Mr. NASSIKAS. Yes, no question-or either a broader geographical base or better interconnections between regions, which is

Senator MUSKIE. What is the relationship between interconnections and the concept of a broader base? Are you speaking of a quality of interconnection that is different from what a grid system would be? Mr. NASSIKAS. What I am saying is that

Senator MUSKIE. To what extent should the power be free to flow from one region to another through interconnections of the kind you describe?

Mr. NASSIKAS. I think we are talking the same language. What I am saying is that if you have effective transfers of power from pool to pool so that you can take advantage of varying peak loads and demands on systems that you, in effect, are broadening out your base so that you can have available power to serve this broader market without the necessity of expanding your generating reserves to the degree that you would be compelled to if you did not have the interconnection.

Senator MUSKIE. So you are talking about something that would permit free flow of power through such connections from one region to another?

Mr. NASSIKAS. Yes, sir.

Senator MUSKIE. I am not enough of a technician to know whether that puts us in a different position or not, but I think that is very helpful.

Now, on page 21 of your statement you begin, I think, some discussion of the recommendations that we may expect here in the Congress at some point, and the administration in this area.

Incidentally, I hope at that point we may get some comment on S. 2752 by the administration.

Mr. NASSIKAS. There are some very excellent features, Senator Muskie, to your bill, and if you wish, I won't wait until then. I appreciated your rescheduling the hearing on S. 2752 until we had a chance to come out with our bill, and I think the orderly way would be to compare them at that time. But I can tell you that there are features of this bill that we have prepared that really are substantially the same in principle as some of the features you have recommended.

Now, we can both be right.

Senator MUSKIE. Maybe I had better let the process of gestation complete itself. [Laughter.]

I appreciate that. But in your statement on page 21 you say this:

A need exists for some workable system to assure that plant sites and transmission rights-of-way for new bulk power facilities can be selected, proven out in all respects, including environmental factors and certified in a timely manner by a competent regulatory authority, preferably at state level.

It does not seem to me that that would serve the needs of the New York area, for example. It seems to me that to serve the needs of the New York area we must take into account resources far beyond the boundaries of New York State. Indeed, as I remember Mr. Luce's testimony here a few weeks ago, Con. Ed. itself has gone beyond the boundaries of New York State to reach out for resources, to tap the West Virginia mines, for example, go up into Canada, and so on, and it would seem to me that authority existing at the State level would be inadequate to the task which we are considering.

Mr. NASSIKAS. I am inclined to agree with you. I think this statement would have read better if I had added State or regional level. In fact, the staff of the Commission recommended among its 10 or 12 points to Consolidated Edison that, as a minimum, Consolidated Edison plan between New York, New Jersey, and Pennsylvania on a regional basis power requirements and resource requirements for that region and, in fact, the power pool of which New York is a part does extend, as you know, up to Canada, and include New England.

I think on a regional concept that you might even embrace beyond that power pool of New York and New England and extend south to PJM, we might even go a little bit west and take up the next power pool and attempt to plan not only power needs but, I mean, overall public benefits resulting from a comprehensive plan for development of

resources.

It does seem to me that-what I am really driving at here, on the State level is that the State itself does have to pass some legislation itself to take care of the problems insofar as it can within its State level.

New York does have a statute which is really designed to meet some of these problems, and to allow certification to the extent that it can be done at the State level by one certifying agency, with a temporary committee to study the resource problem is the way they set it up. Now, this is all right insofar as New York is concerned to meet some of the immediate needs over the course of the next few years. But I agree with you that we have to expand into regional concepts of planning, and this is exactly what our objective is under our policy statement R-362, and the power pools and the reliability councils which are set up on that basis; yes, sir.

Senator MUSKIE. Well, thank you very much, Mr. Nassikas.

I see it is 3 o'clock and time for me to go to vote. We will resume after I return and we will take Mr. Luce after I return.

Mr. NASSIKAS. Thank you, sir.

Senator MUSKIE. There are many other questions I would like to pursue on the basis of your statement, and I am sure on the basis of your attachments, Mr. Chairman. We do look forward to receiving your legislative recommendations.

Mr. NASSIKAS. Yes, sir, and I will wait until the other witnesses are through, anyway. I will be here.

(Short recess.)

Senator MUSKIE. The committee will be in order.

I would like to express my regret this afternoon that Congressman Richard Ottinger of New York, who was scheduled to lead off the witness list, was not able to be with us today because of a conflict in his schedule.

I know of Congressman Ottinger's longstanding interest in environmental issues and values. We regret that he could not be here, and we will welcome any statement he may submit for the record of this hearing.

Now, I would like to welcome the Honorable Charles F. Luce, chairman of the board of Consolidated Edison Co. of New York.

You have testified before this very subcommittee on this very legis lation earlier this year, Mr. Luce, and I think at that earlier testimony

46-966-71-pt. 2- -13

it was an interesting and useful part of the record in terms of the issue we are considering this afternoon, and I appreciate your willingness to come down on such short notice to testify again.

STATEMENT OF CHARLES F. LUCE, CHAIRMAN OF THE BOARD, CONSOLIDATED EDISON CO. OF NEW YORK, INC.; ACCOMPANIED BY JOHN T. CONWAY, EXECUTIVE ASSISTANT; AND ARTHUR HAUSPURG, VICE PRESIDENT OF ELECTRICAL ENGINEERING AND SYSTEM PLANNING

Mr. LUCE. Thank you, Senator Muskie.

With me today are John Conway, my executive assistant, who will be known to the committee members as formerly the staff director of the Joint Committee on Atomic Energy; and Arthur Hauspurg, our vice president of electrical engineering and system planning.

Because when I appeared before the committee 6 months ago I filed quite a lengthy written statement, I have not come today with another written statement, but rather will make some more or less extemporaneous general opening remarks, and be glad to try to answer any questions that the chairman may have.

The situation that now faces us in New York City, and which occasioned the hearings being held here today, is that the breakdown at two of our larger and newer machines has virtually wiped out our reserves for the next 6 weeks until the period of hot weather ends. As we pointed out to the committee when I was here 6 months ago, and pointed out to the community, that we were privileged to serve even longer ago than that, we were aware that for a combination of reasons our reserves this summer were going to be less than they should be. The reasons had to do principally with the delayed completion of several large projects which, if we had them on the line, would have avoided the emergency we face in New York this summer, and perforce, would have avoided the necessity of our being here today to talk about what to do about it.

They are the Indian Point No. 2 plant, which we have a contract with Westinghouse to build. It is a nuclear plant that was scheduled under the contract for completion in May of 1969. It is not yet completed.

The latest estimate we have from the Westinghouse Corp. as to the date of completion is March of 1971. We will be pleased if it is completed by that time for the reason, among others, that certain groups of interested citizens who object to nuclear plants have indicated their intention of opposing the issuance of an operating license for this plant and, of course, those proceedings take time. We hope the Atomic Energy Commission can expedite these proceedings, but it is impossible at this stage to say how long they might take.

The other project, I might say, the delay of which has led to our current difficulties is the Storm King or Cornwall pump storage project, a 2-million-kilowatt project, for which the company applied for a license from the Federal Power Commission in 1963.

The case has been through a series of hearings before hearing examiners; it has been decided once by the full Federal Power Com

mission. It has gone to the Second Circuit Court of Appeals which reversed the license which was granted, sent it back for retrial; it has been retried for various issues several times, and it is now back before the full Federal Power Commission for decision.

Still no license, still no project, and still no electricity from that project.

To meet the emergency situation that we could foresee coming because of the delay in these projects, we ordered a large number of socalled gas turbines. Actually they are like jet engines on aircraft which operate small generators. In total we ordered 1,800,000 kilowatts of these turbines. Most of the orders were placed last summer when we became aware that the delays in Nuclear 2 were not going to be cured in time for this summer.

As of now we have about 700,000 kilowatts of those turbines on the line, and by the 15th of September we expect to have 1,100,000 kilowatts on the line, and by next summer we expect to have about 1,800,000 kilowatts of these new turbines on the line.

They are only peaking units and not good for baseload but, at least, they can carry the load through these hot days, and with those turbines and with tremendous cooperation from other utilities all the way from the Tennessee Valley Authority and the American Electric Power System to Hydro, Quebec, and Ontario Hydro Canada, all the upstate companies in New York the PJM companies, the New England companies, we have been able thus far to operate with our two big units out of service, and meet the essential power needs of New York.

I should say also we have had marvelous cooperation from our customers who have at our request engaged in power conservation.

It is difficult to estimate just what is the total amount of savings from our customers' power conservation. Our best guess would be that it has been somewhere between 250,000 and 350,000 kilowatts which, while in relation to a total load of over 7 million kilowatts may not seem large, believe me, it is very large when your system is up tight. Finally, I want to say a word for our employees, the men who are operating these plants, many of which are old plants, on which the electric power supply of New York is dependent. They are doing a tremendous job, working around the clock not only to fix the units that are out of service, but also to keep the units that are in service on the line.

I think our whole community owes them a great debt of gratitude. I talked the last time I was before this committee about the 10-year plan that our company prepared last summer, 1969, and filed with the Federal Power Commission, the New York State Public Service Commission, the city of New York, the State of New York and Westchester County.

In this plan we laid out the projects that we would expect to build and bring on to line in the next 10 years to meet power demands that are growing about 350,000 to 400,000 kilowatts per year.

In this plan we attempted to reconcile the competing demands of the environment and the need for power, to the best of our ability. We said, in sending it to each of the five entities that I have mentioned, the following:

We believe our plans are sound. But we have no stubborn pride of authorship in them. We recognize that they are always subject to change to meet changing

circumstances. The one thing not subject to change is the growing demand for electric energy. Therefore, if any proposed project is removed from the schedule, another must be proposed to replace it, with the same completion date.

In the year that has transpired since we transmitted this 10-year construction plan to the various regulatory agencies and the city of New York, it has been reviewed by most of them. The Federal Power Commission reviewed it in detail and pronounced it adequate, as did the Public Service Commission of the State of New York.

Each of them had comments about certain changes and certain amendments that might be made. We took no exception really to the comments that they made. We felt they suggested improvements to it. The city of New York referred the plan to the Federal Power Commission for advice, and the Public Service Commission of New York for advice, and also to David Lilienthal & Associates for advice.

Last fall each of these three advisers or consultants to the city filed reports that were made available to the city, which found that the plan was basically sound.

Now, in regard to the new projects listed in this plan, they are of all varieties. They include fossil-fired plants, nuclear plants and, in the first plan that we filed, a hydroelectric or pump storage plant at Stormking.

The new fossil-fired plants are mainly outside of the city. One of them is near Newburg on the Hudson River. Another is near Haverstraw also on the Hudson River; and the third is an enlargement of an existing plant the company has had for 50 or more years in Queens at a location called Astoria.

We wanted very much, by publishing our plans in advance, to have a timely review of these plans and to get a consensus that these plans would both meet the power requirements and protect the environment, recognizing that inevitably there is some compromise that has to be made; that is, it is impossible to build a powerplant that does not have some impact on the environment, and if one wants to use emotionladen words he would say that it would degrade the environment.

Likewise, it is true that the construction of powerplants will improve the environment to some extent. For example, last week during the air pollution difficulties on the eastern seaboard, Mayor Lindsay asked that we at Consolidated Edison not request the transit authority to reduce the speed of trains.

The reason for his request was the experience of the prior day. In accordance with the procedure we worked out with the city and with the Public Service Commission, we asked that the speed of the subway trains be reduced from 40 miles to 18 miles an hour. The result was some delays. I think this occured between about 1 o'clock and 4 o'clock in the afternoon. By rush hour we were back at full power. But the result was that the following day a number of people who normally use the subway came into town in their automobiles, and since automobiles account for 60 percent of the air pollution in New York, and powerplants account for something under 12 percent, approximately a fifth of the problem compared to automobiles, the result was that for lack of electric energy the added pollution from the automobiles was degrading the environment. I think it is an excellent example that when one looks at the environmental impact of powerplants one must