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tion and EHV transmission by interconnected interstate companies who are continually merging into fewer and larger entities complicates the task of regulation and increases the need of the FPC for expert personnel. It is vital that the FPC staff be steadily supplemented in order to deal adequately with the job which it was assigned by Congress. As former FPC Chairman Joseph C. Swidler testified last year:
"The benefits of effective wholesale rate regulations go beyond the savings in the cost of electricity, important as those are. What is at stake is the efficient use of our natural resources. We need sufficient staff to insure the availability of lower cost power to the many small utilities, public and private, whose operations are not large enough to enable them to generate their own power from the most economical sources. In the absence of effective regulation, they will be required in many cases to continue to build small, relatively high-cost generating stations which fail to make the most efficient use of our natural resources. "A failure to provide adequate staff for the Commission could thus have a serious impact on the efficient operation of the electric power industry and on the consuming public, not only now but even more so in the future as power demands continue to grow at a pace faster than in the case of other energy sources.
"The United States has entered an era in which the cost of electric power can be reduced substantially through the use of interconnected power pools covering many States. Our efforts to implement the suggestions in the National Power Survey Report will, we trust, help make this possibility a reality. The payoff activity is effective rate regulation." (Emphasis supplied.)
We understand that the Commission's budget request for fiscal year 1967 will allow a staff level for all electric work about equal to that possessed by the FPC in 1949 when the industry was one-third its present size. APPA supports the full FPC budget request of $14,288,000, and in particular the $3,424,000 allocated to electric power work, which is an increase of $379,000 over the fiscal year 1966 estimate.
Mr. RADIN. My name is Alex Radin, general manager of the American Public Power Association, which is a national trade association of local publicly owned electric utilities. We represent about 1,400 of these systems.
The local public power systems consist primarily of municipally owned electric utilities of which there are about 2.000 in the United States and serve about 30 million people. Now altogether there are more local public power systems than there are any other type of utility in this country and they serve about 30 million people. About 1,000 of these municipal electric systems purchase wholesale power from private power companies that are subject to the jurisdiction of the Federal Power Commission, and about one-fourth is our principal interest in FTC appropriations.
POWER FAILURE SURVEYS
We are, of course, interested also in the work of the Commission in connection with the national power surveys and the studies they have made on the Northeast blackout and other blackouts, but the wholesale rate regulation activities of the Commission is our principal interest because the utilities which are generally speaking rather small systems, and they need the protect on which is afforded by the Federal Power Commission.
As you know, Mr. Chairman, the work of the Commission was rather dormant in this respect until about 5 years ago, and at that time the Commission only had about four people on its staff doing electric regulatory work, and had not decided an electric rate case in 10 years, but about 5 years ago the Commission awoke to its responsibilities in wholesale rate regulations and has been doing a very effective job since that time.
The number of rate schedule filings during 1965 was about double the number received in the 1964 fiscal year, and among the completed filings in fiscal year 1965 were annual rate reductions of more than $8 million compared with about $1.5 million during the previous fiscal year.
We feel that the FPC wholesale rate regulation work is important, not only for the cases that are actually decided by the Commission but also because of the influence that the Commission has, as what has been described as the silent presence at the bargaining table.
The activity of the Commission in wholesale rate regulation has given the smaller utilities a better bargaining position as shown by the fact that 14 companies filed voluntary rate reductions recently, after informal staff investigations. We don't think these reductions would have come about if the Federal Power Commission had not shown some interest in these wholesale rates.
At the present time, there are about 27 electric rate cases pending before the Commission, and about 40 other informal investigations. These include complaints charging rate discrimination, refusal by a company to interconnect and exchange power with a municipality and the failure of privately owned utilities to permit a municipal system to enter into an area powerpool on equitable terms.
We feel also that the growing trend in the industry toward interconnections and extra-high-voltage transmission makes the Commission's role more important than ever before and what really is at stake is the most efficient use of our natural resources.
We understand that the Commission's budget request for fiscal year 1967 will allow a staff level for all electric work about equal to that possessed by the Commission in 1949 when the industry was one-third its present size. We support the full Federal Power Commission budget request of $14,288,000, but particularly about $3.5 million, or $3,424,000 to be exact, allocated to electric power work, which represents an increase of $379,000 over the fiscal year 1966 estimate.
Altogether the Commission, I believe, is asking for about 34 additional personnel in electric work, of which 24 would be in supervising the electric industry and 10 would be in connection with licensing functions that the Federal Power Commission for non-Federal electric projects.
Mr. Chairman, that concludes my statement.
Senator MAGNUSON. We had the FPC before this subcommittee at some length and this was pointed out. Now the House allowed about $120,000 over last years' appropriation but about $638,000 less than the budget estimate. In particular, the $638,000 cut if allowed to stand would result in a cutback on of the power allocation.
Mr. RADIN. That is our understanding.
Senator MAGNUSON. So in any event regardless of what we do, you make a strong plea for the $379,000 which would take care of the power allocation part.
Mr. RADIN. That is correct. That is our principal interest.
Mr. RADIN. Thank you very much, Mr. Chairman.
NATIONAL SCIENCE FOUNDATION
STATEMENT OF HON. HIRAM L. FONG, U.S. SENATOR FROM THE STATE OF HAWAII
Senator MAGNUSON. Today we expect to hear from several outside witnesses on the independent offices appropriation bill, on a variation of subjects. The distinguished Senator from Hawaii, Mr. Fong, is here and I believe Senator Moss from Utah is also here. I understand that both of you want to address yourselves to the National Science Foundation appropriation and, in particular, to the Mohole project.
We will be pleased to hear from you, Senator Fong.
Senator FONG. Mr. Chairman and members of the subcommittee, I appreciate this opportunity to speak in support of Project Mohole. I feel very strongly that this important scientific project should be continued and I wish to voice my keen disappointment and deep concern over the action of the House of Representatives to terminate it.
REQUEST FOR RESTORATION OF MOHOLE FUNDS
My testimony today is to request the restoration of the $19.7 million item for Project Mohole which was deleted by the House from the President's proposed budget for the National Science Foundation. I make this request as one who has long and consistently supported the project.
The project is necessary, feasible, and important to the national interest. In the words of Dr. George P. Woollard, director of the University of Hawaii Institute of Geophysics, Project Mohole is "the most significant single scientific experiment of the century in earth science." It would not only provide an insight into many earth processes that are not understood, but would also have a significant bearing on the planetary space exploration program.
The project is a pioneering effort in the earth sciences field just as our space projects have been in the space sciences field. In attempting to do something that has never been done before, we are greatly extending the state of the art of exploring the earth.
Project Mohole is the first attempt to obtain actual samples of material from below the earth's crust, not only for geologic study, but also for physical and chemical study. The study of the mantle under the crust will produce scientific data which will lead to a better determination of the age of the earth, the amounts and distribution of the elements of the earth, and answers to other difficult questions. The
project has a very important relationship as a source of knowledge to improve earthquake prediction, methods of nuclear detection, and other programs which are important to the national interest, for practical reasons as well as scientific reasons.
Living on a midocean archipelago which has experienced costly volcanic eruptions and earthquakes, we in Hawaii have a stake in the advancements of scientific knowledge of the energy behind the forces in the earth's interior. Project Mohole will help the scientists to discover answers to these mysteries.
PRIVATE ENTERPRISE BENEFITS
Private enterprise, particularly the petroleum and mining industries, will be greatly assisted by the techniques developed for Project Mohole.
It was the first exploratory tests off lower California under this project to demonstrate the feasibility of drilling from a floating platform in deep water that proved the accessibility of offshore oil and gas fields out to and beyond the edge of the Continental Shelf. This development had much to do with the subsequent expansion of our oil and gas reserves at a time when domestic reserves were inadequate.
Also, from a practical point of view, it, in effect, extended our national boundaries out to the 100-fathom line, which in places lies 100 miles offshore. It was the successful tests of the turbodrill for Project Mohole that is now making it feasible from an economic standpoint to drill deeper exploratory oil and gas wells.
It was also the first floating platform tests that gave the impetus to offshore mining for diamonds off South Africa, tin off Malaya, iron off Japan, and gold off Alaska. The economic value realized to date from the technological advances achieved through pioneer developments under Project Mohole already far outweigh the total cost of the project.
Another aspect of the operation to data which should not be overlooked is that the establishment of new offshore petroleum reserves has made the country less susceptible to political unrest, subversion, and confiscation of our oil investments in foreign areas.
SPACE PROGRAM BENEFITS
The stabilized oceangoing platform now under construction will be a valuable asset for this Nation. It will have a useful life of 20 years and indications are that it may not, in the long run, be a single-purpose platform. The platform could be used as a base for space tracking and control stations located in various oceans of the world, particularly in situations which require a relatively high degree of platform stability and the capacity to move from one area of the globe to another.
In response to my inquiry as to the interest of the space agency and the military in Project Mohole, the National Science Foundation advises me that there is considerable interest expressed by these agencies in the practical applications in the development of the Mohole platform.
In the opinion of the National Aeronautics and Space Administration, the characteristics and operational performance of the drilling
platform are closely related to those which would be required in a stable ocean platform as a base for an instrumentation facility for space operations and support. NASA further believes that the geological findings of Mohole, when correlated with scientific knowledge expected to be acquired through lunar planetary exploration, could make a significant contribution in the study of the origin of our solar system.
DEFENSE APPLICATIONS OF MOHOLE
As for the possible defense applications of the Mohole platform, I am advised that the Navy considers the lift capacity, platform stability, seaworthiness, and positioning capability provided in the platform attractive for defense-related areas such as:
(1) Submarine rescue backup;
(2) Accurate placement of bottom-mounted anti-submarinewarfare equipment;
(3) Recovery of lost equipment from the deep sea;
(4) Provision of scientific information of military importance; (5) Ocean-bottom engineering and construction;
(6) Support of Man-in-the-Sea experiments; and
(7) Support of bottom search operations.
The cost of the project has been cited as the main reason for the House decision to stop all work on the project. This action was both untimely and uneconomical.
While billions are being spent to explore outer space, Project Mohole by comparison represents a modest investment for "inner space"-investment which promises substantial scientific and technological benefits for our country.
Since fiscal year 1962, when the initial funds were appropriated for the current phase of Project Mohole, the Congress has made available an estimated $55 million. The Foundation made an extensive review of the project last summer at the time the bids were received on the drilling platform. A panel of nationally prominent earth scientists was assembled to reassess the scientific merits of the project. In addition, the engineering feasibility of the Mohole project systems was again evaluated. The entire matter was then laid before the Foundation's National Science Board, which consists of leaders of the U.S. scientific community, including university presidents, deans, professors, and scientists from industry.
The consensus of these qualified and responsible persons was that Project Mohole was a high-priority scientific undertaking that should be continued.
FUNDS ALREADY EXPENDED
In good faith, the National Science Foundation proceeded to carry out its plans. Work has now progressed to a point where the project has to move ahead if it is not to suffer very substantial closeout losses. Dr. Leland J. Haworth, MSF Director, states that $35 to $40 million will have to be spent in terminating the many subcontracts which have already been committed. He further states that if the project is terminated now very little scientific benefit will have resulted from this expenditure in proportion to the total closeout costs.
The official revised estimate of the total cost of Project Mohole prior to drilling is $85.6 million. Since closeout costs would amount to be