shall have no direct interest therein. The determination made by the committee, or a majority of its members, shall be binding on the parties hereto. 22. Covenant as to Rates.-Participant covenants and agrees that it will maintain and collect rates and charges for power and energy distributed over the electric system of Participant so as to produce revenues in an amount sufficient to pay all obligations of whatever nature payable from said revenues, including all payments required to be made pursuant to this agreement and to perform each and every provision hereof. IN WITNESS WHEREOF, the parties hereto have executed this agreement in several counterparts. [Press release, from the office of Representative James E. Van Zandt (Republican, Pennsylvania), July 3, 1962] WASHINGTON, D.C.-Representative James E. Van Zandt (Republican, Pennsylvania) announced today that he will offer an amendment to the atomic energy authorization bill when it comes before the House of Representatives next week to protect the right of Congress to pass on the addition of a 800,000-kilowatt electricgenerating facility to the new production reactor at Hanford, Wash. The Atomic Energy Commission and the Bonneville Power Ad ministration are considering a proposal by the Washington Public Power Supply System to accomplish the construction of this project by indirection since Congress said last year that they could not do so directly. Bonneville has said it would proceed unless there is expressed objection from the Congress. Representative Van Zandt said his amendment is imperative to prevent the expressed will of Congress from being circumvented by this indirect approach. Last year Congress decisively rejected a proposal for construction of the 800,000-kilowatt Hanford steam electric generating plant. Van Zandt said, "If Congress allows this type of indirect action to circumvent its clearly stated will, it could be used as a precedent for accomplishing other ends which may have been specifically denied by direct congressional action." The Pennsylvania Congressman pointed out that the present project is economically questionable since its estimated costs have been increased from $95 million to over $130 million. Furthermore, he said it is undesirable since BPA would be required to deliver power at existing Bonneville rates to the WPPSS participants in amounts equivalent to their financial contribution to this undertaking regardless of whether the Hanford steamplant produced a single kilowatt of electric energy or not. He pointed out further that BPA could assume future ownership of the facilities by paying off the outstanding obligations of WPPSS, thus putting the Government in the steam electric generating business in the Pacific Northwest without specific congressional approval. Representative Van Zandt asked each Member of Congress who voted against the addition of generating facilities at Hanford last year to support his amendment, which he said was needed to demonstrate that the will of Congress could not be flouted by such devious means as those contained in the proposed arrangement between AEC and BPA with WPPSS. He said, "It is the already overburdened U.S. taxpayer who will ultimately have to pay for this losing proposition at a time when nearly everyone agrees that a tax cut is necessary to get the economy moving again." HOUSE OF REPRESENTATIVES, Washington, D.C., July 2, 1962. DEAR COLLEAGUE: The House is scheduled to consider the Atomic Energy Commission authorization bill (H.R. 11974) next week. During the debate on the bill, I intend to offer an amendment (copy attached) to protect the right of Congress to determine the disposition of energy or nuclear production facilities owned by the U.S. Gov ernment. Approval of this amendment is imperative to prevent circumvention of the expressed will of Congress relative to construction of the 800,000kilowatt Hanford steam electric generating plant by a new and devious approach. Contrary to statements made on the House floor June 25, concerning the proposal of the Washington public power supply system to construct this facility, a careful evaluation of the proposed contractual arrangements between the Bonneville Power Administration and WPPSS reveal the proposal to be far worse than that which the House defeated so emphatically last year. There are many reasons why this is true, but I will mention only four specifically at this time: (1) Since BPA would be required to deliver power to the WPPSS participants in amounts equivalent to their financial contribution in this questionable undertaking regardless of the power received by BPA from Hanford, BPA-and in turn the Nation's taxpayers would suffer all losses resulting from this project. BPA is in reality the primary party of interest in this proposal, regardless of all the overt attempts to hide this fact. (2) BPA could assume future ownership of the facility at any time by paying off the outstanding obligations or when it is paid out by simply taking it over. Thus, the Government would be put in the steam electric generating business without specific congressional approval. (3) If Congress permits this type of indirect action to circumvent its clearly stated will, it could be used as a precedent for accomplishing other ends which may have been specifically denied by direct congressional action. (4) The proposed project-thought uneconomical last yearis even less economical now because of estimated increases in costs for the addition of generating facilities from $95 million to over $130 million. The cost of the new production reactor itself has increased substantially from $145 to $195 million. Therefore, how can we be sure the cost of the Hanford steamplant will not be even more than $130 million? Since BPA is already operating at an annual deficit of $15 million, it is the already overburdened U.S. taxpayer who will ultimately have to pay for this losing proposition at a time when nearly everyone agrees a tax cut is necessary to get the economy moving again. Whether you approve or disapprove of the proposal of WPPSS is not necessarily the issue as far as my amendment is concerned. The real issue is that the current proposal to add generating facilities to Hanford is of such a magnitude and could have such an adverse effect on BPA that the Congress, rather than an administrative agency, must have the right to examine it and express positive approval and disapproval. For this reason, I sincerely urge you to join me next week in voting favorably on the attached amendment. Sincerely yours, JAMES E. VAN ZANDT. AMENDMENT TO SECTION 107 OF H.R. 11974 To AMEND PUBLIC LAW 83-703 BY ADDING NEW SECTION 45 AND BY AMENDING SUBSECTION 161g THEREOF Mr. Chairman, I offer an amendment which I send to the desk. Amendment offered by Mr. Van Zandt: On page 9, between lines 22 and 23, insert the following new subsection (e) and (f): (e) Public Law 83-703 is amended by adding the following new section 45. "SEC. 45. Notwithstanding any other provision of this Act, energy produced at a production facility of the Commission shall not be transferred to another Government agency nor sold to a non-Federal entity without prior and specific authorization by the Congress." (f) Public Law 83-703 is amended by striking out the semicolon at the end of subsection 161g., inserting a colon, and adding the following: "Provided, however, That the Commission shall not sell, lease, grant, license, or otherwise dispose of any production facility or any part thereof owned by the United States without prior and specific authorization by the Congress." B-149083. COMPTROLLER GENERAL OF THE UNITED STATES, Hon. GLENN T. SEABORG, Washington, July 6, 1962. Chairman, U.S. Atomic Energy Commission. 1 DEAR DR. SEA BORG: By letter of June 4, 1962, signed by the General Manager, our views have been requested on the authority of the Commission to enter into a proposed agreement with the Washington Public Power Supply System (WPPSS), a public agency of the State of Washington, whereby steam to be produced at the new production reactor (NPR), authorized for construction as project 59-a-5 under Public Law 85-590, would be utilized for the production of electric energy in a generating plant to be constructed by WPPSS. Under a proposed agreement between WPPSS and the Bonneville Power Administration (BPA) the resulting electric energy would be delivered to BPA on an exchange basis. Section 101 of Public Law 85–590 provides, in pertinent, as follows: SEC. 101. PLANT OR FACILITY ACQUISITION OR CONSTRUCTION.-There is hereby authorized to be appropriated to the Atomic Energy Commission, in accordance with the provisions of section 261 a. (1) of the Atomic Energy Act of 1954, as amended, the sum of $386,679,000 for acquisition or condemnation of any real property or any facility or for plant or facility acquisition, construction, or expansion, as follows: (a) SPECIAL NUCLEAR MATERIALS.— *** 5. Project 59-a-5, production reactor facility for special nuclear materials, convertible type, Hanford, Washington, $145,000,000. The primary purpose of the project is the establishment of a plant for the production of plutonium. The plant is to be so constructed as to permit its conversion to the production of electric energy either in lieu of, or in addition to, the plutonium. An amendment introduced in the Senate to reduce the appropriation authorization to $120 million, having as its purpose the elimination of the convertibility feature, was defeated on July 15, 1958. On June 8, 1961, there was introduced in the House of Representatives H.R. 7576, 87th Congress, which in its original form would have authorized an appropriation for— Project 62-a-6, electric energy generating facilities for the new production reactor, Hanford, Washington, $95,000,000. That project was deleted by amendment on the floor of the House on July 13, 1961. The Senate reinstated the project at an authorization of $58 million, but receded from its position and the resulting Public Law 87-315 excluded project 62-a-6. Agreements between WPPSS and AEC and BPA, respectively, have been proposed by WPPSS as a means of converting the NPR to dual purpose operation and to utilize the resulting energy_without any additional appropriation of Federal funds or congressional authorization. By letter of November 28, 1961,2 WPPSS proposed certain basic terms and criteria for the agreements with the two Federal agencies. With respect to BPA these have ripened into a series of 1 Printed on p. 58. 2 Printed on p. 101. draft agreements, the latest of which, to our knowledge, is preliminary draft No. 6, dated June 5, 1962. As to AEC we are not aware of the existence of any draft agreement. However, the basic terms and criteria have been reviewed by AEC and certain modifications have been suggested as a result in a letter of April 6, 1962.3 Our review of the legality of the AEC-WPPSS agreement is based on the assumption that the ultimate understanding would reflect the basic terms proposed by WPPSS as modified by AEC. Briefly, the agreement between AEC and WPPSS would provide that (1) AEC would lease to WPPSS land adjacent to the NPR for the construction and operation of the electric generating facilities. (2) WPPSS would design, construct, and operate the electric generating facilities. (3) Additions or changes in the NPR in connection with dual purpose operation would be performed by AEC with funds advanced by WPPSS. AEC would take title to and exercise complete control over the resulting equipment. (4) WPPSS would issue revenue bonds to defray the capital cost of the project. (5) WPPSS would purchase from AEC steam resulting from the operation of the NPR by AEC. During periods when the NPR was not being operated by AEC, WPPSS would lease the facility for production of steam, subject to immediate recapture at the option of AEC. (6) The term of the agreement would be not less than the time necessary to amortize the bonds sold by WPPSS to finance the project. At the expiration of the agreement, or when the bond indebtedness was retired, the Government could, at its option, take title to the electrical generating and related facilities. In addition, the Government could acquire title to the facilities at any prior time by payment of an amount sufficient to satisfy the obligations incurred under the project. Section 261a of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2017), includes the following: a. There are hereby authorized to be appropriated such sums as may be necessary and appropriate to carry out the provisions and purposes of this Act, except (1) Such as may be necessary for acquisition or condemnation of any real property or any facility or for plant or facility acquisition, construction or expansion: Provided, That for the purposes of this subsection a., any nonmilitary experimental reactor which is designed to produce more than 10,000 thermal kilowatts of heat (except for intermittent excursions) or which is designed to be used in the production of electric power shall be deemed to be a facility. *** The section up to the proviso is identical in form with the enactment in 1954. As originally introduced, H.R. 9757, 83d Congress which became the Atomic Energy Act of 1954, contained a section 261, providing in pertinent part SEC. 261. There are hereby authorized to be appropriated such sums as may be necessary and appropriate to carry out the provisions and purposes of this Act except such as may be necessary for acquisition or condemnation of real property or for plant construction or expansion. *** The purpose of the provision in its original form was stated at page 31 of House Report No. 2181, 83d Congress, to be to require the Commission "to obtain congressional aproval of new construction, 3 Printed on p. 98. |