-10 for selected years: 1943, the first year for which such statistics are available; 1951, the last year in which sizes over 100, 000 kilowatts were lumped together; 1956 and 1961, middle years of the more detailed breakdown; and 1966, the latest year for which the data are available. The sharp decline in the percentage of smaller plants and the growth of the largest sizes are clearly evident. From 1938 to 1954 the same plant Consolidated Edison's Hudson Geld held - the title of largest, first at 770 megawatts, and subsequently, through additions of other units, at 941 megawatts. Two years later the largest plant was 1, 440 megawatts 1.947 TVA's Kingston succeeded - by 1,600 megawatts and 1,828 megawatts in 1961 and 1965, respec tively. Here, too, the evidence of acceleration is clear. Chart 5 shows the growth in unit and plant size in another way. By 1955 the average size new unit was equal to the average size plant of 1938. So rapid has been the acceleration in unit size, however, that in 1966 the average size new unit exceeded the average size plant of only two years earlier! As for the growth in plant size, it took about 20 years from 1938 for the average plant size to double. In the seven years subsequent to 1959, plant size increased again by more than one-half. The growth in generating unit and plant size has been paralleled throughout the entire range of electric utility equipment as well as in transmission voltages. At the beginning of the century the -12 small loads and short transmission distances did not call for high volt ages, although a 155-mile line at 100, 000 volts was built in California in 1908 to bring hydroelectric energy from Big Bend on the Feather River to Oakland, and a 50-mile line at 110, 000 volts was built in that same year to carry energy from Croton Dam to Grand Rapids, Michigan. These (with a few others of similar voltages in connection with hydroelectric projects) remained the exceptions even in the 1920's, except for one instance when transmission voltage reached 230,000 volts. This upper limit was breached in the 1930's with the Hoover Dam project and its 287, 000-volt, 300-mile line. Again, this higher voltage was for the special purpose of carrying energy from a remote hydroelectric source to the load center. In 1954, 345,000 volts was put into use to carry large quantities of energy over relatively short distances and this became the "standard" extra high voltage (EHV). Until the early 1950's, the U. S. had led the world in the introduction of higher voltages in transmission. In the 1950's, however, the need to carry increasing quantities of energy 300-400 miles from remote northern hydroelectric sites to southern load centers led to the development of 400, 000-volt transmission in Sweden. This same need led to the application of 500, 000-volt transmission for even greater distances in the USSR in 1961 based on the technology developed in the U. S. and Sweden. The U. S. saw its first 500, 000-volt line in -13 1965 and is once again in the process of taking over the lead in EHV with levels of 765, 000 volts in lines scheduled to go into operation in the early 1970's. But it should be noted that in the U. S. there is little need for very long distance transmission and the increase in voltage has taken place in high density load areas to provide lower cost transmission for larger quantities of electric energy over relatively short distances. The growth in electricity has important implications for the subject of these hearings. These implications derive from a crucial relation between facilities size and unit cost in the power industry. This industry represents a classic example of what the economist terms "decreasing costs, "' which are discussed later. To give a simple illustration of just one aspect of decreasing costs, if one is considering whether to build a power plant of one-million-kilowatts capacity versus a plant of half-million-kilowatts capacity, one will find that the total costs of the plant with the one-million-kilowatts capacity will be less than twice the total costs of the plant with the half-million-kilowatts capacity. It is difficult to make precise comparisons among actual examples because of the widely varying conditions for which plants are designed and under which they are built. Nevertheless, this relationship between size and costs is illustrated by two plants completed in 1965 in the same geographic area. Each plant has one unit, coal-fired -14 and of conventional design. One unit, of 299. 2-megawatts capacity, cost $108 per kilowatt. The other unit, of 149.6-megawatts capacity, 7/ cost $142 per kilowatt. The major part of the cost difference is due to size. The same economies of scale hold true for many of the individual units or components of a power system. In transmission, capacity varies roughly with the square of the voltage, and higher voltage makes possible larger loads or longer distances for the same load. For example, it would (other things being equal) cost approximately twice as much per mile for a 765-kilovolt transmission line as for a 345-kilovolt transmission line, but the capacity of the former would be almost six times greater than that of the latter. Thus we have a "built-in" trend toward lower unit costs with greater size. As loads increase and both call for and enable the use of a larger scale of operations, unit costs tend to decrease. At the same time, the industry, especially in recent years, has increased the rate at which it can take advantage of larger scale through the de8/ vices of interconnection and "pooling. "" By tying systems together for combined operation a larger basket is made available in which to 7/ 8/ Federal Power Commission, Steam-Electric Plant Construction Cost and Annual Production Expenses, 1965, pp. xxii, 26, 30. This is in large part the explanation of the recent accelera- |