Evening star., 1954-12-13
Congress May Doom
Dixon-Yates Pact,
Anderson Warns
Substantial Changes
Needed for Acceptance.
Senator Tells SEC

Senator Anderson. Democrat,
of New Mexico said today that
the new Congress may direct the
Atomic Energy Commission to
cancel the Dixon-Yates power
contract unless it is "very SUBJ
stantially modified"
The prospective chairman Of
the Joint Committee on Atomic
Energy made this prediction in
a letter to Ralph H. Demmler.
chairman of the Security and
Exchange Commission, as that
body continued to explore the
financial structure of the con-
troversial contract for power in
the Tennessee Valley.
In the letter, released in Al
buquerque, Senator Anderson
asked that Mr.. Demmler urge
the Commission to withhold its
approval of the financing plan
until the joint committee has
q chance to take another look
at the overall contract.
The contract was signed in
November.
Some Changes Already Mailed.
Senator Anderson said the
notifications of the original con-
tract, embodied in the document
signed a few weeks ago, were
definite improvements. However.
he urged the SEC to examine
certain other portions Of the
contract which he said have
not been settled and which
should be corrected before in
vestors are permitted to put up
any money.
II believe" he said, that If
this contract is not again very
substantially modified by the
time Congress resumes on Janu-
ary 5. there may shortly be in
troduced into the Congress a
concurrent resolution insisting
that the Acc avail itself of pro-
visions of a letter which has been
agreed upon by the Acc and the
Mississippi Valley Generating
Co."
The contract provides that
either party may terminate the
agreement without cost if the
SEC has not approved the finac-
ing arrangements by February
Is.
Senator Anderson said it Is an
SEC obligation Ito see that 500
million worth of bonds and other
securities are not now floated on
the market and ). later con-
tention (made) that we should
let this contract stand in order
to protect these bondholders."
Sections Are Itemized.
The sections Of the contract
he wanted the SEC to examine.
he said, included:
/. An income tax provision
under which the Government
pays a fixed amount to the COM
pany each year as a part of the
price of the power 1t Is to buy.
This amount Is to offset income
tax the Dixon Yates group esti-
mates at this time that it will
have to pay. Senator Anderson
contends that the payment must
be made every year whether or
not the Dixon-Yates group has
income large enough for its in
come tax to equal the payment.
2. The capacity charge versus
contract capacity. Senator An-
derson says the contract calls for
100000 XIV. of power out Of
total capacity Of $50 900 II, be-
cause Of poor design or other
failure. the plant produces less
than the contract amount, the
Government Is to get 60i65, Of
the total capacity. but pay for it |
at the same rates as IL it were
getting 600. 900 XIV. tie Senator
said. Il can't believe that a
housewife win pay 80 cents for
eggs whether she gets one or
dozen eggs"
8. Force majeure" provisions. |
Senator Anderson says the con- {
tract obligates the Government !
to continue to. pay for power |
even If the plant is wiped out by
tsee DIxoN-YATEs. Page A-2J !