Evening star., 1953-09-26
Letters to The Star. q

it's vociferous stand in favor of private
power and equally vocal condemnations
of public power.
The chief import of Mr.. Welch's and
Mr.. Payne's letters is that it is doubtful
whether the private utilities will ac-
tually receive any benefits, over the
long pull, from these certificates. and
that the companies stand chance of
losing money from having obtained
them.
This is a rather interesting thesis.
If it is correct, as Mr. Welch and Mr..
Payne contend, that the electric COM
panies will receive no benefit from these
certificates, one is confronted with
some degree of puzzlement as to why
the electric companies bother to apply
for them in the first instance. Vepco.
incidentally, is not novice at asking
for-and receiving-theSe tax certifi-
Gates. Prior to the company's receipt
of the certificate for the Roanoke Rap
ids project. Vepco had applied for sim
liar certificates for 16 other projects
having a total cost of $75 ,437 900. of
which $73, ,551 900 was approved and
$31 ,636, $50 was actually certified for
rapid tax write-off These figures, bear
tax write-off granted for the $33 ,095 900
cost of the Roanoke Rapids project.
One begins to wonder, therefore, after
having read the views of the company's
defenders, as to whether the company
subjected itself to the rather compli-
Gated procedure of applying for and
obtaining these certificates merely to
engage in bureaucratic gymnastics. AS
ofHnio11t ontornrico thic CToc
not the company's motive.
On the contrary, there is an abun-
dance of evidence to show that the
program has indeed been a boon, not
only to Vepco but to the entire electric
utility industry. 1t was not the asso-
citation which I represent, but a con-
gressional committee that called the
accelerated tax amortization program
"the biggest bonanza that ever came
down the Government pike" And it
was not this association, but Mr.. Fran
els Walsh of the staff of the Federal
Power Commission who stated in an
FPC hearing that under the accounting
methods presently proposed by the pri-
vately owned companies. the electric
companies would receive benefits of al
most So billion, over a 30-year
p6r1OQ, OH CIlG DdS1S VI CSEOI1lCdCcS W1llCIl
had been awarded up to that time.
And it was Senator Warren Magnu-
son of Washington who has stated that
in granting the certificate to Vepco for
the Roanoke Rapids project. the COM
pany was not only receiving assistance
in construction of the DAM but was
getting a $20-million bonus to boot.
Mr.. WEIGH contends that he detects
a subtle motive in our associations
criticism of the tax certificate for the
Roanoke Rapids project. This motive,
Mr. WEIGH speculates, is that we are
opposing the issuance of tax certificates
to the privately owned electric COM
panies so that they will not be able to
meet the defense needs for electric
power, and that this will bring about a
great demand for public power prof.
ects.
Perhaps Mr.. WEIGH gives us credit
for more Subtlety than we possess. If
the motive which Mr. Welch ascribes
to us were in fact our motive, then it
hardly seems likely that we would OBJ
ject to the issuance of a certificate for
a $33,075,000 project, when the pro-
gram is admittedly near its end. after
ODM had already approved certificates
to the electric industry for almost 81
billion.
Rather than having "scorn" for COL
umnists like Lowell Mellett, as express
ed by Mr. Payne, believe The Star is
to be complimented upon having an
experienced and capable columnist such
as Mr.. Mellett who has the courage to
express himself upon the less popular
side of a controversial issue.
Alex Radin,
General Manager,
American Public Power Association.
Mr.. Payne asked Lowell Mellett:
when the IVA is going to start repay
ing to the Treasury some of the hun
dreds of millions it has obtained from
the Treasury to finance its operations
in the Tennessee Valley" For Mr..
Payne's information, Congress required
in it's appropriation bill in 1948 that
the IVA repay over a 40-year period
all the Federal Governments invest
ment in power facilities. IVA is now
ahead on its payment schedule. This
information would have been easily
available to Mr.. Payne at the General
Accounting Office or the Bureau of the
Budget if he we're really seeking infor-
nation.
Mr.. Payne further wants to know
when iva is going to stand on its own
feet. He seems to think that the fact
that IVA goes back each year to the
Congress to ask for appropriations to
expand its existing system is an indica-
ton that it is not standing on its own
feet. I'd like to ask Mr. Payne if he
knows of any private utility in the
United States that finances its plant
expansion from earnings only. would
also like to ask him # he knows of any
private utility that's reinvested as much
in plant expansion out of their earnings
as IVA has done.
Ken G. Whitaker,
Secretary.
Information Committee,
Tennessee Valley Public Power
Association.