Evening star., 1936-08-23
POWER CONCERNS
ASKT.V.A. RULING
Fearing Destruction, 19
Make Appeal to Federal
Courts for Help.
BY JOHN H. CLINE.

BY JOHN H. CLINE.
Fighting for their very existence
against the rapid advance OF the T.
". A., 10 Southern power companies
have laid all their cards on the table
in q final appeal to the Federal
courts for help.
With their customers going over
to T. ". A. In droves, the utilities sent
their attorneys into the United States
District Court at Knoxville last week
to ask for a preliminary Injunction,
which, If granted, would halft all T.
v. A. activities until there Is a final
decision in the suit filed last May by
the power companies to test the con-
stitutionality of the T. v. A. act.
The suit last May was filed some
three months after the Supreme
Court, in a narrow opinion. had up
held the right of T. v. A. to lease
transmission lines of the Alabama
Power Co. for the sale of surplus
power generated at Wilson Dam.
In this opinion, the high court ex-
pressly refrained from any commit
ment as to the validity of other T. V.
A. activities, and the purpose OF the
second suit is to obtain a Supreme
Court ruling on the issues 1t did not
decide last February.
Firms Face Destruction.
That a final ruling on these ques-
tions is of vital importance to the
utility companies was indicated when,
in asking for the preliminary. injunc-
ton last week, they said: I'VE are
faced with the complete and rapid
destruction of our entire businesses. =
In its February opinion the Supreme
Court decided only one point-that
the T. v. A. could lease power lines
to sell power generated at Wilson Dam.
This ruling was based on the dual
finding that the dam, authorized by
the national defense act OF 1915, was
actually adapted to the purposes OF
national defense and that 1t was a
legitimate contribution to the i'm
movement Of the navigability of the
tennessee River, q function within
the province of the Federal Govern
uaent under the terms of the COM
nterce clause of the Constitution.
Left unanswered by this opinion
were two fundamental questions
those involving the right OF T. V. A.
to construct a dam primarily in fur
tterance of its "yardstick" experiment
and its authority to sell power gener-
ated at any Of the other costly dams
1t has constructed at intervals along
the entire length Of the Tennessee
River.
T.V. A. Goes Merrily On.
Despite the doubtful validity OF
these activities, however, the T. V. A.,
encouraged by its partial victory, has
gone merrily ahead along both lirses
of endeavor and the utility operators
are again appealing to the courts Tor
help.
The yardstick experiment, whereby
the T. v. A. has undertaken to DEM
onstrate at what price electric energy
can be produced and sold, has been
particularly annoying to the utility
men.
Attacking this experiment, they
characterized the yardstick as dis
honest, unfair, unreasonable and con-
fiscatory" as q measure Of the rates
of privately owned and operated
companies. They charged that the
yardstick Excludes the cost Of the
major part of the investment neces-
sary to render the service and excludes
necessary operating expenses, which
T. v. A. either ignores or recoups
from the State and Federal taxpay-
srs instead Of from the rates"
The effect of these low yardstick
rates, the companies say, Is that their
customers are going over to T. V. A.
at such a rate that the financial death
Of the private utilities is but short
way off unless the court steps In and
halts the defections.
Cite Ruthless Methods.
Citing specific illustrations OF the
"ruthless methods pursued by the T.
v. A. in driving the utility companies
out of existence" the motion for the
preliminary Injunction points out that
on Jul "a. 1886, the Alabama Power
Co. began to stake out line from
Vinemont to West Point, Ala.
I'm less than an hour after this
work had commenced" according to
the motion, "the defendants Ct. v.
A. began work in the same loca-
ton with q crew Of more than 100
r. v. A. employees, who proceeded
to dig holes and set poles within a
few feet Of the poles being erected
by the Alabama Power Co. On the
same afternoon. defendants crews
began stringing wires, which In some
instances touched the tops Of the
power company's poles. The defend
ants continued and completed work
on this line on Saturday, July 25."
Chemical Concern Withdraws.
It was also charged that T. v. A.
i directly soliciting large industrial
concerns, municipalities and other
customers of the private utilities.
They point to the case Of large
chemical concern, which had con-
tracted to purchase its power from
the Tennessee Electric Power Co.,
one Of the plaintiffs. Evidently fear
ing, according to the motion, that the
Tennessee company was going to be
forced out of business, the chemical
concern refused to go through with
the contract and made arrangements
I'd buy its power from T. v. A., which
has begun construction of $4,000
volt transmission line from the
Wheeler Dam to supply the needs Of
this customer.
In all. the plaintiffs say, T. " A.
now has 1900 miles Of transmission
lines, has started or is planning 1900
more miles, Is serving territory with
q population Of 2,400, 900, and now has.
or is soliciting, contracts to serve 40
cities in Tennessee, Mississippi, Ala
bama and Georgia.
The plaintiffs contend that none
Of these activities was sanctioned by
the Supreme Court opinion. They are
determined to carry their fight once
more to the Nations highest tri-
bunal, and when another decision is
49,