"We ascribe to the position that the cooperatives ought to produce for their rural members the lowest cost power it is possible to generate and deliver. Onecent electricity for our member-owners should continue to be the goal of rural electric cooperatives."

Following the annual meeting of NRECA in February and the approval by about 85% of the membership of a resolution directing NRECA to seek passage of a supplemental financing plan, the Basin Electric Board of Directors formally adopted a position in regard to future financing. I have attached a complete copy of that statement and wish only to note here that although we would prefer the continuation of the 2% REA loan program in adequate amounts to meet the requirements of the Missouri Basin rural electrics, and others serving such sparsely settled regions, the prospect of a multi-interest rate program seemed to threaten the unity among the rural electric cooperatives and suggested to us that a single-interest rate program would be the wiser course, although that rate might be greater than 2%.

I mention this point because it accentuates the Missouri Basin cooperatives' desire to preserve a unified program based on the lowest possible interest rate in order to carry on rural electrification in a region where it is necessary to build a mile of line to serve less than two consumers or on the average, for Basin Electric members, one mile of distribution line for 1.7 consumers.

Our concern about the future of low cost financing is partly based upon the fact that not one member cooperative, that I know of, in the two Dakotas are not losing farms every year. A neighboring cooperative I have knowledge of, for example, has lost on an average about 50 services a year during the past several years. This cooperative has only .96 consumers per mile of line. To double the interest rate on such a rural electric cooperative either intentionally or because inadequate safeguards to 2% interest loans were not provided in the supplemental financing legislations-would be a cruel blow to the farmers in that area. America's farmers are expected to feed the nation. Today the farmers in the Missouri Basin are providing one of the most valuable exports we have wheat-and yet receive only 82% parity for their products.

The question I mean to raise is not the survival of the rural electric cooperatives. The question is whether the legislation being considered today is going to result in an additional cost of farming. Without a doubt the local rural electric cooperative can pay the higher interest rates-it merely has to increase the rate it charges for electricity. It is the man at the end of the line, the farmer and rural resident, who will bear the cost of this increased interest cost. In the case of Basin Electric, we have conservatively calculated that should we be required to build our next generating unit with 4% funds rather than 2% loan funds, $17 million additional costs will have to be paid by the farmers of the Missouri Basin during the first ten years of unit operation alone.

It does not seem logical to us to promote such programs as rural areas development and stable food prices on the one hand and to propose to increase the cost of essential electric power to farmers on the other.

In conclusion Mr. Chairman, I respectfully, urge the members of the Committee to give full weight to the social values of rural electrification in their deliberations upon a plan for supplemental financing and to assure themselves that the legislation they approve will not mean taking away a vital equalizer for the rural people who have enjoyed a much smaller share of the nation's prosperity than most. Surely there can be some positive assurance to rural people that at the very time they are being asked to produce more food and fiber for their nation and the world, that the cost of farming is not going to be increased, because of increased interest costs on rural electric facilities. It is not a hand-out that the farmers of the Missouri Basin ask for, but a measure of equity in an economic system which has left the farmer with little bargaining power and a dwindling share in the nation's prosperity.

This need for equity has been recognized many times by Congress in a variety of legislative acts. We respectfully urge that in acting upon supplemental financing programs, Congress will provide adequate safeguards to preserve the low interest loan program so necessary to the majority of rural electric systems. Thank you for this opportunity to present our views to your Committee.

BASIN ELECTRIC MEMBERS

Central Power Electric Cooperative, Inc., Minot, North Dakota.
Baker Electric Cooperative, Cando, North Dakota.
Capital Electric Cooperative, Bismarck, North Dakota.
James Valley Electric Cooperative, Edgeley, North Dakota.
McLean Electric Cooperative, Garrison, North Dakota.
North Central Electric Cooperative, Bottineau, North Dakota.
R.S.R. Electric Cooperative, Milnor, North Dakota.

Tri-County Electric Cooperative, Carrington, North Dakota.
Verendrye Electric Cooperative, Velva, North Dakota.
East River Electric Power Cooperative, Inc., Madison, South Dakota.
Beadle Electric Cooperative, Inc., Huron, South Dakota.

Bon Homme-Yankton Electric Association, Tabor, South Dakota.
Charles Mix Electric Association, Lake Andes, South Dakota.
Clay-Union Electric Corporation, Vermillion, South Dakota.
Codington-Clark Electric Cooperative, Inc., Watertown, South Dakota.
Douglas Electric Cooperative, Inc., Armour, South Dakota.
H-D Electric Cooperative, Inc., Clear Lake, South Dakota.
Intercounty Electric Association, Inc., Mitchell, South Dakota.
Kingsbury Electric Cooperative, DeSmet, South Dakota.
Lake Region Electric Association, Inc., Webster, South Dakota.
Lincoln-Union Electric Company, Alcester, South Dakota.
Lyon-Lincoln Electric Cooperative, Inc., Tyler, Minnesota.
McCook Electric Cooperative, Inc., Salem, South Dakota.
Northern Electric Cooperative, Inc., Aberdeen, South Dakota.
Ree Electric Cooperative, Inc., Miller, South Dakota.

Sioux Valley Empire Electric Association, Colman, South Dakota.
Spink Electric Cooperative, Redfield, South Dakota.

Tri-County Electric Association, Inc., Plankington, South Dakota.
Turner Hutchinson Electric Cooperative, Marion, South Dakota.
Traverse Electric Cooperative, Inc., Wheaton, Minnesota.
Union County Electric Cooperative, Inc., Elk Point, South Dakota.
Whetstone Valley Electric Cooperative, Inc., Milbank, South Dakota.

L & O Power Cooperative, Rock Rapids, Iowa.

Lyon Rural Electric Cooperative, Rock Rapids, Iowa.

Osceola Electric Cooperative, Inc., Sibley, Iowa.

Southwestern Minnesota Cooperative Electric, Pipestone, Minnesota.

Northwest Iowa Power Cooperative, Le Mars, Iowa.

Cherokee County Rural Electric Cooperative, Cherokee, Iowa.
Harrison County Electric Cooperative, Woodbine, Iowa.
Ida County Rural Electric Cooperative, Ida Grove, Iowa.

Monona County Rural Cooperative, Onawa, Iowa.

Nishnabotna Valley Rural Electric Cooperative, Harlan, Iowa.
O'Brien County Rural Electric Cooperative, Primghar, Iowa.
Plymouth Electric Cooperative, Le Mars, Iowa.

Sioux Electric Cooperative Association, Orange City, Iowa.
South Crawford Rural Electric Cooperative, Denison, Iowa.
Woodbury Country Rural Electric Cooperative, Moville, Iowa.
Rushmore Electric Power Cooperative, Rapid City, South Dakota.
Black Hills Electric Cooperative, Inc., Custer, South Dakota.
Butte Electric Cooperative, Inc., Newell, South Dakota.
Lacreek Electric Association, Inc., Martin, South Dakota.
Tri-County Electric Association, Inc., Sundance, Wyoming.
West Central Electric Cooperative, Inc., Murdo, South Dakota.
West River Electric Association, Inc., Wall, South Dakota.
Tri-State G & T Association, Inc., Denver, Colorado.

Big Horn Rural Eectric Company, Basin, Wyoming.
Carbon Power & Light, Inc., Saratoga, Wyoming.

Chimney Rock Public Power District, Bayard, Nebraska.
Garland Light & Power Company, Powell, Wyoming.

Gering Valley Rural Public Power District, Gering, Nebraska.
Highline Electric Association, Holyoke, Colorado.

Hot springs County Rural Electric Association, Inc., Themopolis, Wyoming.
K. C. Electric Association, Hugo, Colorado.

The Midwest Electric Membership Corporation, Grant, Nebraska.
Morgan County Rural Electric Association, Fort Morgan, Colorado.
Mountain Parks Electric, Inc., Granby, Colorado.

Mountain View Electric Association, Inc., Limon, Colorado.

Niobrara Electric Association, Inc., Lusk, Wyoming.

Northwest Rural Public Power District, Hay Springs, Nebraska.

Panhandle Rural Electric Membership Association, Alliance, Nebraska. Poudre Valley Rural Electric Association, Inc., Fort Collins, Colorado. Riverton Valley Electric Association, Inc., Riverton, Wyoming.

Roosevelt Public Power District, Mitchell, Nebraska.

Rural Electric Company, Inc., Pine Bluffs, Wyoming.

Sheridan Johnson Rural Electrification Association, Sheridan, Wyoming. Shoshone River Power, Inc., Cody, Wyoming.

Union Rural Electric Association, Inc., Brighton, Colorado.

Washakie Rural Electric Company, Worland, Wyoming.

Wheatbelt Public Power District, Sidney, Nebraska.

Wheatland Rural Electric Association, Inc., Wheatland, Wyoming.

Wyrulec Company, Lingle, Wyoming.

Y-W Electric Association, Inc., Akron, Colorado.

Upper Missouri G & T Electric Cooperative, Sidney, Montana

Burke Divide Electric Cooperative, Columbus, North Dakota.
Goldenwest Electric Cooperative, Wibaux, Montana.

Lower Yellowstone Rural Electric Association, Sidney, Montana.
McCone Electric Cooperative, Circle, Montana.

McKenzie Electric Cooperative, Inc., Watford City, North Dakota.
Mountrail Electric Cooperative, Inc., Stanley, North Dakota.

Sheridan County Electric Cooperative, Inc., Medicine Lake, Montana.
Southeast Electric Cooperative, Inc., Ekalaka, Montana.

Williams Electric Cooperative, Inc., Williston, North Dakota.

Other Member G & T Cooperatives

Central Iowa Power Cooperative, Cedar Rapids, Iowa.

Corn Belt Power Cooperative, Humboldt, Iowa.

Individual Distribution Cooperatives

Cam-Wal Electric Cooperative, Inc., Selby, South Dakota.

Cherry-Todd Electric Cooperative, Inc., Mission, South Dakota.

FEM Electric Cooperative, Ipswich, South Dakota.

Grand Electric Cooperative, Bison, South Dakota.

KEM Electric Cooperative, Linton, North Dakota.

Minnesota Valley Cooperative Light & Power Association, Montevideo,
Minnesota.

Moreau Grand Electric Cooperative, Timber Lake, South Dakota.
Mor-Gran-Sou Electric Cooperative, Inc., Flasher, North Dakota.
Oliver Mercer Electric Cooperative, Hazen, North Dakota.

Renville Sibley Cooperative Power Association, Danube, Minnesota.
Rosebud Electric Cooperative, Inc., Gregory, South Dakota.
Slope Electric Cooperative, Inc., New England, North Dakota.
West Plains Electric Cooperative, Inc., Dickinson, North Dakota.

RESOLUTION PASSED AT THE BASIN ELECTRIC POWER COOPERATIVE FIFTH ANNUAL MEETING, NOVEMBER 1965

1. Financing proposals

Studies made by the National Rural Electric Cooperative Association concerning supplemental financing for rural electric cooperatives have been given se-‐ rious study by Missouri Basin rural electric cooperatives. A majority of the members of Basin Electric Power Cooperative have taken clear positions in regard to supplemental financing as did the rural electric cooperatives of NRECA Region VI and the statewide associations of North Dakota, South Dakota, Montana, Wyoming. The following is the position of the members of Basin Electric Power Cooperative:

We believe that in this sparsely settled region there continues to be an essential need for 2 percent, 35 year loans from the Rural Electrification Administration in order to carry out the program of rural electrification.

We ascribe to the position that the cooperatives ought to produce for their rural members the lowest cost power it is possible to generate and deliver. One-cent electricity for our member-owners should continue to be the goal of rural electric cooperatives.

Any supplemental financing program which is proposed to Congress as a change to the present loan program must meet the following criteria :

1. Such supplemental financing must afford an opportunity to achieve truly low-cost power for rural electric members and result in the lowest possible retail rates.

2. Such supplemental financing must make it possible for the rural electric cooperatives and their members to share the economy which results from large scale generation and transmission and the modern technology of producing and transmitting such power.

3. Such supplemental financing must preserve the right of rural electrics to own and control their own generation and transmission cooperatives and provide adequate financing of these cooperatives.

We are resolved that the recommendations presented in the NRECA Financing Study Report for intermediate financing and a bank for rural electric systems do not meet the above criteria or laid in the achievement of our common objectives.

We are further resolved that additional studies be made of other methods of financing rural electric systems such as public power districts, tax exempt bonds, revolving fund at 2 percent, or methods of supplementary financing of debts as now available to other electric utilities.

We are resolved also that the member systems of NRECA should have greater opportunity to participate in the continuation of the studies and the development of the conclusions from them.

Until such time as these additional studies have been made and proposals and legislation drafted that meet all the above criteria, we are resolved to oppose any changes in the present REA loan program and urge our friends in Congress and the Administration to continue their wholehearted support of this great program in its present form, and to support an electric loan fund authorization of $675 million to meet both backlog and current needs of fiscal year 1967.

STATEMENT OF POSITION OF BASIN ELECTRIC POWER COOPERATIVE, FEBRUARY 25, 1966 After serious consideration of proposals for future financing of rural electric cooperatives the Basin Electric Power Cooperative Board of Directors adopts the following position:

At the National Rural Electric Cooperative Association annual meeting in Las Vegas, February 14-17, we were told by NRECA and Administration spokesmen that 75% of the nation's rural electric cooperatives require 2% REA loan funds. Further, we were told that both the NRECA and the Administration supported 2% loan funds for all generation and transmission cooperatives needing such financing. The Basin Electric Board of Directors is in agreement with these positions.

At this crucial point in the REA program, twenty United States Senators have urged President Johnson to take the necessary steps

1. to restore the full amount of loan funds authorized by Congress for fiscal year 1966

2. to initiate a deficiency appropriation of $262 million in order to reduce the present backlog of loan applications

3. to approve an increase in the fiscal year of 1967 budget to a level that will meet the requirements of the program.

We fully support these senators and will work to prevent jeopardizing the position they have taken. We comment these senators, as well as other senators and congressmen who have taken substantially the same position, for their efforts to provide rural electrification with the low cost financing it requires. We believe that these statements by NRECA, the Administration, and senators and congressmen demonstrates the need for continuation of 2% REA loan funds in substantial amounts and that any program of supplemental financing for REA borrowers must include sufficient 2% loan funds for all systems requiring such financing. We also believe that these REA loan funds should be used for the benefit of the rural consumers who own the electric cooperatives and not to benefit private power companies.

We believe that REA financing would best be managed under a single interest rate which would apply to all REA loans. Because more than one interest rate has been suggested as the basis for a revised REA loan program, we believe that all REA borrowers must proceed with extreme caution in approaching any