The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-04-13
Expects to Return
to TrpaSu1yS6O, 900, 900
Sbent on Muscle Shoals
Repayment of Every Cent
Is Promised to Fed
eraI Body.
BY BENTON ]. STONG
Times Special Writer

Times SpeCiai writer
WASHINGTON, April 13.-The
Tennessee Valley Authority expects
to pay back into the Treasury the
nations full investment in Muscle
Shoals.
The Wilson Dam at Muscle
Shoals cost about $50, 100000. IVA
engineers have estimated its present
value for power purposes at S22,000,-
900, citing excessive wartime costs
and natural depreciation.
David E. Lilienthal, IVA director
in charge of power, said to the
Interstate and Foreign Commerce
Committee recently that I'VE want
the people of the country to know
that the users of electricity in the
Tennessee Valley area need no
subsidy and are asking for nc sub
sidy from the Federal Treasury.
Not Entirely Fair"
1.-THE Tennessee Valley Authority
is in a position, on the basis of
present wholesale power rates, to
repay into the Treasury not only
the present value of Wilson Dam.
but every penny the government
has invested in that property a
total in the neighborhood of $780,
900, 900.
Frankly I think such disposition
of excess revenues is not entirely
fair to consumers Of electricity in
the valley. The excess war cost
should be borne by the whole
country. Electric consumers should
not bear all the navigation costs.
But there is no business reason why
this property will not permit the re-
payment of every cent that was
actually invested, war or no war,
~naviation or no navigation. Con-
gress may decide, in order to remove
the red herring of value of Muscle
Shoals from the trail once and for
all. that such a disposition should
be made"
Twas Rate System
Questioned closely by committee
members, Mr.. Lilienthal outlined
the basis upon which IVA rates
were set up.
First" he said, consumers of
electricity must pay all the operat-
ing costs of furnishing that elecs
tricity, without any contribution
whatever from taxpayers.
Second, consumers of electricity
pay taxes through the IVA rates
equivalent to the national average
taxes, local, state and Federal, paid
by private-owned utilities. NUM-
cipalities buying IVA power and re-
selling it to their citizens pay taxes,
also equivalent to the amounts a
private utility would nay.
Third, depreciation and amortt-
cation are provided for, both by
IVA and the municipalities. AS
to IVA, the rates charged include
a margin to offset depreciation
from year to year SO that in the
course of years there is a reserve
adequate to rebuild the plant as
a new plant; and there is also a
surplus which if Congress so de-
sires can be used to pay back to
the Treasury not only the present
value of this deprecated wartime
property, but also every penny of
the original investment, put into
the property in order to defend this
country against its enemies.
Fourth, interest is charged.
Computations of cost of furnish
ing electricity have produced a
wholesale rate which will make the
bulk sale operations Of the Auth
GRITTY wholly self-sustaining."
5 Per Cent Goes to States
The IVA now pays 5 per cent of
its gross revenue to the states in
which power is generated. In addi-
ton it is setting aside another 7 per
cent tax reserve to bring their total
charges up to the national average
paid by private utilities.
Municipalities buying IVA power
at wholesale and reselling it have
agreed to pay 7 per cent Of their
gross revenues to their city treas
uries in lieu of taxes.
Future dams, Mr.. Lilienthal testi-
fed, will be included in the power
rate base at the actual cost of the
power installation.
The IVA wholesale rates, scaled
on consumption, now range from 2
to 7 mills per kilowatt hour.
Domestic retail rates range from
a top of 3 cents for the first so kilo-
watt hours to 4 mills per XVIII for
all over 400 XVIII used in a month.