Commission and activities of other Federal and State agencies interested in the trade involved. 3. INTERGOVERNMENTAL REVIEW OF INBOUND-OUTBOUND RATE DISPARITIES The Joint Economic Committee of the Senate pointed out the deleterious effects on this nation's balance of payments of rates in our outbound trades that are unjustifiably higher than rates on similar commodities in our inbound trades. As a result, the Commission studied a number of trades to determine whether such disparities appear to exist. In Docket No. 65-45, the Commission initiated a formal proceeding covering inbound-outbound rate disparities in the trade between the United States and the United Kingdom. The proceeding necessarily has been protracted and expensive. It probably will establish legal principles in this field. The Commission, as an alternative to formal proceedings in this area, has undertaken a pilot program with Japan to try to agree upon whether any unreasonable disparities are present in the United States/Japan trade and to seek cures if they are found to exist. We feel that if both countries approach this study on an objective and constructive basis a method to cure unjustified rate disparities will have been found which avoids the time, expense, and possible national bitterness engendered by formal proceedings. 4. AUTOMATIC DATA PROCESSING PROGRAM The Commission is forging ahead with a program to give uniform code numbers to all commodities specified in freight rate tariffs in foreign trades and to reduce tariffs to an automatic data processing system. Because of the speed and facility of automatic data processing and the uniformity with which freight rates will be identifiable, the Commission will be able to study freight rate data in a way not possible before. Carriers will be able to make similar use of our system. Finally, shippers will have a uniform coding for transportation of their products destined to all parts of the world and, therefore, have a better basis for price quotation, billing, etc. 5. SIMPLIFICATION OF BILLS OF LADING AND OTHER TRANSPORTATION DOCUMENTS In the coming year we intend to embark on a new program for simplifying bills of lading and other transportation documents. Preparatory work is now being done for a treaty convention on bills of lading to be held in Brussels next May. Our work at the treaty convention will be supplemented by preparation of simplified bills of lading to cover intermodal transportation. We are hopeful that the fruits of our studies of intermodal container transportation (No. 1 above) Automatic Data Processing (No. 4 above), and simplified bills of lading will result in an era of fast, low cost, efficient transportation of products between points in the United States and points abroad that will revolutionize the foreign commerce of the United States. 6. RATE OF RETURN OF CARRIERS OF DOMESTIC OFFSHORE COMMERCE We have undertaken a series of studies concerning rate of return in the domestic offshore trades. The study will consider such problems as (a) whether the Commission should utilize a new formula with respect to the carriers' rate base, e.g., inclusion of long term property leases, (b) whether we should modify the presently used prudent investment theory to stimulate greater use of debt capital (as opposed to equity capital) by the carrier, (c) whether we should fix the rate of return on the basis of the carriers' expenses over a number of years rather than a single year, (d) whether we should allow a greater rate of return where a capital investment is made in an under-tonnaged or under-serviced area, and (e) a comparison of rate of return theories of this Commission with other State and regulatory agencies. We think that it will be more fruitful to study rate of return principles in this way and test them later in adversary proceedings than it is to attempt to design changes in ratemaking principles during adversary proceedings. 7. REVIEW OF COMMISSION RULES We now have a policy of reviewing Commission rules six months after they become effective. Commission personnel seek comments from people in the regulated industry and the public to determine whether rules recently adopted by the Commission are having their desired effect, whether they are having any undue adverse impact, and whether improvements can be designed. This review has led to speedy revision by the Commission of recently established rules. In this way unintended deleterious effects of recently adopted rules can be corrected before they become institutionalized. Other "planning ahead" activities involve the Commission's legislative program, our pilot container inspection program to prevent misdescription of freight in containers whereby shippers obtain unlawful undercharges (the program is fully operative in domestic trades so that it can be quickly implemented in foreign trades when needed), our preliminary efforts to curb malpractices on an intergovernmental basis, a passenger safety program, a proposed study of the cost of transporting individual commodities, a program to exempt from the requirements of our statutes certain activities that are not anticompetitive and have no material effect on our overall regulation, and a non-adjudicatory fact finding proceeding to obtain information of various terminal practices at United States Atlantic and Gulf ports so that the Commission can determine whether regulatory action should be initiated. You may also be interested in my leettr to Senator Douglas dated September 28, 1966 (copy enclosed), setting forth the Commission's actions and plans to carry out the recommendations of a report dated October 4, 1966, of the Subcommittee on Federal Procurement and Regulation of the Joint Economic Committee, entitled "Discriminatory Ocean Freight Rates and the Balance of Payments". If you are particularly interested in any of these additional "planning ahead" activities, I would be glad to discuss them further. I am delighted that you as Chairman of the Subcommittee on Regulatory and Enforcement Agencies are encouraging regulatory agencies to plan ahead. I think that the Federal Maritime Commission can set an example in this field. I would be delighted to discuss our program with you at any time and make available for consultation agency personnel who have been instrumental in "planning ahead" activities. Sincerely yours, JOHN HARLLEE, Rear Admiral, U.S. Navy (Retired), Chairman. SECURITIES AND EXCHANGE COMMISSION, Hon. JOHN D. DINGELL, DEAR MR. DINGELL: The problems of "planning ahead" to which you refer in your letter of March 10 are ones that have also troubled us greatly during the past few years. I deeply appreciate both your concern with these problems and your understanding of the difficulties that we face in getting out from under the press of current business and taking a long look at the direction in which the securities markets and the economy are moving. As you are of course aware, the Report of the Special Study of the Securities Markets, which we submitted to the Congress in 1963, recommended that the Commission give more attention to continuous examination of changing market circumstances and regulatory needs. In response to that recommendation, the Commission has established an Office of Policy Research to initiate and coordinate our activities in this area. That office, in conjunction with our other divisions, is currently engaged in, or is about to undertake, a number of important projects of this type, and I have asked the staff to prepare a response to your specific inquiries. I will forward this report to you as soon as it is ready. Sincerely, MANUEL F. COHEN, Chairman. Hon. JOHN D. DINGELL, CIVIL AERONAUTICS BOARD, Washington, D.C., March 24, 1967. Chairman, Subcommittee on Regulatory and Enforcement Agencies, House of Representatives, Washington, D.C. DEAR JOHN: This is to acknowledge the receipt of your letter of March 9, 1967, concerning the planning efforts of the Civil Aeronautics Board. We welcome the opportunity to discuss our program with you. We are assembling the required material now. The answer to your request should be on its way to you in a very short time. Sincerely, CHARLES S. MURPHY, Chairman. Mr. DINGELL. The next question I wish to ask is with regard to the expiration of your licenses of hydroelectric facilities. I first would like to know whether or not you intend to apply to the relicensing the requirements of the Fish and Wildlife Coordination Act. Mr. WHITE. Yes. There is no question about it. We impose those conditions in licenses in initial licensing. I am satisfied that we have the authority to impose those or any other conditions in any relicensing applications. Mr. DINGELL. The authority and responsibility, both insofar as preservation of existing values and, of course, enhancement to provide for additional values according to the requirement of law; is that correct? Mr. WHITE. Absolutely. Mr. DINGELL. As you recall, I am chairman of a subcommittee which held very extensive hearings in connection with an application by a utility in New York dealing with the pump lift station on the Hudson. I am sure you recall one of the points that was explored was the amount of notice which was given to fish and wildlife. I am satisfied that you will recall that a subsequent judicial review of this matter resulted in, first of all, rejection of the license by the courts with instructions to the agency for further proceedings. Now, would the request of the agency concerned, that being the Federal Power Commission, give thought to affording adequate notice and, of course, carrying out other requirements of the Fish and Wildlife Coordination Act? I would very much appreciate it if you would advise us today what steps, within the context of the proceedings, are going forward within your agency, administratively, to give adequate notice and opportunity both to the Federal Fish and Wildlife Service and the State agency concerned to adequately furnish your agency their views? You will remember the court's discussion of the matter hinged on the fact that a very limited amount of time, in real fact, was given these agencies to make their views available, and to present their comment on the matters which happened to be before the agency. Mr. WHITE. As you suggest, Congressman Dingell, it would not be appropriate for us to discuss a case that is actually pending before us and I won't do so, but in terms of the general approach we have a requirement that every license application that comes before us must be submitted to every appropriate Federal and State agency and in this particular case it is the Interior Department of the Federal Government and the various agencies of the individual States and local governments involved where the project is located. Mr. DINGELL. As a matter of fact, though, in this particular case the amount of time afforded to the agencies was very little. As I remember, it may have been as little as 40 to 60 days which is obviously not an adequate amount of time for the kind of study involving fish and wildlife values to be successfully arrived at by the responsible State or Federal agency. What I am asking you is that you give us, and you may wish rather than discuss it at this time, to insert it in the record, is what your agency is doing to assure more adequate notice to State and Federal game and conservation authorities to protect fish and wildlife values in connection with applications of this kind. Mr. WHITE. Since the last time that we discussed this, Congressman Dingell, you may recall we did appear before your subcommittee last year, the Commission has adopted a change in its requirements. The applicant for a hydroelectric license must consult with the appropriate Federal and State agencies prior to submitting its application rather than subsequently. Of course, we, ourselves, take these responsibilities very seriously. We check these matters closely; we have on our own staff a resource expert whom we took on primarily to make sure that we were able to interpret the information that was submitted by licensees and that came back from other Government agencies. I am satisfied that we are not only making a sincere effort but a successful effort to insure that these important problems of fish and wildlife, and recreation, are not subverted by the power factor which is, of course, important. Mr. DINGELL. I believe, Mr. Chairman, you are making an effort in this direction and a very sincere and effective one. I would particularly like to know at the conclusion of your testimony if you would submit to this committee information on how you are changing the notice requirements so that these agencies concerned have a sufficient amount of time to perform the necessary studies in matters of this kind to assure carrying out of the Coordination Act. Mr. WHITE. We will be glad to answer that in a fuller letter to be made a part of the record, if there is no objection. (The information requested follows:) Hon. JOHN D. DINGELL, Washington, D.C. FEDERAL POWER COMMISSION, DEAR CONGRESSMAN DINGELL: On the occasion of the Federal Power Commission's agency hearing, March 21, 1967, before the House Committee on Interstate and Foreign Commerce, you requested our written reply to the following questions: 1. What is the Federal Power Commission doing to assure more adequate notice to state and federal game and conservation authorities to protect fish and wildlife values in connection with license applications? 2. What administrative steps is the Federal Power Commission taking within the context of proceedings now going forward with regard to giving adequate notice and opportunity to federal and state wildlife agencies to furnish the Commission with their views? 3. What changes are being or have been made in Federal Power Commission notice requirements to assure that the agencies concerned have a sufficient amount of time to perform the studies necessary to carry out the provisions of the Fish and Wildlife Coordination Act? Effective August 1, 1966, sections 4.31, 4.41 and 4.50 of the Commission's Regulations under the Federal Power Act1 were amended to require that all license applications for unconstructed projects of more than 2,000 horsepower installed capacity or minor parts thereof, and all applications for new licenses for constructed projects under section 15 of the Federal Power Act, shall include an Exhibit S describing the expected effects, if any, which the construction and operation of the project will have on fish and wildlife resources and the measures proposed to conserve and where practicable to enhance those resources. The regulation requires applicants to prepare Exhibit S on the basis of studies made after consultation and in cooperation with the U.S. Fish and Wildlife Service 1FPC Rulemaking Proceeding Docket No. R-303. See reference at p. 119 in Hearings on Miscellaneous Fisheries Legislation, Part 1, May 1966, 89th Congress, 2d Session, before the Subcommittee on Fisheries and Wildlife Conservation of the House Committee on Merchant Marine and Fisheries. of the Department of the Interior and appropriate state fish and wildlife agencies and to include as part of the Exhibit a statement on the nature and extent of that consultation. Where public lands are involved, the applicant is also required to advise the federal agencies having jurisdictional responsibilities therefor of its proposed plans. Each Exhibit S must comply with these requirements in order to be accepted by the Commission for processing. On August 1, 1966, the Commission issued a notice of proposed rulemaking (Docket No. R-306, 31FR 10582, August 6, 1966) to amend Part 131 of the Commission's Regulations under the Federal Power Act to require submission of Exhibit S with license applications for unconstructed minor projects with an installed capacity of 2,000 horsepower or less. Comments have been received and the matter is now pending before the Commission. I shall be glad to send you a copy of the Commission's order in this proceeding as soon as it is issued. Exhibit S is designed to expedite the processing of licensing applications through early identification and resolution of fish and wildlife problems. It is also designed to facilitate the Commission's compliance with the requirements of the Fish and Wildlife Coordination Act (16 U.S.C. 661-666c) for consultation with the U.S. Fish and Wildlife Service, Department of the Interior and appropriate state fish and wildlife agencies on the conservation and enhancement of fish and wildlife resources affected by a project. As a result of this procedure, with respect to hydroelectric projects over which the Federal Power Commission has jurisdiction, federal and state fish and wildlife agencies are assured that their advice and assistance with respect to the conservation and enhancement of fish and wildlife will be sought during the early planning stages of the proposed project when consideration of such problems is particularly influential. Similarly in the case of applications for new licenses under section 15 of the Federal Power Act these agencies must be consulted by the applicant well in advance of submission to the Commission of the formal license application. When, on the basis of information supplied in Exhibit S, this cooperation and consultation appears to have been inadequate, the Commission may require applicants to make further studies and prepare additional recommendations in consultation with appropriate fish and wildlife agencies. Until an adequate report is presented, the Commission may either refuse to accept Exhibit S for filing, pursuant to §§1.14 and 4.31 of the Commission's Rules and Regulations, or delay further processing of the application. In addition to the opportunity afforded fish and wildlife agencies under Commission rules to study the impact of hydroelectric projects on fish and wildlife resources prior to submission of formal license applications, Commission procedures for processing license applications afford an additional six to eight month period for further consultation and study of fish and wildlife problems by and with the Commission, the applicant, the U.S. Department of the Interior, including the Fish and Wildlife Service, and state fish and wildlife agencies. After initial staff review and determination that the license application meets the basic filing requirements, a complete copy of the license application is sent to the Department of the Interior for review in the light of the Department's responsibilities for the enhancement and preservation of fish and wildlife. At the same time, copies of Exhibit S, with selected project drawings, are referred for review to the appropriate state fish and wildlife agencies. The U.S. Fish and Wildlife Service also receives this material in advance on an informal basis. Ninety days are usually allowed for an intital reply and most responses are generally received within this period. However, the Commission is liberal in granting extensions when more time is needed for study or analysis and staff knows of no instance in which a request for additional time to pursue further studies was turned down. When the formal views of the Department of the Interior and the state fish and wildlife agencies are received, they are forwarded to the applicant for information and comment. Any controversial comments by the applicant are referred back to these federal and state agencies for further review and evaluation. While this external review is underway, Commission staff undertakes its own independent analysis and evaluation of Exhibit S and may, as needed, confer informally with the Department of the Interior and the state fish and wildlife agencies. Where the applicant's proposals for preservation of fish and wildlife resources seem inadequate, the staff may initiate negotiations for possible changes and improvements. Only after completion of this intensive review, study and analysis of the fish and wildlife aspects of the project, are appropriate provisions for the protection and enhancement of fish and wildlife prepared for Commission consideration for inclusion in the license. 77-336-67-48 |