RETREAT ON PUBLIC POWER
Ottenad, Thomas W.
Retreat on Public Power by THOMAS W. OTTENAD Tt is a long way from the Shrine A Auditorium in Billings, Montana, to the White House in Washington, D.C., and the road is littered with the zeal of...
...One of the best demonstrations has been in defense policy...
...In the face of this frontal assault, why has the Administration temporized...
...Their aim, he charged, was to kill plans proposed by the Interior Department last December for the nation's first long-distance transmission line...
...L. The ultimate direction of the Kennedy Administration's power policy has a significance that goes far beyond any single issue or daily skirmish...
...First, he fears, that the line, which he termed "an almost mile-lor-mile parallel and duplicate" of part of a 1000-mile line proposed by the Interior Department, will prevent the building of a Federal or other publicly owned intertie between the Pacific Northwest and California, Second, he sees the hookup as the opening wedge in a drive for a longer, privately owned inter-tie...
...It included funds for a transmission line linking the firm's system at Klamath Falls, Oregon, with that of Pacific Gas & Electric Company at Round Mountain, California...
...Udall is pursuing the will-o'-the-wisp of cooperation with the private power industry...
...L. financing plan issued a majority opinion in a reversal of usual procedure...
...The rights of the so-called public "preference customers" in buying Federal power have been upheld...
...At its worst, it could lead to confusion, uncertainty, and lack of Federal leadership, with private utilities moving in to fill the vacuum...
...In answer to mounting complaints, Udall claims the combination approach will cut the Federal government's immediate investment by $27 million, and will boost long-term Federal revenues...
...The Federal Power Commission reported that in 1957 the cost of advertising placed under just one industry campaign, the so-called Electric Companies Advertising Program, came to slightly less than $2 million...
...way to private lines in the Upper Colorado basin and in an important area of Oregon and California...
...The Commission says the composition of the committees is consistent with the fact that private firms make up the bulk of the power industry...
...Kennedy has displayed most clearly since becoming President: his distaste for being committed to a single course without alternative routes...
...After eight years of "partnership" and other friendly and profitable arrangements concluded with Mr...
...The fifth member, Harold C. Woodward, did not participate in the case...
...An ambivalent policy on power has caused amazement, confusion, and dismay among some of the New Frontier's best and earliest friends...
...He wanted stronger conventional forces as well...
...FPC vice chairman Howard Morgan put his finger on this aspect of a seemingly minor 110-mile line included in the P.P.&L...
...L. plan because of the considerations cited by Morgan...
...Morgan is concerned on three counts...
...For another, the Administration's attempt to straddle the public-versus-private power issue already has lent aid and comfort to the private firms' persistent campaign to control transmission lines, for its latest moves have opened the THOMAS W. OTTENAD is a Washington correspondent for the St...
...It makes this claim despite the fact that FPC chairman Joseph C. Swidler says the United States is "probably the only civilized country in the world that does not have a coordinated national electric system...
...For one thing, the nature of power projects is such that mistakes are memorialized in concrete dams and high-power transmission lines and are not easily undone...
...The overall climate for public power development has shown improvement over that of the Eisenhower Administration...
...Stewart L. Udall, the mountain-climbing Secretary of the Interior, talks loftily of bringing about a new spirit of "competitive cooperation" between public and private utilities...
...As it was, the private utilities scored a significant victory...
...And he was right...
...The attitude of the private utilities was spelled out last June at the annual convention of the Edison Electric Institute, a trade organization that represents nearly 200 private power firms...
...Third, he views it as a grab for power from the Federal Bonneville Power Administration...
...But on which side of the power issue the Administration eventually takes its stand is vitally important to the whole country...
...How long and how successfully the Administration can keep one foot planted on the private side of the power right-of-way and the other on the public side is open to debate...
...Louis Post-Dispatch who covers developments in the field of power, among others, for that newspaper...
...Studies of prospective interregional connections of power systems have been initiated and other constructive steps have been taken...
...Despite their sworn hostility to public power, Udall has held out the olive branch to the private utilities and has his Department working in tandem with them...
...This year it has carried on a well-heeled advertising campaign designed to convince the country that it already has an adequate national private power grid...
...Semantics aside, the Kennedy Administration's approach is highly risky for a number of reasons...
...Sherman R. Knapp, then retiring president of E.E.I.t warned his colleagues to arm themselves for a future of intense competition with both government power projects and other sources of energy...
...Udall is confident the eventual formal contracts will be drawn so as to enable the government to exercise a strong checkrein over the utilities...
...Philip Sporn, president of the American Electric Power Company, told the convention that the industry must be ready to defend itself and to sell the idea of private enterprise in power...
...For its policy will affect vast new frontiers that still lie ahead...
...By controlling certain backbone transmission lines, the private companies, through an eventual investment of perhaps $100 million, may be able to control a public generating system costing nearly a billion dollars...
...With 130 billion dollars worth of new electric generating plants and transmission lines expected to be needed in the next twenty years, the whole future of public power rides on which direction the swinging compass of the Administration ultimately points...
...If he had, they think he might have saved the day...
...Udall rejects any suggestion that his policy seems to be only a New Frontier variation of the "partnership" concept of the Eisenhower Administration...
...Evidence is accumulating that this kind of multiple-choice technique is what the Administration wants in the realm of power...
...Why has it failed to move more forcefully...
...Apparently operating on the theory that a good offense is the best defense, the industry last year punched away at one government proposal after another...
...At its best, the Kennedy policy could, through the threat of Federal action or inaction, seek to force both private and public power groups to do more than they would without pressure...
...In its ultimate implications," Morgan said, "this issue is perhaps as important to the states of the Pacific Northwest as any development since construction of the first Federal mainstream dam across the Columbia River more than twenty-five years ago...
...In addition, there are "informational" and other activities by such groups as the National Association of Electric Companies, a registered lobbying organization with 112 utility members, and the Public Information Program, representing about seventy utilities...
...Its performance has fallen short of his promises, and some of its goals seem to have changed or disappeared entirely...
...Of the twenty-two states west of the Mississippi River, he carried only sevenThe views of Swidler and Udall also enter into the situation...
...Of these four examples of the Kennedy Administration's fence-jumping, the Upper Colorado decision and the Pacific Power & Light plan are by far the most important and, to public power advocates, the most alarming...
...The reversal was an astounding about-face because just last year the Administration, with the President himself leading the fight, waged a valiant and successful battle on behalf of the all-Federal concept...
...his insistence on having a choice of actions that can be employed as he sees fit...
...The Pacific Power & Light plan is a good example of one of those innocent-looking, routine-sounding issues that backers like to slip quietly through the bureaucratic labyrinth without exposing the broader ramifications...
...plan...
...Kennedy lacks first-hand knowledge of the problems of the West where the major remaining power resources are located...
...Retreat on Public Power by THOMAS W. OTTENAD Tt is a long way from the Shrine A Auditorium in Billings, Montana, to the White House in Washington, D.C., and the road is littered with the zeal of the New Frontier...
...Item: The Federal Power Commission in March approved a financing plan proposed by Pacific Power k Light Company of Portland, Oregon...
...It also pointed out that the Interior Department's plan for a Pacific Northwest-California inter-tie made provision for a somewhat limited private connection of the type proposed by P.P...
...Supporters of the project say the President failed to throw his full weight into the fight...
...The industry's campaign is patently designed to kill off any Federal or public effort to create a power grid on a regional or national scale...
...Of all the mountain and Western states, only two—Nevada and New Mexico—went for the President in 1960...
...Two weeks after Morgan's dissent became generally known, the three commissioners who voted for the P.P...
...There has been more emphasis on long-range and basin-wide planning...
...his demand for room to maneuver...
...In seventeen months in office, however, his Administration has shown little zest for some of his pledges...
...In a bitterly worded dissent from the three to one decision, Howard Morgan, vice chairman of the FPC, warned that the private line was a gamble by the utilities...
...In the face of these sudden, sharp veerings, it is difficult, if not impossible, to tell where the course will lead...
...The present plan, he claims, is much improved over an offer by the private companies that drew sharp criticism last year, and, furthermore, it is designed to safeguard the public interest...
...The fury of the private firms is traceable to the outcome of the Presidential election in 1960...
...Last year's attack against public power by private utilities was one of the most powerful that veteran members of Congress could recall...
...So it launched an immediate offensive to block any public power program that might be contemplated by the Kennedy Administration...
...In Billings on September 22, 1960, Candidate John F. Kennedy proposed an ambitious program of vigorous Federal leadership in developing electric power and other natural resources...
...Eisenhower, the industry feared the coming of a new Administration, since the Democratic platform was committed to a more vigorous Federal power effort...
...Another is that the election may have left the Administration understandably somewhat disenchanted...
...Like a sailing ship tacking erratically into an uncertain wind, it has zigged first in the direction of bold public power programs and then zagged hastily toward the sheltering arras of the private utilities...
...Kennedy can lake credit for a number of significant accomplishments...
...Both committees are heavily weighted in favor of private utilities...
...Udall's unexplained reversal handed the private power lobby a victory it had not been able to win even from the Eisenhower Administration, for former Secretary of the Interior Fred A. Seaton had endorsed the all-Federal system...
...This quality has shown clearly in a number of fields...
...Critics suggest several answers...
...The President quickly dropped the Eisenhower Administration's almost total reliance on nuclear power...
...Friends say the FPC chairman, who has a public power background as former general counsel for the Tennessee Valley Authority, has told them he does not intend to let himself be accused of pro-public power bias in his new position...
...He has strengthened the Rural Electrification Administration...
...To have still another weapon in his arsenal, he also has emphasized guerrilla training...
...One is that as an Easterner, Mr...
...Item: The Federal Power Commission has appointed two principal advisory committees from the electric industry to assist it in a proposed study...
...The pole-to-pole gyrations of the Kennedy power policy have been illustrated a number of times...
...In place of an all-Federal transmission system to serve the hydroelectric installation, Udall swung over to a hybrid combination of private and public lines...
...The big line is intended to move a large volume of electricity cheaply from the Pacific Northwest to southern California...
...For the New Frontier is facing what may well be the biggest, best financed, most concentrated fight ever waged against public power by the country's private utilities...
...While critics feel the Administration has not gone far enough in its power programs, Mr...
...His appointments to power and resource posts have generally been of high caliber...
...The substance of the majority statement was that the FPC's jurisdiction over financing proposals is sharply limited and that the agency lacked authority to hold up the P.P...
...This is a prospect that public power advocates believe seriously jeopardizes the future of public power in a large part of the West...
...The utilities are not at all backward in spending money for propaganda...
...The National Rural Electric Cooperatives Association, a favorite whipping-boy for the private firms, estimates that the total annual budget for national advertising and pamphleteering by private utilities on the general theme of public versus private power is in the neighborhood of $20 million...
...The Administration's behavior is a classic example of one of the traits Mr...
...Kennedy is reported to have remarked privately and pointedly shortly after his victory that the Western states had not given him much support...
...Consider the following: Item: Last year Congress turned down a proposal that the Federal government construct an electric generating plant that would use waste steam from the Atomic Energy Commission's plutonium production reactor at Hanford, Washington, to create a new source of power for the Pacific Northwest...
...Item: In February, Secretary Udall suddenly reversed the Administration's previous policy on transmission lines for a big Federal power project in the Upper Colorado river basin...
...Among other things, the study is aimed at developing plans for interconnecting and coordinating both private and public power systems into a nationwide network...
...Stripped of the technical complexities that mark power projects, the essential danger of the decision for combination public-private transmission from the Upper Colorado project stands out starkly: Critics say it will allow the utilities to erect a private toll gate in the middle of a big public power system...
...By these tactics, he thinks he can calm the battle between public and private power interests, although more war, rather than peace, seems to have resulted...
Vol. 26 • June 1962 • No. 6
