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On September 30, 1970, the Federal Power Commission forwarded to the Congress a proposed form of bill to "secure electric power supplies adequate to the demands of the Nation compatible with environmental quality." A copy of that bill is appended as Appendix G, together with my letter to the Vice President (identical letter to the Speaker), a sectional analysis and an environmental statement.

Thank you.

(The full prepared statement of Mr. Nassikas follows:)

STATEMENT OF JOHN N. NASSIKAS, CHAIRMAN, FEDERAL POWER COMMISSION Mr. Chairman, in my remarks to day I shall discuss short-range and long-term conditions associated with the supply of electric power throughout the United States, with special attention to electric power events of recent weeks and the outlook for the immediate winter months ahead in respect to electric power and fossil fuels. I shall also discuss these conditions in the context of the Nation's total energy needs and what I consider to be relevant parts of a national energy policy.

My prepared statement includes, by way of reference and appendices, a number of prior statements which I have given recently before the Congress on matters of electric power and utility operation, environmental considerations, and fuel resources-gas, oil, coal and nuclear. These appearances were as follows: on August 13, 1970, before the Subcommittee on Administrative Practice and Procedure, Committee on the Judiciary, United States Senate; on August 3, 1970, before the Subcommittee on Intergovernmental Relations, United States Senate; on May 7, 1970, before the Subcommittee on Communications and Power, Committee on Interstate and Foreign Commerce, House of Representatives; on January 30, 1970, before the Subcommittee on Energy, Natural Resources and the Environment, Committee on Commerce, United States Senate; on November 14, 1969, before the Subcommittee on Minerals, Materials and Fuels of the Committee on Interior and Insular Affairs, United States Senate; and on October 28, 1969, before the Joint Committee on Atomic Energy.1

Recent Eastern Seaboard Conditions.-On September 22, and for some days thereafter, the northern and mid-Atlantic coastal area utilities and some adjoining inland region systems experienced difficulty in carrying some portions of their connected electric loads. The immediate reasons were protracted unseasonably high temperatures, forced outages of electric generating units and the happenstance that scheduled maintenance practices had taken a number of other units out of service after Labor Day. The factual details of these conditions are set forth in two reports prepared by the Commission's staff and annexed as Appendix D. These reports are self-explanatory and I need not repeat factual details at this point. I would note, however, that both reports were released to the general public on September 25 and that the Commission's investigation is continuing at this time. We are particularly concerned that the maintenance practices of the utilities along the eastern seaboard and elsewhere throughout the Nation be reviewed in the light of this experience to obviate similar situations in the future. I believe that utility operating procedures, including inter-area power transfers and system maintenance practices, must be revised to reflect a greater awareness of known and unexpected load conditions, the interrelation of operating conditions prevailing upon individual company networks, within area power pools and among inter-regional networks. Corrective steps must be added to existing operating procedures in cases of emergency or abnormal conditions.

1 My statements of August 13. August 3. and May 7, 1970, are appended as Appendix A. B. and C, respectively. A limited number of copies have been furnished to the Committee Clerk. If additional copies are needed, they will be supplied. My statement of January 30, 1970, appears in the hearing before the Subcommittee on Energy. Natural Resources, and the Environment of the Committee on Commerce, U.S. Senate, 91st Cong.. 2nd sess.. on A Report Covering the Principal Policy Questions Now Facing the Federal Power Commission, pp. 11-76. My statement of November 14. 1969. appears in hearings before the Subcommittee on Minerals, Materials, and Fuels of the Committee on Interior and Insular Affairs, U.S. Senate, 91st Cong., 1st sess., on Supplies of Natural Gas, pp. 115-183. My statement of Oct. 28. 1969, appears in hearings before the Joint Committee on Atomic Energy, Congress of the United States, 91st Cong., 1st sess., on Environmental Effects of Producing Electric Power, pp. 32–82.

The electric power conditions which prevailed in the New York area in midsummer 1970 are covered at length in my statement before the Senate Subcommittee on Inter-Governmental Relations on August 3 and before the Senate Subcommittee on Administrative Practice and Procedure on August 13. I shall not restate them orally. It is sufficient to note that generating equipment outages, high atmospheric temperatures and heat sensitive load conditions were present at that time also, causing load-capacity imbalances in particular areas.

Operation of Systems and Power Transfers.-Under conditions such as these, the immediate and short-range solution is to insure the fullest utilization of available generating capacity, wherever located and by whomever owned, to meet consumer demands. The Commission and its staff, in coordination with other Federal government departments or agencies, state utility commission personnel and representatives of the operating systems have worked throughout the summer to accomplish needed electric power transfers to serve local areas of shortage. Federal activities in this regard are being coordinated through the Inter-agency Power and Energy Committee convened by the Office of Emergency Preparedness. I am serving personally on this Committee along with members of the Commission's staff.

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On September 29, 1970, Dr. Paul W. McCracken, Chairman of the Council of Economic Advisers, and General George A. Lincoln, Director of the Office of Emergency Preparedness, jointly outlined steps which the members of the Interagency Committee, and other offices of the Federal government, will pursue throughout the approaching winter months to meet electric power and fuel needs of the Nation. That statement, appended as Appendix E, provides in part as follows:

We will continue to work closely with the electric power industry through the Federal Power Commission along the lines of our program for the summer to assure that interruptions in electric service are minimized. We urge the state and local governments to meet with the utilities in their respective service areas to review contingency plans for meeting loads this winter in those areas of tight supply ***, (pp. 5-6)

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We are establishing a Joint Board composed of the Director of the Office of the Emergency Preparedness (Chairman), the Secretaries of Interior and Commerce, and the Chairmen of the Council of Economic Advisers, the Council on Environmental Quality, the Interstate Commerce Commission, and the Federal Power Commission, to identify emergency problems in fuel supply and fuel transport and coordinate prompt and appropriate remedial action by the responsible federal agencies.

These steps are in addition to a number of measures already taken, or in the process of being prepared for implementation, to use the transportation and power systems more efficiently and respond to local shortages. (p. 6)

2 Page 26 of my August 13 statement details an example of such action taken in the light of load conditions which prevailed in the New York area.

In the area of emergency power transfers, an example of cooperative action by the Interagency Committee may be seen in my statement of August 3 (App. A to this statment), in relation to recent emergency power transfers to the New York City area. Deliberations of the Committee led to the curtailment of 450 MW of load at the Atomic Energy Commission's three gaseous diffusion process plants beginning on July 1, 1970. Arrangements were also made with a number of other Federal agencies to curtail nonessential uses of electric power during the summer. Some of the power released by the reduction in AEC loads was helpful in assisting Consolidated Edison at times last week when as much as 200 MW was supplied to the New York City area from investor-owned companies and publicly owned systems operating as far away as the Ohio Valley and Tennessee Valley areas.

3 The Committee is comprised of representatives of the Department of Health, Education, and Welfare; the Department of the Interior; the Office of Emergency Prepardedness; the Office of Science and Technology; the Atomic Energy Commission; the Interstate Commerce Commission; and, the Federal Power Commission.

4 I have assigned George E. Tomlinson, Acting Chief, Bureau of Power, and Thomas J. Joyce, Chief, Bureau of Natural Gas, to be FPC staff members of the Working Group to assist the Joint Board in identifying emergency problems in fuel supply and fuel transport and coordinating prompt and appropriate remedial action by the responsible Federal agencies. The Working Group is composed of representatives designated by the Secretaries of the Departments of the Interior and Commerce, the Chairman of the Interstate Commerce Commission and the Federal Power Commission, and the Director of the Office of Emergency Preparedness.

A Field Board on Fuel and Energy Problems has been established by the Office of Emergency Preparedness in Region 1. This Field Board is the counterpart of the Joint Board at the national level established by the President. The Regional Director of OEP Region 1 will be Chairman of the Board. The Council on Environmental Quality will not have a member but will be kept informed by the Board and will provide assistance as required. I have assigned Paul Shore, FPC Regional Engineer for the New York-New England area, and Kenneth Lucas, Assistant to the Chairman, to the Field Board.

Included within these measures previously initiated, as referred to by Dr. McCracken and General Lincoln, are two basic steps which the Federal Power Commission has undertaken: our request for the establishment upon a Nationwide basis, (1) of a schedule of plans and procedures which major utility systems will follow to effect all possible needed electric power transfers between utilities or areas to meet electric shortages, whether arising from equipment breakdown, equipment, fuel or water shortages, equipment maintenance requirements or other emergency conditions, and (2) our request for the formulation, also upon a Nation-wide basis, of load relief or load curtailment procedures which may be required to avert wide-spread service interruptions in the event of severe capacity-load imbalances in any given locality, area or region. These steps are described in some detail in my May 7, 1970 statement before the House Subcommittee on Communications and Power, pp. 28-31; and in my August 13, 1970, statement before the Senate Subcommittee on Administrative Practice and Procedure, pp. 19-28, 50-60.

The National Reliability Council has established the following steps as a preliminary contingency plan or program to meet emergency conditions:

1. First, full use will be made of interconnection capacity within and without the regional organization to deliver all power available to the affected system or systems. Should energy thus be further available, no customer will be affected.

2. Generally accompanying 1, above is the reduction in the use of electricity by the affected power system itself.

3. Interruptible loads will be dropped in accordance with provision of contracts.

4. Large industrial customers will be requested to reduce their unessential load as much as possible. The cooperation of these customers in this regard has been excellent.

5. The next step would be a voltage reduction throughout the system or systems. This should have no appreciable adverse effect on the customers. The magnitude of the voltage reduction is arrived at only after careful consideration of its impact on customers' equipment, particularly that affecting the health and safety of the public.

6. As a final step, and the most serious one-the dropping of load. First, this would involve industrial customers to the extent this can be done, considering the customers' load and system conditions. If this proved inadequate, parts of the service areas could be cut off for short periods of time alternately. Of course, every effort is made to provide continuous service to the essential public facilities-police, fire stations, and the like.

7. A further possibility currently under study is an overall reduction in frequency by all interconnected systems.

The necessary review and formulation of expanded contingency plans or programs will be conducted by the National Electric Reliability Council and the nine regional electric reliability councils in coordinaton with the 22 major power pools in the contiguous forty-eight states. The geographic reference and identity of these councils and pools is set forth on the following map.

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I propose that all of these plans be stated definitely by all affected utilities: be reviewed by all affected state or local regulatory bodies as well as the Federal Power Commission; and be made public knowledge with opportunity provided for hearing before adoption. In my judgment, broad public understanding of the nature of this problem will be beneficial both to the operating utilities and to the customers served. With knowledge, customers can be expected to take all steps needed to protect their respective interests in outage conditions.

The underlying problems of service continuity, inter-regional power transfers and load relief or load curtailment procedures involve many legal, economic and social issues, as I pointed out in my statement of August 13, 1970, pp. 50-62. The Federal Power Commission is charged with basic regulatory responsibility of the investor owned segment of the utility industry at the bulk power supply or wholesale level. Adequacy and reliability of bulk power supply is the essential business of the nine regional reliability councils and the 22 power pools which I have described. The Commission does not regulate retail rates or services under the Federal Power Act. That is a matter of state regulatory jurisdiction.

At the bulk power supply level the Commission's established procedures provide for regulatory commission, as well as general public review and disclosure of operating reliability criteria including load relief programs of the various utility systems operating throughout the Nation-wide nine electric reliability councils. See the Commission's Policy Statement on Reliability and Adequacy of Electric Service Reporting of Data-Participation of Regulatory Personnel in Regional Councils-, Docket No. 362, Order No. 383-2 (Appendix C to my statement of May 7, 1970, Appendix C to this statement).

The staff participation, Federal and state, in the work of the councils is set forth as follows (Order No. 383-2, issued April 10, 1970):

§ 2.11 Reliability and adequacy of electric service.

(a) Participation of Federal Power Commission personnel in regional reliability councils. The Federal Power Commission's responsibilities under Section 202 (a) of the Federal Power Act, to promote and encourage voluntary efforts by the various segments of the electric utility industry to coordinate their activities, can best be carried out if each regional reliability council or other coordinating organization which is a member of the National Electric Reliability Council permits participation by staff personnel on a non-voting basis in its deliberations. Accordingly, these organizations are requested to permit non-voting participation by FPC staff personnel in their principal meetings, and upon occasion, as may be requested by the Chief of the Commission's Bureau of Power, in their important technical meetings.

(b) Participation of State Commission personnel in regional reliability councils. It is the policy of the Commission that personnel of appropriate State commissions be permitted to participate in the meetings of regional reliability councils or other coordinating organizations which are members of the National Electric Reliability Council on the same basis as personnel of the Federal Power Commission.

In matters of involuntary load curtailment the Federal Power Commission and its staff are working to coordinate the demonstrated interests of the respective state commissions within each of the bulk power supply regions of the country and to propertly relate any specific load curtailment plans which they may prescribe or approve with the load relief and overall reliability plans which I have described as being particularly of Federal concern.

This work of the Commission staff is being done through the electric reliability councils in whose work the FPC staff and state regulatory staffs participate, as well as through Federal-state staff working groups which the Commission is initiating throughout the United States. Over the past several months the Commission has met with representatives of state commissions from all regions of the Nation. We have formed, or are in the process of forming, staff working groups in each of the nine reliability council areas.

Energy Subcommittee of the Domestic Council.—At the request of the President, the Domestic Council is now studying the national energy situation to develop for the President new or revised energy policies; and to recommend to the President

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