OCR Text |
Show timate knowledge of regional peculiarities on the part of the coordinating agency. 2. Problems Associated with the Assumption of Utility Responsibility by the Federal Govern- ment The Problem The effect on basin development of the Govern- ment's assumption of the primary responsibility for supplying power to the Tennessee Valley power marketing area. The Situation The Tennessee Valley Authority Act of 1933, as amended, provides that the Authority: Shall have power to construct such dams, and reservoirs, in the Tennessee River and its tributaries, as in conjunction with Wilson Dam, and Norris, Wheeler, and Pickwick Landing Dams, now under construction, * * * and shall have power to acquire or construct power houses, power structures, transmission lines, navigation projects, and incidental works in the Tennessee River and its tributaries, and to unite the various power installations into one or more systems by transmission lines.18 The act also states: The Board is directed in the operation of any darn or reservoir in its possession and con- trol to regulate the stream flow primarily for the purposes of promoting navigation and controlling floods. So far as may be con- sistent -with such purposes, the Board is au- thorized to provide and operate facilities for the generation of electric energy at any such dam fox the use of the Corporation (Author- ity) and for the use of the United States or any age^ncy thereof, and the Board is further authorized, whenever an opportunity is af- forded, to provide and operate facilities for the generation of electric energy in order to avoid tlie waste of water power, to transmit and market such power as in this act provided, and thereby, so far as may be practicable, to assist in liquidating the cost or aid in the main- tenance of the projects of the Authority.19 M Act of May 18, 1933, § 4, 48 Stat. 5860, as amended, 16 U. S. G. 831c(j). M § 9 (a) as added by Act of August 31, 1935, § 5, 49 Stat. 1075, 10"76, 16 U. S. G. 831h-l. In the marketing of power the act provides that-the Board is authorized to enter into contracts for such sale for a term not exceed- ing twenty years, and in the sale of such cur- rent by the Board it shall give preference to states, counties, municipalities, and coopera- tive organizations of citizens or farmers, not organized or doing business for profit, but pri- marily for the purpose of supplying electricity to its own citizens or members: Provided, that all contracts made with private companies or individuals for the sale of power, which power is to be resold for a profit, shall contain a pro- vision authorizing the Board to cancel said contract upon five years' notice in writing, if the Board needs said power to supply the de- mands of states, counties, or municipalities.20 Congress, when it created the TVA, in effect ordered that development of the basin be on a uni- fied plan for the whole valley rather than on a separate piecemeal project basis. Every project is planned to fit appropriately into an integrated whole. Electric power output from the several dams and steam plants is marketed through one transmission network. Power revenues are pooled into a single account. This makes possible a uni- form or "postage stamp" rate throughout the area. In 1934 the Tennessee Valley Authority began to enter into contracts to supply power at wholesale to municipalities, cooperatives, and other organiza- tions for distribution to the ultimate consumer by these local agencies. During the following 5 years, such sales of electricity by the Authority increased at a comparatively modest pace, due partly to the fact that major reservoir and power projects were then being constructed and partly to the fact that large segments of the potential market area were still being served by private utilities. Another fac- tor was the series of injunctions obtained by or at the instance of the private utilities to block the TVA program. In 1939 TVA purchased the generating and transmission facilities of several private utility com- panies in the region. At the same time the local distribution systems of these utilities were purchased by municipalities and by various cooperatives formed to distribute electricity. The Authority then entered into long-term contracts to provide wholesale power to these municipalities and cooperatives (see figure 5). § 10, 48 Stat 58, 64, as amended, 16 U. S. G. 831i. 766 |