Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-04
COURT TEST FACES
RIGHT TO CONTROL
POWER PROJECTS
Non-NavigabIe Water Enter
prises Held AmenabIe to
Federal Supervision.
NEW RIVER DEVELOPMENT
is BASIS OF DECISION
'Major Project License Ordered.
Five States Join in Fight
Against Commission.

A court fight doomed today for the
new Federal Power Commission, which
yesterday, in a decision of vital impor-
lance to the power industry Of the
United States, held that it was vested
with the right to assume full control
over hydroelectric developments on
non-navigable waters whose flow affects
navigable streams.
The ruling came on the 6-year-old
application Of the Appalachian Electric
Power Co. for an $11 100000 project on
the New River near Radford, Pulaski
County. Va, and its importance lies in
the fact that the bulk of the pote I.lal
water-power development of the country
Us surrounded by the same physical coz
ditions as govern in this instance.
In assuming full control over the
Radford development, the Power Com
mission would have positive rights over
the entire financial Set-up, including
fixing valuation, the recapture of e.
cess earnings and setting a 50-year
limit on the leasehold. In addition, II
might eventually exercise supervision
over rates and issuance Of securities.
Vigorous Opposition Develops.
The Appalachian Electric, backed by
Ave States, vigorously opposed the
exercise Of such authority by the Fed
eral Government. contending that sole
Federal interest in case of this nature
is in safeguarding navigation. 1t Of
Tered to accept a minor part" license
making this provision but asserted that
to apply major" licensing provisions
such as are invoked on navigable
stream developments was unconsti-
tutional.
Virginia and West Virginia inter-
vened as particularly interested parties,
tnaSmuch as the development would be
located in the former State, and the
New River flows into the Kanawha in
West Virginia, while Kentucky, Ten
nessee and Arkansas came In on &C.
c1unt Of the principle involved.
In its ruling the commission ordered
the Appalachian Electric not to proceed
with construction until it had obtained
major project" license. The COM
pany, however, already has spent nearly
So .ooo,o0o.-ony preliminary work ct the
site and is not expected to surrender
without a fight.
155 miles from the junction with the
Kanawha, the Union Carbide Co. has
gone ahead without a license and cen
Strueted a large development much
further downstream, and some action is
In prospect here, although the commits
sion ruling made no reference TO this
In its decision and there was no word
this morning as to what steps would
be taken in that case. The Appalachian
also has couple of smaller develop
nentS upstream from Radford which
were put in without license.
Act Obscurely WOrded.
The present dificulty is traceable to
the admittedly obscure wording of the
water power act Of 1920, under which
power projects are licensed.
The Ole cabinet commission in the
Coolidge administration held that
while New River itself was not naVi-
gable, its 1ow could affect the Kanawha
and that consequently a major license
must issue. The dispute finally went
to Attorney General Mitchell for a rIl-
ing. Admitting that the law was not
clear, Mitchell said a miner part"
license could be issued. adding that
such construction appears necessary
In order 10 avoid serious question re-
garding the constitutionality of the
act"
The Attorney Generals opinion was
handed down just before the new Power
Commission came into operation as an
independent agency of the Government,
and instead Of accepting 1t, a public
hearing was ordered
Gov. Clifford Pinchot of Pennsylvania,
filed a brief in the hearing calling for
exercise Of full Federal control at New
River, on the ground that the New
River itself is navigable
The commission, in its decision, did
not pass on the navigability Of the New
River.