Senator GORE. There will be placed in the record at this point a letter from the AFL-CIO, from Mr. Andrew J. Biemiller, director, legislative department. (The letter referred to follows:) AMERICAN FEDERATION OF LABOR AND Hon. ROBERT S. KERR, Chairman, Subcommittee on Public Works, DEAR SENATOR KERR: We request that this letter be made a part of the record in the hearings you are now conducting on bills to provide for development of the power potential of the Niagara River, S. 512 and S. 1037. The American Federation of Labor and Congress of Industrial Organizations wholeheartedly supports S. 512, the bill introduced by Senator Joseph Clark for himself and 16 other Senators. We do so because it provides for power development under the same terms as those which have been established for public programs since the use of electric power became widespread throughout the country. While the bill itself establishes the prior right of municipalities, rural electric cooperatives, State agencies and Federal defense facilities to the power which will result from Niagara power development, it must be remembered that the foreseeable demands of these customers over the next 10 to 20 years will amount to only about 25 percent of the power developed, leaving 75 percent of the power for industrial and other private uses. These terms were originally established in our national policy with the Reclamation Act of 1906. Since then, every major public power development in the United States has, by congressional action, operated under the same terms. The two great public power systems, Bonneville and TVA, have demonstrated that this national policy is beneficial not only to this class of customers, but also to electric power users in nearby areas. We are all familiar with the dynamic effect the TVA and Bonneville systems have had in the economies of the areas which they serve. Because they have been able to produce and sell large quantities of power at low rates, they have encouraged industrial development which has meant new jobs, higher standards of living, and greater revenue returns to the Federal Government. We have seen that these practices have had the effect of driving down rates and increasing consumption in nearby areas served by private power companies, while at the same time the profits of those companies have risen more rapidly than in areas not directly affected by TVA activities. The area which will be served by Niagara power now has nearly the highest electric power rates in the Nation. It is greatly in need of the economic stimulus which can be introduced if the terms for Niagara development adhere to the terms of our other public power systems. It is, of course, essential to the success of this kind of development that the licensee be directed to erect transmission lines necessary to serve this class of customers. Another feature of S. 512 which we believe makes it preferable to the IvesJavits bill, S. 1037, is the provision which instructs the New York State Power Authority to control resale rates in its contracts with private utilities customers. It would be a futile use for public funds and public resources if power sold to utilities at low rates could be sold to consumers at high rates. We respectfully urge the committee to report favorably S. 512. We hope that, especially because of the critical power shortage now existing in the area, the bill will be speedily enacted by the Congress. Sincerely yours, ANDREW J. BIEMILLER, Director, Legislative Department. STATEMENT OF BLAINE STOCKTON, PRESIDENT, NEW YORK STATE ASSOCIATION OF RURAL ELECTRIC COOPERATIVES Mr. STOCKTON. My name is Blaine Stockton. I am president of the New York State Association of Rural Electric Cooperatives, and 91898-57-17 manager of the Oneida-Madison Electric Cooperative at Bouckville, N. Y. Yesterday and today there were a lot of statements made about the power authority having signed contracts with the State of New York. We have not yet had any signed contracts for St. Lawrence power at the present time. We are negotiating. It was necessary for the other New York cooperatives represenatives to leave last night, therefore I shall testify on behalf of the five New York rural electric cooperatives. I shall endeavor to keep my statement very brief, and will not, therefore, go into the background of the power situation in New York State which I am sure would be largely repetition. We are all, I believe, agreed that any further delay in the development of the power potential of Niagara Falls would not be in the best interest of the people of New York State, and the adjoining States, in fact further delay would be almost shameful. We are further agreed, I believe, that this is not a question of public versus private development as both bills being considered by this committee would grant a license to the New York State Power Authority. Therefore, the question before this committee, and the point of difference in the bills before this committee, becomes one of marketing. Gentlemen, we are in favor of the Clark bill, S. 512, for the following reasons: (1) The language of the Clark bill is identical to that of the Lehman bill which was passed upon by this committee last year, and was subsequently passed by the Senate. We believe that this bill would be the most sure and expeditious way of assuring speedy development of the latent power at Niagara Falls. (2) The marketing provision-preference clause-in the Clark bill will give the municipal electric systems, and the rural electric cooperatives assurances of their fair share of the power from this development. In the marketing of St. Lawrence power, we have not as yet been able to negotiate a satisfactory contract with the New York Power Authority, even though the cooperatives were among the very first to make applications for St. Lawrence power. After repeated meetings with the power authority, three of the New York cooperatives have been offered contracts. However, these contracts are still very undesirable. They would result in a cost of power of approximately 9 mills at the cooperatives' load centers. One of the undesirable features of this contract is the wheeling charge. After considerable negotiations, the wheeling charge was reduced from 2.6 mills to 2 mills. This 2-mill figure, however, is for the very limited time of 5 years. After that we have no assurance of what it might be. We have no evidence that the New York Power Authority marketing plan for St. Lawrence power will provide a power cost yardstick in New York State. A great deal has been said by Senator Ives and Congressman Miller that this bill, S. 1037, was a "compromise." In the February 4 issue of Electrical World magazine, is a picture of persons who participated in arranging the "compromise." Under this picture are the following words: "Ganged up for Niagara fight are New Yorkers Javits, Ives, E. J. Machold, Miller, Moses, H. E. Machold, New York Power Authority general manager, W. S. Chopin, and power authority's general counsel, Thomas Moore." You will note that representatives of municipal and rural electric systems are conspicuously absent. To comment further on the preference clause, it seems that the Federal preference clause is indispensable to the successful passage of Niagara legislation rather than preventing it. Last year, Niagara legislation containing the Federal preference provision passed the Senate by a comfortable margin, and would not have passed without it. As to a bill with the Federal preference clause passing the House of Representatives, I was told last year that if the bill were out of committee, it would have passed. Čertainly, if the 25 Republican Congressmen from the State of New York stood for public power and supported a bill with the Federal preference clause, there is no question but that bill would pass the House. It appears, therefore, that the proposed bill, S. 1037, which eliminates the Federal preference clause is, and well might be, the very document which will prevent legislation for Niagara water being passed. It has been said before this committee that only 5 percent of the Niagara power could be utilized by municipal and cooperative systems within the economic transmission distance. Granting that this is true, there should be no objection whatever by anyone to a bill which gives the right of first use to this small amount of power under a preference clause. The word "reasonable" amount in the proposed bill S. 1037, certainly carries the implication that even the 5 percent would be limited. This is not a fair position even for the New York Power Authority to take. The Federal preference clause is a sound and fair provision as a matter of principle. No valid attack can be made against it, since it merely recognizes the fundamental right of first use, which the owner always has. It seems inconsistent to favor public power and at the same time to say that the State, as the owner, does not have the right of first use-preference-to the power generated at its own plant. Principles are important and should be maintained and fought for. The right of first use clause-preference-does not materially interfere with the proper contracting for the power on a practical basis. If, as has been said, the municipals and cooperatives would only utilize 5 percent of the power, there would be 95 percent of the power which the power authority would be in a position to contract for. With such a large percentage of power available, there is no force to the argument that the right of first use clause--preference-would interfere with contracting for the sale of power. Gentlemen, I thank you for the privilege of appearing before you today, and urge that you report S. 512 favorably out of the committee at an early date, in order that the power potential of the Niagara River may be developed for the good of the people. Senator GORE. The committee will adjourn until 10 o'clock tomorrow. (Thereupon, at 4:50 p. m., the committee was adjourned, to reconvene at 10 a. m., Friday, April 12, 1957.) DEVELOPMENT OF POWER AT NIAGARA FALLS, N. Y. FRIDAY, APRIL 12, 1957 UNITED STATES SENATE, SUBCOMMITTEE ON FLOOD CONTROL, RIVERS AND HARBORS, The subcommittee met, pursuant to adjournment, at 10 a. m., in room 412, Senate Office Building, the Honorable Robert S. Kerr, presiding. Present: Senators Kerr (chairman of the subcommittee), Carroll, and Cotton. Also present: Senator Clark (Pennsylvania). Senator KERR. The committee will come to order. STATEMENT OF POWERS LUSE, MANAGER OF THE HANCOCK-WOOD ELECTRIC COOPERATIVE, INC. Mr. Luse. Mr. Chairman, my name is Powers Luse. I am the manager of the Hancock-Wood Electric Cooperative, Inc., of North Baltimore, Ohio. I am also the secretary of the Pennsylvania-OhioNew York Committee on Low Cost Niagara-St. Lawrence Power. This committee represents electric cooperatives and municipal electric systems interested in putting an end to high-priced electric power in the northeastern United States. I would like to digress for a moment from my prepared statement, Senator Kerr, to correct a bit of misinformation which was apparently involved yesterday morning when it was suggested_that neither Ohio nor Pennsylvania had made any move to qualify themselves as purchasers of such power as may become available through the enactment of either of these proposed bills. As a matter of fact, we have introduced in the Ohio Legislature a bill very similar to the Vermont statute which would, of course, qualify us, if it is enacted into law, to receive a share of this power when it does become available for us. The Pennsylvania people have prepared such legislation and expect to introduce it in the very near future. I would like to skip down to the bottom of my first sheet there. Senator KERR. I am interested in everything that is on it; you go ahead and do as you like. Mr. LUSE. There are 39 electric cooperatives within the economic transmission distance of Niagara Falls serving about 170,000 rural and domestic consumers. 257 |