Mr. OLDS. Not where the W. P. B. has been working out these pooling arrangements.

Mr. FITZPATRICK.. I am trying to find out where you were called in. Mr. OLDS. We have been working in a rather different way. They have been handling the operating

ACTIVITIES OF COMMISSION IN POOLING OF POWER AND INSTALLATION OF SOUND ACCOUNTS SYSTEMS

Mr. FITZPATRICK. You said you were called in and that you accomplished a great deal in the matter of pooling power; that is, that you had conferences with the utility companies in the pooling of power, and also in putting in a sound system of accounts. And in that cornection you stated that you had your representatives there and held meetings and took minutes, I assume.

Now, would you mind giving the committee a report, including the date and the place, and showing what transpired, of these conferences? Because, no doubt, you made a report. I would like to get a copy of that report, just to see what took place.

Mr. OLDS. I want to be sure that I understand what you have in mind.

Mr. FITZPATRICK. You said that your commission held conferences with utility corporations, where they agreed upon a certain distribution of power, and on the setting up of a different accounting system, so that they would be prepared after the war to have their business on a sound basis.

Mr. OLDS. That was purely on the accounting basis.

Mr. FITZPATRICK. I know, but you said you held meetings. Would you mind giving us the names of the members of your Commission's staff that were present and also what transpired, and the names of the utility corporations with whom you had these conferences? That is very important.

Mr. OLDS. As far as the matter of accounts is concerned, we can give it to you.

POOLING OF POWER

(NOTE. The following statement by Mr. Buck was subsequently submitted:) The Federal Power Commission has taken a leading part over a period of years in the promotion of interconnections and pooling of power with relation to wartime needs. As early as 1938 preliminary plans were worked out covering substantially all of the power resources of the industrial East and discussed with the utility systems at a series of conferences. Following these conferences, smaller meetings were held with the utility engineers to discuss pertinent engineering details.

In 1939 and 1940 individual studies were initiated and carried on for each of the 48 power-supply areas of the country to determine the benefits that were to be gained by such coordination and pooling.

As the national-defense program gained headway and materials became increasingly tight, emphasis changed from general schemes of interconnections and pooling to the promotion of certain interconnections, requiring a minimum of critical materials and designed to accomplish a specific and essential purpose. On May 19, 1941, a conference was held with utility system executives from the Southeastern States, from which developed the voluntary set-up of a giant power pool among utilities in 17 States to alleviate the power shortage resulting from the severe drought. In connection with the pooling operations and after consultation with the companies involved, a number of interconnections were ordered to make additional power available or eliminate bottlenecks.

In June 1941 a series of conferences were held with utility executives throughout the country (see attached schedule of meetings) to review with them the power situation and to present preliminary plans for interconnection and pooling.

With the expansion of the authority of the Office of Production Management and its successor, War Production Board, that agency undertook much the same work. As a result, a considerable portion of the interconnection work was taken over by that agency in connection with its priority control of materials.

The working agreement between the two agencies, dated April 29, 1942, recognized the statutory authority of the Commission with respect to the ordering of interconnections. Since that date, the Commission has acted on interconnections only after consultation and agreement with the War Production_Board.

Action by the Commission has been necessary in many cases. In some instances, the use of the statutory power of the Commission has been necessary; in others the exercise of that authority provided the simplest means of obtaining quick action where problems of public-utility status or rates were involved.

Commission action has been taken with respect to interconnections between private utilities to make the reserves of one system available to another or to permit the saving of fuel oil through greater use of coal-burning plants. Typical of these are the Potomac Electric Power Co.,-Virginia Public Service Co., Connecticut Light & Power Co.,-Mystic Power Co., United Illuminating Co.,-Connecticut Light & Power Co., and the New Bedford Gas & Edison Light Co.,Montaup Electric Co. interconnections.

Other interconnections have been ordered between private utility systems and municipal or cooperative systems in order to make power available for a particular war activity. Typical of these are the Tidewater Power Co., Jones-Onslow Electric Membership Cooperative's connection to supply power to the New River and Cherry Point naval bases; the Florida Power & Light Co., Jacksonville, Fla., connection to supply power for the naval air base; the Florida Power & Light Co., Gainesville, Fla., connection to supply power to the air base; and the PensacolaJones Mill connection to supply power for aluminum reduction.

Other interconnections have been necessary to give stand-by protection or to make reserve capacity available for service. Typical of these are the Norwich, Con.-Connecticut Light & Power Co.; Malheur Electric Cooperative-Idaho Power Co.; Rocky Mount, N. C.-Carolina Power & Light Co.; and Florida Power & Light Co.-Clay Electric Cooperative Associates connections.

The procedure on interconnection and pooling activities consistently has been based on thorough consultation and discussion with the interested systems before any action has been taken. Many have been consummated without formal action by the Commission.

CONFERENCES ON ACCOUNTING MATTERS

(NOTE.—The following statement by Mr. C. W. Smith, relating to conferences on accounting matters was subsequently submitted:)

During the year 1942 conferences were held on accounting matters with 45 electric utilities. These conferences were held by Messrs. Charles W. Smith, Chief of the Bureau of Accounts, Finance, and Rates; Melwood W. Van Scoyoc, Chief of the Division of Original Cost; Russell C. Rainwater and John J. O'Neil, Assistant Chiefs of the Division of Original Cost; and members of the staff working under their direction. The matters discussed appertained to the adjustments the companies should make to conform to the Commission's accounting requirements. The utilities with whom the conferences were held were as follows:

Florida Power Corporation, St. Peters- Portland General Electric Co., Portland, burg, Fla.

The Commission's work in the field of original cost is coordinated insofar as is possible with the work of State commissions, most of which have adopted a system of accounts for electric utilities almost word for word the same as that prescribed by the Federal Power Commission. The Federal Power Commission has made joint accounting studies with the following regulatory commissions:

Alabama Public Service Commission, North Carolina Utilities Commission, Montgomery, Ala.

ANTISABOTAGE ACTIVITIES OF COMMISSION

Mr. FITZPATRICK. You also talked about the matter of antisabotage; did you make a report and could you make a report to the committee indicating what transpired? The F. B. I., for instance, and other agencies, are looking after that. Where do you come into the picture? What do you do and with whom have you had conferences on that? I would like to see a report of those things. Mr. OLDS. We can give you a complete report.

QUESTION OF DUPLICATION OF POWER INVESTIGATION WORK FOR WAR PURPOSES

(See p. 590)

Mr. FITZPATRICK. Today we have a number of groups that are working on this power question, and they all claim that their work is for war purposes. If that is true, there must be some overlapping. And if that is a part of the program that it is not necessary for you to engage in, because the others are taking care of that end of it, I think we might make a considerable cut here and bring down your appropriations to what you would normally require. If only 15 or 20 percent of what you are now doing is going for your normal work, then perhaps you should not have more than that percentage of your normal appropriation.

Mr. OLDS. Let us take this protection work. It is not a question of overlapping. It is a question of collaboration. The two parties, the Government agencies that have a joint responsibility for electricfacility protection, are the War Department and the Federal Power Commission. The Federal Power Commission provides the technical knowledge of the industry and the War Department provides the military point of view. As far as the joint efforts are concerned, joint inspections are made. The original protection reports on these utilities are prepared by our power engineers after covering the entire property. They are then transmitted to the War Department for its information and advice.

On the plant protection work, the information was gotten by going directly to the plants. A man would go directly to each system and go over it from top to bottom. I shall be glad to submit a further report on the matter.

(The statement requested is as follows:)

No duplication exists in the protective work covering electric and gas utilities by the Federal Power Commission, War Department, Navy Department, or the Federal Bureau of Investigation. This best can be set forth by a brief explanation of their respective functions and activities.

The Federal Power Commission's work is of a supervisory nature only and does not include the provision of guards, the actual installation of protective structures, or the investigation of suspected subversive actions. Field surveys

are made of the security status of those utility properties determined to be essential to the war effort, security deficiencies are ascertained, and reports prepared containing recommendations for the correction of deficiencies. Copies of these reports are furnished or made available to the War Department and other appropriate agencies.

The electric utility protection program of the Commission was undertaken pursuant to the President's directive of June 14, 1940. In 1941 the Internal Security Division of the War Department was expanded. Although mainly

interested in the protection of industrial plants, it recognized the primary importance of power for war production and expressed interest in the protective status of electric utilities. Full information was furnished to the War Department and a joint procedure was established, coordinating the work of the two agencies, and utilizing the technical knowledge of the Commission's engineers and the War Department's techniques of plant-protection methods. Close collaboration exists on all phases of the work, without duplication of effort.

Executive Order 9165, May 26, 1942, ordered the Office of Civilian Defense to establish a facility security program, supplementary to and correlated with the protection programs of the Army, Navy, and Federal Power Commission. The order named nine participating agencies to develop and execute the program with respect to specified facilities, subject to the policies, plans, directives, and procedure set up by the Office of Civilian Defense. The protection of electric utilities was not included in the order as this had already been covered by the President's directive of June 14, 1940. The responsibility for the protection of gas utilities was delegated to the Federal Power Commission and that for power and irrigation water and related facilities was assigned jointly to the Department of the Interior and the Federal Power Commission.

In accordance with Executive Order 9165, the Commission developed a protective program for gas utilities similar to that already in effect for electric utilities. Close collaboration has been maintained both with the War Department and the Office of Civilian Defense on the formulation and prosecution of the gas utility program and no duplication has arisen or is anticipated.

With respect to power and irrigation water facilities, jointly assigned to the Department of the Interior and the Federal Power Commission, a division of coverage and responsibilities has been worked out by the two agencies.

The Office of Civilian Defense is responsible for setting up of policies and standards and coordinating the, work of the nine participating agencies. Under Executive Order 9165, the Federal Power Commission performs the work of inspecting and reporting on the facilities assigned to it. The Facility Security Branch of Office of Civilian Defense does not carry on or duplicate these functions. Its regional and headquarters forces are charged simply with the coordination of these activities.

The Federal Bureau of Investigation concerns itself with the investigation of suspected subversive activities. Prior to the development of the Internal Security Division of the War Department and, it is understood, at the request of the War Department, the Federal Bureau of Investigation undertook protective duties with respect to certain important industrial plants. This phase of the work was turned over to the War Department and the Federal Bureau of Investigation does not enter the field of protection today. Suspected subversive action with respect to gas and electric utilities is reported to the Federal Bureau of Investigation for investigation. The Federal Power Commission does not make such investigations.

The Navy Department does not carry on protection work with respect to electric and gas utilities. The Federal Power Commission has arranged, however, for cooperation by Coast Guard patrols on the actual protection of utility facilities located on patrolled water fronts.

Special reference should be made to situation with respect to gas utilities in the State of California. Prior to the issuance of Executive Order 9165 and before any Federal agency was charged with responsibility for supervising the protection of gas utilities, the California Railroad Commission undertook surveys to provide such supervision. The Federal Power Commission collaborated with the Railroad Commission and utilized its reports, confining its coverage to supplement that of the Railroad Commission. The California Commission, unsolicited, has expressed its gratification for the cooperative manner in which the work was conducted.

Much time and effort has been expended to avoid and eliminate the possibility of duplication in the supervision of protection of electric and gas utilities. This has resulted in close collaboration with other interested agencies and the programs have proceeded smoothly without overlapping of responsibilities or duplication of activities.

In connection with the protective work of the Commission, it should be stated that the same engineers are utilized on it and other field activities connected with the war power requirements and supply work of the Commission. The merging of the work and of travel has made it possible for the Commission to both activities with a small field force.