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<br />L:OO.L <br /> <br />I <br /> <br />Substantially our criteria was this: if there <br />is to be construction of a transmission line <br />which utilizes entirely only project power then <br />this line must be constructed by the federal <br />government. We arrive at that conclusion from <br />very simple arithmetic. There is no mystery <br />about it. <br /> <br />I <br /> <br />When the federal government buys telephone <br />poles, steel, or what have you, and buys trans- <br />mission lines, it buys those lines and poles <br />from the same person and at the same cost that <br />the utility companies would purchase them. When <br />the government lets a contract for the construc- <br />tion of lines, this is done by private indivi- <br />duals - private contractors - the same way that <br />the utilities co~anies handle their construc- <br />tion. So that if you have the same type of con- <br />struction in the same area, you get the same <br />price. Neither the federal government nor these <br />investor utilities construct the lines. They <br />are constructed by private contractors. So it <br />is absurd to argue that it will cost the federal <br />government more to do the same job. It is just <br />not a fact. ~lhen you put on top of that that <br />the investor utilities must borrow money at <br />something like 6% as compared to the government <br />rate of 2.78%, you have an additional factor <br />immediately that must go into the amortization <br />of that line as far as the investor utilities <br />are concerned. Then you must put in a prof~t. <br />These companies are organized for profit, and <br />properly so. They are controlled by the v~rious <br />regulatory agencies of the United states and the <br />states. So you have interest plus profit which <br />immediately increases the cost to the investor <br />utilities, plus taxes. When you compute those <br />items then, we find that on the same lines the <br />investor utilities must have a 12% plus return <br />annually, on a fifty-year basis, to pay the cost <br />of the lines. The federal government needs 5.6% <br />return. So it costs more than 100% more for the <br />investor utilities to operate that line than it <br />does the federal government. There's no mystery <br />about it. It's just simple arithmetic. <br />