Mr. ROCKWELL. What is it in the city of Washington, do you know? Mr. WARNE. I can give you that figure, but I do not have it at my finger, tips, but I believe it is lower than the national average. I think that the District of Columbia is lower than the national average. In the Columbia Basin area, as an illustration-I want you to bear with me on that because you will have to know that I am talking in "guess-timate" terms because no one can cast himself back 10 or 12 years and make an assumption of what would have happened had conditions been different and then review with perfect accuracy what would have happened in the Northwest under different conditions-but we do know that at the rates at which Grand Coulee power is being sold out there, and Bonneville power is being sold out there Mr. ROCKWELL. What is that rate? Mr. WARNE. 17.5 a kilowatt-year, which means about 2 mills at 100 percent load factor and 4 mills at 50 percent load factor. Out of that rate we do know that in 11 years the total output of Grand Coulee Dam would have been absorbed in the market. We do know this, that under the normal increase in load that was then prevailing in 1932 in the Northwest-and it was no different than any other part of the country at that time-it would have taken 70 years to absorb the total output of the Grand Coulee Dam. In other words, we do know that the rates that are prevailing there, we gain 59 years in the time that you could have expected the power to have been utilized. What does that mean in terms of development in the Northwest! It means these things: First, that new industries are operating there now. You know them. They are the aluminum industry, electrometallurgical, and electrochemical industries that are there. You do know that Bonneville Dam is there now. Bonneville Dam could not have been built had we kept the rates on Grand Coulee at what you would have called the competitive rate in the area-not until 70 years had passed, because it would have taken that long to have absorbed the power from Grand Coulee. And, of course, Hungry Horse Dam and these other dams that are already authorized would not have come in until some later time because it would have taken that span of years to absorb the power from Grand Coulee. Our figures show that you would have just about the same income from Coulee Dam in 75 years under the one system as under the other. But you would not have had the development which has gone with the development of the Northwest. Mr. D'EWART. There are some other factors that enter into that increase in use of electricity, are there not, other than the decrease in rates? A few years ago we brought an REA line out to my ranch. When we first started that line the use of electricity was somewhere under $3 a customer. With exactly the same rate over the last 10 years, we are now using something like twice that amount, and the number of customers has multiplied by a great many. In other words, the cost per customer was somewhere around $2.50, and now it is somewhere around $6, with exactly the same rate. Mr. WARNE. I do not doubt that there are other factors. The very fact that power was available in rural areas has meant that power has been sold there. Mr. SANBORN. That is the picture generally all over the United States; is it not? Mr. WARNE. I can focus it down, if you like, to the Central Valley. Mr. SANBORN. It is the picture all over the United States, very large expansion of electrcity not only because of your cheaper rates, but also because of the invention of many things that people now have learned to use that require electricity. Mr. D'EWART. And also availability. Mr. LEMKE. May I suggest: And also because Congress passed laws establishing the REA. Mr. D'EWART. The rates in the REA project has not varied. It is practically the same now that it was 10 years ago. I think we all agree that we have doubled and tripled the use of electricity on farms. There are other factors that enter into it other than the rate charged. Mr. LEMKE. It depends on how many you take in and how densely it is populated, and how far one farmer helps the other one. Mr. SANBORN. It is the picture generally all over the United States, whether you have an REA or something else. Mr. WARNE. There is a very close correlation between price and use, especially in the industrial brackets of power rates. Of course, we know that without an extremely low price for power in the Northwest you would have no use there of power in the electrometallurgical and electrochemical industries. If you want another illustration, here is one showing the average residential rate and consumption in the Tennessee Valley area, which shows that in 1926 the consumption of power on the Tennessee Electric Power Co. system, which then served about 80 percent of the area in residences, was 360 kilowatt-hours a year, and the price was 8 cents a kilowatt. When the Tennessee Valley project came in, you can see the effect of it on these rapidly dropping and rising lines in the middle of the chart [indicating]. In 1946 the average residential user down there was using 1,902 kilowatt-hours at a rate of 1.8 cents a kilowatthour per year. And the revenue coming into the Tennessee Electric Power Co. in 1929, which was 3 years after this chart starts, was $2.639,000 from 89,816 customers; whereas the revenue from this same class of customers to the Tennessee Valley in 1946 was $18,455,000, and they were serving 565,972 customers. It pretty clearly indicates that use follows price, and that revenue-especially when you have these projects that bring in great blocks of power, and the area developedcomes with the encouragement of wide use of power. Mr. ROCKWELL. Is it not true that you are speaking particularly of industry? You cannot hardly conceive of anybody these days not using electricity if he can get it, even if he has to pay 25 or 50 cents a month more for it. I never hear the price. Out in my country our REA buys electricity from the Western Colorado Power Co., a private concern. I do not know what the rate is, but it is nothing like this, and nobody ever thinks about it, because the idea of going from the oil lamp to electricity is so desirable. I cannot see that your argument applies, particularly as to home consumption, although it would apply to big industries in which, of course, it would automatically increase the use of power as they are brought in there. Mr. MURDOCK. That chart before us says average residential rates and consumption. Mr. WARNE. We are talking only about residential rates. I would like to have these charts reproduced and submitted for the record. Mr. D'EWART. I would like to have you prepare one for the REA's showing the rate for the same period and the consumption. Mr. WARNE. Yes, sir, I will try to get some from REA that will do the same job. Mr. D'EWART. I think it would be very interesting. Tabulation showing average customer uses and average sales return per kilowatt. hour for REA financed projects in the United States REA does not report sales by customer classifications. Average unit figures are not typical for these periods because they include energy sales to large war industries. |