rence. Throughout our drive for the FPC license we have always stated clearly that getting the power job underway would become the "lead horse" for the seaway and that it would follow as night follows day. The seaway has had tough sledding for years because it has not enjoyed as broad support as had the power project. But today we believe that national conditions of steel production and international conditions of public affairs give the seaway a "new look." Our power authority act requires that we support the seaway, but as individual trustees, we personally believe in the seaway irrespective of our legal mandate. The dwindling iron-ore reserves at Mesabi are threatening the steel heart of this Nation. New ore fields are opening in Labrador and Venezuela, but they will tend to drag the steel mills to the east coast. In a war the ore boats would be sitting ducks on an open ocean. It would be an economic crime against this whole Nation to choke off the steel men and machines of the Middle West. The seaway would give it the cheapest delivery of ore and an inland waterway from Labrador-safe from submarines. The New York State administration appeals to the Congress to support the seaway as a vital link in our broad national security. New York State and its neighbors have an urgent demand for more electric power and for cheaper power. To understand the State's present power predicament, the facts about the development of our present supply are required. When the power authority was created in 1931 under Gov. Franklin D. Roosevelt, hydroelectric power made up 43 percent of the State's total power output. One-sixth of the Nation's hydro output was generated in our State, and the potentialities of Niagara and the St. Lawrence were scarcely tapped. When we consider hydropower in New York, we must look at both the St. Lawrence and Niagara. Today, 20 years later, Niagara and the St. Lawrence are still only potentialities. Hydroelectric power now makes up only a quarter of the State's output. The development of Niagara and St. Lawrence today would increase our present whole power capacity by one-third, and output by one-half. Despite this potential advantage, hydro capacity in the State has increased only 8 percent since 1930, while in the other States, it has increased an average of 119 percent. New York's inability to develop its resources because it has been blocked by the Federal Government makes an even stronger contrast with what has happened in those States where the Federal Government has spent hundreds of millions of dollars to develop water power. During these past 20 years, while New York's hydro capacity was increased by only 8 percent, capacity increased by 330 percent in Washington, 390 percent in Oregon, and 910 percent in Tennessee. These other States have enjoyed the benefits of cheap electricity, and the vastly increased use that goes with it. New York has just limped along while it could have tripled its hydro capacity. It still can. In 1949 New York's residential consumers paid an average of 3.59 cents a kilowatt-hour-21 percent higher than the national average and two and a half times the average for Washington, Oregon, and Tennessee. Preliminary data for 1950 indicate that our position has worsened-out average price is 3.76 cents per kilowatt-hour and we are 30 percent above the rest of the country. As a result of these high rates, in only seven States was average usage in 1949 lower than New York's 1,284 kilowatt-hours per consumer. In the area around Niagara Falls, where the effects of hydropower can be felt, consumption does compare favorably with that in other States. In the State as a whole, however, consumption is 70 percent lower than in Washington and Oregon and 56 percent lower than in Tennessee. In New York alone we produced 30 billion kilowatt-hours of energy in 1950. At the very minimum we expect a demand of 47 billion kilowatt-hours in 1960. In 1949 we had an installed capacity of some 6 million kilowatts. During 1950-54 the capacity is being increased by 2 million kilowatts. By 1960 we need 2.6 million kilowatts capacity to be further added to the system. St. Lawrence and Niagara would provide 1.7 million kilowatts of that capacity and at least 900,000 kilowatts capacity would have to be added in private steam capacity between 1954 and 1960. This is not stand-by requirement, but basic need. Clarity is required in the nature of the arrangement contemplated by section 5 between the Federal Government and New York State whereby the State shall own and operate the power project. This section is predicated upon the FederalState accord between the Army Corps of Engineers and the Power Authority dating back to February 7, 1933. It embodies a principle supported by both our major political parties and every governor of our State for many years. Under the accord the Power Authority has worked closely with the Federal Power Commission and the Army engineers in the planning of the St. Lawrence 81181-51-pt. 1-24 project. While we have had very close contact with these two Federal agencies, we have had no contact relative to the St. Lawrence project with the Department of the Interior. If the negotiations of the arrangement are to be conducted with the Federal Power Commission and/or the Army engineers, we would know fairly well the direction in which we could move. If the negotiations are to be with the Interior Department, we have no direct experience on which to draw. We have heard much in recent years about river-basin development and more recently about regional developments. Dr. Arthur E. Morgan, first chairman of the Tennessee Valley Authority, has had unusual opportunity to observe the forces in action behind such concepts. In 1948 he was asked by the Senate Committee on Public Works to express his views relative to regional governments to administer river-basin water programs. He reported: "If we get at the bottom of this proposal we see that it arises from a feeling that State and local self-government is a failure, and it must be displaced by a centralized administration controlled from the national capital." This is pretty rough on the States of this Nation that have taken great forward strides in recent years to meet the responsibilities of sound, progressive government right down among the people. Last December the President's Water Resources Policy Commission reported on a water policy for the American people. At page 242 (misnumbered 244) this statement by the Commission is made: (* * * in certain regions, the Federal Government is, or will presently become, the main source of future power supply and will provide a completely integrated wholesale regional power system for transmitting low-cost power to the major distribution centers in the region. * * * It may prove desirable in northern New York and New England, where the Niagara-St. Lawrence and New England River basin developments would afford a splendid interconnected source of power supply in what is now one of the highest electric-rate areas in the country."' Again, at page 227 the Commission reports: "Public plans for the development of water power resources should be accorded a preference, this preference going first to Federal projects and then to those of States and municipalities." The power authority plan for transmission and distribution of St. Lawrence and Niagara power will gain cheapest power for the widest possible market without federalization. If the dual-purpose of St. Lawrence project is approved by Congress and section 5 remains intact-both of which we earnestly support and urge-we want the Congress to understand clearly our plan. We do not want the arrangement contemplated in section 5 to turn up with conditions the Congress or our power authority never contemplated. We do not want a pig in a poke. We are filing with your committee section 1005 of our Power Authority Act (exhibit 5). It states fully the powers and duties of the authority. With the statutory tools of our act the authority is fully equipped to gain the objective of cheapest power for residential and rural consumers by feeding the hydroenergy into existing transmission and distribution lines. It is the position of our authority that the St. Lawrence and the Niagara power sites in New York should be publically developed and operated, and the transmission and distribution of the energy should be handled privately under authority contract and authority price control. This is not bus-bar sale. We are not going to kiss the kilowatt-hour good-bye at the river bank. Our law requires that we follow the hydro kilowatt-hour or their equivalent right to the ultimate consumer, but it is contemplated that we accomplish this by contract. We look forward to a partnership between public and private enterprise to gain most effectively the goal of cheaper power in our area. We expect the potential 14 billion kilowatt-hours per year of St. Lawrence and Niagara power to do a double job of price reduction (1) by the process of averaging down present prices particularly for residential and rural consumers and (2) by being used to encourage a more complete integration of existing utility systems within the area of economic transmission distance. If we do not have the full cooperation of the owners of existing transmission and distribution lines in our area, we will not achieve the greatest benefits of cheap electricity for the domestic and rural consumers contemplated under our act. If we had to build duplicate transmission lines the real cheapness of hydrogeneration would be lost. We want the cheap hydro of St. Lawrence and Niagara to reach out to the greatest possible number of consumers whether they live in Buffalo, New York, Albany, or Jamestown, N. Y. And through a strong integrated system the savings of hydro and integration can reach well beyond our State boundaries. This program demands a strong private-public partnership. The power authority is certain that it will come into being once we have cheap hydro to bring it about. The Power Authority of the State of New York offers to join into full partnerIship with the Federal Government to finance, construct, and operate the power side of the St. Lawrence dual-purpose project from the very beginning. We would expect to do this in complete cooperation and joint supervision with the Federal Power Commission and the Army engineers. In this manner the Federal Government would be relieved of all power-project cost from the outset. We are going to make the same offer relative to the redevelopment of Niagara Falls and River. If it is the wish of your committee, we are prepared to offer for your consideration an appropriate amendment of section 5 of the resolutions before you. The power authority forcefully urges your favorable report on the dualpurpose St. Lawrence project. |