NORTHWESTERN RURAL ELECTRIC COOPERATIVE ASSOCIATION, INC., Re Niagara power. Hon. ROBERT S. KERR, Chairman, Senate Public Works Subcommittee, Senate Office Building, Washington, D. C. DEAR SENATOR KERR: I have been instructed by our board of directors to write you, respectfully asking that your subcommittee favorably consider the Clark bill, S. 512, for Niagara redevelopment. The Clark bill, alone, protects the rights of preference customers and especially those located in States adjoining New York State. We anticipate serious difficulty in trying to do business with the New York Power Authority unless the Congress gives us such protection as is already written into the Clark bill. Our co-op serves 7,850 members. Some of them are within 85 miles of Niagara Falls and all of them are within 150 miles of the project. Our system demand is now 10,000 kilowatts and our energy requirements are 47 million kilowatt hours per year. We estimate our demand in 1980 at 33,000 kilowatts and our energy requirements at 320 million kilowatt hours. We now pay 8.5 mills per kilowatt-hours and our power supplier tells us that they lose money at this rate. We need a supply of wholesale power at a lower rate and from a friendly source. We think that it is available at Niagara and that our State has a legitimate right to some of that power. We are in position to take the power at the New York-Pennsylvania border and transmit it into our system and to other co-ops that join us to the south and east. By 1975 our co-ops in Pennsylvania will need more power than the New York Power Authority proposes to allocate to both Pennsylvania and Ohio. Our total demand will exceed 250,000 kilowatts by 1980 at present rate of growth. An assured supply of power at a lower rate would surely accelerate this rate of growth. Your favorable consideration of the Clark bill is respectfully requested. Hon. DENNIS CHAVEZ, United States Senate, WM. C. WENNER, Manager. SPEER CARBON CO., Saint Marys, Pa., April 10, 1957. Senate Office Building, Washington, D. C. SIR: We are writing you with reference to proposed legislation for the development of the Niagara River power. Speer Carbon Co. is a member of the Basic Industries Power Committee, a group of Niagara Falls industries interested in current mutual power problems. Our Niagara Falls plant which operates as the International Graphite & Electrode Division of the Speer Carbon Co., presently employs approximately 500 people. It has been in continuous operation since 1930, and an expansion program of approximately $5 million is nearing completion. The manufacturing process is predominantly the electric heating of carbonaceous material to very high temperatures. The cost of power thereby becomes a major portion of the manufacturing cost. It was because of the then available low-cost hydropower that we originally located at Niagara Falls. Power in our industry is used at consistently high-load factors, and thereby becomes a particularly desirable load for hydroelectric power generation. International Graphite & Electrode Division produces graphite electrodes which are used by the major steel companies for the melting of electric furnace steels of the stainless and high alloy types. The ferroalloy industry also uses graphite electrodes in the manufacture of ferroalloys, ferrochromes, ferrovanadium, and ferrotitanium. Graphite anodes of a special type are also manufactured by us and are used in the electrolytic production of caustic, chlorine, sodium and magniseum. Most of the Niagara Falls electrochemical plants use International anodes. Various other carbon and graphite specialties are produced, such as molds for production of uranium and precious metals, graphite liners for rockets, missiles, etc. During World War II, our products were most important to the war and defense effort. As a result very high priorities were afforded to us in the procurement of necessary scarce materials and supplies. Because of our important position, the War Production Board assigned an unusually high amount of low cost (allotted) hydropower in order to increase production of the much-needed graphite. Since the collapse of the Schoellkopf hydrostation at Niagara Falls in June 1956, our take of low-cost hydropower has been drastically reduced-by some 90 percent. This loss has been replaced with high-cost power, resulting in a 60 percent increase in our power costs. There is an immediate need for low-cost hydropower at about 4 mills per kilowatt-hour in order to retain and expand basic industries at Niagara Falls. Certainly if this is not forthcoming in the reasonable future, any further expansion on our part must of necessity be in an area where such low-cost power is available. The proposed redevelopment would provide power at 60 cycles requiring that we convert or replace all our 25-cycle electrical equipment to 60-cycle design. The cost to our company for such change-over is estimated at $1 million. We are very much concerned and disturbed about the uncertainty of the power situation at Niagara Falls and urge that no time be lost in the determination of a favorable plan for the Niagara River power development. The bill to license the New York State Power Authority to develop the power should be given prompt consideration in order that no further time will be lost. Any legislation formulated should consider the problems of our basic type of industry and provide for the needs of similar established industries at Niagara Falls. Very truly yours, Hon. DENNIS CHAVEZ, ANDREW KAUL III, President. KIMBERLY-CLARK CORP., Neenah, Wis., April 10, 1957. Chairman, Senate Committee on Public Works, Senate Office Building, Wasihngton, D. C. DEAR SENATOR CHAVEZ: I am writing you concerning the pending legislation for the redevelopment of the Niagara River: Senate bill S. 1037, House of Representatives bill H. R. 4294, Senate bill S. 512, House of Representatives bill H. R. 2137, House of Representatives bill H. R. 3952. Prompt consideration of this legislation is important to Kimberly-Clark in order that they may continue to consider plans for expansion of their manufacturing facilities at Niagara Falls. Kimberly-Clark Corp. has operated two paper-producing mills at Niagara Falls, N. Y., since 1921. Major products manufactured there are publication-grade printing papers and the corporation's well-known line of creped wadding products marketed under the trade names of Kleenex, Kotex, Kimpak, etc., for the Eastern market. One thousand six hundred and seventy-five people are directly employed in our operations there. Due to the progressively decentralized manner of our operations, an increasing number of commercial suppliers look to Kimberly-Clark for business in this area. Because of the continuous nature of our process, our present total load of 15,000 kilowatts presents a load factor of at least 85 percent to the local power system. Our load has steadily grown to this figure since the start of operations, and we expect it to continue to increase regularly in the future. During World War II the products Kleenex, Kotex, and Kimpak were considered so essential that no abnormal power curtailment was imposed upon Kimberly-Clark when power was in short supply. Kimberly-Clark located in this area initially because of the favorable power rates. Those rates have enabled Kimberly-Clark to remain competitive in spite of the lack of basic raw materials in the Niagara Falls area. Prior to the Schoellkopf disaster, our average 25-cycle power cost was $0.0039 per kilowatt-hour. Since that time, when our supplier, Niagara Mohawk, was forced to purchase Canadian power, the unit cost has risen to $0.0056 per kilowatt-hour-a rate increase of 44 per cent. Recognizing for some time that the life of the 25-cycle generating equipment on the Niagara Mohawk system is old and has a limited life, Kimberly-Clark has inaugurated a policy of conversion from 25 cycle to 60 cycle on a planned basis as new or redesigned equipment is installed. Redevelopment of Niagara at 60 cycle, requiring Kimberly-Clark to convert its entire load at one time, would cause an immediate hardship because of the financial burden. This extra expense of conversion on a planned basis alone warrants consideration of lower rates to industry. 91898-57- --23 May I strongly urge you to support any Federal legislation that will recognize this situation and would equitably provide the power requirements of the area. The immediate initiation and passage of a bill to license the New York Power Authority to proceed on a logical and sound basis to remedy the present situation would receive our unqualified support. Kimberly-Clark Corp would be most cooperative in assisting you with your support, either directly or through the Basic Industries Power Committee which represents Kimberly-Clark in this matter. Yours truly, W. R. KELLETT, Executive Vice President. HODGSON, RUSS, ANDREWS, WOODS & GOODYEAR, Re S. 1037 and S. 512. Hon. ROBERT KERR, Senate Office Building, Washington, D. C. DEAR SENATOR KERR: Enclosed are copies of telegrams which were sent today to Senators Clark, Ives, and Javits. The Industrial Power Consumers Conference consists of the 36 Buffalo area companies, a list of which is enclosed. As one of the counsel for this group of companies, I sincerely hope that this matter can be worked out along the lines of your very fine statement at the hearing last Thursday morning which I was privileged to attend. Very truly yours, HOMER H. WOODS. INDUSTRIAL POWER CONSUMERS CONFERENCE Air Reduction Sales Co., division of Air Reduction Co., Inc. The American Radiator & Standard Sanitary Corp. Barcalo Manufacturing Co. F. N. Burt Co., Inc. Becco Chemical division of Food Machinery & Chemical Corp. City Products Corp., City Ice & Fuel division Colorado Fuel & Iron Corp., Wickwire Spencer Steel division The Columbus McKinnon Chain Corp. Continental Grain Co. The Crosby Co. Donner Hanna Coke Corp. General Mills, Inc. Hewitt-Robins, Inc. Houdaille Industries, Inc. International Milling Co. Lackawanna Steel Construction Corp. Larkin Warehouse Lehigh Portland Cement Co. McKaig-Hatch, Inc. Merchants Refrigerating Co. National Aniline division, Allied Chemical & Dye Corp. Niagara Lithograph Co. Pillsbury Mills, Inc. Republic Steel Corp. Russell Miller Milling Co. Spaulding Fibre Co., Inc. Standard Buffalo Foundry Co., Inc. Standard Milling Co. Strong Steel Foundry Co. Tonawanda Electric Steel Casting Corp. The William Simon Brewery J. H. Williams & Co. APRIL 15, 1957. Senator JOSEPH F. CLARK, Senate Office Building, Washington, D. C.: If S. 512 subject your conference today with Senators Ives and Javits as reported in press, respectfully urge an amendment to avoid any doubt that Niagara power can be made available to industries in Buffalo and Niagara Falls which have been built up and now operate primarily on 25-cycle power. Schoellkopf plant was principal unit and heart of 25-cycle system which must be replaced by Niagara power if these industries are to continue to operate as in the past. Suggest for your consideration that the following be added to bill "the licensee shall make a reasonable portion of the project power available for industries, particularly those relying upon the 25-cycle system of which power developed from the Niagara River was the principal part." Sincerely hope that you and Senators Ives and Javits will reach agreement. INDUSTRIAL POWER CONSUMERS CONFERENCE. APRIL 15, 1957. Senator IRVING M. IVES, Senate Office Building, Washington, D. C.: Local press reports conference today between you, Senator Javits and Senator Clark on Niagara bills. We note that S. 1037 while giving preference to certain customers leaves the balance of project power available for distribution under State act which expressly authorizes sale to industries but that S. 512 not only gives preference to certain customers but then disposes of balance of power under paragraph 4, page 4, without any mention of sale to industry. Wiring Senator Clark today that S. 512 be amended to avoid any doubt that Niagara power can be made available to industries in Buffalo and Niagara Falls which have been built up and now operate primarily on 25-cycle power. Schoellkopf plant was principal unit and heart of 25-cycle system which must be replaced by Niagara power if these industries are to continue to operate as in the past. Suggested to Senator Clark that following be added to S. 512 "the licensee shall make a reasonable portion of the project power available for industries, particularly those relying upon the 25-cycle system of which power developed from the Niagara River was the principal part." Sincerely hope conference successful. INDUSTRIAL POWER CONSUMERS CONFERENCE. Senator ROBERT KERR, PENNSYLVANIA-OHIO-NEW YORK COMMITTEE ON Senate Office Building, Washington, D. C. DEAR SENATOR KERR: Thank you for your courtesy and interest in our Niagara problem on the occasion of the committe hearings last week. I have given much thought to your expressed hopes that the interested parties in this controversy will prove themselves "men of good will" and make a sincere effort to compromise their different positions into a workable and acceptable bill that can be quickly passed. One rather obvious possibility occurs to me suggested by the proposed allocation of 445,000 kilowatts to Niagara Mohawk to replace their "lost" plant and water. This is, that since that amount represents roughly 25 percent of the total and since that reservation will presumably be written into any bill that you simply go on with three additional "quarters" of the available power on a basis somewhat as follows: 25 percent to Niagara Mohawk (Schoellkopf industrial replacement); 25 percent to New York preference customers; 25 percent to New York power companies (for rural and domestic customers); 25 percent to Pennsylvania and Ohio preference customers; That would result in these ratios: 75 percent to New York and 25 percent to "other States;" 75 percent to rural and domestic users and 25 percent to industry; 50 percent to preference customers and 50 percent to nonpreference customers; All of which can be defended as reasonable and fair. While I am aware that such arbitrary divisions are by no means usual, the current situation is certainly not in the usual pattern, either. If we propose to include a 25-percent prior preference for Niagara Mohawk there would seem to be some logic in going the rest of the way and arbitrarily dividing the rest of the pie. Such a division might also help to placate Mr. Moses' banker friends on the matter of marketing the bonds, particularly if some of the preference portions could be immediately allocated to other industries or other power companies in case there are not enough preference customers available at first for the entire amount of their share. These additional amounts could be given to industry on a withdrawal basis so that ultimately the preference groups could get their entire 50 percent. I would very much appreciate your keeping the contents of this letter confidential as I suspect this approach would be unsatisfactory to my good friends in NRECA and APPA whom, I gather, are not inclined to compromise at all on this preference matter. It is my thought, however, that this situation is quite different from that from which we usually encounter on federally financed projects and I feel, also, that the exigencies of this situation require an entirely different approach by everyone involved. I you feel that an approach of this sort is desirable and would provide an acceptable bill and, if you think it advisable, I would be agreeable to approaching my people in New York and Pennsylvania and attempting to get their agreement. However, I should like to be able to approach Mr. Radin and Mr. Ellis directly with such a proposal rather than to have you tell them at this time of my feelings. With kindest personal regards. POWERS LUSE, Executive Secretary, PONY Committee. Hon. DENNIS CHAVEZ, NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION, United States Senate, Washington, D. C. Washington 9, D. C., April 29, 1957. DEAR SENATOR CHAVEZ: We have given careful study to the testimony of various witnesses on S. 512 and S. 1037, to develop power at Niagara Falls. The purpose of this letter is to reiterate to you our very strong belief that S. 512 (Senator Clark) should be passed as quickly as possible. Our study of the testimony of opposing witnesses leaves us unimpressed. We have no objection to a provision which would enable the New York Power Authority to allocate to Niagara Mohawk Power Co. 445,000 kilowatts of capacity for industrial customers to take the place of capacity lost when the Schoelkopf powerplant slid into the river, provided that this capacity be exempt from the preference clause only for the duration of that company's FPC license No. 16. We have submitted suggested language to achieve this to the chairman of the committee and to Senator Clark. Sincerely, CLYDE T. ELLIS, General Manager. POWER AUTHORITY OF THE STATE OF NEW YORK, Memorandum to the trustees. All of the trustees and the staff attended the April 10 hearing on Niagara legislation held by the Subcommittee on Flood Control, Rivers and Harbors, of the Senate Public Works Committee. Mr. Thorne Hills and the staff were present |