The people's voice. [volume] (Helena, Mont.) 1939-1969, 1956-08-03
Electric Coop Leaders Opposing
interior Power Rate Increase
National Rural Electric Coop Assn.

National Rurai Electric Coop Assn
Rural electric co-operatives are bat
thing to stave off a S3-million annus
increase in federal power rates in tn
Southwest, where drought and de
pressed farm prices already hav
squeezed their members severely.
Six rural electric leaders appeare,
before the House Interior and Insula
Affairs Committee recently in sup
port of a bill to halt an Interior-pro
posed 40q0 rate hike to rural electric
systems in the Southwestern Power
Administration service area, and
called for an investigation of Interior
marketing policies.
Protesting the proposed "discrimi-
natory action" which would raise
costs for preference customers but
not to the private utility companies
in the SPA area, DR.. Henry W. Bla-
lock, special consultant for three gen.
GRAFTON and transmission co-opera-
tives in Missouri and Oklahoma, de-
MED allegations by interior Assistant
Secretary Fred Aandahl that the in
crease was necessary because OF in
flation and g-t-contracts. Surely"
he observed, with depressed farm
prices, the rural electrics could not be
blamed for initiation"
Rather than the ct contracts be-
ing at fault, he declared, "There is
close correlation between the deterior-
alton of SPAS financial picture and
the contracts wi h the private
utilities in the area" In particular,
Blalock called attention to four "sub-
sidized contracts with the private
companies" which, he asserted, "more
than offset the greatly increased pow
er available to SPA and tumbled its
financial position into deficits of
$849,562 in 1854 and $2,733,139 in
1855" During that same period, he
declared, ''The ct contracts were not
in effect"
Of the four special contracts SPA
has with private companies, the pub
lie utility economist singled out the
imposed by the aluminium
contracts with the Arkansas Power
and Light Co., which has not been
slated for renegotiation.
Under the Aandahl proposal, the
aluminium contract and its subsidies
would be extended an additional II
ears beyond the expiration of the /
,ontract in 1882, Blalock told COM /
nittee members, thus raising accumu
ated deficits from $10,828,11G to
26, 882,720 at the end Of the ex-
ension period in 2O09. !
In addition, Blalock charged that c
he Assistant Secretary had failed 10 i
cEnowledge discriminatory methods i
f cost ALLEGATION. @. the govern n
tent is using the 'incremental' meth Z
d of cost ALLEGATION in determining
ne rate increases to the private COM b
anies but steadfastly maintaining O
rat 'separable cost-remaining bere- S
is method should be applied when b
rate increases to the e
reference customers" d
Presenting the statement of Clyde "
Ellis, general manager Of the Ma fl
onal Rural Electric Coop Associa- "
on, DR.. Clay L. Cochran, director of e.
e associations legislative, manage P
ent and research department, told F
mmittee members the proposed In
ease "would mean total additional ~
Bt-of-pocket expense" to rs rural IL
,ctric systems in the southwest "well F
owe rates paid by other co-ops to W
any of the private power companies CT
the SPA area" h,
ONKEY BUSINESS SOMEWHERE tn
SIN our opinion" he challenged, &c
he very fact that the proposed rate u, ~
ledule would lead to pattern un- ~
r which rates for federal power &c
'uld be higher than those for power ~ ~
released from private utility COM ~ =:
mics indicates there is something 'i'
sically questionable in the federal
,e determination" i
Calling attention to the method of I