Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-09-07
For Private Power

In The Evening Star OF Au-
gust 16, criticizing your edi-
torial of August 8 on Hell's
Canyon, follows the usual
arguments of those who be-
lieve in Federal power prof.
ectS.
The Senator states that
Idaho Powers three small
dams will generate 505.000
prime kilowatts. but the high
Federal dam will generate
$4,000 prime kilowatts-thus
the Nation will lose 100000
kilowatts (the difference is
$4,000 according to my arith-
metic). What the Senator did
not state is that the cost of
the Federal high dam would
be 1929 million as compared
with only $l33 million for the
company's three-dam project.
a difference Of 1896 million.
Using the Senator's figure of
10000 added kilowatts, this
added power would cost $722
per kilowatt. Compare this
with the cost of $500 to $400
per kilowatt capacity for q
steam plant. But the Idaho
Power Company estimates that
the added power from the
Federal high dam would be
only $1,000 kilowatts of prime
power, at an added cost of
$6.298 per kilowatt. An inde-
pendent engineer has esti-
mated the added prime power
capacity as 10000 kilowatts,
making the cost $l.647 per
kilowatt.
Senator Neuberger calls the
Idaho Power Company an
absentee dominated monop-
oily" Every power company Is
Of necessity o monopoly-but
q regulated one. The Bonnie
vile Power Authorit.'. on the
other hand. is an unregulated
Federal monopoly. absentee
dominated" from Washington.
The Idaho Power Company is
financed by voluntary pur-
chases Of its stock and revenue
bonds. whereas the Bonneville
Power Authority Is financed
through their representatives
in Congress.
Senator Neuberger. in at
tempting to prove that Federal
power is not a drain on 1.-The
taxpayers of the country rs q
WHOLE" states that Bonne-
vile and Grand Coulee have
returned over $3.50 million to
the Treasury In power receipts
and are SOS million ahead of
schedule in repaying principal
plus interest. The Hoover
Commission Task Force on
Water Resources and Power
has made a complete study
Of the Bonneville Power Adj
ministration System. which in
cludes Bonneville and Grand
Coulee Dams. The investment
chargeable to power. as re-
ported by BPA, is $1.249,175.-
969. To this the task force
added interest during con-
struction, as required by good
business practices, making the
total investment $1,279, 1885,
827. BPA reported total oper-
ating revenues Of 1904, 203, 240.
and costs of operations and
payout requirements Of $243,-
69,2l2--an excess Of revenues
over costs of $61,134, 028.
BPA's cost figures include in
terest after construction at
2h per cent on BPA and
Corps Of Engineers invest
ments and 3 per cent on Bu-
reau Of Reclamation invest
ments.
In order to make compare
son with theoretical operation
Of the system by private en-
terprise under Federal Power
Administration regulations.
the task force added to the
costs interest during construc-
ton and an equivalent Of Fed
eral. State and local taxes.
This would make the costs Of
services $403, 1921 1858, leaving
a deficit in revenues Of $99,-
018,623.
It is often argued by pro-
ponents Of public power that
Federal power projects should
not pay taxes. particularly
Federal taxes. Yet they are in
competition with private cleo
trio utilities which do pay
taxes. AS a consequence, Fed
eral power is actually sold at
. discount Of Is per cent to
SO per cent below its fair value.
This constitutes a burden on
the taxpayers rather than the
reverse and, even though ca
pable Of fully paying their
way. all Federal power prof.
ects thus contain q subsidy.
Hell's Canyon is not even q
multipurpose project with