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<br />the. contracten.for power in the first year and 90"'0 in lhe second year,
<br />regardless of whether they used il. The ostensihle rcason for this policy
<br />was the desire to make heller use of non-preference power; however, it
<br />had the effect of penalizing prefererh'" customers in high growth areas
<br />by forcing them 10 choose bctween paying penalties for unused power
<br />and operating with the certain knll\\ ledge Ihattheir future powcr needs
<br />could not be met because of the contracts with privately owned Iltililies.
<br />Interior also limited scverely the construction of Federal transmission
<br />lines, which had proven to he crucial in enahling coopcratives and
<br />municipalilies to exer,'lSe their preference rights; rcstricted thc con.struc-
<br />tion of the thermal energy plants nec"ssary to provide firlll I'ower;" and
<br />adopted a "no ncw starts" jlolky for lIlulti purpose ri'er pn1.lects. It
<br />also Iloated proposals to raise Federal powcr cOsh If' matdl t hose of
<br />privi:ltdy owned ulilities and ceased rl~qllirillg privatt' IIlililies In whed
<br />Federal power.'~ "lllIegralion," a practicc which \\"(Juld have re:-.uhed
<br />in preference customers purchasing prl'fcrCIlL'l.' pt)\\"L'r fur rcsah: 10 pri-
<br />vate companies, also received support. Thc fillal pn1posalllf Ihc Ei.sen-
<br />hower Administration was "partnel'hip"--a policy \\hich, \\hik billed
<br />as cooperation hetween Federal, public and privatc PO\\t'r intcrcsts, had
<br />th~ effecl of foreclosing preference CH"i101l11.'f"S frl1m ohlaining ne\\
<br />sources of Fcderal power. lIa,ically', .'partner,hip" ill,'ant Ihat pri'atl'
<br />utilities would he perillillcd to install smaller danIS, \\ hich ofl(.n fore-
<br />closed the coTlstruction of Federal nurlti-purl'ose prnjel.ts," and thai
<br />private companies would be pCfmith:d III ill,,(,dl gcnnaling raLilili~~ ill
<br />dams built by the Federal governml'llI.
<br />One of the mo\t clllolil)llal (llllflif.,:h rt:~l1ltillg t"r(11ll rh~ pallller\hip
<br />policy was that arising from the "Dixnll- Yates ,'oturact," \I hich would
<br />have authorized subsidiaries nf The Southern ctllnpan' and ~IiJdk
<br />South Utilities, Incorporated, holJillg cnmpanics ft'r pri'ale electril.al
<br />utilitics. to construct gcncnlling facililies In "lIrpl~' pll\\'er to Ihe .'\ltlmil:
<br />Energy Commi,sion facilities ill Padncah, Kenllll.ky, Ilht.~ad or having
<br />the power supplicd hI' the TV A. The nwnl'III'Cr, \I hich wnnl" han,
<br />severely damaged the strength of TV A, was bitlerlv fOllgln In COllgress.
<br />In another effort hy the adminislrati\)n, Secretary /...lcKay proposed
<br />[hat, instead or having the Federal go\'crlllllt'1lI ray t'11l" ('fHlSlrlh.:lingtlw
<br />John Day Dam and generating facilitiL" olllhc Columbia River, and sell
<br />the resulting power \villI a rl('fcfCIl(I~ [n L'1".'n.lill ..:la......('.'i nl" (uqnmer...,
<br />that privIltc utililies erh;1".'livcly PflY (llr Il1e {:ll~l Ill' L'lllhlrll1".'lillf! Ihe gel1-
<br />eraling facililies by paying for lhc e.\~:III,;I\'L' fi~!l1h In all pi.l\\Cf fOf it
<br />period of fifty years. Sudl a 1<l\,.'lic \\iHlld kt\L' rm..',,:lmkd prek'fCl1l'L'
<br />clIstomers from obtaining illlY \hare (lllhe ddm'~ pd\\'r:r.
<br />In il third siluation, Ihe Dl.:parlllh~1l1 l'f IllIeritll" JelC'fmillL'd Ihat il
<br />could ,ell preference power from the Clark Hill, (,cllr~ia I'roje,.1 III all
<br />inveslor.owned uriliry b~L'allse of il1ad~qLlale filj~tlh.:illg prllposals for
<br />the purchase of power by cooperaliH',. The AlltHlley (;ellcral decided
<br />that In[crior had no such power, sinc~ the cnopl'ra(i\"t.~" were [0 he given
<br />a reasonable time in which In onlain Ihl.: mcan\ ur pllfcha."iing, lakillg
<br />and delivering the power. Moreover, till' Attortle)" (,elleral stated lhat
<br />the proposal that the investor..ownec111tility purchase prefcrellce powcr
<br />and resell an equivalent amoullt of power to preferCth.e CllSlOmcrs do-
<br />lated the preference elause.
<br />
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<br />
<br />"Fred G. Aandahl. A'isbl"nl Se([elar~' ('If
<br />lhe Illlcrior, :::.Ial~d that he of1po~ed lh~ con.
<br />"lrLh:IIOIl of ~ll'ilm generaling planh h~ the
<br />hdt'rJi g,we;:rnmcllI in hi<. fl:'marks at the
<br />RL\ llleC'lJng Jl kffcrsnn City. 1\1i:-.,ouri.
<br />Fd'ruary 2(.. 1954. \':1\\ ref. "PrcfcrclKI..' 10
<br />I'ubli\.' Hodic, ill Ilk' Marh'ling llf FClkr,tl
<br />Po\\~'r." I.ibr;\f~ nr l'on",rc~:,> I.C~!I,Ii1II\l'
<br />Rcfcrl'Ilf.:\,.' Sl'f\'i\.'l,.'. 119%), [1, 20
<br />
<br />'The h::dcral P\l\\\.'r Cmlll11i...,iLlll had C<1rlICr
<br />il'.'l,.'rll'd II:'> rll\\l,.'1 I,) \.'omrd \\'h(,'dill~ a~ a
<br />c\llldill,lllt!j' C,hl;lllling ri!!hh of \\w. rnr
<br />II an\lI1i....\inll lillt':'> a':ro~" public blH.b.. and
<br />\\';1' llliilll~IIl'ly Ilrheld p~ Ill\? ~urreme
<br />1,'01111. Ft'dt'rol POll'cr C(lml1l1:~~i/Jn \',
<br />[(Mho P()\I'('T ('(1.. 344 t J ,S, 17 (1l)5:!).
<br />
<br />; 'Fnl in..;r;ull.:l,.', lht' IIH\.'l,.' r. i\:ill,.' danh
<br />lill'lhl,.'d In Ihl..: F.:..kral P~l\\l..:r Clllllllll~:,i(ln
<br />llll rhe Sl1~d,\.' 1{1\~'r f(llt'd~bcJ I.:lUblllh,'li\lll
<br />III :1 l'I".',kr:lI darn;11 fh'II', ('all~'(ln,
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