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<br />.
<br />
<br />adopted the technique of granting preferences to those gowrnmental
<br />bodies, orgamzalions and corporalions which were organized for Ihe
<br />public benefit, without limiting Ihe uses to which the power could be
<br />PUI. The first slat ute 10 grant a preference 10 a parricular dass of uses,
<br />the Federal Water Power Act of 1920,41 Sial. 1063, 10/\7, 16 U.S.c.
<br />800, provided that the Federal Power Commis.sion" give a preference in
<br />the award of licenses for hydroelectric plalits to states and municipali-
<br />ties, provided that Ihose licensees would serve Ihe public imcre,1 as w~11
<br />as wonld non-preference licensees. T hc concept of a preference to
<br />classes of users, as opposed 10 " preference for p"rticu"'r purroscs,
<br />proved allractive and in 1928 Congress aprroved the first uscr rrcfe,-
<br />ence in the aClual sale of eleclric p(lwer. Boulder Canyon Proiccl ,\CI of
<br />1928,45 SIal. lOtiO, 43 U.s.e. tiI7d(cl.
<br />In 1933, Congress developed the COllCCpl 01 preferellcc power one
<br />step furrher, by requiring that COnlraclS II ilh l](lll-prekrence customers
<br />for the sale of eleetricily eonlain provision., "ulhmi/ing thc caucellalion
<br />of the contract on five years' nOlicc in thc cvent Ihat lhe p(lwer were
<br />needed for preference customers. The Tenncss~c Vallcy "ulhorily Act
<br />of 1933,49 Stal. 1076, 16 U.s.C. 811, IIhidll.olllained Ihi, provi.sion,
<br />authorized Ihe most ambitioll.s Federal program of cl.onol11ic de'.elop-
<br />ment, improvement of navigation ami no('d conlml e\~r underraken.
<br />The Congress was mOlivated 10 adopt Ihis legislation iu pari II) alleviate
<br />the great unemploymenl of Ihe [)epr~sSlon. hut SUPp\lIt Inr crcating
<br />TV A resulled, as well, from the Pllhlic outr"ge fl)llowing till, ".andals
<br />and ullimate collapse of the Insull-Hopson holding company empire.
<br />The <ibuses of utilities and luilily 1l\\lding companies in the 1920'.s,
<br />which ullimately led 10 Ihe Public Utility Holding Company Act, so dis-
<br />turbed the Congress Ihat il nol only providcd ill the TV""" Act for a
<br />preference in the sale of eleetricily 10 municipalille" hUI extended the
<br />preference to include non-profit cooperalivc organi/ations, and aUlhor-
<br />ized the construction of transmission lines 11' carry Ihe power, Ihereby
<br />minimizing reliance on the pri'.alc power l"l)mpanics. In 19.15, the Act
<br />was amended 10 give TVA the authority 10 pllrchase existing private
<br />eleclrie utilities, further col1solid~ling thc conirol by public power
<br />agencies over the use of Federally-owned water power resources.
<br />The belief that Federally-owned power resources hdonged (0 the gen-
<br />eral public and thallhe best way to ensurc thai the public enjoyed those
<br />resources w~s to award preferencc, 10 puhlic bodies and non-profil
<br />organizations remained slrong for Ihe l1e.\I sc\aal years. 111 14.16, the
<br />Rural Eleclrifiealion Administrat ion ACI, 49 Sial. 1.165, 7 U.s.c. 904.
<br />authorized loans for rur~1 elcclrification. and granled prekrences 10
<br />municipalities, utility districlS and cooperative, non-profit or Iimited-
<br />dividend associations. The Bonneville Power Act, 50 St~1. 7J.l, 16
<br />U,S.e. 832, nOI only contained preference clauses, bUI also guaranteed
<br />a minimum of 50070 of the Project's power 10 prefercnce CUSlomers
<br />through the end of 1941 and directed that thc people who were within
<br />transmission distance of the Project be given a reasonable lime to creale
<br />public bodies and cooperatives which would be eligihle for preference
<br />power.
<br />Over the next several years, three morc prefcrence power statutes
<br />were passed by Congress." The focus of llie bailie, however, bel ween
<br />
<br />.
<br />
<br />'Unlill9.l5, the Federal Power Commi....!lion
<br />wn...i'ited of th~ Se(relanes or the )l1lerl(lr,
<br />\\.'Llr and "\!lriculwrL'.
<br />
<br />"'The FOri Peel.. Proj~ct A(l, 50 Sial. 403,
<br />1611.S.C. 833: Ih~ RCl:lamalion A,..:I of 19311.
<br />53 Slat. 1193; and the: WaleT Con!'>~r\""lion
<br />and Ulilil.J.li0n 1\(1. a... amended. ~4 SIal.
<br />II 24. /6 U .S.c. .l90z-7.
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<br />II
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