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technical engineering studies into the safety and adequacy of structures proposed to be constructed by permittees and licensees.

The Federal Power Commission has no authority to, nor has it ever engaged - in, construction work. No part of the funds requested are to be used for conloss. struction or for engaging in construction.

s It is possible that Mr. Case's question may grow out of the fact that, under

ris ho authority of section 9 of Executive Order 8455, signed June 26, 1940, the Director o of the Bureau of the Budget and the Chairman of the National Resources Planjo o ming Board determined, in letter dated November 14, 1940, that the Federal Power solo Commission should be designated as a “construction agency (class I)” concerned o with "planning for or surveying the need of power projects to be financed in whole or in part by the Federal Government.” It may be noted that no reference *" is made or suggested that envisions actual construction work by the Federal r|. I. Power Commission.

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Mr. CASE. Then you referred to the fact that you had suspended the notification to utility companies that they were subject to license, under the New River case. Have you made a determination of those facilities which you think are subject to your licensing, even though * you have not notified them? - Mr. OLDs. I think Mr. Shannon can give you a better answer on that. Mr. WEAVER. Probably one answer to that is that through the past * years, the Commission has made studies of all power projects in the United States and recently, as the chairman has stated, after the decision with respect to the New River Dam of the Appalachian Power Co. there have been quite a number of applications for licenses that have been made on the initiative of the power companies. The chairman has in mind this, that the Commission is not undertaking, on its own initiative, to cause power companies to come in with applications for license; the Commission is handling applications which are made on the initiative of the power companies, and to we have several of such. Mr. OLDs. I think, Mr. Weaver, you misunderstood the Congressman's question. The Commission has reviewed the situation, but has not come to a very definite segregation of projects. Mr. CASE. Have you established any demarcation by which a utility jompany can know for itself that it is subject to license, or is not : Mr. OLDs. In each instance, it has to be taken up as a separate instance in relation to the particular river where the project is lo(ated. You cannot make a general determination that would be a Proper guide in carrying out the purposes of the act. Mr. CASE. It is a rather important question to some of the smaller companies, on some of the smaller streams, to know whether or not they are subject to license, which has a bearing on what they do in the way of improvements, repair, rates, and a great many other questions. Mr. QLDs. I assure you, if it had not been for the war coming on, We would have before this gotten out letters to companies involved in such power projects. Mr. CASE. Is it not possible to set up some guidepost so that these companies will know where they are? 81710–43–40

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Mr. SHANNON. They have a guidepost, I think, Congressman, in the decision itself, which is very sweeping. Mr. CASE. It is very sweeping; but, as I recall, it was on any stream which might be made navigable. Mr. SHANNoN. Which might be made navigable by the expenditure of a reasonable amount of funds. Mr. CASE. What is a reasonable amount of funds? Mr. SHANNoN. There would be a question. Mr. CASE. It seems to me the Commission has the responsibility to make some determination so that these companies will know. For instance, I live in a country where you have a great many streams of an intermittent character and by certain expenditures you might say certain streams could be made navigable, or almost any stream; but these little outfits that use electric power seasonably are up against it to know what to do—whether to replace with Diesel equipment, if they can, or to shape their policy in that direction. - * What expansion of duties have you received with regard to the field of gas as a result of Executive orders? Mr. OLDs. As the result of the Executive order, the main expansion has been in the field of protection against hostile acts of all gas properties. r. CASE. You have received nothing in the field of regulation by the Executive order? * Mr. SHANNoN. We have received by Executive order the requirement that the Commission control and make recommendations with respect to the granting of Presidential permits for the maintenance of facilities for the exportation or importation of natural gas from or to the United States. - - Mr. CASE. Do the Presidential permits cover both export and import? Mr. SHANNON. That is correct, as to electricity and also gas. The permits require the Commission's approval. They have to get authority from the Commission in order to engage in the act of exportation or importation. Then the Executive order supplemented that, with the provision particularly requiring the Commission to consider and make recommendations to the President for the granting of Presidential permits to permit construction and maintenance of facilities at the |. for exportation and importation.


Mr. CASE. There has been some reference in the discussion previously to the fact that the W. P. B. has issued certain orders which, to a certain extent, would override the functions of the Federal Power Commission. Has there been any division of responsibility between you and the W. P. B. as to what your duties are and what their duties are 2

Mr. OLDs. Definitely, yes; by an agreement signed April 24, 1942, between Mr. Nelson and myself.

Mr. CASE. Is there any reason why that agreement should not be placed in the record?

Mr. OLDs. None whatsoever.

(The agreement above referred to is as follows:)

For the purpose of securing maximum efficiency in the promotion of war activities related to the production and utilization of power, it is recognized that the primary directing responsibility for problems of war power supply, both in respect to planning and administration, rests in the War Production Board. It is also recognized that the Federal Power Commission under its various statutory authorities has numerous permanent responsibilities and functions relating to the operation of electric utilities during both peace and war and that, at the direction of the President, it has, since 1938, been engaged in planning for a supply of power adequate to meet the demands of war, a function now vested in the War Production Board. In carrying out these permanent and emergency functions the Commission has assembled an experienced staff and has collected considerable information and data which can be of substantial value to the War Production Board in connection with the dispatch of its responsibilities.

In order to avoid duplication of effort and to avoid confusion in carrying out their respective responsibilities, the War Production Board and the Federal Power Commission have agreed that the following outlines their respective responsibilities and establishes a procedure for making the most effective use of their staffs and information.


The War Production Board has the exclusive responsibility for the following problems arising out of war power supply: 1. Development and administration of programs to assure that the equipment and materials which can be made available for power supply purposes, pursuant to the Board's production programs, are allocated to those areas where and at those times when the need is most urgent from the standpoint of the military and war production program, keeping in mind the minimum dislocation of civilian supply. This includes, of course, planning for and administration of priority control and allocations of materials and equipment for all power systems, both public and private, and for industries operating or installing generating facilities. 2. Determination of power supply and demand in relation to the war production program and essential civilian activities. This includes the programming of power supply requirements for the various War Production Board branches, the armed services, the Maritime Commission, and the other agencies engaged in the military effort or in war production. 3. The planning, development, and administration of power-supply-allocation programs for those regions where the available supply proves insufficient to meet all requirements. 4. The mobilization of power to meet specific war production requirements including the working out of arrangements for power supply to specific military establishments and war industries and the development and administration of programs for coordination of transmission lines and power plants to assure an adequate supply for such establishments and industries, including the expansion of power capacity where needed to meet such requirements. ... It is recognized that, while the War Production Board has exclusive authority and responsibility with respect to the matters above outlined, the Federal Power Commission, as a resulf of its experience, can contribute materially to the performance of these functions by its advice and counsel. To this end the War Production Board will welcome such suggestions and recommendations as the Commission may from time to time desire to submit. Consistent with the purpose of this memorandum and to avoid duplication, the Commission will not undertake any investigations with relation to the above outlined matters for which the War Production Board is responsible, except after clearance with the Board, unless such investigation may be necessary in order to carry out

the responsibilities of the Commission as outlined in paragraph B below.

B. RESPONSIBILITIES OF FEDERAL POWER COMMISSION The Federal Power Commission will in the public interest continue to exercise its full statutory powers, as set forth in the Federal Power Act and amendments thereto, the principal of which are as follows:


1. The licensing of privately constructed hydroelectric projects and the regulation of such projects in accordance with the provisions of the act. 2. The fixing of rates for the transmission and sale of electric energy in interstate commerce; control of the importation and exportation of electric energy; and the disposition and acquisition and merger of public utility properties. 3. The supervision of accounts and rates of depreciation of public utilities subject to the Commission's jurisdiction. 4. The collection, compilation, and tabulation of information regarding the generation, transmission, distribution, and sale of electric energy by public and private agencies throughout the United States; and regarding the ownership, financing, operation, management, control, service and contracts of such public and private agencies, as specifically set forth in section 311 of the Federal Power Act. 5. Surveys and explorations of river-basin developments and studies of power installations in connection with flood-control programs. 6. Protection of the power supply against hostile acts in cooperation with the utilities and other Government agencies, in conformity with the President's directive of June 14, 1940. With respect to the Commission's authority to require the interconnection of electric facilities under section 202 of the Federal Power Act, it is understood that during the continuation of the war, action will be taken and orders will be issued by the Commission with reference to such interconnections only after prior clearance with the War Production Board as to the nature of such action and the form and substance of such orders, to make certain that any interconnection to be planned for or ordered is essential in the war effort and to assure that materials can be made available for carrying out such interconnection.


In order to obtain maximum effectiveness and avoid duplication of effort the War Production Board and the Federal Power Commission agree that— 1. All such studies and compilations as the Commission may make in carrying out its functions as outlined above will be made available to the War Production Board, such as– (a) Monthly reports on power system capacities and loads by power supply areas; (b) periodic reports describing power plants, transmission facilities, and interconnections; (c) periodic reports on industrial power plants, capacities, and loads; (d) investigations of rates in connection with power interchange matters. 2. The Commission will make such specific additional studies as the War Production Board may request which can be carried out with available perSonnel and without interfering with the essential statutory functions of the Commission. 3. At the request of the War Production Board, the Commission will make available for employment in the activities involving the War Production Board's responsibilities outlined above such members of its staff as are not required by the Commission in the performance of its duties and responsibilities as above outlined, with the understanding that such staff members will be available for the duration of the war and that, in the execution of such responsibilities, such Staff members shall be subject to the supervision of the War Production Board. 4. The Power Branch will submit its basic M. L. and P. priority orders to the Commission for consideration and recommendation in accordance with the procedure governing the relation of the Power Branch and the other branches and divisions of the War I’roduction Board in such matters. 5. In times of emergency the Commission will, if requested by the War Production Board, make available temporarily such additional members of its staff as can be spared from other work to assist the staff of the War Production Board in carrying out programs essential to assuring an adequate power supply for military needs, war production and essential civilian requirements. 6. In order to secure maximum efficiency and economy and evidence cooperation before the industry and the public, the Power Branch of the War Production Board and the Division of Finance and Statistics of the Federal Power CommisSion, with the approval of the Division of Statistical Standards, Bureau of the Budget, will work out procedures in the collection and compilation of statistical and other information, having a general or national coverage, which will avoid duplication and impose upon industry the least burden compatible with Securing sound and satisfactory results.

The carrying out of the program outlined above shall be effected by specific arrangements to be worked out between the Power Branch of the War Production Board and such representatives of the Federal Power Commission as may

be designated.

For the War Production. Board.
For the Federal Pouyer Commission.

To o

or APRIL, 24, 1942.

to or To do. JURISDICTION OF COMMISSION ON REGULATION OF ELECTRICITY RATES so TO CONSUMERS. * Mr. FrtzPATRick. One more question: Where a utility corporation

... extends its lines outside of the State it is located in, do you have the is of o to regulate the rates outside of the State where they extend their lines? Mr. OLDs. We have authority to regulate the wholesale rates where that electricity is wholesaled by the utility; not the rate charged to the consumer. Mr. FITZPATRICK. Are you permitted to regulate it also in the same State where it is produced? [.. Mr. OLDs. I think Mr. Shannon can give you a better description about that. Mr. SHANNoN. Our jurisdiction is to supplement the jurisdiction of the State commissions. State commission regulate the price that the individual household consumers pays. The interstate price, where energy is transported from one State into another State, and sold in ... the second State to the distributing company, the Federal Power Commission has jurisdiction to regulate, which, of course, directly affects "; to the consumer. r. FitzPATRICK. Yes. But assume in the State where they extend the line, the consumer gets it for 50 percent less than in the State where it is produced. Are you able to do anything in a case of that kind? You - See, the point is this: Because they produce such a large amount, they can extend their lines into another State and sell at a lower rate to the consumer than they can in the particular State where they are located 2 * It does not seem fair that such a thing should exist. Mr. SHANNON. Of course, our jurisdiction, being a Federal agency, is limited to the interstate shipment. M; FITZPATRICK. But is it not true that could happen, Mr. ChairIslan Mr. OLDs. Yes, sir. Mr. MANLY. We do not permit any discrimination in the case of rates under our jurisdiction. We have alreaddy given a hearing to the Otter Tail Power Co., for example, which was serving quite a numher of communities and had widely different rates, and the Commission handed down a decision in which they held that discrimination could not be permitted and fixed the rates on a basis of the lowest rates which were being charged for communities of the same class, that is of the same size and the same general order. Mr. FitzPATRick. In the same State? Mr. MANLY. No; all over their system, and the company accepted that decision and revised its rates downward. sr. FitzPATRICK. Did that mean the rates to the consumer? Mr. MANLY. No. We cannot deal with the local consumer,

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