| OCR Text |
Show and others by the Corps of Engineers, under vary- ing laws, presents certain problems arising from the divergent authorities under which the agen- cies proceed. These include the following: Lack of authority to pool costs and revenues from all projects in the basin for the purpose of rate making.-Electric energy from the various projects is merged in the transmission system, and it cannot be segregated as to source when de- livered to the customer. Yet present laws deal with power rates on a single-project basis. They require a segregation of power which presents either physical impracticabilities or fiscal difficul- ties or both. The single-project concept also fosters competition among the dams for the gen- eration of power (in order to produce the maxi- mum revenues allocable to any one dam), although substantially greater amounts of power may be gen- erated by the system if some dams are used for storage rather than generation at certain seasons of the year. Under present practice single-project accounting also fosters development of irrigation projects which happen to be associated with power dams, rather than irrigation developments most desirable from an over-all point of view. Such pooling of accounts is commonly accepted practice in privately owned power systems. Regu- latory authorities, in fixing rates for private power companies, base the general level of rates upon the over-all cost. When new generating plants are added to a private system, the new and higher costs are merged with the cost of existing properties and no increase in rates is permitted until the level of costs in relation to total revenues requires addi- tional revenues to provide a fair rate of return. Lack of uniform statutory policies governing the disposition of power from Federal dams in the basin.-The present diversity in law governing the disposition of power from Federal dams in the Pacific Northwest arises out of authorization of projects by separate and not identical statutes. This diversity creates severe problems in view of the physical impracticability of segregating power for the several dams. For example, the Bonne- ville Act and the Flood Control Act of 1944 give preference in the sale of power to cooperatives,19 but reclamation law gives preference to cooperatives only when financed wholly or in part from Rural 19 Act of August 20, 1937, § 4, 50 Stat. 731, 733, 16 U. S. C. 832c; Act of December 22, 1944, § 5, 58 Stat. 887, 890, 16 U. S. G. 825s. Electrification Administration funds.20 Where the Bonneville Act applies, power contracts must con- tain certain resale rate provisions, but not where other laws apply. The marketing of merged power from a system of dams under these circumstances is most difficult. It is possible to achieve, through administrative interpretation, some measure of uni- formity in marketing policies. Nevertheless, nu- merous legal and practical problems are created by the diversity in statutory policies. Lack of authority to use revenues from power sales for the generation and transmission of power.-Funds for the operation and maintenance of Federal power projects in the Columbia River Basin are provided by congressional appropria- tions. Some provision for emergency maintenance funds needed to cope with disaster conditions is provided by the continuing fund of the Bonneville Project Act.21 No funds are available for modifi- cation of or additions to customer service facilities not anticipated when appropriations are granted. The necessity for preparing requests for appro- priations long in advance of the time funds are available for use makes it impossible to foresee all eventualities. Desirable changes in or additions to customer services facilities which were not antici- pated may be delayed. As long as operation costs are provided through appropriations, no continuity is assured. Revenues collected from power sales exceed the cash requirements for generating and transmitting power. Use of these surplus funds for operation and maintenance would permit a degree of flexi- bility needed to meet day-by-day service problems which cannot be foreseen sufficiently far in ad- vance to be covered by the usual appropriation process and would permit long-range plans for the integration and coordinated operation of a system of power dams. Conclusions (1) The pooling of costs and revenues for basin power developments facilitates integration of the water control and electrical operation of the proj- ects and is more satisfactory than a project-by-proj- ect approach to rate making and accounting. There is need for legislation that will permit the rate problem to be managed on an over-all, pooled 80 Act of August 4, 1939, § 9 (c), 53 Stat. 1187, 1194, 43 U. S. G. 485h (c). M Act of August 20,1937, § 11, 50 Stat. 731, 736, 16 U. S. C. 832j. 65 |
