OCR Text |
Show that it "has no authority to prescribe rates, to initiate rate investigations, or to order the removal of discrimination." At the time when the Bonneville Act was under consideration in 1937, the Federal Power Com- mission recommended "that it either be relieved from any responsibility in connection with the rates charged, or that its control over rates be made adequate, effective, and complete, if, in the opinion of Congress, it should be charged with this responsibility." On the basis of over 10 years' experience it reiterates that recommenda- tion. It very accurately points to the difference between regulation of rates charged by privately owned utilities and approval of rates of Federal projects as follows: In the regulation of rates of privately owned utilities, emphasis is on the prevention of excessive and unfair charges and the accumulation of un- reasonable profits. The approval of rates of Fed- eral projects involves different concepts. Federal hydroelectric projects are not operated for profit, hence the prevention of excessive charges is not normally a major problem with respect to them. Their main rate problems are associated with carry- ing out the congressional purposes of encouraging the widest possible use of electricity generated by the projects, the prevention of monopolization of the energy by limited groups, the giving of prefer- ences to public bodies and cooperatives, and the recovery of the cost of producing and transmitting the energy, including the amortization of the capital investment over a reasonable period of years. The Federal Power Commission indicates that, if the recommendations of the Hoover Task Force for repeal of its required approval of rates in connection with certain Federal projects is not favored, the acts should be amended to vest in the Commission comprehensive rate-making au- thority with respect to all Federal hydroelectric plants. This would include authority to initiate rate investigations, to modify rates, or to suspend them and to allocate costs as between power, flood control, navigation, and other benefits. It would also require consideration of means for enforcing the orders of one Federal body against another. This Commission concurs in the conclusion of the Hoover Commission Task Force. Sound management of Federal power enterprises requires repeal of this divided responsibility provision. Those made responsible for the success or failure of such enterprises, should be responsible for decisions in the fields of allocation and rate- making. The standards they are to follow in making their decisions should be laid down by Congress, as they have been, as legislative policy. Then the managers should be held directly re- sponsible to Congress for the degree to which their decisions follow such policies. Where one agency has responsibility for the successful accomplishment of all of the purposes of a multiple-purpose project, the allocation of costs among the purposes is properly a manage- ment function. Where more than one agency shares the responsibility, the agency responsible for the main revenue-producing purpose might reasonably undertake the initial responsibility for allocation, subject to review by the river basin commission and the Board of Review which this Commission is recommending. Similarly, rates for Federal power are expres- sions, in terms of prices for electricity, of the policy of Congress. If rates are too high, the purposes of widespread use at low rates estab- lished by Congress, will not be accomplished. If rates are too low, the financial results of the enterprise will not be satisfactory from the stand- point of the taxpayers. In any event, the agency should be held responsible. This Commission further concurs with the Hoover Commission Task Force in relation to Federal projects that "the role of the Federal Power Commission with respect to rates for power supplied by Federal power operations should be one of consultation and appraisal, not regulation and control." As pointed out by the task force, the Commission could well be directed to prepare an annual comparative analysis covering the dif- ferent Federal power operations in the several basins, thus providing a sound factual basis for judgment as to the administrative soundness of their operations. There is one other phase of the rate-making responsibility of agencies responsible for market- ing power from Federal projects which requires consideration. Under present legislation the 243 |