DYNAMITE AT HELLS CANYON
Lewis, Robert G.
Dynamite at Hells Canyon = By Robert G. Lewis — = THE Republican Administration found itself with a kicking, yelling, and extremely conspicuous baby on its lap when it came into control of the...
...The government, in such a situation, would have no recourse but to sell its power at just about any price the utilities chose to Pay-Based on the preference law, Democratic Administrations have carried on a substantial program of transmission line construction in many sections where economic considerations assure self-liquidation of the projects...
...This amendment also postponed the final hearing date into the new Administration's term, thus giving the new Secretary of Interior an opportunity to withdraw and keep out of the record all the comprehensive arguments marshalled against the power company's application by the Department staff under the Democrats...
...It would dam the Snake in the deepest gorge in the United States—7,900 feet deep, or 2,000 deeper than Grand Canyon...
...It is a significant commentary on the political and ideological climate of the day that very little is said— and probably little is thought—of what the logical projection of this power policy and program leads to...
...The first expression in a long time of any vision of "super power" magnitude in national power policy planning was the release by the Interior Department Dec...
...Public acceptance of the idea is being sought almost exclusively on the ideological grounds that "socialism" is immoral, and not that the present policy is impractical...
...It asserts the primacy of public rights to the benefits of natural resources development...
...The Department of Interior has intervened against the power company's application, and there is little chance the license will be issued if Interior stays in the fight...
...The original application called for one little run-of-the-river dam at Oxbow...
...Most important of all, the cost of power from the federal project would be far lower with the federal investment—only $15.62 per kilowatt year of prime power capacity contrasted with around $25 under the power company's plan...
...On the contrary, the origin of the demands for interstate compacts has been entirely with the "special interests" that stand to increase their cut out of the proceeds from developing natural resources...
...Oxbow would provide only 106,000 kw of capacity, less than a tenth as much as the federal project, and all five dams in the plan would provide only 530,000 kw...
...they even suggest that private management of the post-office should be considered...
...Senator from Nebraska, and the political movements in which they worked...
...Chamber of Commerce and the Council of State Chambers of Commerce are also backing the liquidation idea...
...The Interior Department study anticipates transmission of energy at twice the maximum voltage so far used in the United States for distances up to 660 miles—more than double the longest distance so far reached in the nation...
...Assume that the plan, when its enormous detail is filled in, will be sound from an engineering, operational, and economic standpoint...
...A few men would thus wield authority over the economic life of half the nation, subject only to approval by their stockholders, the pressures of the market, and the tenuous restraints of state and federal regulation...
...Primarily it is the ideological product of the generation of Theodore Roosevelt and the two decades of the New Deal-Fair Deal...
...About a year ago Idaho Power injected a "spite dam" proposal into the picture...
...The facts are that when all taxes, contributions in lieu of taxes, direct cash and capital contributions to governments, and rates to consumers are accounted for, the net cost to the people for service is lower from publicly-owned utilities...
...It springs from the hearts and minds of such notable progressives as Gilford Pinchot, the great conservationist, and George W. Norris, the progressive U.S...
...it was the utilities' first target for attack in the postwar strategy of opposition to the national power policy...
...Ironically, the qualities which in private business are praised as virtues—vision, imagination, initiative, and bold enterprise—are condemned as the cardinal sins of public administrators...
...But about the same sized majority opposed "socialism...
...The utilities need to dominate only a single state in a region to block all effective action on major problems...
...So ECAP promptly re-designed its propaganda, launching a coordinated multi-million dollar campaign to hammer away at the theme that TVA and other power projects are "socialistic...
...The new Administration will have to decide within weeks whether to hold Idaho Power in check, as the Truman Administration did, or let the project go down the slide...
...Everyone who reads popular magazines or hears the radio is familiar with the content of utility advertising...
...Just how far the Republican Administration will dilute the public interest in power development policy by a shift toward the interstate compact device, depends upon the balance struck in Congress...
...And they would provide no flood control or navigation benefits, contrasted with benefits capitalized over a 50-year period of over $40 million from Hells Canyon...
...The "super power" principle is neither a new nor untried idea...
...The big joker is that an interstate compact simply cannot function to get the needed job done...
...But it is an essential cog in the federal government's plan for efficiently developing the resources of the Columbia River system and meeting the mounting needs of the nation...
...This policy has favored the development by the government, for public benefit, of important water-power resources, with a strong inclination toward integrating power production, flood control, irrigation, recreation, and navigation into a unified plan to secure maximum benefits...
...Probably shamed by these glaring contrasts, Idaho Power last fall amended its application to call for three dams, in place of five, which would provide somewhat larger benefits...
...It would add a whopping 1,124,000 kilowatts to the prime electric power ROBERT G. LEWIS, born oi home-steading parents in Montana, was educated at the Uni-^^^^^^^^^^m versity of Wisconsin as an economist He served with unusual distinction as an officer in World War 11, winning the Distinguished Service Cross and two Purple Hearts...
...The decentralization and interstate compacts approach has far more superficial allure and plausibility than outright liquidation...
...30, 1952, of a study foreseeing a giant power network linking 22 Western states by 1975...
...The combined output then becomes "firm power" able to command a prime price on the market...
...Three—Creation of publicly-owned, rationally conceived "super power" systems—the sum of the first two points...
...It could—as at present—admit privately-owned companies to a predominant share in the retail phase...
...There is far less support today than ever before in the Republican Party for the once strongly bi-partisan national power policy which originated largely through the leadership of the progressive Sen...
...The private companies, to provide the necessary centralized direction to this vast program, would need to concentrate control over a 22-state utility empire into a unified command...
...General outlines of the "next steps" forward were spelled out a generation ago, however little they may be spoken of today: One—Continued pressure toward rationalizing the electric utility industry through reorganizing and shifting ownership and control into patterns providing maximum operating efficiency...
...The most telling factor will undoubtedly be public opinion, mobilized mainly through such organizations as the National Rural Electric Cooperative Association, the American Public Power Association and its state and regional affiliates, the Farmers Union and the Grange, most of the labor movement, and the Cooperative League...
...An important complement to ihe "preference" policy in power sales is the policy of building federally-owned transmission lines from the damsites to load centers of the preferred customers...
...And they have not yet adjusted themselves to the ideological battleground chosen by their foe...
...George Norris, a Republican...
...A dream by public planners on so grand and bold a scale will inevitably draw a frenzy of protest from the profit utilities who will undoubtedly smear the dream as a plot by "socialistic" bureaucrats to extend their tyrannical domain...
...Many important elements of the Republican Party have railed for outright liquidation of the existing federal power program...
...Moreover, none of the complaints about the present federal-state-local partnership pattern has originated with consumer organizations or local power district management...
...It has also proved its worth in TVA by every economic standard...
...Idaho Power has fought the Hells Canyon Dam proposal from the first...
...Despite the "preference" policy, most of the power produced by federal projects goes to privately-owned companies...
...Nor would they provide irrigation benefits, while the federal project would include a financial component for subsidizing irrigation out of power revenues...
...Two—Extension of public ownership to additional municipalities...
...The fate of the principle now hinges on how well the public power movement can muster its courage to stand up to the intellectually vaporous ammunition of name calling...
...This national power policy has developed a highly successful pattern of federal-regional-local-public partnership, with a satisfactory degree of democratic participation throughout...
...The U.S...
...But the transmission program has been all but stopped dead in its tracks for several years...
...Nor do they argue the question of costs of power service to users—the record of low rates made by publicly-owned power distributors is too convincing to be denied...
...they do not serve retail customers, although a few big industrial concerns, notably aluminum producers, do buy directly from federal agencies...
...All of these preferred customers serve their customers on essentially a non-profit basis, so that everything beyond the actual costs of service is retained by or returned to the public...
...Just where they will balance out only time and events can tell...
...Federal agencies are almost exclusively producers and wholesalers of power...
...For several years now, the Department of Interior has wanted to build a giant multi-purpose dam in the Snake River at Hells Canyon, on the Idaho-Oregon border...
...capability of the region—688,000 kw at the damsite, and 436,000 kw more at planned and existing power plants downstream through more effective control of the Snake's and Columbia's waters...
...They represent a lot of people, and they know how to fight...
...But the Idaho Power Co., the villain of this piece, has arranged to put the Hells Canyon dream on the skids...
...The proposed dam would be one of the three biggest in the world, ranking with Boulder (Hoover) and Grand Coulee...
...Pressures within the Republican Party for shifts from the power policy followed by Democratic Administrations are conspicuous...
...Right after World War II the Electric Companies' Advertising Program hired a public opinion research firm to look into ^ the public mind which the utilities are trying to influence...
...It must fight back not only by exposing the power trust strategy to discredit, by attributing to socialism the American principles of bold planning ands democratic cooperation for the general welfare, but also by simply being unafraid of the hate content of words like "socialism...
...But their resources are pitifully small for meeting the nearly solid phalanx of private business ranged against them...
...This wonder of the world has not yet won approval of Congress...
...An overwhelming majority—about two-thirds—of the U.S...
...It would be the highest of all —750 feet...
...The American Farm Bureau Federation meeting at about the same time specifically recommended, for the first time, that federal power projects be disposed of by the government...
...The part-time hydro production, of course, reduces the average cost well below that of all-fuel generated power...
...Louis Reynolds, vice president of the tobacco (Camels) family's aluminum company, proposed that the transfer to private ownership be accomplished by distributing shares in proportion to federal income taxes paid during the past 10 years...
...This is institutionalized in a number of legislative enactments, including the Federal Power Commission Act, which provides that power sites in navigable streams may be turned over "temporarily" for private exploitation under federal license, but subject to a "recapture" right by the public...
...The power company's "spite dam" is now before the Federal Power Commission, which must issue a license before the river can be dammed...
...The grand strategy of the embryonic plan is to transport energy from Western coal fields and hydroelectric sources to distant industrial and population centers at far less cost than the alternative haulage of coal by rail— 1.86 mills per kwh compared to 2.19 mills per kwh for the equivalent amount of coal...
...Their formula covers all kinds of public business enterprise...
...The Swedes are already successfully operating a line 600 miles long...
...There is a glaring absence of any discussion of the practical economic effects on consumers of electricity...
...Douglas McKay of Oregon, to decide before hearings resume April 13...
...Moreover, the five-dam plan would provide no storage capacity to increase the productivity of downstream installations, while Hells Canyon would provide 3,880,000 acre-feet...
...Grace Pfost to Congress...
...Even more important, widely diffused responsibility plays right into the hands of the carefully coordinated utility lobby, making it easy to baffle and mislead the voters about the issues...
...Its fundamental characteristic is establishment of a favorable climate toward public and cooperative ownership and operation of electric power facilities...
...The utilities no longer bother to debate the question of economic feasibility—too many publicly-owned "white elephants" have proved their worth as national nec-cessities and financial successes...
...From Army service he ^fefe went to the Wisconsin Farmers Union as field organizer, then became editor of the Wisconsin REA News, and is now in Washington as editor of the National Union Farmer...
...In the TVA, the huge demands of the Atomic Energy Commission and the widespread extent of municipal and cooperative retail power distribution resulted in preference customers taking the predominant share, but the overall national total sold to preference customers, including AEC, still reached only 46...
...The smarter political brains are concentrating more quietly on a strategy of dilution rather than forthright liquidation...
...Significantly, all these proposals come couched in the ideological argument that it is, somehow, not quite clean "Americanism" to tolerate public ownership of anything that private interests might want to own...
...Subject to the same pressures for conformism imposed by the current hysteria over communism and the parallel identification of the profit system with patriotism, most of the public power people broke and ran when the utility propaganda cannon fired the epithet of "socialist" at them...
...The preferred customers in 1951 purchased less than one-third of the Interior Department's energy, with private utilities getting 35% and a few big industrial customers taking about 30...
...The National Association of Manufacturers, at its convention in December, presented a proposal calling for eliminating all federal business, credit, and state aid activities...
...Four additional dams, likewise small, were part of the company's announced plan, but if Oxbow were approved and the big federal project forestalled, the company would be under no obligation to complete even the planned development...
...The federal government's role is solving major regional watershed problems and developments too big for smaller agencies to handle...
...The Idaho Power "spite dam" proposal, if approved, would squander the fabulous power site at Hells Canyon on a far inferior development...
...A practical question remains as to who could carry it out in order to-^realize the enormous benefits it implies for the West—maximum utilization of natural resources, conservation of oil and gas, economic efficiency, and dynamic expansive impact on industry, agriculture, and trade...
...In the process, it won political domination of Idaho's state government and Congressional delegation—a stranglehold that was loosened, despite the national trend, by the November election of Democrat Mrs...
...regional integrated development has been thwarted elsewhere, but isolated projects generally represent at least a rough approach to multi-purpose integration...
...Normally, there's nothing so urgent about a gigantic dream like this as to make it an instantaneous political hot-foot for a new Administration...
...A relatively new phase of power policy is supplementing hydroelectric power plants with steam power generation to compensate for the slack in hydro output during low-water seasons...
...The origins of the current strategy are illuminating...
...The national power policy on which the Republicans' resolution of the Hells Canyon issue will reflect so importantly has been a long time developing...
...The hokum that public power creates a magnetic pull toward communism is a familiar part of the literature of the campaign...
...That is the choice posed by the ideological debate...
...Nevertheless, a nose-count of the 83rd Congress discloses that a bloc of 44 Senators, with past voting records fairly favorable to public power, should be able to stop any extreme wrecking operation...
...Ill The new emphasis on ideology is significant...
...Should a private group or a democratic government be endowed with primary authority in decisions about rates and terms for electric service, utilization of basic resources, and everything else that such a critical decision in the economic life of the region implies...
...They advocate turning the federal government's activities in power over to states and local communities...
...II The final and critical point in present national power policy is the so-called "preference clause...
...Without a federal transmission program, most federal power would find no market other than large privately-owned utilities...
...public was found to consider the TVA "a good thing...
...Without transmission lines, the preference principle would be largely ineffective, since most preferred customers are too small to provide their own transmission to the dam sites...
...Where it is obvious that state boundaries can not encompass the problem, as in great watershed development and manag -.-ment problems, they propose a program of interstate compacts to establish regional agencies...
...C. E. "General Electric" Wilson proposed that federal power projects be liquidated by swapping shares in new corporations for government bonds...
...The best realization of the ideal of integrated multi-purpose development is the TVA...
...Based on the Flood Control Acts and reiterated in other power legislation, this clause provides that, to assure that maximum benefits from public power development will reach the public, preference in the sale of power from federal projects must be given to public utility districts, municipalities, other public bodies, and cooperatives...
...And what happens will furnish a positive and dramatic signpost to reveal what the Eisenhower Administration's policy will be in the highly critical field of electric power...
...The federal government clearly could provide the centralized direction required to implement such a super-power system without impairing existing local freedom in handling local aspects of power distribution...
...The last rational argument left in the utility book is on the question of taxes, and that needs the embellishment of e'x-tensive distortions to give it sticking power...
...The Interior Department's proposal for a giant power grid in the West is a good issue against which to measure the utility companies' new ideology...
...IV No interstate compact has ever solved a major regional resources problem, although the device has had a lengthy trial...
...that is up to the Eisenhower Administration and the new Secretary, former Gov...
...It has been iri operation in the Province of Ontario since World War I, where municipal and provincial ownership, complete integration, and up-to-date operating and management practices have made Ontario the leader of the continent...
...Whatever it does about that baby, it will have to do right out in public with everybody in the neighborhood looking on...
...Dynamite at Hells Canyon = By Robert G. Lewis — = THE Republican Administration found itself with a kicking, yelling, and extremely conspicuous baby on its lap when it came into control of the federal government Jan...
...But it is freely acknowledged on all sides that the political climate will be more favorable to private ownership and profit operation than previously...
Vol. 17 • February 1953 • No. 2
