Evening star., 1934-01-05
u. S. TO DETERMINE
FAIR POWER RATES
T. v. A. Purchase of DiStri.
button Facilities to Be
Used as Basis.
BY the Associated Press.

BY the Associated Press.
An agreement whereby the Tennessee
Valley Authority will purchase the cleo
trical distribution facilities of privately
owned companies, today set the Gov
eminent power 'yardstick" in position
for measuring the fairness of rates
charges by private companies,
In exchange for the right to acquire
the existing facilities and other con-
cessions from the companies, the Au-
thority has agreed to limit its sphere
Of operation.
Purchases Total $3,O00,O0o.
The agreement, entered into by David
E. Lilienthal, power director Of the
Authority and Wendell L. Wilke, pres
ident of Commonwealth & Southern,
which operates in the Tennessee Valley,
was said by a Valley Authority an
nouncement to provide for purchase by
the Authority of approximately S3,00o,-
900 of property from the Alabama
Power Co., Mississippi Power Co. and
the Tennessee Electrical Power Co.
Under the contract, the companies
will sell municipal distribution systems
in the Tennessee Valley area of Ala
bara and Mississippi and grant an
option to the Authority to purchase
city systems in certain areas of the
valley in Tennessee.
Shows Large Saving.
Lilienthal estimated the reduced rate
would result in saving to Tennessee
householders of $415.000 annually. In
a statement, he added.
The agreement is a demonstration
of the Authority's often expressed policy
to carry out the mandate of Congress
and yet avoid the destruction OF pru-
dent investment in privately owned
utilities"
The contract between the power COM
panies of the three States, all subsldi-
aries of the Commonwealth q Southern
Corporation, was summarized by Llllen-
thai as follows, in part:
The Authority agrees to purchase
all the property OF the -oaEt3i MisSisSippi 5iEId
in the distribution of electricity TO
consumers. either urban or rural. in
the following counties OF MISSISSIPPI:
Pontococ. Lee, Itawamba, Union, Ben
ton. Tippah. Prentiss and Tishomingo.
The Alabama Power Co. agreed to
convey, when and as requested by the
Authority, all of its property, excepting
municipal distribution systems, in the
following counties in Alabama; Lauder
dale, Colbert, Lawrence, Limestone,
Morgan. the north half of Franklin
and some of the northern part OF
Cullman In addition, the Authority
undertakes to buy about 1900 acres OF
land owned by the Alabama Power Co,
at the Joe Wheeler Dam site in
Alabama.
Property to Be Conveyed.
THE Tennessee Electric. Power Co.
agrees to convey, when and as requested
bv the Authority. all of its property,
including property used in serving both
rural and urban consumers in the
counties of Anderson. Campbell, Morgan,
Scott and western part OF Claiborne,
| Tenn. together with Transmission line
from Cove Creek to Knoxville. in Knox
County.
The aggregate price for Alabama and
Mississippi properties, including Joe
Wheeler Dam site, is fixed at $4,000, 600
and all the Tennessee properties at
5000 600 additional.
The contract contemplates that the
power companies in Tennessee and
Alabama will sell their municipal dis
tribution systems to the respective
municipalities. except for such as the
Authority may itself purchase in Ten
nessee The contract obligates the
Alabama and Tennessee companies to
attempt to come to a reasonable agree
ment for the sale of these municipal
systems with respect to the municipal
tiles Where no agreement can be
reached in three months. the Authority
may serve competing municipal plant"