testified on the proposed Bonneville legislation in 1936 and 1937. Probably his main distinguishing policy as Administrator was his forthright advocacy of public power. He was the only Administrator to do so, at least openly. In terms of effectiveness, especially in getting construction funds, Ross made good use of his visits at the White House.

The second Administrator, Dr. Paul J. Raver, assumed his duties September 15, 1939. Two weeks later on September 29 he told the Portland City Club his thoughts when offered the job:

"I saw the opportunity to extend the advantages of the Columbia River's tremendous power resources to the region... And, finally, I saw a chance to help in the big job of making America's greatest river serve all her people. It is a high privilege which I invite you to share."

On October 2 he talked to the Portland Chamber of Commerce about:

"...the broad economic development that will come from the wise use of this region's greatest single asset - the Columbia River."

Thus the first Administrators tried to portray the bureau as a bridge between Columbia River power plants and the people of the Pacific Northwest.

Raver was recruited by Ickes in part on the basis of Raver's investigations of the Insull utility empire. Chicagoan Ickes had no use for Insull. Raver came from Illinois where he was a recognized utility expert, teacher and just appointed Chairman of the Illinois Commerce Commission. He will be discussed in more detail later. He brought with him a number of outstanding division officers and assistants. They quickly became his Executive Committee and the core of a strong organization.

Raver's early perception of the Act was recorded in his address September 29, 1939, to the Portland City Club:

encourage the widest use of energy by adopting the uniform rate concept;

- prevent monopolization by limited groups by building transmission lines;

— insure benefits to the general public, particularly rural and domestic consumers;

- grant preference and priority to public and cooperative systems;

- establish reasonable and nondiscriminatory resale rate schedules; and,

provide 5 years' notice to private utilities to pull back power and insure an adequate supply for preference

customers.

Raver emphasized in a speech at Reed College May 1, 1940, three main policies the Act imposed on him:

encourage the widest possible use;

prevent monopoly; and,

- preserve preference rights.

The Administrators had no easy job trying to explain they did not operate Bonneville Dam, did not generate any power, and the bureau office was not at Bonneville Dam. Unfortunately, they went by the title, Administrator, The Bonneville Project. Early in 1940 Secretary Ickes approved renaming the bureau "Bonneville Power Administration." But in the public mind the confusion with Bonneville Dam remained.

The confusion did not extend to President Roosevelt. In signing the Bonneville Project Act, he signed his own bill. His personal imprint was evident in almost all the policies and decisions. Throughout his presidency he took a personal interest in Columbia River development and construction of the transmission grid.

In his first year or two, Dr. Raver continued the Ross initiatives but moved more forcefully to build a strong and broader staff, assist new public power systems and build lines to transmit power to them, sign up industrial loads, and extend a fair hand to private utilities.

As later chapters will show, the emphasis and administrative styles and vigor of Ross and Raver probably reflected the support of President Roosevelt and Secretary Ickes as much as it did the Act.

The letter of the law, particularly the widespread use clause, has led to substantial interpretation, as will be shown in later chapters, notably on rural electrification, the Raver objectives, industrialization, a higher standard of living, conservation of natural resources, power exchange, irrigation, a better environment, and most recently conservation of energy. The Act has been cited as a factor in regionalism, increased job opportunities, economic decentralization, hydraulic and electrical integration, and influence as a yardstick.

The Act has served as the foundation for amendments and new laws. The cluster of policies interrelate and support one another, and comprise the Act's logic and philosophy. Since each policy exists in the context of the other policies, they do not lend themselves to isolation or separation from the Act. The Act as a whole constitutes the policy unit. Within this context, the next two chapters concern two major policies of the Act.

10. THE PREFERENCE CLAUSE

The preference clause is, most simply, a recognition that publicly owned resources belong to the nation's people and should be distributed directly to the people where it is possible to do so.

- Lee White Former Chairman Federal Power Commission

Five Preference Policies. In the Bonneville Project Act and the Flood Control Act of 1944 the Congress directs the Administrator to give preference to public bodies and cooperatives. The preference command appears in the Bonneville Act five times. The first is a strong, overall directive:

"SEC. 4. (a) In order to insure that the facilities for the generation of electric energy at the Bonneville project shall be operated for the benefit of the general public, and particularly of domestic and rural consumers, the administrator shall at all times, in disposing of electric energy generated at said project, give preference and priority to public bodies and cooperatives."

The language is not derived from any other act. It is an original Congressional finding regarding the purpose of the preference clause. For the first time, "priority" appears for emphasis.

The second command, section 4(b), requires that public bodies and cooperatives be given preference when there are competing applicants.

Third, section 4(c) allows public or cooperative bodies a reasonable length of time to secure financing to enter into the electric business.

Fourth, section 4(d) includes preference customers. within economic transmission distance, allowing them a reasonable length of time to hold an election, organize, obtain financing, or otherwise become qualified electric energy purchasers and distributors.

Fifth, section 5(a) requires the Administrator to include a 5-year cancellation or "pull-back" clause in every contract with a nonpreference electric utility, if the energy may be needed to serve preference customers.

The preference clause appears more forcefully and at greater length in the Act than in any other law. In the Flood Control Act of 1944, for example, the preference language reads merely:

"Preference in the sale of such power and energy shall be given to public bodies and cooperatives."

History of Preference. Under the property clause of the

U.S. Constitution only Congress can dispose of public property such as public lands, war surplus, and Federally generated electric power. Congress has long shown its preference in making land grants for schools, homesteading, railroads, and to veterans. In 1877 it granted preference to water from public lands for irrigation. A list of 28 Federal laws which provide for preference appears at the end of this chapter. As the list shows, a weak form of preference began in 1906, for sale of surplus power incident to the Federal irrigation program. Dr. Martin Theodore Farris chronicles the history of the preference clause in his 1957 doctoral dissertation The Economic Significance of the Preference Clause in Public Water Policy on the Development of the Pacific Northwest. Its quotations and documentation sources are useful.

The first strong preference clause appears in the TVA Act of May 18, 1933. The strength came from the conviction of Senator Norris, Senate Committee on Agriculture chairman, that the Corps of Engineers should not sell power from the Wilson Dam generator bus at Muscle Shoals to Alabama Power Company at dump power rates. Norris introduced 9 of the 16 Muscle Shoals bills reported out of committee from 1920 to 1933. Each of his bills contained the preference clause in much the same form as it appears in the TVA Act.

Senator Norris' convictions resulted from extensive study. He drove through the countryside of Ontario Province to visit farms electrified by the Hydro-Electric Commission of Ontario. He compared rates. He took part in the many electric power battles in the Senate. He helped launch the investigation of public utility holding companies in 1928. He helped make Nebraska the nation's only State served entirely by public and cooperative power agencies.

The TVA Act expanded the concept of preference three ways.

First, it included cooperatives. This paved the way for a thousand rural electric cooperatives across the country, which eventually provided political support for the preference clause. The Rural Electrification Act of 1936 gives preference to public bodies and cooperatives in applying for REA loan funds. The two kinds of preference, one on loan funds and one on power supply, complement each other in helping a new preference customer get into business. In his testimony on the TVA bill in 1933, Washington Senator Bone told of the success of the electric cooperatives that had purchased power at wholesale rates from Tacoma.

Second, the TVA Act authorized construction of Federal

transmission lines, thus giving potential preference customers direct access to the power.

Third, the Act directed the inclusion of a 5-year, pullback clause in contracts with non preference utilities. All three of these innovations became part of the Bonneville Project Act.

The Bonneville Act went beyond the TVA Act to broaden the meaning of the preference clause, as noted in the preceding section in this chapter on the "five preference policies." An extensive file of Regional Solicitor opinions, letters, and memorandums covering almost 40 years attest to the effectiveness of the Act's preference provisions.

President Roosevelt wrote the chairman of the House Committee on Rivers and Harbors on February 7, 1944 to urge inclusion in the next River and Harbor bill of a provision for integrated power marketing from Corps of Engineers hydroelectric dams by the Secretary of the Interior, along the lines of the Bonneville and Fort Peck Acts. It did not pass without challenge. A seesaw battle ensued all that year.

From November 22 to 24 the Senate debated the Bailey substitute amendment which called for selling energy at the generator bus or switchyard with no preference. It was defeated 27 to 44.

Congress finally included Section 5 in the Flood Control Act of December 22, 1944 to apply the Bonneville principles to all Corps of Engineers hydroelectric projects. It stated simply, "Preference in the sale of such power and energy shall be given to public bodies and cooperatives."

Kerosene oil for the kerosene lamps of America was for many years the main product from oil production. The lamps were smoky and smelly, requiring frequent adjustment and trimming of the wick and cleaning soot in the glass electrification the kerosene lamp was a chimneys. With the coming of rural favorite subject for conducting a mock wake or funeral.