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 lower 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.

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

38, 506 15, 000

29,920

904, 719

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

of these cities are relatively small and they are unable to build their own generating plants in the most economical manner considering today's technological trends. Consequently, these smaller municipalities have no alternative but to buy power at wholesale from prívate companies at rates that are well above the national average.

For example, the nationwide average of wholesale power costs of companies buying from all sources-public, private, Federal, and local public power-is about 5 mills per kilowatt-hour. In the Northeast this figure is at least two or three times this amount. For your information, I have appended to my statement-it is the last page a table showing figures as to the wholesale power costs of the municipal systems throughout New England. Those figures are taken from the reports filed by the companies with the Federal Power Commission.

Our own survey shows that the average wholesale power cost in New England is almost 12 mills per kilowatt-hour. This includes figures for Vermont which has an allocation of St. Lawrence and Niagara power. As you look over this list you will find it is common for these utilities to pay two or three or four times the national average and certainly several times the amount that the companies claim that they can generate power for.

These high wholesale power costs are the principal reason for our support of the Lincoln-Dickey school project. The Department of the Interior says this power can be delivered to the load centers in Maine for 7 to 8 mills per kilowatt-hour. Mr. Robinson just testified that, according to his calculation, this power can be delivered even at a lower cost of about 6.5 mills. Obviously, this would represent a very substantial savings over the present power costs of the municipal systems.

It is not surprising that the power companies are trying to discredit this project. They have been trying to do so with practically every other Federal power project proposed.

If Congress had heeded their advice in the past, there would be no TVA, no Columbia River power development, no Missouri River development, and no Central Valley project.

In connection with their opposition, I would like to note two points: First, the Northeast power needs will almost treble in 1962–80, according to the Federal Power Commission's National Power Survey. The needs will rise from 7 million kilowatts in 1962 to 20 million kilowatts in 1980. New England will need all the power it can get― public and private, conventional steam, atomic, and hydro.

I think, based on experience in other areas, it is clear that the power companies will use some of this power once it is developed.

As for the cost estimates of alternatives, we have not had an opportunity to make an economic or engineering analysis of the figures presented here by the companies. I believe the point is that, even if the companies are able to generate power at a lower cost, they are apparently not passing these savings along to their wholesale customers.

As pointed out earlier, the municipal electric systems in New England are paying as much as two to four times more for wholesale power as the national average. The municipal systems can use all this power developed at the Lincoln-Dickey project because we estimate that our