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TENNESSEE VALLEY AUTHORITY FINANCING

HEARINGS 4 OCT 17

BEFORE A

SUBCOMMITTEE OF THE

-1955

COMMITTEE ON PUBLIC WORKS
UNITED STATES SENATE

EIGHTY-FOURTH CONGRESS

FIRST SESSION

ON

S. 2373

A BILL TO AMEND THE TENNESSEE VALLEY AUTHORITY
ACT OF 1933

66466

JULY 21, 22, AND 27, 1955

Printed for the use of the Committee on Public Works

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON: 1955

COMMITTEE ON PUBLIC WORKS

DENNIS CHAVEZ, New Mexico, Chairman

ROBERT S. KERR, Oklahoma
ALBERT GORE, Tennessee
STUART SYMINGTON, Missouri
STROM THURMOND, South Carolina
PAT MCNAMARA, Michigan

RICHARD L. NEUBERGER, Oregon

EDWARD MARTIN, Pennsylvania
FRANCIS CASE, South Dakota
PRESCOTT BUSH, Connecticut
THOMAS H. KUCHEL, California
NORRIS COTTON, New Hampshire
ROMAN L. HRUSKA, Nebraska

SUBCOMMITTEE ON FLOOD CONTROL-RIVERS AND HARBORS
ROBERT S. KERR, Oklahoma, Chairman

ALBERT GORE, Tennessee
STUART SYMINGTON, Missouri
STROM THURMOND, South Carolina
PAT MCNAMARA, Michigan
RICHARD L. NEUBERGER, Oregon

II

FRANCIS CASE, South Dakota
PRESCOTT BUSH, Connecticut
THOMAS H. KUCHEL, California
NORRIS COTTON, New Hampshire
ROMAN L. HRUSKA, Nebraska

Copy 2

CONTENTS

5!

Statement of-

Page

ingnam,

Ames, Charles T., Tennessee Valley Public Power Association-----
Bingham, Herbert J., executive secretary, Tennessee Municipal

182

League__

193

Dempster, Hon. George R., mayor of Knoxville, Tenn
Fain, Charles J., assistant general manager, National Rural Electric
Cooperative Association.

181

238

Finley, S. R., general superintendent, Electric Power Board of Chat-

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Hooper, W. E., president, American Public Power Association
Hundley, J. C., executive manager, Tennessee Rural Electric Coop-

185

erative Association_

130

Kampmeier, R. A., assistant manager of power, TVA

173, 206

Marquis, Robert H., Assistant General Counsel, TVA

181

Paty, Hon. Raymond R., member, Board of Directors, TVA------
Radin, Alex, general manager, American Public Power Association.

49

185

Sammis, Walter H., president, Ohio Edison Co--

145

Schwartz, Carl, Jr., Resource and Civil Works Division, Bureau of
the Budget__

23

Smith, Richard W., manager, natural resources department, Chamber

of Commerce of the United States.

131

Sutton, Luois V., Chamber of Commerce of the United States------- 131
Swidler, Joseph C., General Counsel, TVA----

93, 114, 206

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Neff, Allison, C., president, National Society of Professional Engi-

neers.

208

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Results of the operations of the TVA (table)
Sammis, Walter H., president, Ohio Edison Co. (letter)

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TENNESSEE VALLEY AUTHORITY FINANCING

THURSDAY, JULY 21, 1955

UNITED STATES SENATE,
COMMITTEE ON PUBLIC WORKS,

SUBCOMMITTEE ON FLOOD CONTROL, RIVERS AND HARBORS,

Washington, D. C.

The subcommittee met at 10:30 a. m., pursuant to notice, Senator Robert S. Kerr, chairman of the subcommittee presiding.

Present: Senators Kerr (chairman), Gore, Thurmond, McNamara, Case, Cotton, and Hruska.

Senator KERR. We will now proceed with the hearing on S. 2373, a bill amending the Tennessee Valley Authority Act. I would like to put the text of the bill into the record.

(The above-mentioned bill is as follows:)

[S. 2373, 84th Cong., 1st sess.]

A BILL To amend the Tennessee Valley Authority Act of 1933, as amended, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the last three paragraphs under the subtitle "INDEPENDENT AGENCIES AND CORPORATIONS" in the title II of the Government Corporations Appropriation Act, 1948 (61 Stat. 576-577), are hereby repealed; and the Tennessee Valley Authority Act of 1933, as amended, is hereby amended by inserting immediately after section 15c thereof (16 U. S. C., sec. 831n-3) the following new section:

"SEC. 15d. (a) The Corporation is authorized, without regard to the provisions of section 303 (a) of the Act of December 6, 1945 (59 Stat. 601-602; 31 U. S. C., sec. 868 (a)), to issue and sell bonds, notes, and other evidences of indebtedness (hereinafter collectively referred to as "bonds") to assist in financing its power program and to refund such bonds. The Corporation may use the proceeds of such bonds for the construction, acquisition, enlargement, improvement, or replacement of any plant or other facility used or to be used for the generation or transmission of electric power (including the portion of any multiple-purpose structure used or to be used for power generation) as may be required in connection with the lease, lease-purchase or any contract for the power output of any such plant or other facility; and for incidental purposes. The principal of and interest on said bonds shall be payable solely from the Corporation's net power proceeds as hereinafter defined. Net power proceeds are defined for purposes of this section as the remainder of the Corporation's gross power revenues after deducting the cost of operating, maintaining, and administering its power properties (including costs applicable to that portion of its multiplepurpose properties allocated to power) and payments to States and counties in lieu of taxes but before deducting depreciation accruals or other charges representing the amortization of capital expenditures, plus the net proceeds of the sale or other disposition of any power facility or interest therein, and shall include reserve or other funds created from such sources. Notwithstanding the provisions of section 26 of this Act or any other provision of law, the Corporation may pledge and use its net power proceeds for payment of the principal of and interest on said bonds, for purchase or redemption thereof, and for other purposes incidental thereto, including creation of reserve funds and other

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