PUBLIC WORKS FOR WATER AND POWER HEARINGS BEFORE A SUBCOMMITTEE OF THE NINETY-THIRD CONGRESS HUNTER L. SPILLAN, GEORGE A. URIAN, and JCHN G. PLASHAL, Staff Assistants COMMITTEE ON APPROPRIATIONS GEORGE H. MAHON, Texas, Chairman JAMIE L. WHITTEN, Mississippi EDWARD P. BOLAND, Massachusetts ROBERT N. GIAIMO, Connecticut FRANK E. EVANS, Colorado EDWARD R. ROYBAL, California J. EDWARD ROUSH, Indiana GUNN MCKAY, Utah TOM BEVILL, Alabama EDITH GREEN, Oregon ROBERT O. TIERNAN, Rhode Island BILL CHAPPELL, JR., Florida BILL D. BURLISON, Missouri GEORGE E. EVANS F. MICHAEL HUGO ELFORD A. CEDERBERG, Michigan J. KENNETH ROBINSON, Virginia KEITH F. MAINLAND, Clerk and Staff Director STAFF ASSISTANTS NOTE. This Surveys and Investigations supervisory staff is supplemented by selected personnel borrowed on a reimbursable basis for varying lengths of time from various agencies to staff up specific studies and investigations. The current average annual fulltime personnel equivalent is approximately 42. GERARD J. CHOUINARD PAUL V. FARMER SANDRA A. GILBERT EVA K. HARRIS VIRGINIA MAY KEYSER MARCIA L. MATTS ADMINISTRATIVE SUPPORT (II) AUSTIN G. SMITH RANDOLPH THOMAS BETTY A. SWANSON SHARON K. TINSLEY GEMMA M. WEIBLINGER PUBLIC WORKS FOR WATER AND POWER DEVELOPMENT AND ATOMIC ENERGY COMMISSION APPROPRIATION BILL FOR FISCAL YEAR 1974 TUESDAY, MAY 1, 1973. TENNESSEE VALLEY AUTHORITY WITNESSES AUBREY J. WAGNER, CHAIRMAN DON MCBRIDE, DIRECTOR WILLIAM L. JENKINS, DIRECTOR LYNN SEEBER, GENERAL MANAGER JOHN S. BARRON, ASSISTANT TO THE GENERAL MANAGER (PLANNING AND BUDGET) ROBERT J. BETTS, DIRECTOR OF PERSONNEL PAUL S. BUTTON, DIRECTOR OF POWER MARKETING H. PETER CLAUSSEN, DIRECTOR OF TRIBUTARY AREA DEVELOP- JAMES L. CRAIG, M.D., DIRECTOR OF MEDICAL SERVICES MINARD I. FOSTER, DIRECTOR OF NAVIGATION DEVELOPMENT FRANCIS E. GARTRELL, DIRECTOR OF ENVIRONMENTAL PLANNING ROBERT M. HOWES, DIRECTOR OF LAND BETWEEN THE LAKES GEORGE H. KIMMONS, MANAGER OF ENGINEERING DESIGN AND CONSTRUCTION ROBERT H. MARQUIS, GENERAL COUNSEL HAROLD W. MEEKS, CHIEF, FINANCIAL PLANNING STAFF LEWIS B. NELSON, MANAGER OF AGRICULTURAL AND CHEMICAL DEVELOPMENT THOMAS H. RIPLEY, DIRECTOR OF FORESTRY, FISHERIES, AND WILDLIFE DEVELOPMENT < HERBERT S. SANGER, JR., ASSOCIATE GENERAL COUNSEL JACOB D. VREELAND, WASHINGTON REPRESENTATIVE JAMES E. WATSON, MANAGER OF POWER JAMES L. WILLIAMS, JR., DIRECTOR OF PURCHASING (1) Mr. EVINS. The committee will come to order. We have with us today our friends of the Tennessee Valley Authority. We are pleased to have with us the distinguished Chairman of the TVA, Chairman Aubrey J. Wagner, and other members of the Board of Directors Mr. Don McBride, and the new Director, Mr. William "Bill" Jenkins, who, I believe, is the first Tennessean ever to serve on the TVA Board. We are also pleased to have other high officials of the TVA and the TVA staff. Mr. Chairman, I have read your statement with interest and note that you are emphasizing that this month represents the 40th anniversary of the TVA Act and the beginning of the TVA operations. We congratulate TVA on its 40 years of successful service. I don't think I have to establish my credentials as a friend and supporter of the TVA. I believe they are well established. I believe not only in the purposes and objectives of the TVA, but I believe also that TVA has an important role as a producer of low-cost power and the maintenance of a low-cost power as a yardstick for the Nation. TVA has, over the past 5 years of its 40-year history, increased electric power rates substantially. These rates have increased to the point where many feel that TVA is impairing if not losing its low-cost yardstick image. We will want to discuss all of your programs, but especially TVA's power operations. Let me say that we all recognize that TVA has been responsible for much flood damage prevented-navigation promoted-electric power produced reforestation created-indus trial development encouraged-and the general economic conditions of the Tennessee Valley have greatly improved. However, our committee at these hearings will be especially concerned with the frequency and the magnitude of the power rate increases recently imposed by the Agency. We are concerned over the announcement of escalating rate increases and the possible repetition of such increases in the future. But we are more deeply concerned with the potential danger such increases impose to the economy of the TVA and the entire TVA area. Our investigation this year certainly is not an adversary proceeding, as before a regulatory commission, seeking to determine just and reasonable utility rates, but an inquiry into pertinent aspects of the Authority's power rate increases and power operations program. As the hearings progress, we hope to go into some detail and to solicit appropriate responses from the Directors and the staff of the TVA. I will at this time give you only one facet of the evidence brought to the attention of this committee. During the past 5 years since 1967 as the chart which we are exhibiting displays, TVA has effectuated a number of consecutive rate increases averaging about 70 percent in the composite. During the same 5-year period, we are informed that the investor-owned electric utilities increased their rates by an average of only 12 percent. In short, TVA's electric rates were raised about six times greater than those average increases imposed by investor-owned utilities during the last 5 years. We intend, as always, that these hearings be constructive and helpful. Mr. Chairman, we shall be pleased to hear you and other Directors of the Board, and your General Manager, Mr. Lynn Seeber. We welcome all of you, Mr. Chairman, you have a distinguished group. You may proceed with your statement. STATEMENT OF TVA CHAIRMAN Mr. WAGNER. Thank you very much Mr. Chairman and gentlemen of the committee. Again it is our privilege to come before this committee to present our program for the fiscal year 1974. We welcome the opportunity to describe our plans for the coming year and to discuss our appropriation request with you. TVA'S 40TH ANNIVERSARY As you have observed, on May 18 TVA will be 40 years old. Birthdays provide a reason for remembering, and as a preface to my remarks today, I would like to reminisce a few minutes. In 1933, at the request of the President, Congress directed its attention to the problem and opportunities of the Tennessee Valley, an area that had long been the victim of abuse and neglect. The valley offered a prime regional example of the price a nation pays for lack of foresight, planning, and prudence in the use of natural resources. The problems confronting the Tennessee Valley in 1933 involved virtually every aspect of the environment and every facet of human |