2 Data are for December 1949-November 1950, inclusive. Niagara and St. Lawrence would add (net) 2,135,500 kilowatts to capacity and 13.68 billion kilowatthours a year to energy generated.

4 New York State excluded.

Sources: First four columns from Federal Power Commission, last two columns computed from Edison Electric Institute data. Private industrial plants, not contributing to the public supply, are excluded.

EXHIBIT 5

THE POWER AUTHORITY ACT OF NEW YORK STATE

The Power Authority Act of 1931 established the first power authority created by any State government to plan, execute, and administer a State power project. The power authority under its enabling act exercises its powers through a board of trustees. It is a body corporate and politic, a political subdivision of the State, exercising governmental and public powers, perpetual in duration, capable of suing and being sued-and has the power of eminent domain.

The following section of the Power Authority Act (particularly pars. 5, 6, and 7) is pertinent to the agreement between the Federal Government and the New York State agency:

Sec. 1005. Powers and duties of authority

Forthwith upon the appointment and organization of the trustees and subject to the conditions and limitations in this title contained, the authority, in cooperation with the proper Canadian authorities and those of the United States as hereinafter directed, shall proceed with the improvement and development of the International Rapids Section of the St. Lawrence River (which is defined as that part of the said river from Ogdensburg to the point where it leaves the territory of this State) for the aid and benefit of commerce and navigation and for the development of the hydroelectric power inherent therein in accordance with the provisions of this title.

The authority is authorized and directed

1. To cooperate with the appropriate agencies and officials of the United States Government to the end that any project undertaken under the authority of this title shall be consistent with and in aid of the plans of the United States for the improvement of commerce and navigation along the St. Lawrence River, and shall be so planned and constructed as to be adaptable to the plans of the United States therefor, so that the necessary channels, locks, canals, and other navigational facilities may be constructed and installed by the United States, in, through and as part of such project.

2. To negotiate with the appropriate Canadian authorities and agencies respecting the improvement and development of the International Rapids section of the St. Lawrence River for the aid and benefit of commerce and navigation and the development of hydroelectric power thereform, and to plan and agree with them upon cooperative action to that end, including any shifting of international boundary lines between Canada and the United States and upon the use, control, and disposition of the facilities to be created and the hydroelectric

power to be developed by the project. Such negotiations and agreements shall be conducted and concluded with due regard to the position of the United States in respect to international agreements, and any such agreements as may be reached with Canadian authorities or agencies may be submitted by the authority to Congress for its approval, if it be advised that such approval is necessary, and desirable.

3. To apply to the appropriate agencies and officials of the United States Government and/or of the Dominion of Canada or its provinces, including the international joint commission, for such licenses, permits, or approval of its plans or projects as it may deem necessary or advisable, provided that neither the authority nor any trustee, officer, or agent thereof shall have any power to waive or surrender for any purpose whatsoever any right of the State of New York, whether sovereign or proprietary in character, in and to the St. Lawrence River, its waters, power, channel, bed or uses, or the right of the State to assert such rights at any future time, and provided further that if for any reason the authority shall fail to secure any such license, permit, or approval as it may deem necessary or advisable, or shall decide not to make application therefor, it is authorized to institute suit, or to apply to Congress for legislation, or take such other action in the premises as it may deem necessary or advisable, in the furtherance of the project and for the protection of its rights and those of the State.

4. To study the desirability and means of attracting industry to the State of New York, consistent with and in effectuation of the policy declared in subparagraph 5 immediately following.

5. To develop, maintain, manage, and operate that part of the project owned or controlled by it in such manner as to give effect to the policy hereby declared (and all plans and acts, and all contracts for the use, sale, transmission, and distribution of the power generated by the project, shall be made in the light of, consistent with, and subject to this policy), namely, that the project shall be in all respects for the aid, improvement, and benefit of commerce and navigation, in, through, along, and past the St. Lawrence River and the International Rapids section thereof, and that in the development of hydroelectric power therefrom the project shall be considered primarily as for the benefit of the people of the State as a whole and particularly the domestic and rural consumers to whom the power can economically be made available, and accordingly that sale to and use by industry shall be a secondary purpose, to be utilized principally to secure a sufficiently high load factor and revenue returns to permit domestic and rural use at the lowest possible rates and in such manner as to encourage increased domestic and rural use of electricity. In furtherance of this policy and to secure a wider distribution of such power and use of the greatest value to the general public of the State, the authority shall in addition to other methods which it may find advantageous make provision so that municipalities and other political subdivisions of the State now or hereafter authorized by law to engage in the distribution of electrical current may secure a reasonable share of the power generated at the project, and shall sell the same or cause the same to be sold to such municipalities and political subdivisions at prices representing cost of generation, plus capital and operating charges, plus a fair cost of transmission, all as determined by the trustees, and subject to conditions which shall assure the resale of such power to domestic and rural consumers at the lowest possible price. To that end, the authority may provide in any contract or contracts which it may make for the sale, transmission, and distribution of the power that the purchaser, transmitter, or distributor shall construct, maintain, and operate, on such terms as the authority may deem proper, such connecting lines as may be necessary for transmission of the power from main transmission lines to such municipalities or political subdivisions.

6. To negotiate in the manner hereinafter provided a contract or contracts for the sale, transmission, and distribution of the power generated under the project, which by the terms thereof will provide:

(a) Payment of all operating and maintenance expenses of the project.

(b) Interest on and amortization and reserve charges sufficient within 50 years of the date of issuance to retire the bonds of the power authority issued for the project.

(c) Continuous control and operation of the project by the authority. (d) The effectuation of the policy declared in subparagraph 5 above. (e) Full and complete disclosure to the authority of all factors of cost in the transmission and distribution of power, so that rates to consumers may be fixed initially in the contract and may be adjusted from time to time on the basis of true cost data, provided that in fixing such cost of transmission and distribution

no account shall be given to any franchise value, going value, or good will based upon the existence of the contract and the availability of the power for sale by the transmitting or distributing company or any company associated therewith.

(ƒ) Periodic revisions of the service and rates to consumers on the basis of accurate cost data obtained by such accounting methods and systems as shall be approved by the trustees and in furtherance and effectuation of the policy declared in subparagraph 5 above.

(g) That the rates, services, and practices of the purchasing, transmitting, and/or distributing companies in respect to the power generated by this project shall be governed by the provisions and principles established in the contract, and not by regulations of the public service commission or by general principles of public service law regulating rates, services, and practices.

(h) The rate structures agreed upon in such contract may provide different rates for different localities, classes of consumers, and amounts of current consumed, and for changes in the rates resulting from variation in operating costs and fixed charges.

(i) For the cancellation and termination of any such contract upon violation of the terms thereof by the purchasing, transmitting, or distributing company or any subsidiary or associate thereof."

(j) For such security for performance as the authority may deem practicable and advisable, including provisions assuring the continuance of service by the purchasing, transmitting, and/or distributing companies, and/or the use of their facilities for such service and/or the continuance of an outlet and adequate market for the power generated under the project.

(k) Such other terms not inconsistent with the provisions and policy of this title as the authority may deem advisable.

7. To proceed with the physical construction of any project authorized by this title, including the erection of the necessary dams, powerhouses, and other facilities, instrumentalities, and things necessary or convenient to that end, and including also the erection of such transmission lines as may be necessary to conduct electricity to industrial users located at or near the site; and including also the acquisition, by contract only with the owners thereof, of transmission lines or the use of such transmission lines, available or which may be made available, to conduct electricity to such point or points at which the electricity is sold by the authority to any person, corporation, or association, public or private, engaged in the business of distribution and sale of electricity to ultimate consumers; or if the authority is unable to so acquire by contract the ownership or use of such transmission lines, including also the erection by the authority of transmission lines necessary for such purposes; and thereafter to maintain and operate the project in accordance with the provisions and policy of this title. The authority is specifically authorized to undertake the construction of any project in one or more steps as it may find economically desirable or advantageous, and as it may agree with the appropriate Canadian and United States authorities. Whenever in this title reference is made to "project," it shall be understood to refer to such part of an entire project as may from time to time be in existence or immediately projected.

8. To exercise all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this title; and as incidental thereto to own, lease, build, operate, maintain, and dispose of real and personal property of every kind and character, to acquire real property and any or every interest therein for its lawful purposes by purchase, or by condemnation as hereinafter provided, to borrow money and secure the same by bonds or liens upon revenue from any property or contracts held or to be held by it; to sell water or electric power, and generally to do any and everything necessary or convenient to carry out the purposes of this title, provided that the authority shall have no power at any time to pledge the credit of the State nor shall any of its obligations or securities be deemed to be obligations of the State nor shall the authority have the power to lease or sell any dam, or powerhouse at the site.

9. Notwithstanding any limitations hereinbefore expressed, the authority is authorized and directed forthwith or from time to time as it shall deem advisable and within the limitations of the appropriations made available for it to initiate and prosecute all inquiries, investigations, surveys, and studies which it may deem necessary or desirable as preliminary to the effectuation of the other powers and duties conferred upon it by this title.

HISTORICAL NOTE

Opening paragraph amended by Laws of 1949, chapter 612, section 1, effective April 16, 1949. Subdivision 7 amended by Laws of 1949, chapter 612, section 2, effective April 16, 1949. Section derived from Laws of 1931, chapter 772, section 5, repealed by section 1801 of this chapter.

The CHAIRMAN. We had arranged to hear three other witnesses this morning-Mr. Ellis, Mr. Stong, and Mr. Hendrickson. Mr. BLATNIK. Is Mr. Ellis here?

Mr. CLYDE T. ELLIS. Yes, sir.

The CHAIRMAN. Mr. Ellis, I am very sorry we are unable to hold a hearing this afternoon. I would like to have you submit your statement to the committee, and we will put it in the record.

Mr. ELLIS. May I make this statement, Mr. Chairman?

The CHAIRMAN. Yes.

Mr. ELLIS. There are several others here from the rural electrification systems of New York, Pennsylvania, and New England. I have to get some understanding from them. I understood we would have an hour. I was simply going to say a few words and let them divide the time. They have come down here from these New York and New England States expecting to appear.

The CHAIRMAN. We do not have a quorum present.

Mr. BLATNIK. Could it be arranged to have them heard tomorrow morning?

Mr. DONDERO. Could they stay over and be heard tomorrow morning?

The CHAIRMAN. Could we say 1 hour divided up among the three witnesses that were to testify here today? Could we divide up an hour for the three witnesses tomorrow morning?

Mr. ELLIS. Yes; three or maybe more, if we get them within the hour.

The CHAIRMAN. One hour's time will be sufficient?

Mr. ELLIS. Yes, sir.

The CHAIRMAN. Ten to eleven tomorrow morning then, Mr. Ellis. Mr. SMITH. He is referring, Mr. Chairman, to the witnesses for his organization.

The CHAIRMAN. For his own organization?

Mr. SMITH. That is right.

The CHAIRMAN. I did not understand that. I thought you were speaking for the three witnesses we have listed.

Mr. ELLIS. I did not know about the other three, Mr. Chairman. As I understood it, we were to have an hour. I beg your pardon. I believe it was half an hour that you thought we could have between this group, with the hope of it running longer.

Mr. DONDERO. How many witnesses will you have?

Mr. ELLIS. I believe, sir, there are eight, but we would still come within whatever time you say.

Mr. LARCADE. Mr. Chairman, I think that the committee should make every effort possible to give every opportunity to the proponents and the opponents of this project to testify and be heard, but we are behind in our schedule and it will be impossible for us to carry on without inconveniencing other witnesses that have been scheduled to testify from now on. We have gotten behind in our schedule. While I am perfectly willing to do everything possible to give these men an

opportunity to be heard, I was wondering if it could not be arranged perhaps by one or two making the main statement and the others filing prepared statements.

Mr. DONDERO. May I make this suggestion to see if it would be helpful? Suppose you speak for the industry, Mr. Ellis-that is, REA-and let the witnesses who have come with you from this faraway area file statements for the record so that we will have the benefit of their opinions? Would that be helpful?

Mr. ELLIS. Well, Mr. Dondero, of course, I do not like to speak for them. They are sitting here. They could better speak for themselves than I could speak for them. I had intended to say only a few words and then let them have the time. That had been the plan. After all, Mr. Chairman, I do not want to begin testifying here, but we think this thing is very important to the farm people of this New York and New England area. We think they are one of the most important segments of people who are interested in being heard on the St. Lawrence.

Mr. SMITH. I was going to suggest, Mr. Chairman, that the reason we did not take care of these witnesses was because of the interminable questioning on the part of members of this committee on matters which have just purely been put in the record, and I do not think we should, just to convenience ourselves, prevent people who have come down here and made a special trip from having a full opportunity to testify.

Mr. DONDERO. I thought of that, Mr. Smith, that a lot of questions that are irrelevant to the main issue have been asked here.

Mr. SMITH. That is right. I am a new member, and so far I have tried to take as little time as possible on this matter, but I certainly think we owe it to these people who have been assured of an opportunity to testify to give them that full opportunity-and before enough of the committee where they can have some opportunity to impress the committee.

Mr. DONDERO. May I ask Mr. Ellis if the eight witnesses have eight different viewpoints on different phases of this? If they are going to be cumulative it would be unfair to ask the committee to hear them.

Mr. ELLIS. Mr. Chairman, I wonder if we could arrive at something like this then: That we would get together among ourselves, file our statements, but endeavor to make no repetitious statements here, and agree among ourselves on what we are going to say. Mr. Chairman, we will cut them just as short as we can within whatever time

you say.

The CHAIRMAN. And have one speaker? Would that be all right? Mr. LARCADE. No; let each member appear.

The CHAIRMAN. Mr. Smith, I had a call yesterday-and Mr. McGann will bear this out-from city hall, and they wanted to send 50 speakers, opponents, from New York State, from every part of the State, from Buffalo down. I said, "No. You will have to confine the representatives from the State of New York to three speakers."

Now, we did not know anything about these other seven speakers. We have Mr. Ellis listed as one of the speakers. I am sure, Mr. Ellis, as in the case of New York State, that three speakers can represent the other speakers that want to come here and testify. I think Mr. Ellis could represent the other eight, because the testimony is practically the same.