to determine the application of penalties, and the development of appropriate constants and correction factors in order that the power quantities for which bills are rendered may properly reflect load diversity, divisions of energy between onpeak and off-peak periods, and the reactive requirements of the load. The extent of the contract administration workload in any year corresponds roughly to the number of contracts on hand.

10. Reporting.-Monthly and annual summaries of power marketing information are required for the orderly conduct of the activity. Periodic reports are required by the Federal Power Commission (FPC Form No. 1). Establishment of repayment accounting for the newly operating projects, the expanded marketing arrangements for administration, and other such factors, will increase the amount of work required in the preparation of reports, although the reports will not increase in number over the current year.

General administration, $94,000

The amount requested for this activity for the budget year is $94,000, an increase of $5,000 over that available for the activity for the current year.

The activity is conducted to provide executive management for the agency and to supply the agency with supporting administrative and fiscal services. Its extent from year to year results from and is proportionate to the extent of the agency's other activities. It consists principally of the following tasks:

1. Management.-The agency's program is determined by Secretarial criteria. Coordination of the agency's activities and their executive direction and control is secured by staff conference, written directives, and a systematic review of transactions in progress. The effectiveness of procedures, methods, and routines is subjected to regular appraisal.

2. Personnel.-Actions are taken, records are maintained, and reports are forwarded to accomplish recruitment, separation from the service, job classification, promotion, performance rating, retirement, and the like, under procedures required by the Department, the Civil Service Commission, and the Congress.

3. Procurement and office services.-Materials, equipment, supplies and services are purchased, records and reference materials are managed, mail is processed and handled, duplicating equipment is operated, motor vehicles and headquarters premises are maintained, staff transportation is secured, switchboard communication is operated, space is managed, and other work of a similar nature is performed to support the operation of the agency.

4. Fiscal services.-Accounts are established and maintained to record and control the expenditure of appropriated funds in accordance with the terms of their appropriation. Periodic and special reports on the status of accounts are prepared and forwarded as prescribed by the Department, the General Accounting Office, and others.

5. Budget. In each year, program criteria established for the coming year are reflected into an estimate of appropriations required. Departmental review of the estimate is secured, and presentations for justification are made to the Bureau of the Budget and to the Congress in accordance with their respective procedures.

PREPARED STATEMENT

Chairman HAYDEN. Mr. Leavy, you may proceed with your presentation to the committee. If you desire, you may make your presentation orally, filing for the printed record your prepared statement. Mr. LEAVY. I have a prepared statement which I will file as you suggest, and I will highlight that, if I may, sir.

Chairman HAYDEN. Yes.

(The statement referred to follows:)

STATEMENT OF CHARLES W. LEAVY, ADMINISTRATOR, SOUTHEASTERN POWER

ADMINISTRATION

Mr. Chairman and gentlemen of the committee, you are, of course, already acquainted with the statutory authority for the Southeastern Power Administration and with the activities for which the agency is responsible. I would, however, like to invite your attention to the map attached to your copies of this statement which shows the area and the hydroelectric projects with which we are concerned and the table of capacity installations at the projects which is the first attachment to the statement.

The power now generated at the projects in operation is being sold under 134 long-term contracts.

The entire output of the Wolf Creek, Center Hill, and Dale Hollow projects is being sold to the Tennessee Valley Authority under a long-term contract and the entire output of the Old Hickory and Cheatham projects is also being sold to the Authority under another long-term contract.

The output of the Philpott project and two-thirds of the output of the John H. Kerr project is being sold under long-term contracts to the Virginia Electric & Power Co., and to 17 rural electric cooperatives in Virginia and North Carolina. The remaining one-third is being sold under long-term contracts to the Carolina Power & Light Co., and to 15 rural electric cooperatives and 1 municipality in North Carolina.

Clark Hill project power allocated to South Carolina is being sold to the South Carolina Public Service Authority and Greenwood County Electric Power Commission under long-term contracts. Clark Hill power allocated to Georgia and the output of the Allatoona and Buford projects is being sold under long-term contracts to the Georgia Power Co. and to 39 rural electric cooperatives and 47 municipalities in Georgia.

Power from the Jim Woodruff project is being sold under long-term contracts to four cooperatives and to two municipalities in Florida located in the service area of the Florida Power Corp.

Power from the Walter F. George project is expected to be sold in Alabama and in Georgia. Power from the Hartwell project is expected to be sold in Georgia and in North and South Carolina. A long-term contract has been executed with Alabama Electric Cooperative, Inc., a generation and transmission cooperative, for the sale of Walter F. George power in Alabama. Negotiations with Georgia Power Co. for an amendment to the existing wheeling and firming contract with the company are at an advanced stage. The proposed amendment would make possible the sale in Georgia of power from the Walter F. George and Hartwell projects to the company and to cooperatives and municipalities upon the same basis and for the same term as power is now being sold in the State from the Allatoona, Buford, and Clark Hill projects. Negotiations with Duke Power Co. have been initiated with respect to the sale of Hartwell power in North and South Carolina. It is proposed to market power to the company and to preferred agencies in these States by means of a wheeling and firming contract with the company.

The status of revenues is set forth in the table which is the second attachment to the statement. You will note that last year's actual revenues reached a total of nearly $20 million. This revenue was more than normal due to better than average water conditions. We expect that the total of this year's earned revenues will be approximately $23 million, and that the total revenue earned for the budget year will be almost $24 million. The increase for the budget year is due to the beginning of sales from the Hartwell and Walter F. George projects.

An appropriation of $800,000, consisting entirely of operation and maintenance funds, is requested for the activities involved in marketing power. The activities are system operation and maintenance, purchase of energy and wheeling charges,

power contracts and rates, and general administration. The sum of $450,000 is requested for purchase of energy and wheeling charges, to be devoted exclusively to the purchases of firming energy and the payment of wheeling fees under existing contracts with Virginia Electric & Power Co., and Florida Power Corp. The remaining $350,000 of the appropriation request will provide for the system operation and maintenance, power contracts and rates, and general administration activities comprising the direct operation and maintenance of the agency headquarters.

The budget year will involve an increase in work over the current year but no increase in personnel is contemplated by the requested funds for the direct operation and maintenance of the agency headquarters.

Funds appropriated for purchase of energy and wheeling charges are used only to pay amounts charged the Government under contractual arrangements for (1) delivery of power over non-Federal systems to load centers of preferred agencies for the account of the Government, and (2) purchase by the Government of energy to firm up federally generated power to the load factor required by preferred agencies, of energy to prevent excessive drawdown of reservoirs, and of capacity required to meet commitments from the Jim Woodruff project under certain water conditions. As I mentioned earlier, the appropriation requested for the activity is required solely to meet budget year obligations under the existing contracts with Virginia Electric & Power Co. and the Florida Power Corp.

Current year status of generating capacity―January 1962 status of generating capacity and marketing arrangements

STATUTORY AUTHORITY FOR SEPA

Mr. LEAVY. Mr. Chairman and gentlemen of the committee, you are, of course, already acquainted with the statutory authority for the Southeastern Power Administration and with the activities for which the agency is responsible. I would, however, like to invite your attention to the map attached to your copies of my statement which shows the area and the hydroelectric projects with which we are concerned, and the table of capacity installations at the projects, which is the first attachment to the statement.

LONG TERM CONTRACTS FOR POWER SALES

The power now generated at the projects in operation is being sold under 134 long-term contracts.

SALES TO TVA

The entire output of the Wolf Creek, Center Hill, and Dale Hollow projects is being sold to the Tennessee Valley Authority under a longterm contract and the entire output of the Old Hickory and Cheatham projects is also being sold to the Authority under another long-term

contract.

VEPCO SALES

The output of the Philpott project and two-thirds of the output of the John H. Kerr project is being sold under long-term contracts to the Virginia Electric & Power Co. and to 17 rural electric cooperatives in Virginia and North Carolina.

CAROLINA POWER & LIGHT SALES

The remaining one-third is being sold under long-term contracts to the Carolina Power & Light Co. and to 15 rural electric cooperatives and 1 municipality in North Carolina.

SOUTH CAROLINA POWER SALES

Clark Hill project power allocated to South Carolina is being sold. to the South Carolina Public Service Authority and Greenwood County Electric Power Commission under long-term contracts.

GEORGIA POWER SALES

Clark Hill power allocated to Georgia and the output of the Allatoona and Buford projects is being sold under long-term contracts to the Georgia Power Co., and to 39 rural electric cooperatives and 47 municipalities in Georgia.

WHEELING OF POWER BY GEORGIA POWER CO.

Chairman HAYDEN. They worked out an equitable arrangement whereby that could be accomplished without the construction of additional transmission lines, is that correct?

Mr. LEAVY. That is correct, sir. All of the power that is being sold in Georgia is being wheeled over the lines of the Georgia Power Co., and we are working out similar arrangements at present to sell