the Commission has taken steps to assure that to the extent possible all of the cost of this work is recovered from licensees. Applications for licenses and preliminary permits for non-Federal hydroelectric projects for new capacity pending before the Commission involve construction costs approximating $2.7 billion. The Commission must develop better tools to move these cases along so that these large projects can provide jobs and electricity, as well as the numerous other benefits of well-planned water resource development projects. One of the handicaps which has plagued the Commission in its licensing program has been the lack of even skeleton surveys of the river basins concerned. In many river basins, demands for water supply, water quality control, recreation, and wildlife are competing with flood control, navigation, irrigation and power. The Federal Power Commission needs up-to-date basinwide plans to discharge effectively its statutory responsibilities for insuring that its licensing activities will advance the development of the Nation's river basins on the most efficient and comprehensive basis. When a license application comes before the Commission and no study is available to help evaluate the basin and the relationship of the application to the overall river basin, the Commission is faced with two equally unsatisfactory alternatives: (1) to delay action until the necessary studies are made available, or (2) to act upon inadequate information. Acting upon inadequate information in these matters may impose costly mistakes upon the river basin for years to come, because of the long-term commitments that are involved. Delayed Commission action retards needed development. To avoid these undesirable alternatives the Commission has undertaken a program of basinwide appraisals of the water resources of river basins with the highest priority for hydroelectric licensing purposes, with due regard for the emerging problems of water supply, water pollution, and the enhancement of recreation. The Commission intends to use the studies made by other Federal agencies in this area to the maximum extent possible, adding whatever additional studies and inspections by the staff may be necessary for its own purposes. We do not intend to study every existing river basin, but first will conduct an overall planning study which will indicate data currently available and in this way determine whether a new study is required. However, most of the existing river basin studies were completed 10, 20, or 30 years ago. In this period the economics of navigation, flood control, and power projects have been greatly altered and serious problems of water pollution, recreation, and water supply have emerged which may not have even existed when the studies were made. The river basins reflect the changes that take place in the economy of the country, and, even though geography remains the same, the changing factors which both cause and reflect economic growth must be recognized in our current appraisal program. Up-to-date basinwide resource studies can provide the essential standards for determining the desirability of hydroelectric projects and the features that should be incorporated in their construction and operation for the best use of the water resources. With the benefit of these studies, the Commission can more effectively exercise its responsibility to frame licenses in such a way as to further the public interest in optimum overall water resource development. The availability of such studies will also expedite the licensing of projects and encourage applicants to file for the projects set forth in the development plans. The 106 license applications for proposed major hydroelectric projects currently pending before the Commission provide evidence of the Commission's immediate and urgent need for such plans. In addition, the owners of 285 existing unlicensed projects have either filed or reported to the Commission that they intend to file applications for license. These 285 projects will reduce by more than half the number of projects operating without licenses 2 years ago. The basin studies are also needed to appraise the many projects which will be subject to recapture beginning as early as 1968. A major new Commission licensing activity is our program to require licensees to provide full development of the recreational potential of their reservoirs. Every new license application must now include a recreation plan to provide adequate public recreation facilities. The lakes formed by our hydro projects constitute a priceless recreation asset and this Commission is now actively engaged in working with all of our licensees to insure that the recreation potentials of licensed projects are fully developed. Another aspect of our licensing program warrants special attention. Licenses for projects of substantial size will expire beginning in 1968 and licenses for projects of major size will expire beginning in 1970. As licenses expire, the United States has the right under section 14 of the Federal Power Act to recapture the projects, upon 2 years' notice to the licensee. Licenses for two projects with total installed capacity of 82,000 kilowatts will expire in 1968 and licenses for 25 projects with total installed capacity totaling 429,520 kilowatts will expire in 1970. Evaluation studies of the streams on which projects subject to early recapture are located must be initiated as soon as possible. Our basin survey program will fill this need. We will begin immediately evaluaton studies of 10 streams with projects on which licenses will expire between 1968 and 1970, and expect to complete studies of several of these streams in 1965. Studies must be completed well before the expiration of the license periods in order that the Commission may provide the Congress with the essential information to permit it to determine whether the projects should be recaptured by the United States. An additional task of large dimensions is the accounting necessary to determine the price at which the projects may be recaptured. State in general terms, the price on recapture must take into consideration the original investment less depreciation and less an amortization reserve based on excess earnings of the licensee, plus severance damages. For many projects these determinations are yet to be made. Our manpower requests should be evaluated in light of this urgent additional workload that is now upon us. We are requesting 18 additional people to speed action on license applications which, if approved, could pour billions of dollars of new construction into our economy. The additional staff will enable us to do a better as well as a faster job. Existing projects which are unlicensed need to be brought under license so that these projects can make the greatest possible contribution to the comprehensive use of our water resources. The recapture problem adds a new element to the workload for licensed projects which cannot be delayed. These 18 people will not represent additional cost to the Government because their salaries will be reimbursed by fees from the licensees. We also believe it is essential to increase our efforts in the supervision and inspection of licensed projects and are requesting five additional people for this purpose. The Commission must assure itself that projects are constructed in accordance with approved plans and good engineering practices and that constructed projects are operated safely and efficiently. This is especially important with respect to old projects coming under license under our program for unlicensed projects. These inspections are directed toward assuring that the licensees have adequate operating and inspection procedures so that risk of accidents such as those which have occurred in the the past year with great loss of life and property in the United States and foreign countries will be minimized. We are requesting an increase of 23 positions to a total of 198 in the non-Federal hydroelectric projects activity. The increase is due primarily to our licensing work and the program of water resources appraisals and as I have mentioned it is reimbursable from fees by licensees. The final activity I shall discuss is our work on Federal river development projects. River basin planning activities of Federal agencies have been increasing since 1961 when the President accepted the planning goal of the Senate Select Committee on Water Resources that comprehensive water development plans be prepared for all major river basins of the United States. The Corps of Engineers has expanded its program of comprehensive river basin surveys and has established basin survey coordinating committees to aid in the conduct of these surveys. The Commission has designated representatives on each committee, 12 of which had been formed by the end of fiscal year 1963, and has major responsibilities for studies of the potential development of hydroelectric power in these basins. Since additional funds were not available for this work in 1964, six positions were financed by reimbursement from the Corps of Engineers. Funds are requested in 1965 for 12 additional positions including the six currently financed by the Corps of Engineers. Summary table of increases (1965 over 1964) Personnel compensation and benefits (86 new positions) Personnel compensation and benefits (to restore 48 positions not filled in second half of 1964) Increase due to pay raise_ Cost of within-grade promotions. Other cost increases such as travel, ADP rental, equipment, supplies, materials, and printing.. $510 219 273 100 383 1, 485 Total increase, 1965-- NATURAL GAS INDUSTRY Positions Certificates, increases in natural gas reserve and deliverability requirements activity____ +13 Increased personnel compensation and benefits costs due to 26 new positions_ Other personnel service cost increases._ Increase in level of other costs_ 158 265 94 Power system analysis, completion of national power survey- -14 +14 Total_ +25 Dollar amount Increased personnel compensation and benefits costs due to 25 new positions. NON-FEDERAL HYDROELECTRIC PROJECTS Licensing, increase for processing applications__ Increase in water resources appraisals for hydroelectric licensing_ Supervision of licensed operations, increase in construction projects Total----- Positions +5 +9 +4 +5 +23 Dollar amount 137 113 122 372 Increased personnel compensation and benefits costs due to 23 new positions-- Other personnel service cost increases. Total____. FEDERAL RIVER DEVELOPMENT PROJECTS Positions Survey coordinating committee, increase for cooperative work with the +12 Total. +12 Dollar amount Increased personnel compensation and benefits costs due to 12 new positions__. APPENDIX B Natural gas pipeline rate reductions since Jan. 1, 1964 Senator MAGNUSON. You make the statement that despite this report, you are not asking for any new positions in the rate cases? Mr. SWIDLER. In the pipeline rate cases, yes. Senator MAGNUSON. What does it mean, then, on 13 new positions in the appendix A on rate cases increase for independent producer rate proceedings? Mr. SWIDLER. Those are the cases to fix the prices in the field rather than the pipeline cases. Senator MAGNUSON. They are distinguished, rather Mr. SWIDLER. Yes, sir. Senator MAGNUSON. You say you need 13 people extra in that field? Mr. SWIDLER. Yes, sir. Senator MAGNUSON. Then the certificate is 13 more? Mr. SWIDLER. Yes, sir. |