Mr. CLAPP. I think I made a mistake in answering your question. These gentlemen whose names I read to you are the present executive advisory committee. There were others

Senator LAUSCHE. They don't necessarily duplicate the ones that were members at the time the survey was made?

Mr. CLAPP. That is right. I wanted to correct that, please.
Senator LAUSCHE. All right.

Mr. CLAPP. The 1964 executive advisory committee consisted of Chairman Philip Sporn, American Electric Power Co.; Vice Chairman G. O. Wessenauer, Tennessee Valley Authority; William Webster, New England Electric System; Harold Quinton, Southern California Edison Co.; Vincent M. DeMelto, Cleveland Department of Light & Power; J. Harris Ward, Commonwealth Edison Co.; E. W. Morehouse, Princeton, N.J.; Eugene S. Loughlin, Public Utilities Commission of Connecticut; John Hyde, Southwestern Federated Power Cooperative; J. W. McAfee, Union Electric Co.; and Paul J. Raver, superintendent, Seattle City Light (deceased).

In February 1966, the Federal Power Commission appointed an advisory committee on reliability of electric bulk power supply to review and investigate the problems involved in assuring a reliable supply of bulk power on an area and regional basis.

An advisory committee on underground transmission was established by Federal Power Commission in 1965, for the purpose of assisting the Commission in preparing a report on the state of the art of underground transmission both by alternating and direct current. This committee was composed of experts in this field from the electric utility industry, cable manufacturers, and the American Society of Planning Officials.

With this sort of voluntary cooperation we submit that no additional legislation is neeeded to accomplish the objectives of the three bills before this committee. In fact, provisions of these bills would distort the optimization of system design and would create more problems than they would solve.

Senator LAUSCHE. You stated this committee was composed of experts in this field from the electric utility industry, cable manufacturers, and the American Society of Planning Officials.

The American Society of Planning Officials is an organization made up of members that are supposed to envision the future and develop plans that will be most compatible with the rendition of services at the present and the preservation for the future of esthetic beauty and natural resources. Is that substantially correct?

Mr. CLAPP. That is my understanding; yes, sir.
Senator LAUSCHE. All right. Proceed.

Mr. CLAPP. S. 2139, which was recommended by former Chairman Swidler and Commissioner O'Connor, has been said to embrace this voluntary approach. Indeed, in submitting the draft bill, Mr. Swidler pointed out that it "confers upon the Commission a responsibility for advice and guidance but leaves final decision in the hands of the constructing agencies, public and private."

However, such final decision, if it differs from that of FPC, can be made only after a lapse of 2 years. Such a delay could seriously handicap system planning and increase costs materially.

For example, plans for new generating units must be m premise that associated lines can be built where and when possible delay of 2 years in getting transmission lines under result in generating capacity being installed 18 to 24 months needed in order to assure a reliable power supply wit

reserve.

A premature disclosure of plans to avoid delay wou hamper the orderly and economical securing of rights-of-wa The inherent delays that would result from the proposed and the effect of such delays on cost and the carrying ou responsibilities can be highly detrimental to the utilities

customers.

S. 1472 specifically provides as a condition precedent to t of a certificate of convenience and necessity that any capa quired for the transmission of electric energy by the app

be made available on a common carrier basis for the tran other electric energy.

To require as a condition precedent to a certificate tha capacity in a proposed line becomes a common carrier wo reduce reliability of service.

In the first place, it raises the question as to who would the amount of "surplus" capacity in a particular line and general rule, transmission lines are not designated to in plus" capacity, as such. Capacity in excess of the load pr reserve in the event of an emergency.

Furthermore, transmission lines are not designed as su component of an entire system for which reserve capac provided.

To have this capacity in use on a common carrier basi croach on this reserve capacity, and, in the event of a fau the components of the system, it could create a very dang tion which could jeopardize the stability of the entire produce a cascading type of interruption.

Senator LAUSCHE. What is your interpretation of t which would require a power company to make its exc available as a carrier to some other user? What if in t time the excess no longer existed? Would the right of t tinue as a priority over the right of the power company

?

Mr. CLAPP. Well, that is one of the several problems in with the matter of the common carrier principle, the negotiating contracts, it would determine where the prec lie.

It is of a great deal of concern to us to think about ha tract out surplus capacity on the common carrier basis. Senator LAUSCHE. Can you add anything to that? Mr. KEARNEY. No, sir.

Senator LAUSCHE, Proceed.

Mr. CLAPP. We wish to emphasize that a single transm but a part of the entire system, and modification of the the line or delay in permitting it to be installed could se the overall plan which component utility planners and op developed over a period of years.

The common carrier provision raises the very difficult problem of how all systems, regardless of size or type of ownership, could have access to the economies of scale.

Many of the aspects of this problem are described in chapter 16 of the National Power Survey. In fact, municipal systems and REAfinanced cooperatives now have access to these economies through their wholesale power contracts with the companies in the same manner as any other customer.

S. 1472 and S. 2140 contain an abandonment provision, paralleling section 7(b) of the Natural Gas Act. As interpreted by decisions under the Natural Gas Act, this provision would require continued wholesale service even after the expiration of a contract, whether termination was by lapse of time or by the exercise of an option on the part of the seller.

The same situation does not prevail in the electric utility industry as in the natural gas industry. In most cases a natural gas pipeline represents a gas distributor's only source of supply from the natural gas fields, whereas an electric utility is not restricted by geography from constructing a generating plant as its source of supply.

Moreover, the economics of purchasing power is based on this very alternative the relative cost of self-generation.

The right of a seller to terminate an onerous wholesale contract after a suitable period of notice is an essential part of the basic contract bargain, and in many cases may be the only route by which a discriminatory rate situation can be rectified.

The National Power Survey outlines in full detail the potential benefits to be obtained from EHV interconnections and the formation of broader power pools. It by no means, however, proves the case for regulatory control.

Major steps already announced and in progress across the country make it clear that the National Power Survey has served its immediate purpose of further stimulating growth of interconnections and coordination.

It is our understanding that the principal objective of these bills is to foster strong interconnections for the benefit of the electric power -consumer. In fact, the preamble to S. 2139 states the purpose of the bill as follows: "to encourage and facilitate the construction of extrahigh-voltage electric transmission lines in the public interest."

We do not believe the legislative action is necessary to encourage the fulfillment of the purpose. Interconnections and coordination in the electric utility industry are nothing new. In fact, today almost all of the major electric power systems in this country belong to one of several large regional or area coordinating groups.

Senator LAUSCHE. We now have pending a bill before this committee that contemplates removing some of the supposed obstacles that exist against coordinated effort by reason of the monopoly and antitrust laws.

You say:

In fact, today almost all of the major electric power systems in this cou belong to one of several large regional or area coordinating groups.

That is, you are coordinating your efforts?

Mr. CLAPP. Yes, sir.

Senator LAUSCHE. And you believe in the coordination that an economy is produced for the benefit of the consume Mr. CLAPP. That is right.

Senator LAUSCHE. And that you therefore do not believe lative action is necessary to encourage the fulfillment of thi of coordination?

Mr. CLAPP. We do not feel legislation

Senator LAUSCHE. I am not trying to put you on a h right. That is, you feel you have coordinated?

Mr. CLAPP. Yes.

Senator LAUSCHE. And for the benefit of the consumer? Mr. CLAPP. Yes, sir.

Senator LAUSCHE. But still there is present among ma companies the fear that they might be subjected to pros antitrust suits, and they have therefore asked for the ado law that would definitely legalize the coordination, if th question about its legality in existence?

Mr. CLAPP. I think the bill you are referring to is Senato son's bill.

Senator LAUSCHE. That is correct.

Mr. CLAPP. And there are certain-a few power compa country that did advocate that legislation. There were would say the majority, that did not feel that was necessary Edison Electric Institute took no stand on that because the unanimity among the companies on it.

Senator LAUSCHE. I see. You may proceed.

Mr. CLAPP. Within these groups electric utility systems the planning and operation of their respective systems so as reliable and economical electric service. Coordination als out between these regional groups."

These groups, generally through committees, coordinate lation of generating units and related transmission, the e energy for reasons of economy or emergency and coordin nance of equipment so as to provide more reliable service.

A few examples may help to illustrate how electric util are constructing extra-high-voltage lines in the public int instance, in the Middle Atlantic States, a coordinated grid is being developed to serve the present and future n electric power consumers in this area. Portions of this g are in operation. It will tie together large and efficient units.

This same voltage is being used for interconnections Tennessee Valley Authority (TVA) and 11 companies in west known as the South Central Electric Companies (SCI and SCEC are using these EHV interconnections for the change of capacity. Ultimately this exchange will rea million kilowatts.

The 500-kilovolt system in the Middle Atlantic States into the existing 345-kilovolt grid in New York State wh is tied into the 345-kilovolt grid that is being built in New

American Electric Power Co. recently announced plans lay of 765 kilovolts in its service area to provide for the of its customers.

In the Far West the joint efforts of investor-owned and noninvestor-owned systems have resulted in the establishment of a plan to tie together the Pacific Northwest-Southwest with EHV transmission including the first use of direct current transmission in this country.

These various EHV transmission interconnections are not limited to investor-owned systems but involve various segments of the electric utility industry as illustrated by the participation of TVA in a diversity exchange arrangement and the involvement of Federal power agencies and a municipal system in the Pacific coast intertie.

The Mid-Continent Area Power Planners (MAPP) is another example of how the various segments of the industry coordinate the construction of EHV lines so as to provide reliable service to their

customers.

MAPP is an organization that includes 14 investor-owned electric utility companies, 6 generation and transmission rural electric cooperatives with a membership of 70 distribution cooperatives, the Omaha Public power district, the Manitoba Hydroelectric Board of Canada, and 17 municipal electric utilities having their own generation.

Nearly 200 other municipal systems are connected to MAPP member systems, thus deriving benefits from the MAPP program.

MAPP systems operate in 10 Midwestern States and the Province of Manitoba, Canada. MAPP member utilities and several coordinating adjacent power suppliers will build a 5,400-mile network of 230- and 345-kilovolt lines by 1980. This network will add significantly to the reliability and economy of the power supply in the region. Furthermore, Edison Electric Institute sponsors and supports a substantial amount of R. & D. related to EHV transmission, including research on extra-high-voltage cable, d.c. transmission, cable insulation, a.c./d.c. system operation, esthetic designs, and extra-high-voltage a.c. and d.c. underground transmission.

Many of these projects are being carried on through the Electric Research Council which embraces all segments of the electric power industry.

In this country we have the greatest power system in the world. We lead the world in technology, interconnections, reliability, and in service to our customers. We believe we can do even better, and that is what we plan to do.

America now has almost as much electric generating capacity as the next five nations in the world combined.

America has the largest network of transmission lines in the worldover four times the miles than that of the Soviet Union, which has almost three times the land area.

Continuing advances are being made every day, including advances in the areas of high-voltage transmission and pooling. The electric companies have made definite plans through 1970 and are now planning for the 1980's and beyond.

Expenditures on new construction will be on the order of $4.9 billion in 1966. It is estimated that these expenditures will reach $6.4 billion in 1970 and $12 billion in 1980. Included in these expenditures are funds for many miles of EHV lines.

Realizing the growing importance of coordination among electric utility systems, EEI has formed a division on power systems coordina