Evening star., 1954-10-16
Dixon-Yutes
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Dixon-Yutes
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through Tennessee Valley Au-
thority public power lines to re-
place some iva power used by
Acc.
The Dixon Yates group, COM
posed of Middle South Utilities.
Inc, and the Southern Co..
would invest $51a million. The
remaining amount would be
borrowed by Dixon-Yates from
private sources at about 312 per
cent interest. and this interest
cost, the contract shows, would
be paid by Acc as part Of
Dixon Yates charges. .
Terms Not Disclosed. a
Representative w. Sterling
Cole, Republican of New York,
chairman of the Atomic Com
mittee. indicated today the Acc
soon may make the proposed
contract public. The Acc ap-
proved it early this month but
the terms have not been officially
disclosed. despite repeated de-
mands for their disclosure by
critics of the plan.
Mr.. Cole returned to Washing
ton today and repeatedly con-
tacted Acc officials about re-
leasing the document after being
asked to do so. by at least one
member of the committee.
He told a newsman there is
nothing to hide"
"The administration preferred
to wait until the committee
acted on it," he said. 'tBut as
one member of the committee,
I see no reason why it cannot
be published"
A copy of the complex So
page proposed contract made
available to the Associated Press
showed that:
/. Basic yearly charges to be
paid Dixon-Yates by the Acc
would include $495 900 identified
as 8 per cent of the companies
contemplated $512 million in
vestment.
Special Fund Provided.
Any earnings above the $495,-
900 would be placed in a special
fund from which Dixon-Yates
could withdraw to make up the
. difference in any year when
earnings fell below that figure.
When the fund exceeded $780,
600 the company and the Acc
would split the excess. (Wheth-
er Dixon-Yates might actually
earn more than 8 per cent is a
separate question, informants
said, depending on economic
factors and on the rulings of
Federal and State regulatory
commissioner
2. Dixon-Yates is authorized to
sell power generated beyond Acc
needs and to tie in other utility
lines to the proposed plant. The
contract specifically calls for a
tie-in with the Arkansas Power
& Light Co., a subsidiary of
Middle South Utilities.
8. The Acc would pay replace
ment costs for the first five years
at the annual rate of $524,O00,
including whatever portion of
that is taxes. After that period
Aces replacement payments
would drop to about $3.50, 900
yearly.
4. AS part of one charge to it
under the contract. the Acc
would pay Federal income taxes,
now computed at $536,250 yearly,
and would meet any future in
crease. In another charge, the
Acc would pay all State and To-
cal taxes-except such payroll
levies as Social Security-so that,
the contract says the amounts
received by the company i
shall be net after all such taxes"
No Violation, Says GAO.
The General Accounting Office
has ruled that the Federal in
come tax provision does not vio-
late the ban Congress voted last
summer against direct Acc pay
ment Of these taxes for Dixon
Yates. The congressional action
was aimed at making Dixon
Yates include the taxes in figur-
ing its cost.
5. An escalator clause provides
for increases or decreases in Acc
payments rejecting specified
changes in the cost of delivered |
coal. and for each Accent change /
in average hourly wages above
$1.97.
6. Nixon-Yates is absolved of I
responsibility for failure to pro- /
duce power through causes be-
yond its control. but the Acc is
obligated to continues paying a
base capacity charge Of $9,052.-
$50. If, during the period Of a
major shutdown, the ACC wants
more than 100000 kilowats Of
power, 1t must reimburse the
company for the actual cost Of
obtaining it from outside sources.
The Dixon Yates controversy
first sprung to national promi-
nence last summer during the
Senate's marathon debate On