fiscal year 1983. The fiscal year 1983 request allows us to continue this service in an efficient and businesslike manner. Our total request for fiscal year 1983 of $256,647,000 does not include Bonneville's budget, which will be financed from its power revenues and sales of bonds to the Treasury. Bonneville's budget for fiscal year 1983 has net outlays estimated at $265 million and contains a request for $1.25 billion in borrowing authority pursuant to the Pacific Northwest Electric Power Planning and Conservation Act. This borrowing authority is to finance the multiyear conservation and renewable resource programs required under the act. Mr. Chairman, that concludes my testimony. Dr. Ogden will provide an overview of the power marketing program and the Administrators will provide specific details of the activities and proposed budgets for their administrations. If you have any questions for me, I will be pleased to respond. BIOGRAPHICAL SKETCH Joseph J. Tribble was confirmed Assistant Secretary for Conservation and Renewable Energy, U.S. Department of Energy, on May 14, 1981. Prior to his current appointment, Mr. Tribble was energy coordinator for the unbleached division of Union Camp Corp. In that position, he was responsible for energy management for the firm's unbleached paper mills in Montgomery, Ala.; Monroe, Mich.; and in Savannah, Ga. He previously held positions as assistant powerplant superintendent and powerplant superintendent, in the Savannah Mill which has the largest and most complex powerplant in the industry and where several pioneering steps have been taken in energy utilization. The primary objective of the corporation's energy management program, to reduce the consumption of fossil fuels, has been achieved most notably at the Savannah plant, where fuel use per unit of production was reduced by 40 percent between 1972 and 1980. The overall success of the firm's energy management program has been attributed |