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Show 6. Principles for Marketing Hydroelectric Power from Federal Projects The Problem Principles to be followed in marketing the hydro- electric power generated at Federal projects. The Situation Federal policies for marketing hydroelectric power from Federal dams are summarized in the Flood Control Act of 1944 which provides that power and energy produced at Federal projects must be marketed in such manner as to encourage the most widespread use of the power at the lowest possible rates consistent with sound business prin- ciples, and to give preference to public bodies and cooperatives in the sale of such power.7 The Secretary of the Interior, who is responsible for marketing power developed at dams constructed by the Department of the Army, has assigned these marketing responsibilities for the section of the Ohio River Basin below the Ohio River and Pennsylvania line to the Southeastern Power Administration. Power marketing activities in this area are limited in the immediate future largely to multiple-purpose reservoirs in the Cumberland River Basin. The Dale Hollow and Center Hill power plants are in operation and the Wolf Creek Project is under con- struction. The output of these three plants will be marketed through the TVA power system, which covers most of the Cumberland River Basin area. To the extent that the existing TVA system can be used to market Federal power in this portion of the Ohio RJver Basin, no problem exists for dis- posing of the Federal power in accordance with recognized principles. In other areas of the Ohio River Basin, plans for development of hydroelectric power at Federal multiple-purpose projects are not so well advanced, although as stated in Problem B-4, very substantial undeveloped resources exist. It is recognized that, when such projects are developed, marketing of the resultant po^wer will be greatly influenced by the existing pattern of coordinated private utility sys- tems. The problem will be to integrate the hydro- electric power production into the existing systems in such a way as to assure that maximum utilization of the capacity and energy of such Federal projects as are built can be achieved, and the benefits of T Act of Dec. 22,1944, § 5, 58 Stat. 887, 890,16 U. S. 0. 825s. low-cost power from such Federal dams may be widely distributed to the ultimate consumer, largely through effective operation of preferences given by law to public bodies and cooperatives. In other regions integration has been accom- plished by construction, where appropriate, of Federal transmission lines interconnecting dams and load centers, by sales and interchange with private and other utilities, or by execution of "wheeling" agreements with existing non-Federal power systems. Existing law also provides for the construction and operation of power plants at government dams by non-Federal interests, public and private, under licenses granted by the Federal Power Commission. Examples in this basin are Ohio Falls on the Ohio River, Lock and Dam No. 7 on the Kentucky River, and London, Marmet, and Winfield on the Kanawha River. For the most effective development of the hydro- electric power resources of the basin, the planning, design, and scheduling of the hydroelectric power projects must take account of the particular power market characteristics and needs of the region. For this reason, the Federal power marketing agency should participate cooperatively from the beginning with other interested Federal agencies in consideration of plans, designs, and schedules for power projects. The Southeastern Power Admin- istration has recently been activated within the Department of the Interior and cooperative rela- tions between the Interior Department, Federal Power Commission, TVA, Corps of Engineers, and private power companies are now being established at the field level as well as in Washington. Conclusions Marketing of power generated at Federal mul- tiple-purpose dams in the Ohio River Basin should be such as to provide for its most effective use in integrated systems, whether publicly or privately owned, and to encourage its most widespread use at the lowest rates consistent with sound business principles with regard to preference to public bodies and cooperatives as provided by existing law. No immediate problems exist, as the output of Federal hydroelectric projects now being built in the Cum- berland River Basin will be marketed through the TVA system. The problem will arise in the future, however, when Federal power projects are built in upstream areas of the Ohio River Basin where 676 |
