OPENING STATEMENT OF THE CHAIRMAN

Faneuil Hall is more than a convenient meeting place for the Subcommittee on Intergovernmental Relations; it is a symbol of public debate and public action in a region which has a tradition of cooperative efforts to overcome common problems.

Our task, initially, is to consider the merits of S. 2752, the Intergovernmental Coordination of Power Development and Environmental Protection Act, which I introduced in July of last year. We are to hear from leaders in State government, regional planning organizations, the electric power industry, environmental groups, and the general public.

S. 2752 would establish a cooperative intergovernmental approach to sound planning and development of reliable electric power supplies within the requirements for protection of public health and welfare and the conservation of esthetics and other environmental factors.

Ultimate responsibility for criteria and administration would rest with a Federal agency, but the application of standards and approval of facility construction and operation would be carried out by regional entities.

The economic viability of this great and historic region is of fundamental concern. We have suffered from disabling industrial shifts. Some parts of the region have developed a diversified economy based on modern technology to meet modern needs. Balancing that development throughout the region requires an adequate and reliable system of electric power at far lower rates than are being charged today.

This is our goal but hard questions must be asked as to how we achieve it, and at what cost to the consumer, to the industry, and to the environment.

How much energy do we really need if we assume an economic expansion in the urban base coupled with a catch-up in the less developed areas? What will be the demand even under a relatively stable situation?

What will be the pressure for power with respect to social needs, given an even modest population growth? Mass transportation, improved living conditions, recreation, health care, cleaner cities-all depend upon electricity.

One of the purposes of these hearings is to find some meaningful answers to these questions.

In addition, we must ask ourselves other questions:

First. Will the cost of additional electric power be so high as to discourage economic development? The price of power in New England is already the highest in the United States. Must we continue to be shackled by this as we seek to grow into the 21st century? Or is there technology available; are there methods of efficient operation; and are there cheaper sources of power to be blended into a viable system capable of charging lower rates?

Second. What will be the impact of electric power development on our environment? This is a national dilemma to which my legislation is directed. What are the prospective trade-offs in terms of the drive for economic growth and the concern for the quality of our air and

water-the health and safety of our citizens—and the beauty of our historic land?

We need to direct our attention to the question of technology designed to help reduce harmful environmental effects rather than concentrations only on that which will generate and transmit power more efficiently. Industry must take a leading responsibility in developing that technology. And the people-through the mechanism of government-must become more involved in the planning process.

We can no longer in this, or in any other, region put a generating plant here, or a transmission line there, based on immediate, localized, and often selfish needs. We must plan electric power for a region through strategic, but least offensive, siting of generation and transmission facilities. We must have regional protection against blackouts and brownouts a step beginning to take shape with the NEPOOL arrangement. And we must plan for a system integrated with the rest of the continent, including the possibility of a federally supported grid connecting Canada and New England with neighboring regions to the south and west. If it was done on the west coast, from Washington to California, why not from Maine to Florida-the area of greatest population density?

To assess our needs, to evaluate the economic and social costs in meeting those needs, and then to go forward in planning the most realistic system will require far more cooperative and enlightened effort between the electric industry and the States than we have seen thus far. I am thinking particularly of the private electric utility industry's stubborn opposition to the regional energy proposal inherent in the Dickey-Lincoln School hydroelectric project.

That is why I am proposing a regional approach to power development and environmental protection. It is why I am suggesting that the ultimate expense and responsibility for making such an approach work be placed at the national level. Such an approach does not reduce or minimize the roles of the States and the importance of citizen participation in the planning process. The opportunity to be heard and to influence has been preserved in the legislation.

In closing, I wish to say three things:

First. I believe New England has an excellent chance to move out in front with sound and balanced power development if it takes advantage of its natural resources to the north, of its ports for low-cost fuel, and of its engineering know-how generated from its centers of learning.

Second. I believe that the citizens of New England-who are generally patient people are sufficiently aroused about economical and human consequences of blackouts and brownouts to demand a better system of electric power at lower consumer cost.

And third. I believe that nuclear and fossil-fueled plants can be built, and that essential transmission lines can be located on a sound planning basis with a reasonable protection to the environment. We have to achieve a balance. The sooner we get on with the job, the better off we will be, for the prospect of long hot summers and cold winters without adequate power is very real indeed.

We have a list of distinguished witnesses here this morning and I would like to present them now for their testimony. First of all, my

distinguished colleague from Massachusetts, who needs no introduction in his own State, but I would like to say how much I appreciate my association with him in the Senate, and the fact that he has taken time this morning to testify on this important legislation. He has himself, introduced legislation which is pending in the Senate in this general area, so we do share a common interest and a common effort toward the objective of more effective power planning and development with due consideration to environmental factors here in New England.

Senator Kennedy, we would be delighted to have you and receive your testimony.

STATEMENT OF HON. EDWARD M. KENNEDY, A U.S. SENATOR FROM THE STATE OF MASSACHUSETTS

Senator KENNEDY. Mr. Chairman, I appreciate the opportunity to testify this morning on the need for coordination and broad-scale planning of our electric power resources. And I think it's especially appropriate that your subcommittee has come here to New England.

Historically our region has been slow in terms of developing efficient, reliable and low-cost electric power. And the results of this insufficient planning and development are serious.

First, rates in New England are among the highest in the Nation. A homeowner in Boston pays more than twice as much for electricity as a homeowner in Seattle, where they have effective regional cooperation and the benefit of Federal power in the total mix. Residential consumers in New England pay 30 percent more per kilowatt-hour than in the rest of the United States.

Second, blackouts and brownouts, in New England and elsewhere, have occurred far too frequently when they could have been prevented. During the last 3 years there have been nearly 400 serious power failures in the United States affecting over 25 million people. It is now almost 5 years since the massive Northeast blackout in 1965 left over 30 million people without electricity for up to 12 hours and more. Yet the interconnections and unified grid which can minimize such occurrences in the future have not been developed.

Ironically, just 2 weeks ago a brownout occurred in Boston and the rest of New England during the annual meeting here of 2,500 electric utility industry leaders. Dozens of power companies in the East already have made temporary cuts in system voltage this spring. Boston's major electric utility announced 2 weeks ago that it would reduce voltage production by as much as 5 percent on extremely hot summer days. And when the heavy air conditioning season arrives, millions of consumers will be asked to make voluntary reductions in air conditioner use. Along the way, there may be more scattered blackouts as well-some of them unavoidable but deliberate.

The national situation is so serious that just a few days ago the President's Special Assistant for Consumer Affairs issued recommendations on how to protect appliances and otherwise prepare for anticipated reductions and blackouts this summer.

Third, electric power facilities continue to threaten our environmental, scenic and historic assets. Plants are a steady polluter of air and water. Transmission lines mar the countryside. Environmental protection has not been an integral part of industry planning.

Fourth, the Dickey-Lincoln school project has not been constructed. This public dam and power supply in Maine would serve as a backup in case of blackouts and as a "yardstick" for increased competition and lower prices in New England. Congress authorized the project 5 years ago. But private power companies have consistently and successfully blocked appropriations to carry out the Federal program.

In New England, part of the reason for the present inadequacies has been the failure of the industry-private companies, municipals, and rural cooperatives to develop and carry out comprehensive planning during the 1960's.

Back in 1962, Joseph Swidler, former Chairman of the Federal Power Commission, noted:

"The New England companies have not taken full advantage as yet of the benefits of coordinated planning, construction and operation of the overall power supply system required to serve most economically and reliably the growing needs of the region. The direction of the future is toward a pooling of the programs of all the systems in the area, both publicly and privately owned, in the interest of the greatest possible economy."

Six years later a new chairman, Lee White, still found a "gross inadequacy of regional planning among the numerous electric systems in New England." Former Commissioner Charles R. Ross commented further on the lack of planning. "The Commission is literally working in the dark," he said, "as to the future power supply of New England, and no one will profit from our ignorance.'

There are, however, hopeful signs that the situation may be changing that the companies are now responding more completely to the needs for regional planning and cooperation.

In particular, "NEPOOL," the industry-organized regional planning unit, has accepted membership of municipals and small private power companies, rather than just the large New England utilities. The members are presently negotiating for ways to set up a responsive structure. I certainly hope that "NEPOOL" does develop into the responsible industry unit for regional planning which it has the potential to become, and I congratulate all segments of the industry for their efforts along this line.

I realize as well the need for broader direction, and for input into regional planning which goes beyond immediate technical questions of electricity production to include public and consumer interests as well. For this reason, I have developed legislative proposals relating to reliability, siting, and environmental protection.

As you know, in 1968 I introduced the Electric Power Reliability Act-designed both to reduce blackouts and brownouts, and also to protect environmental assets. In February of 1969, I introduced an updated version, S. 1071. Under my proposed legislation:

The Federal Power Commission would oversee the formation of effective regional planning councils throughout the country.

Full participation and influence in the council would be given to every utility or group of utilities in the region.

Each council would develop a coordination plan for its region, providing interties, backup facilities, and other measures to minimize effects of failure in one part of the system.

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The FPC would establish minimum standards of reliability.

Construction of extra-high-voltage generating and transmission facilities would have to conform to the overall plan and meet the reliability standards.

The FPC would have power to compel steps necessary for reliability and efficiency.

A National Council on the Environment would pass on all licensing and other actions by the FPC from the point of view of their impact on the environment.

Last Congress I also sponsored the Electric Power Plant Siting Act, and I plan to introduce a revised version shortly.

Under my forthcoming bill the Federal Power Commission would study all considerations affected by the decision of where to build a power plant: air and water pollution, effect on ecological balance, scenic beauty and recreation possibilities, geological feasibility, and economic efficiency.

The FPC would develop siting criteria and prepare an inventory of sites for all regions of the country.

The FPC would continually update the siting plan to take new technology and other factors into account.

The FPC would consult with all Government agencies experienced in specific aspects of the problem.

At every stage, the FPC would consult with concerned citizens, local planning agencies, and the utilities.

During the initial 2-year period of the study, certain restrictions would be placed on the construction of new plants. Utilities would be required to comply with existing pollution standards and to give assurance that serious harm to the environment would not occur.

Finally, Mr. Chairman, I feel strongly that every effort must be made to insure that the public interest is adequately considered in decisions relating to electric power. For ultimately it is the consumer who faces air pollution or water pollution or scenic blight if the environmental interests are not met.

Users of electric power are a captive market. Because utilities are granted exclusive privileges by the States, in return they have an obligation to consult with those so vitally affected by what they do, to fully inform consumers about proposed construction of facilities, to give them a larger voice in regional and interregional utility planning. My reliability bill meets this need by requiring that maximum publicity be given to regional plans and construction proposals explaining them clearly in popular media throughout the regions affected. To maximize consumer protection and participation in FPC decisions, the bill also directs the FPC, whenever practicable, to hold public hearings in convenient locations within the regions.

Mr. Chairman, the aim of these proposals is to facilitate timely, responsible planning and construction of necessary facilities. Too often in recent years we have seen long delays when concerned parties have not been consulted on development plans. We have seen companies forced to go from agency to agency-sometimes facing conflicting standards or regulations-in pursuit of construction permits. We have seen consumer groups justifiably protesting when their interests have been neglected.