an important step in the development of New England's available hydroelectric resources-estimated by FPC at almost 3 million kilowatts of potential capacity. Other members of our association in all parts of the country fully support their New England colleagues in endorsing this economic and disirable hydroelectric project. The Dickey-Lincoln School development will make possible the use of a renewable resource, while preserving recreation values on the Allagash River. APPA members are hopeful that in the long run the great Passamaquoddy tidal power project will be designed in such a way as to meet feasibility requirements and be authorized by Congress. But at present, they are hopeful that Congress will act promptly on the Dickey-Lincoln School development and bring to New England at least the benefits of Federal multipurpose water resource development. Such development is long overdue.

The benefit-to-cost ratio of 1.31 to 1 which the Interior Department assigns to these projects on the St. John River indicates that Dickey-Lincoln School is one of the most feasible projects ready for development at this time, a sound investment of the taxpayers' money.

The Department's latest report indicates that power from the Dickey-Lincoln School project could be delivered to preference customers in Maine-including the municipal electric systems-for 7 to 8 mills per kilowatt hour. Construction of an extra-high-voltage transmission grid in New England, as proposed for study by the Interior Department, could bring this low-cost power to other New Eng land load centers at costs well below those now incurred by the municipal utilities.

I was not surprised to learn that the private power companies are undertaking to discredit the Dickey-Lincoln School project by contending that power can be produced more cheaply by alternative methods. The same tactics have been used against virtually every other Federal hydroelectric project which has been proposed in recent history. While I have not made an engineering evaluation of the report of the so-called Electric Coordinating Council of New England. recommending construction of pumped-storage projects and nuclear plants as an alternative to the St. John River project, I want to make some comments on the general approach which the companies have followed.

First, it should be noted that New England, like all of the United States, will need vastly increased power supplies in the years immediately ahead. The National Power Survey report estimates that in the New England area peakloads will grow from 7,064,000 kilowatts in 1962 to 11,410,000 kilowatts in 1970 and 20,450,000 kilowatts in 1980-almost a tripling of present generating capacity. Plainly, the area will need vast amounts of new capacity-nuclear and conventional steam and hydro.

The survey report specifically refers to the St. John River project as "the best remaining site for a major source of hydroelectric power" in New England, where the survey foresees an interconnected regional system in future years. The fact that economical nuclear or pumped storage plants can be built does not in any way detract from the Dickey-Lincoln School project. It is evident that both private and public power will have a ready market in the area.

As to the cost comparisons made by the private utilities, I believe it is important for the committee to know that the power which the utilities say they can generate at low cost will not necessarily get to consumers at low cost. At least. there is no reason for confidence that the municipally owned utilities in the area will enjoy lower wholesale rates.

At the present time, it is possible to generate electricity in large-scale plants of 5 mills or less per kilowatt-hour in the more economical of the privately owned steam-electric plants, the power survey says. The prices charged the municipal electric utilities for wholesale power, however, do not approximate this figure. In the New England area, the municipal utilities are paying more than two or three times this much, in most cases, for wholesale electricity pur chased from the private utilities.

The attached table, containing information obtained from the annual reports of the power companies to FPC, shows the average revenues per kilowatt-hour which the New England companies are receiving from wholesale sales to municipal utilities.

While these average costs are something of an oversimplification and do not take into account the point of delivery, conditions of sale, hours available, and so on, I do believe they present an accurate indication of the amounts which the municipalities in New England have to pay for wholesale power. And they may explain why the members of our association in New England resent the efforts of the power companies to discredit a Federal hydroproject on grounds that private power is less expensive. Less expensive to whom?

With residential consumers in New England paying some 29 percent more than the national average for electricity, and with municipal wholesale customers paying more than twice the nationwide average-which is just under 5 mills per kilowatt-hour-there is evident need for a "yardstick" of Federal power to provide an element of competition in New England's electric industry. The Tennessee Valley Authority and other public power projects have proven to all of us that when the cost of power is low, the usage increases, unit costs go down, and the cost becomes lower still. It took the Federal Government to teach this lesson, by example, to the utilities of the Southeast, and I am confident that a similar example ultimately would be helpful to the utilities of the Northeast. With their Tower rates and greater sales, the private power companies serving on the periphery of the TVA find their earnings growing faster than the national average.

Federal development of New England's substantial hydroelectric resources is long overdue. From the standpoint of conservation of our national wealth, APPA believes that feasible hydroelectric projects should be built on an orderly timetable. Investment in hydroelectric projects is paid back, with interest, by the electric users and the users, in turn, benefit from the economic stimulus of low-cost power while improving their standard of living.

The members of APPA urge you to authorize the Dickey-Lincoln School project so that construction can get underway without delay. This development will benefit a region badly in need of an economic "shot in the arm" and will be a sound investment for American taxpayers.

APPA also supports the marketing of Federal power in New England under laws which have proven to be successful in other parts of the country. We favor the transmission of St. John River power to regional load centers for widest possible distribution.

I hope that the committee also will favor the recommendation of the Secretary of the Interior that a comprehensive plan for development of the hydroelectric resources of New England be accompanied by development of an interconnected electrical network to tie together the power sources of the region, including those of the neighboring Provinces of Canada.

38, 506

15, 000

29, 920

904, 719

NOTE.-Numbers correspond to identifying numbers on map on preceding page.

Wholesale sales for resale (account 447), New England utilities—1964

Mr. RADIN. My name is Alex Radin. I am general manager of the American Public Power Association, which is a national trade organization representing about 1,200 muncipal and other local publicly owned electric utility systems in 45 States. We represent about 77 municipal systems in New England States, and a list of those utilities and a map showing where they are located is attached to my prepared statement.

Altogether, almost 1 million people live in the cities served by the municipal systems in New England. Most of the municipal systems were started in the very beginning of the electric industry. Most