Control Act contain provisions which if enacted in their present form would have an unintended but substantially adverse effect on the operations of Power Authority of the State of New York and thus on its bondholders and customers. These bills include S. 4, already passed by the Senate, and several bills introduced in the House, including H.R. 3988 introduced by Chairman Blatnik, and several bills which are identical to S. 4.

Section 2 of S. 4 as passed by the Senate would establish a brand new bureaucracy in the Department of Health, Education, and Welfare known as the Federal Water Pollution Control Administration.

Section 5 of S. 4 would vest in the head of the Water Pollution Control Administration, acting for the Secretary, the attributes of a virtual czar in connection with almost every stream and waterway in the United States. He would not only have jurisdiction over international and interstate waters but also over all streams large and small running into or out of them. His powers would be unprecedented in the history of the Federal system.

Section 5 of the bill would authorize the Secretary, acting through the Administrator, to prescribe standards of water quality even where standards have already been established by appropriate State or interstate agencies. While the bill requires consultation with various Federal, State, interstate, and municipal agencies before standards are set for interstate waters, there is no requirement that consultations be had with the Department of State or international agencies before setting standards for international waers. The standards which the Administrator would be authorized to establish unilaterally after performing whatever consulting is required by the statute would under the bill be enforcible in the courts of the United States.

New York and particularly the power authority, as well as other States bordering the Great Lakes, would be subjected to great economic hardship if the Administrator should unilaterally establish unreasonably high water quality standards for the Chicago Sanitary and Ship Canal and the upper Illinois River system The fact that he would be likely to do so has been demonstrated conclusively in testimony produced by the Public Health Service which is under the supervision of the Secretary of Health, Education, and Welfare—in litigation pending in the Supreme Court of the United States with respect to the diversion of water from Lake Michigan to the Mississippi watershed by Chicago and other Illinois municipalities.

The standards of water quality which should properly be imposed with respect to the Illinois waterway are at issue in the litigation which has been carried on between Illinois on the one hand and other Great Lakes States, including New York on the other hand, over several years before a Special Master appointed by the Supreme Court. If section 5 of S. 4 were adopted in its present form the new Water Pollution Control Administrator would claim power to nullify by fiat all or a good part of the litigation.

NATURE AND OPERATION OF THE POWER AUTHORITY

The power authority is a public benefit corporation licensed by the Federal Power Commission to construct power projects in the International Rapids section of the St. Lawrence River and in the Niagara River, which is also an international stream. It financed the cost of both projects, together with transmission lines connecting them and extending to Vermont, by the sale of $1.1 billion of revenue bonds to prudent private investors without either State or Federal credit. The authority has no taxing power. Its only sources for meeting its obligations are revenues from the sale of power.

It built the St. Lawrence power project in partnership with the Hydro-Electric Power Commission of Ontario. Actually that power project is part of the overall power-navigation project colloquially known as the St. Lawrence Seaway. The two power entities constructed and paid for the major part of the overall project works which constitute the joint power-navigation project. A relatively small part was constructed and paid for by the U.S. St. Lawrence Seaway Development Corporation and by the Canadian St. Lawrence Seaway Authority. Thus power users, through the amortization of bonds and through meeting operation and maintenance expenses, are required to pay for a good part of the cost of the construction and operation of the seaway.

The overall St. Lawrence project was authorized pursuant to the 1909 Boundary Waters Treaty between the United States and Great Britain by the International Joint Commission established by that treaty. The International Com

mission's action was taken upon recommendations of the Governments of the United States and Canada after exchanges of notes between the two countries. Plans of regulation for Lake Ontario were developed by the Commission, at the behest of the two Governments. These plans are based on the existence of the present diversion at Chicago and upon the fact that the U.S. Supreme Court had decreed that the amount of water diverted will not be substantially increased. The project was financed on that same basis.

The Niagara project was authorized by a specific act of Congress (the Niagara Redevelopment Act, Public Law 85-159, 16 U.S.C. sec. 836) and pursuant to the 1950 Treaty between the United States and Canada Concerning Uses of the Waters of the Niagara River (1 U.S.T. 694). The authority as part of the cost of the project was required to pay for the U.S. share of the remedial works at Niagara Falls constructed by the two Governments pursuant to the treaty to preserve and enhance the beauty of the falls. In addition the authority constructed and paid for parkways and other facilities which dramatically improved the beauty of the falls and surrounding area. These facilities cost many millions of dollars. The Hydro-Electric Power Commission of Ontario built a power project and power revenues financed related park facilities on the Canadian shore.

The Niagara Redevelopment Act required the authority to build a project sufficient to use all the water available to the United States by international agreement. It built such a project and financed it on the basis that the amount of water taken out of Lake Michigan at Chicago would not be substantially increased.

The authority's power is required to be sold in New York and neighboring States without profit. Municipalities and rural electric cooperatives are provided with all the power they can reasonably use. Utility companies which purchase part of the power and sell it to their rural and domestic customers are required to pass on savings resulting from their purchase of authority power to those customers. Industries at St. Lawrence and Niagara to which power is sold are industries which were either brought there by the availability of low-cost authority power or already were there and would have left if this power had not been made available to them. These are industries to which the cost of power is a very large element in the total cost of doing business.

The authority's projects have a total capacity of more than 3 million kilowatts and in normal water years produce about 19 billion kilowatt-hours of energy. The plants are interconnected and tie in with other power systems in the Northeast United States and Southeast Canada and are a very important part of the total power production potential of the area.

Water supply of the Great Lakes and the Niagara and St. Lawrence Rivers has been below normal for several years and in the past year was just about as low as it has ever been in the 104 years in which records have been kept. Therefore, power production has suffered badly as have navigation and recreational activities in the Great Lakes and Niagara and St. Lawrence Rivers. Any further diversion at Chicago would worsen the situation intolerably.

EFFECT OF CHICAGO DIVERSION

Every cubic foot of water diverted by the State of Illinois is a cubic foot of water which, if not diverted, would flow through the hydroelectric powerplants of the power authority and of the Hydro-Electric Power Commissions of Ontario and Quebec on the Niagara and St. Lawrence Rivers.

At present, Chicago is diverting approximately 3,300 cubic feet per second. If this water were not diverted to the Mississippi River Basin it would provide more than 100,000-kilowatt capacity and produce over 1 billion kilowatt-hours per year of electric energy at the authority's projects and the hydroelectric plants in Ontario. At power authority rates this power and energy would be worth over $4 million per year. At utility company rates it would be worth $7 million per year.

The Hydro-Electric Power Commission of Quebec operates huge powerplants in the reach of the river downstream from the International Rapids section. This reach of the river is wholly in Quebec. The same water, if not diverted, would also provide additional capacity and produce additional energy at those plants.

Canadian officials have indicated that they will insist that the power authority alone must bear the loss of power and energy at Niagara and in the

International Rapids section of the St. Lawrence River resulting from further diversions from the Great Lakes into the United States. Pursuant to the 1950 treaty, at Niagara, Canada already has a right to the exclusive use of 5,000 cubic feet per second, which have been diverted into the Great Lakes system from a Canadian source north of Lake Superior.

Of the 3,300 cubic feet per second (more than 2.1 billion gallons per day) diverted at Chicago, 1,500 cubic feet per second is diverted directly from Lake Michigan for the purpose of oxidizing and diluting the raw sewage and sewage effluent from Chicago and for flushing that sewage westward through the Chicago Sanitary and Ship Canal and into the Des Plaines River which flows ultimately into the Mississippi. Another 1,800 cubic feet per second is withdrawn from Lake Michigan by Chicago, used for domestic and municipal purposes and then discharged into the canal.

THE CHICAGO DIVERSION LITIGATION

In the 1920's Chicago took as much as 10,000 cubic feet per second from Lake Michigan and dumped it into the Mississippi watershed.

After years of litigation the Supreme Court in 1930 in an action brought by six Great Lakes States, including New York, declared that diversion illegal and issued an injunction against Illinois which on the grounds of practicality was limited to a prohibition against the diversion of more than 1,500 cubic feet per second in addition to domestic pumpage. (Wisconsin v. Illinois, 281 U.S. 179.)

The 1930 decree permitted the complainant States of New York, Wisconsin, Minnesota, Michigan, Ohio, and Pennsylvania as well as the defendant State of Illinois to apply for modification of the decree should circumstances warrant in the future. In the litigation which resulted in the 1930 decree the Supreme Court did not consider damage to New York resulting from the diminution of the hydroelectric potential of the Niagara and St. Lawrence Rivers because at that time powerplants capable of using all the water had not been built. (New York v. Illinois, 274 U.S. 488 (1927)). The Court stated, however, that New York could in the future litigate the question of power damages when such plants were built on the Niagara or St. Lawrence Rivers.

The construction of these plants and other changes in circumstances since the 1980 decree, such as Chicago's gradual increase in the water it diverts; improvement and development in the art of sanitary engineering; and the recent critical demand for water in the Great Lakes Basin were the basis for a Supreme Court order in 1958 reopening the 1930 decree and ordering that new hearings be held with respect to the complainant States' request that the diversion again be reduced. In a consolidated case involving the same parties, Illinois seeks a declaratory judgment against the complainant States which would authorize a new diversion from Lake Michigan to serve a group of suburbs north of Chicago. Pursuant to the Court's 1958 order, hearings were held before the Honorable Albert B. Maris, appointed by the Court as special master. The hearings extended from October 1959 to July 1963 and resulted in a record consisting of 29,231 pages and almost 2,000 exhibits. Judge Maris, at the present time, is preparing detailed findings of fact and conclusions of law, which already amount to hundreds of pages, for presentation to the Supreme Court.

At the hearings, the complainant States presented evidence showing the tre mendous extent to which their hydroelectric power, navigation and recreation interests are adversely affected by the reduction of Great Lakes levels and outflows caused by the Chicago diversion. They also presented extensive evidence, at great cost, based on the testimony of many experts which proved that the present diversion can be substantially reduced if the sewage treatment system of the Chicago Sanitary District is modernized and improved. This testimony was predicated on water quality standards for the Chicago Sanitary and Ship Canal which are deemed by both Illinois and the complainant States to be reasonable for a sanitary canal.

In addition to the testimony presented by the complainant States and Illinois at the hearings, testimony was presented by the U.S. Public Health Service on behalf of the United States, which was allowed to intervene. The Public Health Service testimony was predicated on standards of water quality for the upper Illinois River system and the Chicago Sanitary and Ship Canal which are clearly unreasonably high. The Public Health Service suggested standards of water quality for these streams which included a dissolved oxygen standard of not less

than 3 parts per million as an interim goal, and 5 parts per million as an ultimate goal.

Achievement of these unreasonably high Public Health Service standards could substantially preclude a reduction in the diversion which has already caused serious injury to the complainant States. Maintenance of a dissolved oxygen standard of 5 parts per million would undoubtedly be construed to require a substantial increase in the present diversion, the amount depending on the degree of modernization and improvement made in the sewage treatment system by Illinois. Maintenance of a dissolved oxygen standard of 3 parts per million might be achieved without increasing the present amount of diversion if recommended improvements were made in the system but no reduction of the diversion could be made.

On the other hand, a minimum dissolved oxygen standard of only 1.5 parts per million (which is believed by both Illinois and the complainant States to be sufficient) could be maintained in the sanitary and ship canal with a reduction in the diversion of about 1,000 cubic feet per second if the sewage treatment system of the sanitary district were improved and modernized.

One thousand cubic feet per second of water at the Niagara power project is worth $941,000 per year at power authority rates. One thousand cubic feet per second of water at St. Lawrence is worth $223,000 per year at power authority rates. Replacement of the power and energy lost by diversion of 1,000 cubic feet per second would cost $1,482,000 per year at Niagara and $380,000 per year at St. Lawrence at utility company rates.

The total drop in the St. Lawrence River in the area wholly in Quebec downstream from the international rapids section is about the same as the drop at the St. Lawrence power project. Therefore 1,000 cubic feet per second in Quebec has about the same value as at the authority's St. Lawrence project. In effect, the unreasonably high water quality standards which the Public Health Service recommends would impose unnecessary and needless hardship on the State of Illinois, on the complainant States, and especially on the power authority of the State of New York. To achieve such standards, Illinois would be compelled to provide sewage treatment works and facilities to maintain the sanitary and ship canal at a quality more akin to that of a trout stream than of a sanitary canal. At the same time, the power authority would be deprived of the vast quantities of Great Lakes flow required to maintain the unnecessarily high water quality standards in the sanitary and ship canal. The standards sought to be achieved by the Public Health Service are simply not fitted to the nature of the sanitary canal which is used primarily for the dilution and transportation of sewage. No useful purpose would be served by changing a sewage canal into a fishing stream.

Obviously, the Public Health Service's views as to the water quality of the Chicago Sanitary Canal would become those of the proposed Federal Water Pollution Control Administration should section 5 of S.4 become law. It is beyond question that unreasonably high water quality standards for the Chicago Sanitary Canal would be attempted to be imposed by the Administrator.

While the Administrator would be required to follow the Administrative Procedure Act, his determination of standards would amount to a determination of an issue of fact and those aggrieved would have little or no effective appeal available to them. Such an appeal would not be likely to have more effect than appeals from other Federal administrative agencies on issues of fact.

The effect of section 5 of S. 4 would be to throw to the winds the extensive and costly efforts of all concerned in the protracted Chicago diversion litigation by vesting unilateral authority to establish water quality standards for the Chicago Sanitary Canal in one Federal Administrator.

The placement of this virtually unlimited power over the Nation's streams in the possession of a single Federal Administrator is against the public interest.

CONCLUSION

We submit that the enactment of section 5 of S.4 in its present form would cause irreparable injury to the State of New York and its power authority, that it would give too much power to one man and would be very much against the interests of the people.

This is not to say that the Federal Government should not step in to control pollution where States have failed to act. But we believe that a Federal official should not be authorized to set standards of water quality unless it is necessary for him to do so in the absence of State standards.

It may well be that the Congress should empower the Secretary to review standards set by individual States or combinations of States, and if he deems them to be too low ask the affected States to raise them. In the eevnt of their failure to comply, a procedure could be established to refer the matter to an appropriate committee of the Congress,

We think it particularly unwise to permit an official in the Department of Health, Education, and Welfare to determine unilaterally standards applicable to international waters without the approval of the State Department. The United States agreed with Canada in the 1909 Boundary Waters Treaty (art. IV) that boundary waters and waters flowing across boundaries should not be polluted on either side to the injury of health or property on the other. The treaty established the International Joint Commission to decide questions arising under the treaty, which of course include questions having to do with water pollution. Similarly, the 1944 Water Utilization Treaty with Mexico provides for consideration of sanitary measures by the International Boundary Commission established by the 1889 treaty with Mexico. Many matters involving pollution of international waters should be referred to one or the other of these international bodies. Certainly they should be consulted if diversion of waters is involved. No U.S. official should take unilateral action affecting boundary waters without prior consultation with our Department of State, which would then have an opportunity to determine whether any international agency or foreign government should be consulted.

We respectfully request that the committee take a hard look at the proposed legislation and come up with a bill which will accomplish the purpose of combating water pollution in an efficient manner and at the same time protect the legitimate interests of all concerned.

Mr. BLATNIK. Mr. Stan Spisiak, chairman of the Water Resource Commission of the New York State Conservation Council.

COMMISSION, NEW YORK STATE CONSERVATION COUNSEL STATEMENT OF STAN SPISIAK, CHAIRMAN, WATER RESOURCES Mr. SPISIAK. Thank you, Mr. Chairman.

I am Stanley P. Spisiak, of Buffalo, N.Y., the authorized representative of the New York State Conservation Council. This council represents approximately one-half million organized sportsmen and conservationists in the State of New York. For the past 14 years, I have served as chairman of the water resources committee of this council.

I welcome the opportunity to testify again before this committee. I testified on April 12, 1954, to this committee, on the then existing state of water pollution in New York State. In the intervening 11 years, the pollution of the waters in the New York State area has increased drastically.

I would like to state at this time, aside from what I have in my statement, that it would be difficult to disagree with what the good Governor of my State had to say this morning. He has proposed to us a seven-point program that is somewhat like the Ten Commandments except, for some reason or other, he only had seven.

I do not disagree with any of the things that he proposes or any of the recommendations that he has made. I think he is to be complimented for having finally awakened to the fact that we have an emergency situation in New York State which will require 6 additional years for solving. It is regrettable that for the past 6 years, he has buried his head and has not seen what has been taking place. Today there is no bathing beach from Buffalo to the Pennsylvania line that is free from pollution during the entire swimming season. Ten years ago, beaches in this area were clean except for occasional instances of pollution.

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