Senator KEFAUVER. Are those the lists as of both dates that we now have?

Mr. FRYE. As of both dates.

Senator KEFAUVER. Let them be made a part of the record.

(The lists referred to may be found in the subcommittee files.) Senator KEFAUVER. Finally, it has been suggested here that a great many applications in the electric-utilities field have been turned down. Were these on account of the fact that they did not meet the dispersal requirement, Mr. Aandahl or Mr. English?

Mr. ENGLISH. There were a number of them which didn't meet the dispersal requirement, and some were outside of the goal limit.

Senator KEFAUVER. Some were outside of the goal limit, and some did not meet the dispersal requirement. Are those the only reasons. for which they have been turned down?

Mr. ENGLISH. The only reason.

Senator KEFAUVER. What percentage were dispersal; do you remember, offhand?

Mr. ENGLISH. I don't believe I can state the percentage.

Senator KEFAUVER. Let me see if I understand this. One reason some have been turned down is because the plant would be put in a target area, and they did not meet the dispersal requirements, and the second was that they did not meet the goal limits; that is, they

were

Mr. ENGLISH. Scheduled beyond December.

Senator KEFAUVER. Scheduled beyond the time set forth. So that all of them were turned down for those reasons; is that correct? Mr. ENGLISH. That is correct.

Senator KEFAUVER. Finally, may I ask, how many of these have been small business?

Mr. ENGLISH. There were no small business included in the electricpower goal of 1955.

Senator KEFAUVER. Do you mean none of these 500 have been small business?

Mr. ENGLISH. None of them.

Senator KEFAUVER. How did you happen to mark Duquesne Power & Light as small business?

Mr. ENGLISH. ODM did that, through error. Small business is limited to a hundred employees or less, and Duquesne Power Co. has between 3,000 and 4,000 employees, so it was an error in listing that as small business. That is my understanding.

Senator O'MAHONEY. That was a good error, at least.

Senator KEFAUVER. So that this program, as far as you are concerned, is not giving any tax amortization to small business?

Mr. ENGLISH. None of them were considered small business. Senator O'MAHONEY. It couldn't give it to any new, starting business, because they wouldn't have any income to offset, would they? Mr. ENGLISH. I don't know of any starting business.

Senator KEFAUVER. But would it have income which the amortization would offset?

Mr. ENGLISH. He wouldn't have any; he wouldn't have an established business.

Senator O'MAHONEY. They wouldn't be classified as rural electric cooperatives, would they?

Mr. ENGLISH. No. They wouldn't be a class I utility.

Senator DIRKSEN. How many small businesses, as such, actually made application?

Mr. ENGLISH. Senator, may I state that Duquesne-I assume that you are talking about the nuclear powerplant Duquesne is building. That nuclear powerplant was not certified under the electric-power goal of 1955; it was certified under research and development control under the Commerce Department, not by Interior.

Senator KEFAUVER. We thank you very much, gentlemen. We will stand in recess until 10 a. m. Friday.

(Whereupon, at 5:20 p. m., the committee adjourned, to reconvene at 10 a. m., Friday, May 31, 1957.)

RAPID AMORTIZATION IN REGULATED INDUSTRIES

FRIDAY, MAY 31, 1957

UNITED STATES SENATE,

SUBCOMMITTEE ON ANTITRUST AND MONOPOLY

OF THE COMMITTEE ON THE JUDICIARY,

Washington, D. C.

The subcommittee met, pursuant to recess, at 10:10 a. m., in room 424, Senate Office Building, Senator Estes Kefauver presiding. Present: Senators Kefauver (chairman), Wiley, and Dirksen. Also present: Senators Carroll and Dworshak.

Paul Rand Dixon, counsel and staff director; Dr. John M. Blair, chief economist; Carlile Bolton-Smith, counsel to Senator Wiley; Peter Chumbris, counsel for the minority; Jerry O'Callaghan, legislative assistant to Senator O'Mahoney; George Arnold, administrative assistant to Senator Neely; Ray Cole, investigator; Philip Layton and George Clifford, attorneys; and Dr. E. Wayles Browne, Jr., economist.

Senator KEFAUVER. Mr. Kuykendall, we appreciate your coming up and being with us. Will you identify the gentlemen you have with you?

STATEMENT OF JEROME K. KUYKENDALL, CHAIRMAN, FEDERAL POWER COMMISSION, ACCOMPANIED BY JOHN C. MASON, DEPUTY GENERAL COUNSEL; RUSSELL C. RAINWATER, CHIEF ACCOUNTANT; WILLIAM R. FARLEY, CHIEF, DIVISION OF LICENSE PROJECTS; AND WILFRID A. FROGGATT, ENGINEER IN CHARGE OF LICENSE PROJECTS, SAN FRANCISCO, CALIF.

Mr. KUYKENDALL. I will be happy to, Mr. Chairman.

On my immediate left is John C. Mason, Deputy General Counsel of the Federal Power Commission, and on Mr. Mason's left William R. Farley, Chief of our Division of License Projects.

Next to Mr. Farley is Mr. Wilfrid A. Froggatt. He is in our San Francisco office, engineer in charge of license project works in San Francisco, and on his left and at the end of the table is Mr. Russell C. Rainwater, who is our chief accountant.

Senator KEFAUVER. Mr. Kuykendall, when did you become a member of the Federal Power Commission?

Mr. KUYKENDALL. I was sworn in on May 15, 1953.

Senator KEFAUVER. When did you become Chairman?

Mr. KUYKENDALL. I became Chairman at the time I became a member.

Senator KEFAUVER. As of the date of the last consideration of, and the granting of, the licenses to the Idaho Power Co., will you name the members of the Federal Power Commission?

Mr. KUYKENDALL. That was in the summer of 1955. I was there of course. Claude A. Draper was the senior member, S. L. Digby was a member, Frederick Stueck, and William R. Connole.

Senator KEFAUVER. Do you have a prepared statement, Mr. Kuykendall?

Mr. KUYKENDALL. No, Mr. Chairman, I did not prepare one because I did not really know just what the subject matter was that you were interested in.

Senator KEFAUVER. We have made a part of the record the finding of Mr. Costello, the hearing examiner, in connection with the application of Idaho Power Co. That is a part of the record, isn't it?

Mr. DIXON. It was requested.

Senator KEFAUVER. It has been ordered to be made a part of the record. Do you have a copy?

Mr. KUYKENDALL. I think I have my office copy which I would be happy to let you take.

Senator KEFAUVER. If you have an office copy, we will see that you

Mr. KUYKENDALL. This is not my copy but this is an extra copy which the committee may have.

Senator KEFAUVER. It has been ordered to be made an exhibit in the record. We have made the decision and the opinion of the Federal Power Commission granting the license a part of the record.

(The material referred to may be found in the appendix on p. 957.) Do you have one of those?

Mr. KUYKENDALL. Yes. Here is a copy which you may have. Senator KEFAUVER. It has been ordered that the opinion of the circuit court of appeals on the appeal from the decision of the Federal Power Commission be made part of the record.

Do you have a copy of the opinion of the circuit court of appeals? Mr. MASON. Mr. Chairman, I do not have a copy with me but we made copies of that available to your staff member, Mr. Cole, this morning at our office.

Senator KEFAUVER. It has been ordered to be made a part of the record.

(The material referred to may be found on p..)

Mr. Kuykendall, will you outline for us, giving the dates as nearly as possible, the proceedings before the Federal Power Commission in connection with the granting of the license to the Idaho Power Co. and other actions in connection with the so-called Hells Canyon matter as it pertains to the Federal Power Commission. If any of you gentlemen want to supplement with dates, please do so.

Mr. KUYKENDALL. The hearing commenced not very long after I became a member. I would think it would have been in June of 1953. Mr. Mason says it was July of 1953.

Senator KEFAUVER. When did the hearing before Mr. Costello begin?

Mr. KUYKENDALL. In July of 1953.

Senator KEFAUVER. Can you give us the date that Idaho Power first filed for the license?

Mr. KUYKENDALL. For the Oxbow project, which was designated project No. 1971, Idaho filed its application on December 15, 1950, and the application for low Hells Canyon and Brownlee

Senator KEFAUVER. You say low Hells Canyon and Brownlee? Mr. KUYKENDALL. Yes; two applications bearing Nos. 2132 and 2133, respectively, were filed on May 15, 1953.

Senator KEFAUVER. Did I understand the application for Oxbow was December 15, 1950?

Mr. KUYKENDALL. Yes.

Senator KEFAUVER. Then these other 2 were separate applications for 2 other facilities filed May 15, 1953?

Mr. KUYKENDALL. That is right.

Senator KEFAUVER. I believe that at one time the Secretary of the Interior intervened in the case to oppose the granting of one of these applications.

What was that, and what was the date of that?

Mr. KUYKENDALL. The Secretary of Interior was permitted to intervene on July 7, 1952. At that time, of course, only the Oxbow application was on file.

Senator WILEY. You were not on the Commission?

Mr. KUYKENDALL. No; I was not.

Senator KEFAUVER. That was only with reference, then, to the Oxbow application, which was the only one pending at that time? Mr. KUYKENDALL. Yes; and I am aware of the fact that hearings were held in the Pacific Northwest on the Oxbow application on July 14 to 17, 1952, in Baker, Oreg., and Boise, Idaho.

Senator KEFAUVER. In the Oxbow project, was it stated or contemplated in connection with that hearing that there would be other applications filed subsequently for these other sites?

Mr. KUYKENDALL. I think Mr. Mason-he was there all the timecould answer that question.

Senator KEFAUVER. First, Mr. Mason, how long have you been with the Federal Power Commission?

Mr. MASON. I started with the Federal Power Commission in 1934 as a mail clerk, and I have been there ever since except for 2 years in the Navy in 1944 and 1945.

Senator KEFAUVER. All right, sir. Will you tell us about this question?

Mr. MASON. Yes, sir. At the time the application was filed for the Oxbow development in December of 1950, as part of the application the applicant included what was the applicant's idea, I suppose, at that time of an ultimate plan of development which contemplated the eventual construction of five dams and powerhouses in the so-called Hells Canyon region of the Snake River.

Senator KEFAUVER. Two of which were low Hells Canyon and Brownlee?

Mr. MASON. No, sir; not as they were actually filed. They may have contemplated dams at those sites, I don't remember that detail, but the five-dam plan did not include a project at Brownlee with a million acre-feet of storage, or the same development at the low site, as was finally applied for. It was a different scheme of development. Senator KEFAUVER. The remaining 4, outside of Oxbow, which you

94133-57-pt. 1-26