The sheepherder's cook wagon is head ing for the high elevation of Boulder Creek Valley, one of thousands of remote unelectrified valleys of the Pacific Northwest. With the advent of rural electrification many remote areas were able to use electricity to develop ski resorts, farms, recreation camps and summer homes.

"I don't know that it is economically feasible at this time, Senator. It costs money to transmit power, and if you superimpose an enormous transportation system or grid over that country with its present small population, relatively speaking, and large distances that you have to cover, and average up the cost so that it is the same all over, it will make your cost so much that you will never be able to sell it to industry, and if you don't get industries, you don't get people, and if you don't get people you can't sell power. You have got to have people to consume power. You can't sell power to jack rabbits or in a country that is not populated."

Apparently neither the PNWRPC report nor the hearings on it made much of an impression. On May 26 the four Washington and Oregon Senators introduced their reconciled bill S. 4695. They obtained a quick, favorable report through Senator McNary from the Senate Commerce Committee on June 5. The House held hearings on the bill June 3, 4, and 8, and reported it to the House on June 8. The bills died due to the rush of adjournment and to the extraneous Boulder Canyon rider. This ended the FPC-Corps of Engineers bill and McNary's efforts on its behalf.

President Roosevelt, concerned about early completion of Bonneville Dam, sent his September 8 letter asking the Federal Power Commission to recommend a rate structure suitable for marketing Bonneville power. He concluded with these words:

"In this connection, I wish to remind you that the advisory committee of the National Resources Committee in its report on this general subject laid special emphasis on the importance of a rate structure which will not lead to the future congestion of industry close to generating units, but in preference distribute the benefits of the Columbia River over as wide an area as practicable. In the opinion of the committee a system like the English grid or that adopted by the Tennessee Valley Authority would be desirable and should at least have the careful consideration of the Federal Power Commission."

Under the urgency of the near completion of Bonneville Dam and in the wake of the November election's Democratic landslide and supportive vote for public power in Washington State, President Roosevelt moved decisively. He met with the Northwest delegation February 18, 1937, and sent Congress a special message February 24, based on the PNWRPC report that suggested the feasibility of a uniform rate. Representative Martin Smith of Washington introduced the Committee on National Power Policy's draft of the proposed Bonneville Project Act as H.R. 4948.

The sporadic hearings of the House Committee on Rivers and Harbors from March 9 to June 4 resulted in the introduction of H.R. 7642 June 23, and a favorable report to the House on June 24. Oregon Governor Martin testified April 22:

"Some testimony was presented last year that Bonneville energy should be transmitted all over the Pacific Northwest. What damn nonsense! Excuse me; I got off my paper. (Laughter.)"

Later that afternoon Corbett, Portland Chamber president, recommended an amendment to substitute for the sentence on uniform rates:

"The rates to be charged for electric energy sold by the administrator pursuant to this act may be uniform through transmission areas to be prescribed by the administrator with the approval of the Federal Power Commission, but all such rates shall bear a reasonable relation to the cost of producing and transmitting the electric energy so sold."

In contrast, Oregon Representative Pierce and others

urged the uniform rate policy be required in the law. Professor Magnusson particularly advocated a uniform rate approach.

Perhaps in deference to Senator McNary and others, President Roosevelt thought the uniform rate question should be left open for future determination by the administrator, provided the Act contained criteria for guidance. The Bonneville Project Act read:

"The said rate schedules may provide for uniform rates or rates uniform throughout prescribed transmission areas in order to extend the benefits of an integrated transmission system and encourage the equitable distribution of the electric energy developed at the Bonneville project."

The Federal Power Commission greatly assisted new Administrator Ross. In response to the President's September 8, 1936 rate study request, the FPC issued a lengthy report in March 1937, revised in August 1937, proposing a uniform rate for a market area along the lower Columbia River some 300 miles long and 200 miles wide.

The FPC issued an interim cost allocation for Bonneville Dam on February 8, 1938. This set the stage for Ross to move. He mailed out thousands of questionnaires March 10. The gist of the six specific questions was: Should Bonneville power be sold at the generator bus primarily to industries in the immediate vicinity, or should transmis

sion facilities be built to encourage widespread use of electricity throughout the Pacific Northwest?

Accompanied by FPC Commissioner Claude Draper, Ross conducted public hearings March 10 through March 18 in eight cities in this order: Salem, Olympia, Boise, Walla Walla, Pendleton, Spokane, Yakima, and Portland. Some 80 percent of the testimony in the 440-page transcript supported the postage stamp rate. By the time Ross returned to Portland for the final hearing, the region already had spoken in favor of a regional transmission grid and widespread use of electricity.

Ross chaired the meetings, answered questions, helped witnesses, and missed no opportunity to explain electricity. At the Portland hearing, Franklin T. Griffith, Portland

General Electric Company president, submitted a 20-page statement offering to pass on to consumers any Bonneville power benefits. At the afternoon session, Corbett read a 20-page statement emphasizing the Portland Chamber's 25-year battle to get Bonneville Dam started. He stressed the need for low rates to attract industry, but denied the Chamber was opposed to building transmission when economical. Oregon Grange Master Ray Gill closed the hearings with a 10-page statement endorsing the postage stamp rate.

Administrator Ross decided to adopt a uniform $17.50 per kilowatt-year rate for power anywhere along the

transmission system, and $14.50 per kilowatt-year within 15 miles of the dam, when the customer furnished the transmission. The FPC approved the rate schedules June 8, 1938. The $17.50 rate, 2 mills per kilowatt-hour, was in effect 27 years. The kilowatt-year rate as such was discontinued in 1974.

Colonel Robins and others had called attention at the hearings to industry contentions that rates needed to be 1⁄2 mill or 1 mill per kilowatthour to attract industry. Yet, the 2 mill rate did attract industry providing thousands of jobs, hundreds of millions of dollars of new investment and tax base, and a more stable economy which contributed to a better standard of living.

Since the $17.50 rate, BPA has adopted many rates, rate changes, and rate combinations. The postage stamp principle has survived.

During World War II, the Federal Government enjoyed the savings from low cost power for Hanford, military installations and defense production. Those benefits continued in peace time. The greatest benefits from Federally generated low cost power went to the residential, commercial, industrial, and public users of the region. The result has been a stronger regional economy and a higher standard of living. In time, California would also be a major beneficiary. Other multi-purpose benefits, flood control, navigation, and irrigation, have enriched the region and the Nation.

Two points bear mention here in relation to the postage stamp rate policy. First, the dire predictions proved erroneous. BPA pooling of all loads and resources provided the greatest opportunity for effective and efficient power management and the sale of power throughout the region. The region was able to provide low cost power for both rural electrification and large industry and meet full repayment requirements.

Second, the results or benefits from the BPA program rarely can be attributed to any one policy. The policies inter-relate. The previous chapter suggests the preference clause enabled BPA to serve rural customers in fringe areas. Actually that was possible because of the whole cluster of policies, such as uniform rates, encouraging widespread use, serving customers within economic transmission distance, benefiting the general public, particularly rural and domestic consumers, and others. The Administrators and Congress deserve credit because their decisions not only established the policies but also provided the appropriations and facilitated implementation of the policies.