REGIONAL PReference Bill

Whereas the construction of major power transmission lines connecting the ific Northwest and the Pacific Southwest is imminent; and

Whereas ground rules are needed to establish policies for the interchange of wer over these lines; and

Whereas the industrial and domestic users of electric power in the Pacific rthwest require assurance that the lines will not be used to disrupt our economy ch is heavily dependent on hydroelectric power: Now, therefore, be it Resolved, That the board of trustees of Inland Power & Light Co. urges the gress to approve a regional preference bill to guarantee electric consumers in Pacific Northwest first call on electric energy generated at Federal plants in t region.

The above resolution was passed unanimously by the board of trustees of and Power & Light Co. at its regular meeting on February 25, 1963.

SOLUTION SUPPORTING REGIONAL PREFERENCE LEGISLATION FOR ELECTRIC CONSUMERS IN THE PACIFIC NORTHWEST

Whereas the construction of interregional high voltage, electric interties is now hnically and economically feasible and desirable; and

Whereas the economic welfare of the Pacific Northwest is dependent on a tinuing supply of electric power for industrial and domestic use; and

Whereas the construction of interregional tielines would make it possible for ference agencies outside the region to demand power from Federal powerplants the Pacific Northwest to the detriment of power users in the Northwest: Now, refore, be it

Resolved by the board of directors of Nespelem Valley Electric Cooperative, Inc., eting in regular session on this 19th day of February 1963, That this cooperative dorses the adoption of protective legislation essentially in the form of H.R. 994, ich has been introduced in the 1st session of the 88th Congress, to guarantee ctric consumers in the Pacific Northwest first call on electric energy generated Federal hydroelectric plants in that region and to guarantee electric consumers other regions reciprocal priority; and be it further

Resolved, That it is absolutely necessary to the welfare of the region that this islation be enacted before authorization is given for the construction of any gh voltage intertie between the Pacific Northwest and any other region. C. A. ROSE, Secretary-Treasurer.

Attest:

VERNE BLOUGH, President.

SEATTLE CHAMBER OF COMMERCE,
Seattle, Wash., March 1, 1963.

REPORT TO BOARD OF TRUSTEES

om: State development division. ): Action.

Recommendation: That the Seattle Chamber of Commerce reaffirm its support Federal legislation to guarantee electrical power users in the Pacific Northwest st call on energy generated in this region, and urge enactment of the protective islation embodied in two identical bills, H.R. 994 and H.R. 1160, currently fore the U.S. Congress.

ckground information

1. Last year the Seattle Chamber of Commerce endorsed a similar bill which d been prepared by the Bonneville Power Administration. It passed the nate, but failed in the House.

2. Under existing Federal law, the Bonneville Power Administration has thority to market power to any customers, with preference to public agencies d cooperatives, anywhere "within economic transmission distance." Modern chnology has extended such distance to the extent that surplus power now can sold, without restriction, to areas many hundreds of miles from the Pacific >rthwest.

3. Representatives of private, Federal, and non-Federal agencies have concurre in their endorsement of some type of protective legislation are in agreement that protective legislation is essential. The only opposition has come from California Congressmen.

Mr. ROGERS. Do you have anything further, Mr. Westland?
Mr. WESTLAND. I only have one or two things further to say.

I think the record ought to be made reasonably clear, and perhaps it will be later on, but, as I understand, the Federal Government has invested a little over $2 billion in the Columbia River Basin. Te Bonneville Power Administration has already repaid some threequarters of a billion of that investment. At the present time, despite the fact that Bonneville has been running into deficits, there stil remains a surplus of some $20 million in prepayments.

So the record should be clear that the Bonneville Power Administration at this time is ahead in its payments of its obligation and, as I said before, I believe it is the duty of the Bonneville Power Administrator to set such rates that it will repay those repayable costs.

There is not much question, I think, in anyone's mind that certain amounts of water have been going over the dam out into the ocean without being used, whereas customers exist who would like to have that power. They have said so. They will buy all of it that is available. It would mean you can get different figuresanywhere from $6 to $72 million a year, which could put Bonneville back into the black again. It could mean that at the time when we have our runoff and California has its peaking problem this power could be available to California.

And at the same time, by the purchase of some 20,000 kilowatts of power from California utilities, the Pacific Northwest could firm up some 200,000 kilowatts of firm power, which would be of benefit to that area.

So this is a two-way street, and it is for the benefit not only of the people of the Pacific Northwest, but for the benefit of the people of California as well.

Now much has been said about preference customers. Preference customers in California should take preference over those who are not preference customers in the Pacific Northwest. And I believe it is law that, if these nonpreference customers are under contract, no preference customer can take that power away from them, and these contracts have been made, I believe, in terms of 20 years. If the legislation were defeated, I think its effect would be to deny substantial amounts of surplus power to California.

Mr. HOSMER. Will the gentleman yield?

Mr. WESTLAND. And that is one of the reasons, the principal reason, I favor this legislation, and why I introduced the bill before

Mr. HOSMER. I was going to say that this bill does not produce all of these magical benefits to California and to Oregon and to Washington-the transmission line technology does that.

Mr. WESTLAND. The transmission line

Mr. HOSMER. I do not see what you are going to do with it other than to preserve a monopoly of the Pacific Northwest on the low-cost

power.

Mr. WESTLAND. The transmission line is no good without the power. We have got seven different groups who have offered to build these transmission lines from Bonneville down to Los Angeles.

Mr. HOSMER. If the Secretary of the Interior will revoke that regulation on making common carriage a condition of building the interties by private people, the private people can build them, there will be no relaxation from the regional preference, and everything will go along swimmingly. But this is a foundation for the Government getting in deeper and deeper in the power transmission, power generation, on an interconnected regional scale up to and including a national power grid.

Mr. WESTLAND. I am not going to go into what the Secretary of the Interior is going to do. But if the gentleman would like to make a small wager, I will make him a bet that a private utility company will build the line.

Mr. JOHNSON. Is it not your understanding, Mr. Westland, that the private power people in our State have no objection to this piece of legislation?

Mr. WESTLAND. Those I have talked to, I think that is approximately true.

Mr. JOHNSON. This would be demanded on the part of the people from the Northwest regardless of whether private people build the line or others?

Mr. WESTLAND. That is the position of the administration as well. I yield back.

Mr. SAYLOR. How about questions?

Mr. ROGERS. Without objection, Mr. Ullman, author of H.R. 4071, will be permitted to insert a statement if he so desires.

(The statement is as follows:)

STATEMENT OF REPRESENTATIVE AL ULLMAN BEFORE IRRIGATION AND
RECLAMATION SUBCOMMITTEE

Chairman Rogers and members of the subcommittee, as sponsor of H.R. 4071, companion bill to H.R. 994, I wish to state my strong support for the establishment of a meaningful boundary of prime responsibility for the Bonneville Power Administration.

Secretary of the Interior Stewart Udall, Bonneville Power Administrator Charles Luce, and Mr. Gus Norwood, executive secretary of the Northwest Public Power Association have already discussed many of the important reasons for this legislation. There are some points, however, that I would like to underscore.

Any power-marketing unit, whether private or public, large or small, must have reasonable guidelines to allow determination of future demand. It is not enough to know how much power will be needed generally; it is necessary to know how much power will be required of each power-generating utility. If Bonneville is to be expected to meet equally the needs of preference customers in the entire western part of the United States, which could be the case if ground rules legislation is not passed, it should have its administrative authority extended to match its responsibility. I know of no proposal by critics of these bills to create a Western States Power Administration. In fact, the fear of a "vast, nationalized Federal grid" is claimed to be one reason no bill should be passed. Is, then, the Bonneville Administrator to wait until all other western power producers have completed their plans, and then be required to fill all the remaining preference customer needs? Obviously, such a requirement would completely conflict with the original congressional intent, which was to enable the development of the Northwest.

This leads me to the second point I wish to make. Much is said about the implications of the Federal support of a program designed primarily to benefit only one region. When Congress acted in the 1930's to create the great power authorities, it knew that this Nation could never progress economically very far

beyond our least developed region. It also knew that even though the most immediate effects of the great sums to be spent would be seen in the local areas, in the long run every State would benefit. In the case of the Northwest, Congress saw that the region had virtually no important fuel reserves, and that its future depended on the full use of the river. The intent was to allow the region to us its greatest resource-not to require that it be exported to the Northwest's ow detriment to areas better endowed with other power sources. The bills being considered by this subcommittee are completely in harmony with that original congressional intent.

It has been suggested that a marketing area bill would weaken the "preference clause." As someone who has always supported the spirit of the preference clause, I wish to point out that its historic purpose is to protect against the evis of monopolv. Chief among those evils is the inaccessability of power to the public which needs it. Opponents of this bill who proclaim the dangers to the preference customer should realize the danger to the preference customers in the Northwest, who, in the event of an intertie without ground rules legislation, could see not only their future power irrevocably taken, but could see the preseLt supply seriously diluted, as Bonneville attempted to allocate its power equally among all preference customers who applied.

There has been reasonable criticism from respected sources that the bill goes farther than is necessary and places undue burdens on customers outside the region. It may be that meaningful amendments are in order, as this committee in its wisdom will determine. However, the fundamental principle, to define marketing area of prime responsibility, must be retained.

I strongly urge that both the Subcommittee on Irrigation and Reclamation and the full Interior Committee approve a marketing area bill at the earliest possible time.

May I extend my sincere appreciation for the courtesy of Subcommitte Chairman Rogers and the other members of the committee for affording me the privilege of submitting this statement.

Mr. ROGERS. The Chair will now recognize Mr. White in support of H.R. 4485. I believe he has a statement.

Mr. SAYLOR. Mr. Chairman, I thought we had the gentleman from Washington as a witness before the committee. Under normal procedure I thought the members were

Mr. WHITE. Mr. Chairman, am I recognized at the present time? Mr. ROGERS. Yes; you are recognized.

Mr. HOSMER. The regular order, Mr. Chairman. I demand the committee be allowed to proceed in regular order.

Mr. ROGERS. The committee is proceeding in regular order, and the members of the subcommittee have been recognized as they always have been before this. Mr. White is now recognized, and if anyone desires to make any statement they will have to get Mr. White to yield to them.

The gentleman from Idaho.

STATEMENT OF HON. COMPTON I. WHITE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IDAHO

Mr. WHITE. Mr. Chairman, and members of the committee, I introduced H.R. 4485 as a companion bill to the other bills which have been introduced, and I would like to make the request that my statement be entered into the record at this point as though read.

Mr. ROGERS. Is there objection?

Mr. SAYLOR. Reserving the right to object, Mr. Chairman.

Mr. ROGERS. The gentleman from Pennsylvania reserves the right to object.

Mr. SAYLOR. In view of the fact these two members of the committee are appearing before us as witnesses, and in view of the fact that the regular procedures were not followed and the members were

ot given opportunity to question our colleague, Mr. Westland, I am ot going to object to Mr. White's request.

I use this method of calling attention to the fact that the Chair's atement that we are following regular order is not correct.

Mr. ROGERS. If the gentleman from Pennsylvania will yield, it has een the policy of this committee to permit members of the subcomittee to make statements, and the gentleman from Pennsylvania ill certainly be recognized to ask Mr. Westland any questions he ants at the proper time.

Is there objection to the request of the gentleman from Idaho, [r. White?

The Chair hears none, and your statement will be included in the cord the same as if read in full.

(The statement follows:)

Mr. Chairman, I appreciate having this opportunity to present my atement supporting the Pacific Northwest power preference bills. .R. 4485 is the first bill I introduced as Representative from the irst District of Idaho, and, I believe, with good reason. The State

Idaho has a vital interest in the outcome of this legislation because s future growth is dependent upon the development, marketing, and asonable guarantee of continued use of low-cost hydroelectric power. The necessity for enacting the power preference bill has been disissed at length, both in the present Congress and the past Congress. or this reason, I will refer only to those benefits which would result om this legislation in my State.

The State of Idaho is rich in natural resources and is a major conibutor to the production of many raw materials. The wealth of ineral resources and the fertility of Idaho's soil are complemented 7 the generous water supply in the Pacific Northwest. The water set has been so well developed by the Bonneville Power Administraon that a bright future exists for the Gem State in the further finement of its industries.

The key to the development of our industries is the guarantee at a low-cost power system will progressively supply the electrical eds of Idaho's expansion. I believe that the provisions of H.R. 85 are such a key. The industrial growth of all the Pacific Northest has relied on the development of the Bonneville power system id will continue to do so because less than 5 percent of its power is t hydroelectrically produced. Other witnesses have pointed out d will further clarify the necessity and fairness of retaining in the acific Northwest "first call" on the electric energy generated in that gion. I will merely reiterate my conviction that these reasons are und and equitable.

There is need for speedy action on the legislation proposed in the >wer preference bill. The establishment of an intertie between the acific Northwest and Southwest is imminent. This is as it should , for it will provide power to the rapidly expanding Southwest and crease the firm power necessary in the Northwest. The intertie ill open the way for marketing Canadian produced power into the outhwest. Of regional interest, the establishment of the intertie ill once again place the Bonneville Power Administration on an celerated payout basis. However, before the intertie is constructed is vitally necessary that the industries attracted to the Pacific