LICENSES FOR PROJECTS WHICH WILL EXPIRE BETWEEN JULY 1, 1970, AND JUNE 30, 1976, WHICH ARE SUBJECT TO TAKEOVER 1-Continued

Mr. NASSIKAS. May I state that appendix E, at page 3, summarizes the specific projects which we have licensed without preparing detailed environmental statements.

Mr. DELLENBACK. Page 10 of your testimony.

Mr. NASSIKAS. I am at pages 2 and 3 of appendix E. This will illustrate my point. I refer you to project No. 2529, Bonny Eagle, Central Maine Power, filed June 22, 1965, latest supplement January 27, 1970. This project was completed in 1911. It is located on the Saco River in the counties of Cumberland and York in the State of Maine, and consists of two concrete dams, a reservoir extending 6 miles upstream, with a surface area of 347 acres. Generating capacity is 7,200 killowatts. Recreation facilities consist of wilderness camping, nature study area, canoe launching and landing site, fishing, with provision for future development. This project is very small, and been in place almost 60 years. I only mention this as an indication of the reasons why staff felt that they should concentrate on some of the larger projects with reference to environmental compliance with the act.

Another point that I should add, as I stated earlier, is that the Electric Power Environmental Policy Act of 1970, and the principles expressed in that act, should be reviewed by the Congress very carefully. They are relevant to this whole question. This bill, which is now undergoing review, would set up standards and tests regarding plant siting.

The resolution of the sometimes inescapable conflict between a plantsite which is optimum from the standpoint of the generation of power, but has some environmental impacts, would, under this bill be delegated to a State agency, or in some cases a regional agency. If State or regional authority were lacking or inadequate, or if an emergency existed, the Federal Power Commission could resolve the impasse. Some other Federal agency could also be delegated should the administration or Congress so prefer.

Mr. DELLENBACK. I have taken a disproportionate amount of the committee's time, and I apologize, Mr. Chairman. May I ask just one more question?

I have listened to what has been said about the fulltime staff on environmental quality. I am pleased to have Mr. Warren here with us. You have indicated the recent acquisition of an assistant, and then you refer to people who devote a proportion of their time to environmental matters. But I would assume that whether we are talking about the General Counsel's office or any of these other offices, that most people's primary responsibility is to something other than the office that Mr. Warren heads up.

Do you have any specific plans at the present time to increase the personnel in Mr. Warren's department?

Mr. NASSIKAS. Yes.

Mr. DELLENBACK. Men who will be directly, primarily involved in this matter of environmental quality on a full-time basis? Mr. NASSIKAS. Yes.

Mr. DELLENBACK. How many people do you plan to have, and when? Mr. NASSIKAS. We propose for our 1972 budget, on which we have already had a hearing before the Office of Management and Budget, to increase for fiscal year 1971 from 1 to 5, fiscal year 1972 we would like to double this complement, and increase it to eight by fiscal year

1972.

Then, in the Bureau of Power, we have requested an additional nine environmental specialists in fiscal year 1972. We are also considering, or I am, subject to the review of the Commission, the possibility of perhaps reorganizing our departments to assign others to the environmental quality adviser.

There are several views in public administration of this matter, which I am sure you are aware of, concerning the validity of a dayto-day review of problems on a line basis, or whether they should be staffed. We are studying it and will come up with something.

We have made, I should say, an unyielding case on this to Management and Budget, and I think I will be equally unyielding-and whether I will prevail or not is another question-equally unyielding with congressional committees on appropriations.

Mr. DELLENBACK. Thank you.

Thank you, Mr. Chairman.

Mr. DINGELL. Thank you, Mr. Dellenback for your very helpful questions.

Mr. McCloskey.

Mr. MCCLOSKEY. Mr. Nassikas, I listened very carefully to your testimony, and I will echo Mr. Karth's concern. I think all of us are concerned, that over the evolution of the first 75 or 100 years of the generation of electric energy, the major goal of industry and Government was to supply energy at low cost, that engineers with 30 or 35 years' experience have been charged with an obligation to get power from the generating site to the public at the lowest possible cost, and consequently that when we have a revolutionary piece of legislation which now imposes an environmental quality by law, perhaps the last to recognize the environmental quality would be engineers who have spent their lifetimes bringing power to the public at low cost, because there is not one iota of preserving environment that is not going to increase the cost to the public.

And I think that is why Mr. Karth asked why pick an engineer of 30 years' experience, and we are wondering whether the engineering profession would adapt to these criteria.

Against that background, let me ask you some specific questions.

I notice appended to your report, at the end of appendix J, is a letter to Gordon Gooch from the Executive Office of the President, Council on Environmental Quality, and that letter of November 28 states:

We would like to see the FPC staff prepare a detailed draft statement to the application's environmental impact in contested as well as noncontested applications.

Hove you made a decision in response to that request of the Council on Environmental Quality?

Mr. NASSIKAS. I am sorry, Mr. McCloskey. Are you speaking of the letter of November 28?

Mr. MCCLOSKEY. Look at your appendix J. It appears just before appendix K, and I am referring to the first page.

Mr. NASSIKAS. I have it.

Mr. MCCLOSKEY. Your testimony today indicates you will not prepare an environmental statement on contested applications. CEQ has asked you to do so. What is your decision?

Mr. NASSIKAS. Our decision has already been made on that, in our order 415.

Mr. MCCLOSKEY. Which was issued when?

Mr. NASSIKAS. In which we set forth the procedure as to noncontested cases.

Mr. MCCLOSKEY. What was the date of that?

Mr. NASSIKAS. December 4. That is submitted as another appendix, here. It is part of appendix J.

I could go into that with you.

Mr. MCCLOSKEY. It is just a simple question.

In contested cases, are you going to honor CEQ's request?
Mr. NASSIKAS. Yes; in contested cases.

Let me state again, Mr. McCloskey, what I have stated, so that I don't get into a problem, here.

I have the exact answer to the question. On page 4 of our order No. 415, issued December 4, and I quote:

We have, in response to comments filed by the Council on Environmental Quality on November 30, 1970, changed the procedures outlined in 2.81(b) and 2.82(b) to include preliminary staff analysis of the detailed environmental statements supplied by applicants. Should this analysis of the statement reveal any deficiencies as to the sufficiency of its form, the staff will request the necessary revisions before the statement is made available on governmental agencies for comment.

Mr. MCCLOSKEY. From whom?

Mr. NASSIKAS. From various governmental agencies.

The deficiencies have to be supplied by the applicant in the first place. It is a deficiency letter similar to a deficiency letter, let's say, in an SEC filing.

Mr. MCCLOSKEY. But that is not under staff analysis, then, is it? Mr. NASSIKAS. Yes. We would make an independent staff analysis to determine the deficiencies. Yes; we would, sir.

Mr. MCCLOSKEY. Will the FPC staff prepare a detailed draft statement, as to the applications, of environmental impact?

In other words, are you complying with that letter from CEQ under this decision?

Mr. NASSIKAS. If I may, Mr. McCloskey, turn this over to Mr. Gooch, our General Counsel, because he has had discussions with counsel for the Council on Environmental Quality, which may straighten out the apparent problem.

Mr. Goocн. Sir, my name is Gordon Gooch. I am General Counsel to the Federal Power Commission.

We have an additional problem, which I am sure you will recognize, that may distinguish us from other Federal agencies, particularly in the executive branch, which have to make decisions which involve environmental considerations.

That additional problem is the Administrative Procedures Act. All of our proceedings have to be on the record, and subject to notice from the parties and the other people who are interested in these problems.

So our procedure is as follows: the applicant as part of his initial filing is required to make a draft detailed statement. Staff will review that statement, send out deficiency letters, will have it corrected as to form, and then, as the evidentiary phase of the hearing begins, which will include evidence on the environmental issues, the staff and intervenors will take their positions and present their evidence in the context of the particular case.

It will be up to the hearing examiner, then, in his decision, and his decision being subject to appeal to the Commission, to make still another detailed study.

Then, as parties take exceptions, if they do, to the examiner's deci sion, those exceptions will, of course, go to the Commission, and the Commission then will make the final statement, based not only upon the comments that have been filed, but also upon the evidence in the case, and the objections to the examiner's decision.

Mr. MCCLOSKEY. Now, in a contested procedure, in your judg ment, Counsel, will the examiner's decision in effect constitute the statement required by the Environmental Policy Act?

Mr. Gooch. I would say, sir, that the answer to that question is yes, but so will the applicant's. In other words, we will comply more than once with the requirements of NEPA.

Mr. MCCLOSKEY. Will the staff presentation to the Commission likewise meet the Environmental Quality Act?

Mr. Goocн. To the examiner?

Mr. MCCLOSKEY. Yes.

Mr. GooCH. Yes. Not just the staff, but all parties are required in their briefs to the examiner to answer the challenge of NEPA within their briefs, as well as previously being required to state their positions and present their evidence.

Mr. MCCLOSKEY. Mr. Nassikas, going to your statement at page 24, you referred to "order No. 408, issued August 26, 1970, amended Commission accounting and ratemaking policies to encourage more extensive research and development activities by electric and gas

utilities."

Does any part of that order include research into environmental problems which may be incurred?

Mr. NASSIKAS. Yes; it would apply to such research.

Mr. MCCLOSKEY. Do you encourage research into underground transmission lines?

Mr. NASSIKAS. Any type of research and development, whether it is in the environmental area or whether it is in the area of improving power, would be contemplated within that accounting and rulemaking procedure, so that we encourage the utilities to develop new methods of meeting the twin goals of protecting the environment and fulfilling energy goals. In other words, this is all-inclusive for any kind of a research project.

Mr. MCCLOSKEY. But traditionally and historically, this is an industry that has been the very last to do any research into alternatives which cost more money, like underground power transmission. I think this has been recognized.

Is there anything about your order 408 that would encourage research in underground power transmission?

Mr. NASSIKAS. Yes; to the extent that this type of accounting procedure is adopted, the companies will have the benefit of the writeoffs that are set forth in our uniform system of accounts for any expenditures that they may make to develop this kind of research. Also, they will be entitled and privileged to receive the necessary return on this to attract the required capital to commit to these projects. We are urging the companies to get involved in research and development to a far greater degree than they have in the past.