House Committee on Public Works held a notable hearing May 2, 1952 on the FPC's "primary responsibilities and its activities in connection with Federal programs for the development and utilization of water resources."

FPC Chairman Thomas C. Buchanan and members of the FPC staff pointed out that Congress had not been consistent in giving the FPC authority over cost allocations and review of proposed electric rates at Federal hydroelectric projects. Buchanan quoted from the FPC's May 10, 1937 letter, adding that the Bonneville Project Act limited the FPC's rate review authority to veto power. The 68-page hearing transcript represents an in-depth review of the FPC's difficult position. Congress ignored the FPC effort to gain more authority over BPA rates.

The only indication of the FPC's role that Congress provided from 1937 to 1952 was the omission of any mention in the Flood Control Act of 1944 as to who would have responsibility for allocating costs.

The FPC provided yeoman service in helping BPA establish its ongoing programs. In 1937 the FPC issued the in-depth rate study ordered by President Roosevelt. FPC Chairman McNinch served on the President's special Committee on National Power Policy which drafted H.R. 4948, the Administration's recommended bill in 1937.

The FPC expedited cost allocation for Bonneville Dam and issued a favorable interim order on February 8, 1938. FPC officials participated in Administrator Ross' series of rate hearings, and the FPC approved the first Bonneville rates June 8, 1938.

The FPC provided a representative to the Bonneville Advisory Board, which met frequently in the first 10 years and often took two days to complete the heavy agenda. Board functions were transferred in 1965 to the Secretary of the Interior by means of Reorganization Plan 4. The original Board had served its purpose.

Ben W. Lewis, Oberlin College economics professor, opened his 1945 article for The George Washington Law Review Special Issue on Federal Power Commission Silver Anniversary 1920-1945 on "The Role of the Federal Power Commission Regarding the Power Features of Federal Projects" with:

"An examination of the conglomerate array of functions with which the Congress has endowed the Federal Power Commission in its relation to the power features of federal projects suggests the existence of a very real problem in the theory and administration of regulatory controls; and suggests even more strongly that Congress has not yet hit upon either a satisfactory solution to the problem or an

effective method for reaching a solution."

While praising the FPC's performance to 1945, Lewis questioned whether it could serve two masters:

"Its primary job in the field of electric power is to control private interstate electric utilities; its functions toward public power projects are patently extraneous and, although they seem to thrust in the general direction of a coordinated program, they represent, rather clearly, a hitor-miss series of sporadic after-thoughts on the part of Congress.

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"It is both bad logic and bad public policy to place either of two agencies which are competing on their records for public acceptance and support in a position to condition or retard the performance of the other."

Lewis concluded that the FPC should not regulate the Federal power program and projects:

"The Federal Power Commission has made an outstanding record in recent years in its regulatory activities; it still has substantial contributions to make beyond its routine work - further pioneering in the regulatory field, influencing and raising the level of performance of state commissions, and consolidating the brilliant gains which it has already made. For its own protection, and in the interest of concentrated effort in a field which is peculiarly its own, the Commission itself should advocate the surrender of those of its duties toward public projects which place it in an anomalous position, and which dissipate its energies and its influence."

This advice also went unheeded. In the 1974 Federal Columbia River Transmission System Act the Congress reaffirmed the authority of the Administrator to prepare rates and the FPC to approve them, including rates and charges for wheeling power.

In the new Department of Energy the FPC and BPA are under one administrative roof but with little change in the relationship. The name of the FPC since October 1, 1977 has been Federal Energy Regulatory Commission (FERC).

13. THE PUBLIC POWER SETTING

There is a tide in the affairs of men, Which, taken at the flood, leads on to fortune;

Omitted, all the voyage of their life

Is bound in shallows and in miseries.

-Shakespeare: Julius Caesar

Early colonists used water to power publicly owned sawmills and grist mills. Four municipally owned electric plants existed by 1882. Municipalities are the oldest form of consumer-owned electric systems. Historically many began, as rural cooperatives did later, to provide electricity where service was inadequate or nonexistent. The Federal hydroelectric power program evolved incident to construction of dams for navigation, irrigation, and flood control. The conservation movement included a concern that a few public utility holding companies might monopolize control of valuable water power sites. Federal financing of rural electrification since 1935 added a nationwide, politically strong interest in electric power.

BPA's creation provided a focal point for the Federal power program as an effective working partner with electric cooperatives and local public power systems. This partnership gradually expanded to include industrial power purchasers and investor-owned electric utilities.

Seven Pacific Northwest cities operated electric systems by 1900: McMinnville, Milton-Free water, and Forest Grove, Oregon, and Tacoma, Centralia, Port Angeles, and Ellensburg, Washington. Soon after the Civil War a series of epidemics with many deaths caused by water-borne disease led most U.S. cities to acquire and operate their own water systems. Municipal ownership of water systems gave many cities experience in managing an essential public utility. Some cities, including Seattle, McMinnville and Eugene began generation of electricity incidental to furnishing water. A total of 44 city-owned electric systems exist in the Pacific Northwest of which BPA serves 33 with wholesale power. Private utilities provide power to seven cities, Tacoma serves two, and PUDs serve two.

Some rural electric cooperatives were organized between 1910 and 1925 in the Burley, Idaho, and Tacoma, Washington, areas. Most of the present cooperatives came into being after the establishment of the Rural Electrification Administration in 1935. Private utilities bought out and absorbed four cooperatives. BPA serves 56 electric cooperatives.

The formation of some 1,000 rural electric cooperatives in the United States added a strong allied movement to the

This picture of transmission line con

struction in the Columbia River Gorge suggests the challenge which the new Bonneville Power Administration and its contractors had to face in mountainous country. The test of each summer's work was provided by the winter storms, snow and ice loading, avalanches, and occasionally an earthquake or plane crash.

This woman for all seasons had to be versatile, have many talents, patience and endurance, because she lived in the

days before electricity. This housewife has a good wood-burning kitchen stove which enables her to cook, bake, heat

water, raise bread in the warming oven, and heat her unelectrified iron - all at same time.

local public power movement. This occasioned the term "consumer-owned electric systems" which encompasses both electric cooperatives and local public power systems.

Enactment of the PUD initiative ballot measures in Oregon and Washington in November 1930 created a new dimension in public power. In fact, the initiatives created a new public power movement. While the traditional municipal electric system served only a city and adjacent suburbs, the PUD proposed to combine urban and rural areas, usually on a countywide basis. The campaign literature called for county light systems comparable to the successful city light systems, notably those of Seattle and Tacoma. Oregon and Washington Granges provided the grass roots political support and leadership.

The 1930 PUD laws authorized but did not create PUDS (in Washington, public utility district, and in Oregon, peoples' utility district). Washington voters at the county level created 29 PUDs, of which 22 now provide electric service, mainly in central and western Washington. Oregon voters created fewer PUDs, and, due to the more restrictive Oregon PUD law, only four became active. These were Tillamook PUD in 1932, Northern Wasco in 1939, and Clatskanie PUD and Central Lincoln PUD in 1940. Many rural PUDs became REA borrowers.

The bitterly contested Washington election of November 1936 was particularly telling. In addition to establishing 15 of the State's 29 PUDs, voters turned down private utility candidates for PUD boards and rejected a major attempt to weaken the PUD law. It exerted a strong influence on the State of Washington delegation in Congress just at the time that they began the serious and final consideration of what became the Bonneville Project Act of

1937.

Investor-owned electric systems date back to 1888 (Portland General Electric Company), and 1889 (The Washington Water Power Company). Most other larger companies resulted from mergers of several hundred small companies between 1910 and 1916. Nearly all private companies swept up by holding companies were able to resume independent status as the holding companies were ordered by the Securities and Exchange Commission to divest individual operating companies after 1940.

Prior to 1940 at least 80 percent of electric consumers in the region received electricity from investor-owned companies. This declined to about 60 percent due to electrification of previously unserved rural areas, mainly by consumer-owned systems, and acquisition of some investor-owned distribution facilities by consumer-owned