EXECUTIVE OFFICE OF THE PRESIDENT, Hon. WARREN G. MAGNUSON, DEAR MR. CHAIRMAN: This is in reply to your request for comments on S. 1934, 90th Congress, a bill cited as the "Electric Power Reliability Act of 1967." The Northeast power failure of 1965 and the recent mid-Atlantic power failure have demonstrated the need for better coordinated emergency planning efforts among the various electric utilities. Such efforts are essential if we are to maintain a strong electric power industry capable of responding to any national emergency. The Office of Emergency Planning therefore favors enactment of this bill which is designed to strengthen coordination among electric utilities. You are advised that the enactment of this bill would be in accord with the President's program. Sincerely, FARRIS BRYANT, Director. FEDERAL POWER COMMISSION, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: This is in response to your letter of June 14, 1967, requesting the Commission's comments on S. 1934, a bill to amend the Federal Power Act. The Commission fully supports enactment of this legislation, and we ask that you treat our letter of transmittal to the President of the Senate and our section-by-section analysis of the bill as our report. We believe that these documents cover all the points we would make in a report, except for a minor oversight which we should like to correct. Section 404(d) of the bill speaks only of immunity from antitrust suits under section 4 of the Clayton Act, whereas suits by private parties for injunctive relief are brought under section 16 of that statute (15 U.S.C. 26). This bill was intended to cover actions in equity as well as for treble damages; consequently the bill's language should read (at page 6, line 13): “under sections 4 and 16 of the Clayton Act (15 U.S.C. 15, 26)". As we have previously noted, the Bureau of the Budget advises that enactment of the bill would be in accord with the program of the President. We believe that the Electric Power Reliability Act would be a most valuable step forward for the protection of the American public. The Commission would of course welcome the opportunity to appear in support of the bill in hearings before the Committee, and in the meantime is ready to provide any further information or assistance you may desire. Sincerely, LEE C. WHITE, OFFICE OF THE SECRETARY OF TRANSPORTATION, Hon. WARREN G. MAGNUSON, DEAR MR. CHAIRMAN: This is in reply to your request for the views of this Department on S. 1934, a bill to amend the Federal Power Act to facilitate the provision of reliable, abundant, and economical electric power supply by strengthening existing mechanisms for coordination of electric utility systems and encouraging the installation and use of the products of advancing technology with due regard for the proper conservation of scenic and other natural resources. The bill is designed to enhance the reliability and efficiency of electric power bulk systems by providing for the establishment of a National Electric Studies Committee and a network of regional power coordination organizations. The bill further provides procedures governing the review of proposals for the establishment of extra-high-voltage (EHV) facilities, including transmission lines. The Department supports FPC's objective of enhancing the reliability of electric power systems, and we defer to FPC as to the need for those provisions of the bill providing for the establishment of an organizational framework to promote regional and inter-regional coordination of power supply systems. Our most immediate concern is that provisions be made for consideration of the effect that the construction of EHV facilities may have on the safety of air navigation. The Federal Aviation Administration, a component agency of this Department, has conducted for many years a program for the evaluation of proposed construction on aeronautical operations. In this connection, the principal interests FAA has in the construction of EHV facilities is that they not be so located that they interfere with, or cause a hazard to, aircraft operations, or that they derogate the performance of air navigational facilities. Power lines located in close proximity to an airport can endanger take-offs and landings from certain runways or preclude their use altogether. Power facilities located in close proximity to electronic navigational aids can seriously limit the usefulness of those aids. We understand that the FPC will give consideration to the problem of air safety when approving the construction of power lines. The FPC will treat air space as one of the "limited resources" referred to in Section 104(b), the conservation of which is an issue the Commission is obligated to consider in administering the provisions of the bill. We will work with FPC to develop the procedures and to assure proper coordination between the FAA and the FPC in achieving consideration of air safety questions, when power line construction authorized by this Act is being evaluated by the Commission. The Department of Transportation supports enactment of this legislation. We have been advised by the Bureau of the Budget that there would be no objection to the submission of this report from the standpoint of the Administration's program. Sincerely yours, JOHN L. SWEENEY, Assistant Secretary for Public Affairs. The CHAIRMAN. S. 1934 comes to the committee with the strong backing of the administration. In his consumer message of February 16 President Johnson said: It is becoming increasingly clear that greater coordination is needed among the various utilities to reap the benefits of reliability and economy inherent in huge generating units and extra-high-voltage transmission lines. The mutual interests of the consumer and the industry are paramount. The scope of the concern over reliability ranges from the recent controversy concerning proposed power lines near the Antietam Battlefield to benefits to be derived from the increasing use of atomic powered generating plants. Reflecting this broad interest, today's hearing will serve as a prelude to hearings which the committee hopes to hold in various parts of the Nation. Details on these hearings will be announced within the next several weeks, before this session of Congress adjourns. We are hopeful to have in the different sections of the country-the Northeast, the Middle Atlantic, the Southeast, probably the Midwest, and the Pacific coast-hearings to elicit what information we can on this whole matter. Members of the committee will naturally look to the areas with which they are familiar, which they come from, to hold these hearings. They will be formal hearings and we will elicit as much information as we can on this problem, with the expectation that we can come back to the next session of Congress and be able to sit down and work out this legislation and the problem of reliability. Our first witness this morning, who has taken a long interest in all of these matters, is our colleague from Montana, Lee Metcalf. We will be glad to hear from you at this time. STATEMENT OF HON. LEE METCALF, U.S. SENATOR FROM THE STATE OF MONTANA Senator METCALF. Thank you, Mr. Chairman. Members of the committee, I come before this committee, as I did last year, to testify in support of legislation to give the Federal Power Commission authority needed to supervise electric power interconnections. This authority is needed to improve reliability and to assure access of all types of power suppliers to the burgeoning extra-high-voltage systems, which can be likened to our Interstate Highway System. I introduced two of the bills before the committee. One is S. 1834, which the late Senator Clair Engle, Congressman John Moss, and I had introduced in previous Congresses. The other is S. 1835, which I introduced last year as S. 2140. It was the proposal put forth by Commissioners Black and Ross of the Federal Power Commission. I have also cosponsored, with the distinguished chairman of this committee, S. 1934, the Electric Power Reliability Act of 1967. During the past 2 years there have been a number-I can recall at least 18 of cascading power failures in the United States. These events have drawn attention to the tenuous ties of our largest and most vital industry. There have also been decisions by electric utilities. to route long-distance transmission lines near or through historic and scenic areas. This has resulted in a realization that in many States there is no public control over the routing of these lines, at the local, State, or Federal level. Utilities have one of the most awesome powers of government, the right of eminent domain, without appropriate checks and balances. The transmission systems, some covering a number of States, are beyond the reach of local officials, or even of State officials. It is appropriate that the powers of regulation be vested in the Federal Power Commission, with procedures, as set forth in S. 1934, for considering the views of responsible Federal, State, and local agencies in land use matters. I also endorse the concept in S. 1934 that the legislation apply equally to all bulk power systems in this country, whether owned by investors, municipalities, customers, or the Federal Government. Å weak link ruins a good chain. Efficient reliability cannot be built into a grid with components that are not subject to the rules that govern the rest of the system. This concept would also protect the small systems which, in several instances lately, have been dealt out of the planning of neighboring investor-owned utilities, and sometimes denied access to wholesale power. I have noticed several statements lately by utility spokesmen to the effect that it will cost a lot of money to achieve the kind of reliability that the FPC has suggested be built into the system. Perhaps it may even be necessary, according to these arguments, to increase the rates, or at least forestall rate reductions. That line of reasoning reminds me of the old story about the student who was like a blotter. He soaked everything up but got it backward. It is the blackouts that are costly. Unreliability is costly. Reliability increases profitability. The Federal Power Commission's report to the President last month, on prevention of power failures, went into that point, and I would like to read one summary paragraph in that report, which appears on page 88 of volume 1: The added transmission which we believe is essential for improving reliability should have large reserve capacity to serve unforeseen requirements and opportunities. The nation's interconnected power systems now span a tremendous field of present and potential diversities-diversity in power demands including errors in forecasting, in fuel costs and the opportunities for economic energy exchanges, in water resources, in types of generation and their proper association to meet regional loads, in weather extremes and the threats of unprecedented localized loads, in air pollution and shifts in generation for relief under critical circumstances, and in the diversity of scheduled maintenance, forced outages of equipment and a wide variety of emergency power and transmission demands. The nature and magnitude of the benefits of increased transmission capability will be varied and extensive. Through meaningful coordination of utility systems throughout the Nation, improvements made for power system reliability can be associated with large economic benefits as well. In conclusion, Mr. Chairman, I would like to relate an experience I had recently which I mentioned the last time I was before this committee. Not long ago I was touring the TVA area with Chairman Wagner. We were talking about the possibility of blackouts. He told me that in 1964 that was a year before the big blackout in the Northeast-generation at TVA's Paradise steamplant was separated from the system during a severe windstorm. High winds blew some sheet metal into the 161-kilovolt substation, causing a short circuit. This created a massive equipment outage. The plant was generating a total of 1,250 megawatts as compared with a 1,500-megawatt load reversal at Niagara in the 1965 blackout. However, in the TVA crisis the system frequency declined only slightly. Loading on the interconnections with neighboring systems increased immediately from a zero level to 1,175 megawatts. Within 41/2 minutes generation on TVA's own system picked up the total generation lost at Paradise. There was no interruption of service other than for a small amount of industrial load supplied directly from the Paradise switchyard. The people at TVA may have some ideas and techniques that this committee would find of interest and value. Congressman Moss of California is unable to be here this morning, because of a conflict with one of his committees. Therefore, at his request and with your permission, Mr. Chairman, and on his behalf, I would like to insert in the hearing record a statement which he made in the House last week on electric power reliability and the text of the bill he introduced on August 14, H.R. 12322. The CHAIRMAN. We will put that in the record in full. Preceding Senator Metcalf's statement, we have in the record the contents of these various bills, so when we read the record, we will know what bill we are talking about, and what they say because the Chair wants it understood that these are all working papers, to arrive at some solution of this problem and see what we can do about the electric reliability. (Text continues on p. 27.) (The above-mentioned materials follow:) A REVISED ELECTRIC POWER RELIABILITY BILL Mr. Moss. Mr. Speaker, I have today introduced a bill to increase the reliability of electric power supply for this country. My bill is, in large measure, similar to the draft of the electric power reliability bill prepared by the Federal Power Commission. 84-381-67- -2 In my opinion, the FPC bill offers a sound approach to the problem of reliability and adequacy of power supply in these days of high consumption of electric energy and almost nationwide interconnection of electric powerlines. However, as I have studied the bill I have found a number of oversights or defects which should be corrected. I have, therefore, prepared the revised bill which I am introducing today. The purpose of this legislation is not merely to prevent more cascading power failures, but to further the national policy, adopted in 1935, of assuring an abundant supply of electric energy throughout the United States with the greatest possible economy and with due regard to the proper utilization and conservation of natural resources. In addition, it would clarify the congressional mandate to the Federal Power Commission to consider esthetic and historic values in carrying out its regulatory duties concerning electric power. This country's power supplies have reached proportions undreamed of 40 years ago, although they are barely keeping pace with demand. They promise to double or triple in the next decade. Furthermore, the advancing technology of the electric industry facilities interconnection and long-distance transmission which was quite impossible even 10 years ago. However, despite these great strides, the fact is that the reliability of electric service has not improved proportionately. Mr. Speaker, there have been 20 major power failures since the great Canuse blackout of November 9, 1965. Seventeen of them were cascading failures. The most recent was the PJM failure of June 5 of this year, which interrupted service to 13 million people in Pennsylvania, New Jersey, Maryland, and Delaware for periods varying from 1 to 10 hours. The cause of each of the 17 cascading power failures was due to the fact that the interconnections were too weak to cope with the particular system disturbance. A few years ago a power failure involved only one town. Now, due to inadequacy of the very interconnections that were intended to provide standby for such local outages, it may block out four, five, or six of our most heavily populated States and even parts of Canada and Mexico. Our great electric power industry, partly because of its lingering tradition of every local utility for itself, is like a spastic giant. Its very limbs must achieve better coordination; and they must do this while the giant is still growing. We have a shockingly thin margin of reserve generation today in this and other areas of the country. The situation may get worse before it gets better. Twice within the last 6 weeks we have been solemnly warned on the floor of this House to get ready for more power failures. We have been told that we should equip elevators with pushout panels to prevent people from suffocating when the elevators stick between floors. We are told to turn off air conditioning in Government buildings whenever the electric power companies tell us to, in order to avoid drains on their inadequate generating capacity. Mr. Speaker, the electric power industry's recent record of meeting its responsibilities to the public is not such as to inspire confidence. The solution to the blackouts cannot be achieved simply by placing more faith in the individual utilities. The technology of reliability requires areawide and interregional planning by all bulk power suppliers and distributors thinking and working together, and the closest operational cooperation by diverse managements. The day when company A does not speak to cooperative B, or Federal power marketing agency C to wholesale customer D, must come to an end. All segments of the industry must realize, or be made to realize, that their first responsibility is public service to the American people. Under modern conditions this cannot be carried out by denouncing Government regulation and asking us to turn off our air conditioners. Reliable electric power service can be achieved only by regional and interregional coordination of planning, construction, and operation among all segments of the industry. The FPC bill, as revised in the version I have introduced today, will further this urgent objective. The FPC bill, and to a greater extent my revised version, views the electric power industry as one nationwide public utility, of which the local generating and transmission entities, both publicly and privately owned, are segments. Both bills would require the organization of the industry into regional councils to plan, coordinate, and provide the most adequate, efficient, reliable, and economic service to all the people of the region regardless of the particular distributor which serves them at retail, and to exchange, or coordinate power with neighboring regions. |