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are now located on Federal lands." It is essential that environmentally acceptable methods and policies of utilizing these national resources be developed without undue delay. This must be one of government's major goals.

Of primary importance from the jurisdictional standpoint of the Federal Power Commission with respect to federal lands is the accessibility of offshore federal domain leases for the production of natural gas. For example, the importance of Offshore Louisiana's resources to the gas supply situation is best illustrated by the fact that during the last three years about one-fourth of total U.S. natural gas reserve additions have been attributable to federal leases in that offshore area. It is my personal opinion that the proposed Department of Natural Resources with its expanded energy resource responsibilities and corresponding environmental overview would facilitate the efficient. development of our energy resources in the federal domain.

Another major area of concern to me as an energy regulator is the problem of power plant siting. My examination of the issues involved in this complex controversy has convinced me that the essential features of the Administration's Power Plant Siting Act of 1971, in basic support of which I testified before the Subcommittee on Communications and Power of the House Commerce Committee on May 5, 1971, offer the best hope of accommodating the nation's undeniable need for additional bulk power facilities and the assurance of adequate protection of the environment. Long-range coordinated public planning by utilities combined with "one-stop" resolution of all power and environmental issues by the appropriate state, regional or federal agency are, in my opinion, the principal features that must characterize legislation in this area.

Timely decisions, including essential environmental safeguards, are prerequisites for an adequate and reliable power supply. As a result of the Calvert Cliffs' decision," however, the timely operation and construction of our crucial nuclear plants are threatened by additional procedural delays. The irony of Calvert Cliffs is that nuclear facilities, we are told by responsible scientists and engineers, have the least adverse effect on the environment of all current sources of thermal power generation. Many plants which have proceeded to completion or are in their final stages of construction after satisfying a multitude of environmental reviews have, as a result of Calvert Cliffs, become the center of raging controversy which may place the adequacy and reliability of our power supplies in jeopardy. Surely, interim procedures can be devised to serve the public interest in its need for power without compromising the environment. It must be remembered that to accomplish the goals of our society we must maintain a balance among interrelated values; idealism must be tempered by pragmatic realism. We must certainly inquire: What are the alternatives?

Decisive and long-range policy actions by all branches of government are necessary to implement President Nixon's announced energy priorities. In addition, the public interest is necessary concerned with two additional important aspects of government policy: consumer protection and antitrust policy.

1 President Nixon's Energy Message, June 4, 1971.

2 Calvert Cliff's Coordinating Committee, Inc. v. AEL, No. 24, 839 (D.C. Cir., July 23, 1971).

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Government, the business community, and the public have increasingly concentrated their attention on consumer problems in recent years. The President has demonstrated his personal concern for consumer problems by the creation of an Office of Consumer Affairs as part of his immediate staff and the appointment of his Special Assistant for Consumer Affairs to direct the new office. Because of its importance and direct bearing on the day-to-day lives of all Americans, government policy, including the President's legislative recommendations, should receive prompt attention so that business can proceed in an orderly fashion to plan and expand its operations consistent with the best interests of consumers.

In his October 30, 1969 Consumer Message, the President noted that "most businessmen in recent years have recognized that the confidence of the public over a long period of time is an important ingredient for their own success and have themselves made important voluntary progress in consumer protection." I share this belief. However, the business community must continue to expand its efforts to protect consumer interests.

By Executive Order No. 11614 on August 5, 1971 the President established the National Business Council for Consumer Affairs to serve the interests of consumers by providing, among other things, for a "liaison among members of the business and industrial community on consumer affairs matters." The energy industries should cooperate and participate actively in the National Business Council for Consumer Affairs. Consumer confidence must be earned and deserved. The energy industries, faced with the challenges of environmental pressures and those who advocate less consumption of energy, must convince the public of the need and importance of energy. Only a scrupulous regard for consumer interests will earn this essential public confidence.

The predominant concern of the Federal Power Commission is protection of the consumer interest under a "just and reasonable” standard whether related to rates, energy supply or service.3

In our regulation of the sale for resale of natural gas, for example, the Commission is directly concerned with the creation of a price structure that will provide the consumer with the requisite supply of natural gas to meet his needs at a just and reasonable rate. The consumer responsibilities of the Commission, therefore, extend to the adequacy and reliability of supply as well as to the determination of just and reasonable rates.

Among the actions that have been taken by the Commission in its regulation of the natural gas industry to protect the public interest in adequate gas supply and service to meet our energy and environmental needs are the following:

(1) A nation-wide investigation to review existing rates and determine whether higher rates should be established for future supplies of natural gas dedicated to the interstate market;

(2) Review and completion of area rate proceedings in impor tant gas producing areas;

3 F.P.C. v. Tennessee Gas Co., 371 U.S. 145 at 154 (1962); Atlantic Refining Co., et al. v. Public Service Commission of New York, et al., 360 U.S. 378 at 388 (1959); Pennsylvania Water & Power Co. v. F.P.C., 343 U.S. 414 at 418 (1952); F.P.C. v. Hope Natural Gas Co., 320 U.S. 591 at 610 (1944).

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(3) Institution of rulemaking procedures designed to stimulate the search for natural gas by independent producers and pipeline companies;

(4) Rulemaking procedures and administrative action to implement and enforce the National Environmental Policy Act of 1969 and other applicable environmental statutes relating to air and water quality and land use;

(5) Change of small independent producers price regulation by means of blanket certification and Commission review of gas purchase costs in its pipeline regulation;

(6) Nation-wide investigation of the reliability of electric and natural gas service;

(7) Establishment proceedings;

of producer rates by rulemaking

(8) Accepting for consideration applications by independent producers requesting issuance of a certificate for sales of natural gas notwithstanding that the proposed rates may be in excess of the ceiling or guideline rates;

(9) Authorization of importation of liquefied natural gas to meet emergency needs;

(10) Establishment of accounting rules for advance payments and loans to producers by pipelines to stimulate further exploration and development and to increase pipeline responsibility for gas supply;

(11) Review of pipeline company curtailment plans and policies;

(12) Overall rate review to attract required investment in facilities to provide consumer service;

(13) The Federal Power Commission has undertaken with approval from the Congress an independent investigation of natural gas reserves in the United States and an overall evaluation of the role of natural gas in meeting energy requirements of the nation.

Another area of government policy in need of careful evaluation is the field of antitrust. In reviewing antitrust policy it should be remembered that the principles of a national energy policy should be directed toward the development of competition insofar as competitive markets will not prevent or unduly retard the development of our resources consistent with overall national interest considerations.

I believe there is a clear need, for example, to examine the potential overall benefits that could be gained by intra-industry cooperative efforts to curb and remedy pollution problems. Policies must be worked out that will allow the pooling of technological and financial effort in such crucial matters without undermining longstanding competitive objectives of the antitrust laws. Furthermore, certain industries that are necessary for essential services, such as the natural gas and electric power industries, may well require innovative government and industry action to preserve competitive postures while meeting new challenges and conditions. For example, the capital and system demands of both the electric and gas industries in the next decade may require re-examination and possible revision of antitrust policy in order to derive substantial economic benefits from unified planning of genera

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tion and transmission, pooling of business and financial risks, and consolidation of managerial talent.

Congress and the courts have stated that antitrust policy is directed not only to economic goals but also to social and political objectives. We are in this country steeped in the competitive heritage and the tradition of small business enterprises. "Competition is our fundamental national policy." U.S. v. Philadelphia National Bank, 374 U.S. 321 (1963). However, it has also been recognized that increased competition in some industries may sacrifice efficiency, or even prevent the degree of investment required for orderly growth and development. Congress has decided that with respect to certain industries, including the electric utility and gas industries, the public interest is best served, not by free competition, but rather by direct and uniform regulation of certain phases of their interstate operations. In fact, the Supreme Court has indicated that in the area of public utilities competition may not itself be a national policy. F.C.C. v. RCA Communications, Inc., 346 U.S. 86 at 91-96 (1953). The application of antitrust policy to the regulated energy industries, for example, requires a balancing of the overall public interest in energy supply at a reasonable price to achieve the most efficient allocation of resources possible and the anticompetitive effects of the proposed industry action. See Northern Natural Gas Co. v. F.P.C., 399 F.2d 958 (D.C. Cir. 1968); Great Lakes Transmission Co., 44 FPC 21 (July 10, 1970), rehearing denied, August 25, 1970.

The public interest has not been as well served by government and industry energy policy over the decade of the 1960's as we would have wished. Our heritage has been energy problems crying for a solution. Indeed, this National Energy Forum had its inspiration in the need for a critical evaluation of current and projected energy policies in relation to the attainment of our national goals. Antitrust and consumer protection policies must be included in this evaluation.

The Committee for Economic Developmen recently published a statement of national policy entitled Social Responsibilities of Busi ness Corporations in order to contribute to an understanding of the responsibilities of business and outline an effective means of respond ing to social change. The Committee observes that "[t]he great growth of corporations in size, market power, and impact on society has naturally brought with it a commensurate growth in responsibilities; in a democratic society, power sooner or later begets equivalent ac countability." I have tried to stress here today the importance and necessity of energy in our national plans for improving the environment, the economy and our social order. At the same time I have tried to impart my strong belief that the time for an accounting is at hand. The responsibility of government in energy matters is manifest; so too, however, is the primary obligation of the energy industries themselves even if policies seemingly opposed to the short-term corporate welfare are required. It should be perfectly clear to all that we have a responsibility to offer imaginative and constructive leadership; it is an obligation we must not fail to meet.

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4 Social Responsibilities of Business Corporations, Committee for Economic Development, June 1971, p. 21.

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STATEMENT OF EDISON ELECTRIC INSTITUTE

PRELIMINARY STUDY OF EFFECT ON NATION'S ELECTRIC POWER SUPPLY OF AEC REGULATIONS TO IMPLEMENT NATIONAL ENVIRONMENTAL POLICY ACT

Electric power systems have turned to nuclear power as a safe, reliable, economical, and environmentally acceptable way to meet the future electric power needs of our nation. Since January 1, 1970, five nuclear power units, aggregating almost 3200 megawatts of generating capacity, have been issued operating licenses. Between now and 1975, 61 additional nuclear power generating units with an aggregate capacity of approximately 53,000 megawatts are scheduled for operation. Attached Table I lists the five units with operating licenses, another with a provisional operating license, and the 61 scheduled additions. These 61 nuclear units account for about 35 percent of the electric power industry's scheduled thermal additions during this period. Together with other capacity additions scheduled by electric power systems, they will assure that the nation's electric power consumers will have adequate supplies of electric energy in the years ahead.

The procedures prescribed by the Atomic Energy Commission for its compliance with the U.S. Court of Appeals decision on implementation of the National Environmental Policy Act of 1969 (NEPA),1 are expected to hinder the ability of electric power systems to complete their current nuclear expansion plans on schedule. This could result in inadequate power supply in many areas of the country with a consequent deterioration in reliability and service quality.

With respect to nuclear power plants that are completed or are scheduled for completion within the next few years, it is estimated that operation may be delayed one or even two years if the environmental review prescribed by the new AEC regulations is required prior to the issuance of an operating license. This is particularly true if the hearing authority permits the scope of the hearing to deal with all environmental aspects of these nuclear power plants.

Following is a summary of the situation that will result if nuclear power plants are delayed one or two years and alternative means of generation are not available to the affected power supply regions or systems. This summary is based on data received from the regional reliability councils.

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