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<br />
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<br />
<br />exempt from taxation. Preference clIstomers get no special tax
<br />"hreak"; an allack on the tax exemption of eoopcrative.s and non..
<br />profit associations attacks equally the tax exemptions of all exempt
<br />organizations.
<br />
<br />R.
<br />Aside from lhe Valid Principles' fnderl)"ing lhe Preference
<br />Clause, Any Disparity Between lhe (.lIsl of "ed.'ral Power and lh~
<br />Cost of Private Power Iloes Nol Make a Case fllr
<br />Abolishing the Preference Clause.
<br />
<br />All utililies, regardless of wh..'lh,'r thc,. reeel\(. prckrelh:c power, are
<br />experiencing Ihe twin pains 01 h,lVing 10 ,:harpl, ili,Tea,e Iheir rate, and
<br />facing far greatcr opp"silion to IICw f..cilllic,. rC'lIliill~ ill I,"'ger lead
<br />times and significanlly inl.'rl.'as('d ~Ihh in .:llnS(rLh..'!lllg gt'llt.'r;t1ing fi.h.:ili.
<br />(ie~. Additionally, most of lhe ~'h(lk't; hyJrnpO\\'l'r Sih..'~ han: hccn
<br />ulililed, and ellvirolllll~nlally ih:('eplahlc lil,."l.:I1\l''\ ilrL' lllOre diffkllll II)
<br />secure. These circlIlll....lancl.'\ ha\"~ IIl1douhlt?J.I~ crealed pn..'\';;lJll'S 1)11
<br />non-preference 1IIililit'~ 10 s(:ek ~llilli.: ("did" ill Ihe way \)f Illllaining a
<br />greater share of t hc availahle l'ed",,,II,,m el .
<br />BUI an examinnliol1 of the IH.:illal 'iilualioll indll.alt..... llt.ll there i...
<br />rcally 'Ikss Ih~re thalllllceh 111I~ t:~.,~." In lht.' lwd\'t.' mnl1lll.'; eliding ill
<br />OCll)ber, 1976, Ihe lalt'~1 period fIll" \\'hil:h .,lali:-.liL.... art.' ;l\;ol;thlt', Ihe
<br />nalion1s Class A rInd A pri\'i.lk ekl:1I i,_' 1IIIiIlIl~~ paid arrrll\iIll;IIL'1~'
<br />$15.96 billion ill Iud l'Xpl.'lbt.'... I'd!" lilt.' Ilk,dlll'liolll'" dL'I.'lril'ily. Ill' -lO 1I 'II
<br />or their total electric operalipll"\[1CIISC.S nl" $.1'I.4.'i hrllhlll..' III 1'171>, the
<br />!'clleral governmcllt ~!L'ncr<lted 2.1 Ii hillion ~",Ii "I" ekctri,.itl. 14.1>"'" "f
<br />the amOllnl generated by Ihe pri""c ulililic,.'" If Ih,. cllIlre _~:1.1l hilholl
<br />k\I,'h l)f Fcdcrally-gl'llcralt'd rnWl~r had ht'L'1l gi\'clI III I Ill' prl', ,lit.' ulilil il.'~
<br />free 0/ cha,.~e, thos,' utilitics ",o,lId llil'" saved 14.1>""" ill" thcir I"ud
<br />expellses, or $2.] hlllion. Th<lt $.'..1 brlli'HI ,,,,,rid 11<l\e rCl'rc'cllh:d a
<br />redlU.:lioll of only 5.70,'1) ill Inlall'lcdl il: "pt.'litlin!! c\I'I.'lbC" hlr I hI..' ~'l';:\I".
<br />Of ..:{)urs~. (he Federal go\'crnlllc..'rll l.'ould Ill) I h~ lit"- g.iv(' II... dt~l'lrh:lly
<br />to private utilities free I)!' chmge. alld \\0111<1 lilli, l.'V(;'lI in Ill(: ahst:llu' (}f
<br />lhe prefer~nce daW'll" .-,dl all ih jHl\\"Ci II) pri\'all' lit II II 1L'.''l. l'\llhl:qUl'lIl-
<br />Iy, Ihe maximum ct'fc.:l'l Ihal the l'Iimillalillll ~JI Ihe prd"t,'ll.'lh.'C 1.'11111"'\'
<br />would hllve on pri\'ute PO\\'(,1 rdll.'S i~ prllhahl~ 1..ln~L'1 Iii 1.5u.u III ~(J'II__
<br />hardly iJ figure 10 \\'~rranl ....~rioll... (dlllpl;lIl1l.
<br />I.ooking al il anolher \I.:ay. dilllinalllll! [he' dindelHh I)!' rri'. :tIc 1I1ill-
<br />lie~ would have pcrmillcd a redUI'IiOIl Ill' 1"t:\'L'lllll'~ of :h~.-I hillion. or
<br />Ilolu or thL' $49.2 hillion ill n..>\'L'lIl1~S 1l(":L'~"lary II) npt.'LIIL' IhL' 11l1l111(;,~ ill
<br />the twelve months ending October 1'171>. ", The ,igniricallce Il) all U.S.
<br />consumers in ferm\ of 10\\'('1" pri\'ate ulilll~ 1':111.'." illllw t.'\L'lllllw prefer.
<br />('11l'~ daLlsl.' \\-'erc .-thdlished \\ollld ht~ I";u k',,~ 111.1111111_' ...i~llii"Il'allt'l'I'l( lilt.'
<br />... 1'01' fu()fil" charat.'I(,1" of lilt.' pnval,' indw,1l ~ .
<br />
<br />C.
<br />
<br />The rn'fercnl'l' Clause is Ftluilubil' E....n TI",u~h lh., Enlire
<br />""plllati..n B..es ,';"1113"" hlllal A...."" .n .....'h'rall.II\H.r.
<br />
<br />Pri".illdy-nwned IHilill!..'!'. .1I'PUt' Ihill Ilh' jHL'fL'n:JlI:I' ..1.111"1": j., lllllall I),,:
<br />l:all.,e it favors L'un~lll1l('r~ \\-Ill' ,11"(' \:lhIOllh'f".', ill 1)/"1.'(1:1 1.'11(,.' ;l!!l.lh.'Il~" iWJ
<br />
<br />. "~I;\II~II~', III Pri\ ;l.Id~ OWIII'U I k,'l r [,
<br />ll[II11ll'~ ill Ih... linill'd Slill...'''' Ilf'6, i"'. ~,
<br />I.,S Ikp;lflllh'lll elf hlt'qn. :\pr.l, 1,/7:-:
<br />
<br />'''Ul','lllt' I ililil~ "ilalhli,:, "/J/1hlic
<br />!lllll'I'r. ]'. J{I. ,1.111. I <.t1., Il)i9.
<br />
<br />'. SI::lIJ..Il~'~ Ill' PII\ alL'Jy I h\ [h'u l.ll'\,. In.:
<br />i :ldIl11'~ In [hi' 1.I111l~d :-;I;lIl'.. III 197(-0, ~'11'l[:1.
<br />t' _~ rIll' In\,.'IHII' ;tol.llhlllll'lll '.\0\11111
<br />1','1 III I I 1,'UIII;'.l l':lrlllll~'~ ,1I ~ 1 .; I-,dlt,,!),
<br />It", .Im,l,dll ,ldll,llh 1"L'I;IIII,.d I" Ill,'
<br />tlilhli..:, ill ~th' PlJh1d
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