the commission in reaching its conclusion, just as assurance of compliance with air and quality of water standards should be considered.

A task force of the Edison Electric Institute has reviewed the subject of siting of major electric facilities and prepared a report and recommendations which we believe will be of interest to the subcommittee. I would now like to introduce Mr. Cohn who will analyze the other bills before your subcommittee.

STATEMENT OF HERBERT B. COHN

Mr. COHN. Mr. Chairman, and gentlemen:

My name is Herbert B. Cohn. I am executive vice president of American Electric Power Service Corp. I am appearing here today on behalf of the Edison Electric Institute.

Mr. Aymond has discussed the bills relating to a national powerplant siting study (H.R. 2505 and H.R. 15955) and presented our views on those bills.

I will address myself to the remaining bills listed in the subcommittee's notice of these hearings.

Several of these (H.R. 489, H.R. 1253, H.R. 5841, and H.R. 9215) incorporate the text of the "Electric Power Reliability Act of 1967” which was drafted by the Federal Power Commission and originally introduced in the 90th Congress in 1967 by Chairman Staggers as H.R. 10727, and on the Senate side by Senator Muskie, as S. 1934.

A second group, including H.R. 7186, and also H.R. 7016, H.R. 7052, and H.R. 9557, introduced in February of 1969, incorporates the principal features of the original FPC bill with some revisions and additions.

H.R. 12585 the bill recommended by former Federal Power Commission Chairman White and Commissioner O'Connor and introduced in July 1969, follows a similar approach but includes a number of differences in language and concepts.

In my general comments, I will refer primarily to the provisions of H.R. 7186, but my general comments apply as well as to all of these bills. In addition to these general comments I have attached as appendix A, comments on some additional questions raised by the bill recommended by former Chairman White and Commissioner O'Connor, H.R. 12585.

H.R. 9429, the bill sponsored by NARUC, takes a somewhat different approach in calling for the licensing of transmission facilities by State commissions or in the absence of State commission authority by State joint boards and gives greater emphasis to the role of the regional councils. We think this greater emphasis on the role of the State commissions and the regional councils is a desirable concept. But some of the general comments on the other bills under consideration are equally applicable to the NARUC bill. And, as I shall indicate, we think its major objectives are now being largely achieved in the work being done by the regional coordinating groups in cooperation with the State commissions and the Federal Power Commission.

There have been several developments since the introduction of these bills, and during the last year, which we believe are relevant in the committee's consideration of the matters covered by these bills. First, there has been a significant increase in the scope of the work

being done by the regional reliability councils and in the areas of cooperation between the Federal Power Commission and the industry. Early this year, FPC issued a proposed revised statement of policy, relating to reliability and adequacy of electric service, for public comment. After considering all comments on this proposal, FPC adopted a statement of policy proposing participation by FPC staff personnel and personnel of the State regulatory agencies, in meetings of the regional councils, and establishing a system for reporting by the regional councils to FPC and to State commissions, of detailed data on current and future plans relating to the bulk power supply. The regional councils are in the process of working out procedures to implement this proposal and to supply the information requested.

As Mr. Aymond has indicated, Mr. Snyder will deal with these developments in area coordination, and in the cooperative efforts of the FPC and industry.

Second, in the last year the Congress has devoted a great deal of time and effort to consideration of proposed legislation dealing with environmental problems. Some of these proposals have already been adopted, including the National Environmental Policy Act of 1969, which among other things created the Council on Environmental Quality now headed by Mr. Russell Train and directs all Federal agencies to consider the environmental impact in all recommendations for legislation and other actions affecting the environment. Several other proposals are under active consideration by the Congress.

Third, in the course of hearings, before other committees of the Congress, the Federal Power Commission has testified that it does not at this time believe legislation is required to deal with the reliability of electric power. I understand that the Commission is scheduled to appear before this committee to present its views in further detail.

The electric utility companies which are members of the Edison Electric Institute-and although I have no authority to speak for them, I am sure this is true of the rest of the electric utility industryare in favor of the most reliable electric service possible, and for anything which will, in fact, further advance reliability. We have every possible motivation to provide the most reliable electric service. We fully understand that the success of our individual companies, and of our industry as a whole is more dependent on our ability to provide such reliabiliy of service than on any other single factor.

As Mr. Aymond has indicated, we have had our problems over the last few years and we can see a number of difficult problems in the future. But they are problems reflecting the fallibility of human beings and are in no way related to any absence of the objective or the will of the industry to do everything humanly possible to achieve the most reliable electric service.

And, not withstanding their problems, we know of no other power system in the world which has a better record for service reliability, both as to service to individual consumers, and as to bulk power supply, than the power system of this country. But we fully agree that we must try to do even better. And we are continually taking steps to bring our record as close as is humanly possible to 100 percent.

We do not believe that H.R. 7186 or the other bills under consideration would, in fact, further advance reliability. We believe these bills would, instead, materially hinder, rather than help, reliability.

In sum, we oppose these bills for the following reasons:

1. While these bills have been proposed primarily as bills to further reliability of electric service, in fact they also deal with a great many other matters which, in many cases, are in direct conflict with reliability.

2. These bills would authorize the Federal Power Commission to make the ultimate decisions in the planning, construction, and operation of utility systems and would divide the responsibility for reliability of electric service and the authority to make the decisions necessary to carry out such responsibility.

3. These bills, by subjecting decisionmaking in the building of essential utility facilities to the administrative and quasi-judicial procedures of the Commission 1 and under some of the bills, to the additional procedures of a new National Council on the Environment as well, and to the built-in delays associated with such procedures, would materially hinder reliability rather than strengthen it.

4. These bills would abandon the existing approach to strengthening of reliability under which the industry has been fully cooperating with the Commission and has been working, on a regional basis, to plan and build the facilities necessary to strengthen reliability.

I will discuss in detail, the basis for each of these conclusions.

1. While these bills have been proposed primarily as bills to further reliability of electric service, in fact they also deal with a great any other matters which, in many cases, are in direct conflict with reliability.

The problem of reliability of electric service is of the greatest importance and merits separate and independent consideration. The bills under consideration are concerned not only with reliability, but with such matters as the economics of power supply, the proper role of the small distribution system, the preservation of the environment, the conservation of natural resources, and the authority of the Commission to order interconnections and to approve abandonments for purposes which may have nothing whatever to do with reliability.

Thus the objectives of H.R. 7186, which are listed in section 401 (b) include reference to "the greatest possible economy," "the preservation an enhancement of the environment," "the proper utilization and conservation of natural resources, including scenic, historic, and recreation assets," "the strengthening of long-range land-use planning," and providing all utility systems with "access to the benefits of coordination."

There are cross references to these objectives, in describing the authority of the Commission and the standards it is to follow, in some 18 of the substantive provisions of the bill. Thus, for example, the Commission's authority to modify or set aside the regional council's statement of organization (sec. 404 (b)) and the regional council's plan for regional and interregional coordination (sec. 404 (c)) and the Commission's authority to disapprove proposals under section 410 to build transmission or generation facilities, are to be exercised nor merely for reliability, but also for such conflicting objectives as "the greatest possible economy" and the "preservation and enhancement of the environment."

This is not true of the NARUC bill, H.R. 9429, which deemphasizes the role of PPC and provides, instead, for licensing by State commissions or regional State joint boards.

In addition, section 405 deals entirely with the establishment of a National Council on the Environment, which is required to ascertain whether coordination plans and proposed generation and transmission facilities are consistent with "the preservation and enhancement of the environment", "conservation of natural resources including scenic, historic, and recreation assets" and "the strengthening of long-range land-use planning." (Section 405 (b)). Objections of this Council, whose expertise and responsibilities have nothing to do with reliability, may have the force, apparently without even a hearing, of suspending construction of essential facilities. (See sec. 405 (f).)

And section 412 authorizes the Commission to compel interconnections and section 413 would require Commission approval for abandonment of service, for reasons which may have nothing whatever to do with reliability. These latter two sections represent proposals for expansion of the Commission's jurisdiction which the Commission first made to the Congress some 16 years ago and long before the Commission evidenced any interest in the reliability of bulk power supply.

Section 412 would enlarge the present authority of FPC to compel interconnections by eliminating the existing safeguards relating to service in section 202 (b) of the Federal Power Act. The latter section. now authorizes such Commission action on application of any State commission or any person engaged in the transmission or sale of electric energy, but it provides that the Commission may not, in ordering such an interconnection, compel the utility to take action which "would impair its ability to render adequate service to its customers." It is rather difficult to see how the elimination, proposed in section 412, of this proviso to safeguard "adequate service" can be justified as a contribution to greater reliability.

The proposal in section 413 to require Commission approval for abandonment of service is not based on any showing that such authority is needed for reliability of service. And this provision, all by itself, could open a Pandora's box of problems. For example, there would be no certainty that a contract entered into by two utilities for shortterm capacity would not be translated by FPC into a long-term obligation on the part of the supplier and a long-term option to the purchaser. If this possibility existed it would certainly discourage short-term contracts which may be of very great assistance in furthering reliability of electric service.

The economics of power supply, the proper role of the small distribution system, the preservation of the environment, and the conservation of natural resources are all important matters. But they are matters which frequently conflict with reliability. We believe that substantive legislative proposals in areas such as these, if they are to be proposed, should be the subject of separate consideration on their own merits. And, as I have indicated, during the last year there has, in fact, been separate consideration of many proposals relating to the environment, some of which have already been adopted and some of which are now under active consideration by the Congress.

2. H.R. 7186 and similar bills would authorize the Commission to make the ultimate decisions in the planning, construction, and operation of utility systems and would divide the responsibility for reliability of electric service and the authority to make the decisions necessary to carry out such responsibility.

I do not think there can be any question but that H.R. 7186 and similar bills authorize the Commission to make the ultimate decisions in the planning, construction, and operation of utility systems.

Section 404 (c) provides that the Commission is to decide whether any plan for regional or interregional coordination developed by a regional council is consistent with the objectives of the bill, and that if the Commission determines that the plan is not consistent with such objectives or is not in the public interest, "it shall modify it or set it aside." Such plans will necessarily cover the generation and transmission facilities required for reliable bulk power supply.

Section 410 expressly authorizes the Commission to decide whether to permit, modify, or prohibit the "construction, extension, or modification" of any transmission facilities in excess of 200 kilovolts or any generating facilities with a capacity of 200 megawatts or more. I should note, parenthetically, that the Commission itself did not request this direct authority over generating facilities in the bill it submitted. This is one of the areas in which H.R. 7186 has gone further than the Commission's bill.

And section 409 in giving the Commission the power to promulgate the reliability standards would authorize decisionmaking by the Commission in the planning and operation of bulk power supply facilities. Moreover, the authority given in sections 404 (c) and 410 is to be exercised to carry out objectives which are phrased in such broad and general terms as to give FPC virtually absolute power of decision to approve, disapprove or require modification of coordination plans, transmission lines and generating facilities.

In the first place it is a fair question to ask whether FPC has the expertise and manpower to make these decisions for all of the Nation's electric power systems. I suspect that even the Commission would agree that it does not and that it would have to use the utility systems' own experts as it has on various occasions in the past, and thus impose a double burden on people who are already in very short supply.

In the second place, we submit that it is unsound, inconsistent with the proper functioning of government, and a complete departure from the entire history of regulation of electric utilities to turn over such detailed decisionmaking in managerial matters to a Federal regulatory agency.

The primary responsibility to provide reliable electric service has been, and should continue to be, imposed on the utility systems. The utilities have accepted this responsibility and the corollary that they are to be held accountable for carrying it out. In referring to the 1967 Commission bill, former FPC Chairman White stated that "the basic responsibility for meeting reliability problems rests with the industry and should continue to do so, and our bill rests on that premise. But how can the utility industry fairly be held responsible and accountable if it no longer has the authority to build the facilities it deems necessary to carry out such responsibility?

The Honorable Ralph Wickberg, a member of the Idaho Public Utilities Commission, testified at the northwest hearings on the

2 See address of Mr. White to the National Association of Railroad and Utility Commissioners on Nov. 1, 1967.