Evening star., 1954-06-22
IVA, ACC and Private Power


Despite some rather extravagant criticism
to the contrary, it is difficult to see anything
sinister or underhanded in the Presidents
directive to the Atomic Energy Commission to
negotiate 25-year contract with two private
companies for the construction of a steam
generating power plant at West Memphis,
Arkansas.
True enough, the directive calls for an
unusually roundabout sort of arrangement and
there is plenty of room for legitimate debate
as to its wisdom and practically in terms Of
long-range national policy and simple eco
nomics. But some Of the outraged cries that
have been raised against it-cries suggesting
that the whole thing is dishonest and con-
Spiratorial maneuver designed to destroy the
Tennessee Valley Authority in order to enrich
the private-power "barons" (silk-hatted men
with dollar. signs on their protuberant vests)-
seem more than a little bit ridiculous, to put
it charitably.
This is so because the directive, far from
being either disingenuouS or particularly sur
priSing, is quite in line with the policy that
the Eisenhower administration has openly
espoused on number Of occasions in the past.
Summed up in broad terms the policy-as de-
fined last August by Interior Secretary Nc
Kay-is to maintain public-power projects on
unless economically feasible and necessary or
unless private enterprise cannot itself carry
out the expansion on the basis of fair charges
to the consumer. And in accord with that view
the President specifically declared in his Janu-
ary budget message to Congress that arrange
mentS are being made to reduce, by the fall
of 1857, existing commitments of the Tennessee
Valley Authority to the Atomic Energy Com
mission by 100000 to 100000 kilowatts" in
order ID to meet the requirements of Twas
non-governmental customers and (2) to "elim-
mate the need for appropriating funds from
the Treasury to finance additional generating
units"
Accordingly, considered against this back
ground, the Presidents directive hardly war
rants reaction of shocked surprise. Under
it, the Aces five members (all of whom
recognize the orders validity, though three
doubt its Soundness) are to arrange with the
private companies to build generating plant
that would cost about $1O7 million. The plant.
whose output would be for civilian consumers.
would feed 100000 kilowatts into the iva
system to make up for the comparable amount
of iva power now being delivered to the atomic
installations at Paducah, Kentucky. AS esti-
mated by Budget Director Hughes, the project
would avoid an outlay Of about 500 million
in Federal funds that would otherwise have
to be spent on new iva facilities during the
next three years. In effect, in that sense, it
would appear to be q kind of bookkeeping
transaction through which the Aces unique
contract-making authority would be used to
eliminate substantial Government expendi-
lures, not by cutting back on TWAS present
operations but by holding those operations at
their current level and letting free enterprise
take care of the expansion needed between
now and 1857.
The Presidents critics - notably Demo-
cratic members Of the Joint Congressional
Committee on Atomic Energy-have attacked
all this on several grounds. Senator Gore, for
instance, has charged that it would misuse one
of the Nations most vital agencies to set in
motion power policy that could bring about
Twas ultimate liquidation for the benefit Of
the private utilities. And Representative Holi-
field, on the basis Of some preliminary Acc
estimates has asserted that power from the
proposed project would coSt-over the next Is
yearS-"at least $50 million more" than equiva-
lent power from facilities that iva could
build.
These are legitimate points Of argument,
but the debate over them ought not to be clut-
tered up-as in the case Of the so-called tide
lands" bil-with a lot of irresponsible talk
about how the administration is conSpiring to
satisfy the greed" of private lobbyists. For
the record shows that the Presidents direc-
tive-whether wise or not-is altogether con-
sistent with what he has said heretofore, in
thoroughly open and above-board manner,
about his desire to see free enterprise operate
in this field wherever it can do so in line with
the public interest. There is certainly nothing
underhanded about that.