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HomeMy WebLinkAboutAgenda Report - November 7, 1984 (56)1Yl�y' OPPOSITION ID H.R. 4402 I CITY. COUNCIL MEETING NQVV4M 7t 1984 City Manager Glaves apprised the Council that Legislation has been introduced in the U. S. Congress (H.R. 4402 and S 2710) which will remove the preference clause from the Federal Power Act. The Federal Power Act, enacted in 1920, authorizes the federal government to issue licenses, for up to 50 years, for the construction and operation of hydroelectric projects using federal waters. The law provides that state and municipally owned applicants are preferred over other applicants in the cantpetition for such licenses, if other relevant public interest factor are equal. The public preference policy of the Federal Power Act has been reaffineed by congress more than 30 times since its enactment in 1920, despite the continuous opposition by the private utility industry. 7be current effort- to anvnd the Federal Power Act is fueled by huge amounts of money from the private utilities. The municipally owned utilities throughout the state of California, reco&mizing difficulty of counteracting this well financed canpiign and of the need to get the municipals side of the issue before the public, have banded together with a plan to hire a public relations fine to aid in the infonnstion campaign. In allocating the costs of the effort, the City of Lodi share will be $6,578.00. If the multi-million dollar campaign undertaken by the private utilities is successful, the financial impact on the citizens of the City of Lodi can be quite substantial in future years. Our efforts today to protect these long established rights of our citizens is worthy of City Council consideration. T } S Following discussion, on nrotion of Council Weber Reid, Hinchman second, Council approved a Special Allocation in the ,nnount of $6,578.00 to join the mnmicipally owned utilities throughout the State of California to hire a public relations fine to aid in an information eampaign in opposition to If. R. 440'2. r -00---- ,r Kl Aq i _ yq� yWt1 • � 1. t``s' ♦ K7 ��, +esu !! � YhE r $$�Vi 1'Y ' �r�F�.t.'� y ; 1 w+' dICOUNCIL C0:11111UNICATW TO THE CITY COUNCIL DATE NO. FROM THE CITY MANAGER'S OFFICE "krvent)er 2. 1984 SUBJECT mr--sF nm,im Ri (SPP( I'm m 'R) 11. R. 4402 legislation has been introxhtced in the V. S. 0mg-ress (H.R. 4402 and S 2710) which wi I I remove the preference clause from the Federal power Act. The Federal raver Act, enacted in 1920, authorizes the federal kr►vernment to issue licenses. for up to 50 years. for the construction a►txi olxeration of hydroelectric projects using f(Aerul waters. The law provides that state and municil►nily owned applicants are preferred over other applicants in the cm;--etition for such licenses, if other relevant public interest factor are equal. 'Me publ is preference Ix)1 icy of the 1=edertcl P(Aver Act has been ren f f i mea by congress nx►re t turn a0 t hers since its enactment in 1920, despite the continuous opposition by the private utility industry. The current effort to t►meml the Federal Power Act is furled by huge anv)unts of money frown the privnte ►►t i l i t ies. me nnniicipal1y owned utilities throughout the state of California, recognizing difficulty of counteracting this well fim meed e.mimign and of the need to get the ►ntnicipals side of the issue before the puE►1ir. have banded together with it plan to hire n puhlir relations firm to aid in the info►mntion emi4 aipi. in allocating the costs of the effort, the City of i.cxli share will he $6.578.00. If the multi -mi Ilion dol lar cau►;mign Lindertaken by the private utilities is successful. the financial inpact on the citizens of the Ci tv of Lodi can be quite substantial in future years. Our efforts today to protect these long established rights of our citizens is worthy of City Council consideration. Heyfry GI av s City Nkinager 1 The Public Preference In Hydro Relicensing 20 Questions Answered smolt Y mors: A Xwvpr of ,eotrond eleo- tric powrr pollry--r1M lick of emnumer- ON eketric syuensr to compere with iewes- tor►ow� utifides wk w lk+n m to operate by*oekctrfe feudildes we e s pirOT-4s uir- der sk wp sheer* fit foreVv= rwdthe Federal EmrV Regulatory Conawissiow. The 20 qutstimis and &% nvers below prestry Me cart for irsolirte bOM caorrtperitioa in nikesising of hydroeiectrte projects. Question: Wbot Is ttteant by the "pubk pidevem»? Public preference is a turn which describes a long-standing federal policy that "prefers" public control and use of public resources. such a rivers and :crests, for generation of electricity. The policy favors puhlicty owned. nonprofit electric utilities over profit-making, investorowned utilities ("torn'`) in the use of these resources. The policy has been included to more than 30 statutes going back as far as 1906. Qt How does pWWle gr4muice worst in Y- cartsirtg of hy"llicdrk projeces? The Federal Power Act. passed by Congress in 1920. autborinmd the Federal Power Com- ntission (row the Federal Energy Regula- tory Commission) to issue licenses for up to So years for construction and operation of hydroelectric projects using federal waters. During consideration of the act Congress 30 rusue ►Owra MarclrApnt 1984 or-aystently rejected the proposition that li- orrnes to use this public resource sbculd be perpetual. The law provides -bat, when a publicly owned utility and an tou oompete lot a Nestle. and when their license applicr;- 'Rep. Shelby's bill (H -R 4402) terewW dintinsts couipeddon In rte. - tions are equally gond. the publicly owned utility is to be preferred over the tou when the license is issued. In other words. the preference only comes into play as a "tic -breaker." The Federal Energy Regulatory Commission (FFac). in the 1980 Bountiful cam. interpreted the law as providing a similar public preference when such projects }re Micenscd upon the expiration of the original tidrrase. The I i th Circuit Court of Appeals, in 1982 agreed. and the Supreme Court refused to review the ease. Q: Wliat is the curmt controversy OM the pob& preferenct all abort' Hydroelectric project licenses began expir- ing in 1970. The sous would like Congress to change the law. reversing the Bountiful decision. w public preference would not ap- ply in the relicensing of these protects. Recently. this legal issue became much murkier. Bountiful was the f arst case raising the issue of preference in relicensing. All parties. including the publicly owned utili- ties and tots. agreed to resolve that issue. Even the tots thought it was settled after all of their appeals were exhatasted However. in a recent case involving the Mervin Dam on the Lewis River in Washington. the com.. mission refused to follow its decision in the Bountiful case and. in fact. expressly over- ruled Bonwtiful. The publicly owned utilities have ap. pealed this decision. And the tots — ap- parently worried that this appeal will be successful — are seeking lesislation which would eliminate, once and for all, the prefer- am refera m in relicensing. Instead. the sous want Congr= in effect to guamntes than a per petual license for use of thhmaa public ro- sourem a position Congress expressly re- jected in 1920. Q: Has hgWadoa Mees isU"icsd? Yes. On Nov. t 6. 1983. C4r4pvsstnan Rich. aid C. Shelby of Alabama introduced a bill (H.R. 4102) that would anumd the Federal Power Act to diatinate public prmferenoe in relicensing, in fam the bill g;oes much fur- ther. It prwAdes that the new lioatae :boll autonwtk elly be issued to the current li- cense holder unless the projoct will not unmet federal standards in such -urea as flood con• trd and naviguiortal benertst. Mott- utilities can easily satisfy these standards. thus Shel- by's bill would eUms0 ata competition en- tirely. The bill would pmdu& publicly owned utilities from proposing plans that would better use public water resources. Q: Why dY Congress catsup die pulls 'rderrsca intie tint tom? Preference was included in tin act for many reasons. Congress was concerned about mo- nopuly control in the utility industry, and wanted to provide opportunities for local communities to establish their own utility systems as an alternative. Congress was also concerned about private monopoly control of a public resource. Finally. Congress felt public resources should be used directly by the public. without passing through the toll- gate of a profit-making utility. These policies apply with equal force to- day. In fact, Congress has repeatedly in. cluded the preference principle in other stat- utes involving electric power. including the Tennessee Valley Authority Act of 1933. the Rural Electrification Administration Act of 1936. the Reclamation Act of 1939. the Flood Control Act of 1944. the Riven and Harbors Act of 1945 and the flood Con- trol Act of 1962. 9Etry ('n Ixillos .S He K, 4402 nt Ttstvtt)!+ To sawai thr F.drrsl Power .art to provdr for more protection to recuse .vmumen. use of pubite resources This basic reason for enactment of the public preference remains valid today. Moreover. Congress should retain public preference because it represents a bargain struck between Congress and the. IOUs back in 1920. Over the 50 -year term of a license, an sou receives a hawse rte return on its investment in the rent -fres public water re- source. The tous recognized im 1920 that • they would have to compete agatirou publicly owned utilities upon expiation of their li- censes. with a tie going to the nonprofit util- ity Now the sous are trying to change the rules. IN THE HOUSE OF REPRESENTATIVES Vovia.tr 16. 19" Mr sNRLef (tor illnWelf. Mf PAaNATAM. Mr CORLHO, Mt MOOtttiRAD, Mr Banti• Mr. EDwAzw of Alabama, Mr. DowD► ol Mississippi, Mt SHVM• WAY. Mr CARa. Mn 11031211. Mr Bosco. Mr HAWKtas, Mr MASTtMaR, Mr PAMRTTA. Mt HAR"RTT, Mr CHArrta. Mr Listheses of Ca►ibrnta Mt Dixon. Mn VUCAMOVICH, lir BoMton of MiettiVm. Mr. NtsuoM of vuh. Mt. rurro. Mt FAsio. Mt iswts of California. Mr. RoT1AL, Mr. CRAIG. Mr. DArts, Mr DTMALLt Mt. BA"ASD. Mt. Lttaastt H. Mt. ; ties LavtMs of CaMwitia. Mr. UNMAN of Calitorais. Mr LAwt. Mr. W^xXAs. Mr PATTaattoM, Mr. ALsooTA. Mr. LAoowAIMPOO. Mt. Rat D, Mt. BaaMAM. Mt. BwaN..M. Mr AMnameoN. Mr. Tons". Mr. L.owsov of Catilwak. Mr. Tussis..A4 Mr. TooMAs of CaMwv6si isuvtt.eai the tel - Mw" btll:.#iei was elm to tttt conn tee OR Emew tai r.•aawarea A BILL To amsod the Federal Power Act to provide for more protection to electric corim niers. Be it enaetad by u4 Senate and Howie o/ Repnesexta- 2 tins o/ Ina United Stataa of Am*rian in Coag,," oasetssbled, 3 That this Act may be cited u the "Electric Consumers Pro - 4 tectioe Act of 1863". The short d1k q/ Caeyevstttssn AkAww/ C. Shelby s (D -Ala) HA4W2 masks k cowl qb a oar su wt► ptmmion MIL Howwr, set oa over t.eaM forbid coerpptttfott /6r exp&ft by" Ifcwwe,s a sate wey to immew xtiompely wd Awrmw conn~ Wwnor own rbrtrk nisei. Qt Wby has Gapsas bebdad Ile pull pssto —ca L tbsse stetuw? public preference; "1 -0191 bealthy oocnpe- titim between publicly owned utilities and toile. The tout am on the wbac much huger thea their ampto(it Counterparts. But pubbd) owned unijiitles have always filled an epattial need. Hesltby amp of it utilities provide a "yardstick" by which perfor- nwnce Ind rates of private. monopolistic tots can be measured. Competition between pubbdy owned util- itia and Iota tends to improve service and reduce rata for a@ utility customers. Prefer- ence also cohw cxs the ability of lual eom- munitia to have some control and indepew dence in eioctric service.. Pnttsteteaee eruabiea direct. democratic control of public to - sources. Preference also allows publicly owned resources to be used directly for pub- lic benefit without private profit and thus maximizes the return to the public from the QP How do you know the tots: always ex- pected that dues pW& prekreow would apply in ? The tots themselves stated that public pref- erence would apply in relicensing. Here, for instance, is what John Mtton, the vice presi- dent and general manager of the Pacific Gas A Ekaric Co., said in 1918. during a bear. ing on the Federal Power Act: "1 think that at the (end of the Hawn period). 30 years from now. we nip find that the governrn«nt will be very glad t o take ito ei for the purpose of turning it over to a mttaici• pality ... I do beliethat most of tbae plants erected Hader those tic a us. wbes they are applicable to a gtewift oommumitX will be taken over by mnakVialitia and oper- ated ated by than and not by the lewww" Q- iwybe dw wear taY slate but times res n dattge& H7*W-oc&k !rater it.Map oar KRX are Maw tlr pebiefj► t+wuta w0d s. Dsaea't tM -pi~ Seri ter iia grwlart amebas" rsgdm kupitg Ile prtajaets b Its tui of tM neat? 'batis the tow' basic _srvunent They claim because thoy ars lamer. they sibnald have the cheap electric power. Butt their at- gun1CM !lam agaim the Brost brie precepts of out nation's policy of eitfs rkky Maea$s- went — namely. that a pWralistic. diverse mixture of pubii* privately sad coopera- tively owned electric atilities provides yard- sticks and competition that keep rata in tine and service satidfic:torX Tie iota ant indeed bigger. and Sang bigger all the tim in I M (what the Fesi- eral Pacer Act was pasted) there were 4.000 tote. but today tbare ars only about 200. Carried to its logical exuarne, the tote' argument would suggest the fakist way of distributing benefits of hydroelectric power is with one, astiona 1, privately owned Woo - tris utility. The result would be Lbs lop of the comptudw mixtures of stwdeo In this country. The relicensing preference, it is important to remember. is simply one of many prefer- ence provi•icro for public utilities in markct- li Puttic rowin March -April 19U ing and distribution of electricity The "big- ger is better" argument would require elimi- nation of all of these preference provisions, including that for electricity marketing. The result: the end of public power as a cost- effective. eonsuawr-otientcd competitor. Q: Tl at wisada okay in the abstract. But how asuds sae ton rates going to rise if the gttH ch owned otill" get their way' First the publicly owned utility P.pplicant must demonstrate that its plans for the new license are at least as good as the plans of the original licensee. Only then will prefer- ence apply and the license be issued to the publicly owned utility. When that occur, the question of rate impact will vary from project to project and utility to utility. 'sous claim because they are burger they should have the cheap electric ---_• There an no studies which dema'Utrate reliably that the transfer of a license from an lou to a publicly owned utility would have any significant impact on the rates of the private utilities' customm. Morwea. be. nue — as the tots themselves empbasine — they are so hirge. tbo effect an rates per customer of the transfer of a project is lik* to be extnmdy small- And whatever the impacts might be, they would be itniptffl- cant compered to the fong-tsrm impacts of Wier factors such as intlatim fuel Coats„ demand for ebctricity and prudent utility aranagcment. No rate increase w+Atsoever would be sect ary if the tots reduced their Mtn of return on invateasnt—__wbieh are now at exuwrdinwdy high levels — by wvmt the slightest amounts. Qt Out won't lolls bare he Wail a lot of assay far new Power Owft N take dw glace ed by4F*d &k 111ejacts? No. Ahhoufh this it one of the tow' fawn its arguments. it is at odds with dhe facts. most publicly awned Oubties now oompet- * for caw term for sating projects do we have suffreiest generating capacity tbameelvra and, as a teraait. have to purchase a comidwahk anwAd of wboiwk power (tam tour. U the Woo -we an trawfem)d. they will buy less power (tom the loua, Or acne at rJL If they mad up baying mora pow" than they actually need. chert they an neo it back to abs IOtu on a wkiesak bow, ills lotw argusnatt implies that. Wade the liasrss for the peojtrcts are tramferted. gemmting power somitl ow disappears or evaporates. That. of oouese. is not the ease. The owner may change, but the level of electricity production will remain the same. Moreover, because sous now have much unused capacity, loss, of hydroelectric ca- pacity would not affect them for many years. Las, ;var. 39 percent of the toui generating capacity was never used. even on the hottest ar coldest day of the year. A utility needs some reserve margin. but 39 percent is far more than necessary. It would be many years before most sous would have to pay for new power plants to replace projects which may be transferred to pub- licly owned utilities. Q Is it amts; as the loan ckaim. that these projects are essential for rraaintainieg their integrated. coordinated system of decuicity P No. it is not at all unusual for more than one utility to own and operate power plants on the same river. For example, wv--n power plants on the mid -Columbia River are owned by four different utilities. In +dditiov.. dis- ruption of service could result from intense transfer — which it most likely would not — the Fane is prohibited by law from transferring the project's ownership. This issue was raised by Pacific Power # Light Co. (PPst) in the fust oanpetitive relicensing procoahng to come t afore the CotnMiasion. ?PAL and the municipal appli- cant. the Clark/Cowlitz Joint C3peeratiaag Agency. bad both applied for a new license to operate Merwin Dam as the Lewis River in Wasltington. PPea was the oripnal fiom m for the Merwin project and bekd hoonses to two oche. projects on the Lewis River. rc:t. ar- Sued it maria receive the new )kerne for Merwin in order to erasure integrated and coordinated operation of all projects. The F g 'The lot s' argument impiks that. y once the licenses for the projects are transferred, generating power k somehow disappears or tupwates.' 1 that a publicly owned utility could succeed in obtaining a new license for an existing project licensed to an lou would) be very slim. It simply would not pay for nonprofit utilities — most of which are small and do riot have the sort of cash available to the sous — to spend the money to oompete for then licenses. Of course. if ConWvunun Shelby's bili were enacted. publicly -owned utilit;cs would be prrcludod frau competing for these licenses. Q. is it Issportn" that we aww* alert pub- licly owned utilities will be elle to coaaPoM? Yes. Without competition for these projodta all electricity consumers — tbao served by both tots and publicly ownedutilities — would lose- Competition for new Ii - carnes in and of itself is very baaltlhy. For etample. when Pacific Cies & Ebo. tric Co, asked also nac for a new )leers for the Rock Creek -Grata Project on the Festhet River is Califcrtra. it told the own - mission their was no bask for spsudirig airy money to iu1pr7M the project Later: a aorW peting appliatim was filed by the sects - meow Municipal UUHty District (384UD) and several other California municipautia. smuD studied the project and datermtined the project's Saleratioa could be t W#. 'Nonprofit intilities pay local h"m tenet wWcb. Ir IM atsoinoed 10 ti,,71 percent of gross reveames—awe z atn the 6.1 percent tolls paid.• nate administrative taw judge strwtgly ob- jectod w ►rat's -veiled thrau of nonco- operation and noncoocdination." "Resin tanoe to coordinated opexatiarr" with the publicly owned appiiam "rraay doom the charades of ever achieving a sanewhat co. ordinated operation of the Lewis River Project" Such a result, the admini.ctrativc taw judge concluded. would undermine the law purposes of Cor +gress in passing the 1920 act Q: If then were as a parbkk preferews, pro. valve, would the publicly owned militias be ceagetiaag for theca Ikcwnes? Na Without public preference, the chances cantly increased without advw" envier,tt. mental impacts. Po&a then took another look at the project. Its conclusion: to file as "amended" lifters application il wirparst- ing many of imuws proposal. Elimination of public pufastaft world make such eompatium unlilosly m funder Con$raumn Sbdby'n bill. naartiaut. Q. Won't (be t wultsr of s o slue* relit In IM of tax lovulew in taut sad emu be wkkb acne Projects aro bcatd? •' Thin is another pa argument of the tout. but it. too, does rant wash, tots pay very little money in vocal and state taxas — only 6.1 percent of their gross rcvsrues in 1982. 1) ri st to vow t o March -April 1994 _ A Nonprofit utilttte%, on the other hand. while technrwliit taxatempt. pay "in lieu ' ta%c% which, to 1 02. arn0unted to b 10 percent tit gruss rcvcrsues -- more than the tot % As stew owner of the projects. kx al publicly owned utilities well continue making %uch payments Q %kj at effect will a changir of ownership have on the en.irormwel' There certainh, will nut be any advcnc ef- fect The project% will ctntsnue to function as the% ha•r to the past with the same ca- pacit. The orth change will be in the owner. %htp of these fac►Irtrc% But the process J ornpctition for these proXcts dots have a beneficial effect on the environment For example. *her. Santa Clara. CAI , in 1974 filed a competing apph- catnxt fix a project operated by rGat. It 'It is not at aU unusual for time than one utility to own and operate plants on the same riser.' proposed to replace wetlands last when the propct was initially Constructed. era a then amended its license application to include a uMilar improvement. In addition, rGAE — &her ycan of wrangling with the California Department of Fish and Game — finally cgreed to implement a fish study on the viva. Without competition, those environ mental improvements might never have been proposed. Md, we should note, publicly owned utile ties have proven OwmvJvd to be leading advocates for environmental protection among the nation's utilities. One recent ex- ample Involves the controversy over how to deal with the problem of acid rain. In btu- geese 1983 the Amcncan Public Potwa ^xso- cistion recommended an crtussions tax on all fol "Ciel sources to Gt>snoe enussion reduc- tion. The tots continue to oppose cffCru to Edison Electric Irotitwr, trade auoriatiort Of the private po"Vr comporws which serk to deny piibltr po%W tystt+u tAe rirlit to COM' pea Joe ,. plrtpr hydrotletetrse Uee—. says -nswitcipahtirs' tun Of the war rraour,nr may sow be co,"potibir weth the eivitrstornawnrd unh- ties' iisrs at other prolrrts on the saner river -' In fart. how~. mrltiplt ownership and lnte- ,role"/ oprroNow of kyho pnn/ecrs an 1Ar stauvw river is am irpiirud. Felty -opt dam# on die Co- lumba River and its tributerees how IJ own- rn—five urorstunow wtlit►es, three public mighty JtstrraYl, two rites, tune VS Jrderal areperes and a Canadian peovrnre MM (•+✓erre ti..wwlH Ain �Ir�Mrr/t..w cornbat acrd rain Che prt.­am;ronmcntal stance of the wiwn', publtck owned utili. ties r. another reason it) ensure the etimcricc of strung, healthy, putli,l% owned contpetr- tor, of the rut.. Q. Can publicly owned utilities run the projects efricientt. The record speaks itir itself Publicly owned utilities deliver piiwer to their customers at average Lvmts %ign►ftt.anth lower than thtx.e charged h. tilt % ane! have done ui for rnanv .Coir. T'hc%e %atrng% to the Consumer are attributable in part to the ib%cncc of a profit factor in the p ubllcl. owned utilities' hargcs But the% arc also atinbutablc to the fact. d'icumented by federal government re- ports for tele past 35 year.. that the unit casts of public power managenal expenses -- including administration. accounting. collet tion, customer service .ind %.ties cit. pcn.e% - .ire much below those .N im s l o%t% td production and distribution of ctec- tncrty also arc lower per- Mh for publicly owned systems than fix pnvate ultitties. Q. But aren't the tots more .experienced than pubtich owned utilities' •1b%olutcly not Publicly owned utilities have a long tradition of serving the public efficiently Manv of them started bustacm before the pn%ate companies Santa Clara. for example, has operated utihttes %trice 1914% 1 : vean longer than r(:• t. its pnvate n%al for erne project to California Q. Noy do you respond to the tot is' claim that it would be unfair to transfer the licenses after they have developed these facilities ltd run them succemfuih for so many years! l - NI rt -1w Iit %I V, hArai 19X4 Publicly owned utilities which recei.c new licenses for these pro)ecu are required to compensate the tour. The Federal Power Aa requires payment of the net investment in the project ami any severance damages. It should also be remembered that the tote have made substantial profits off these projects for 50 years. Preference merely en. sures publicly owned utilities have a chance to operate these projects — without mak- Ing it profit off of tkem. Q: Woadd the "OdYtt kgiakdow is Cow- Yes. Congressman Shelby's bill would re- quire the new licenaee to pay the original licensee "just compemuon." which would, in effect, constitute current market v—Cue. As a result, an lou whose project license is transferred would likely receive a huge profit on the project itself. in addition to profits made over the years tiu.tttgh the rent-free use of it public resource. Q;- I am snit not slit puhik grefavam isn't a b1t "iodtak," b it rae3y fair ors take a project away ft -an one trtilky and gift k to awatler? Abaohutety. Is it unfair for a landlord to refuse to renew a kale? A federal license to• use a public resource Is nothing more than n lease. There was never any guarantee that the lease would be renewed. The original licensees understood that in all probability their leases would not be renewed. In addition. the tots have had the prorst- making use of these public resources for 50 years or more. They knew public preference would apply to relicensing. There is nothing unfair about giving the nonprofit. publicly owned-_tilities a preference in obtaining new licenses. Moreover. sous am cost-plus monopobes. They are guaranteed. if tbey operate effi- ciently, a profit on their investments. Even if production costs incream- Meir profit mar- gin probably would not be afreaed. And although private utilities claim it is "unfair" for the federal government to assist publicly owned utilities through a prefer- ence. they do not mention the direct and indirect financial assistance they receive. For instance. sous pay very little in federal taxes. The reason.- an extraordinary array of tax bresks, including capital investment tax credits; deferral of taxes for aceckrated depro.iation on capital investments, the ability to sue poilutiun control bonds ex- empt horn income taxes and the right to sell stock through a dividend reinvestment pro - Marshall Lancaster has joined Dean Witter Reynolds Inc. as Senior Vice President 36 RUUf Yt)wtfl %tart! -April 1084 gr: m whereby investors do not pay taxes on Incon.- Some sous pay no taxes at all. and accumulate tai credits. despite profit-mak- ing. because of tax provisk-m That is not all. tons receive other benefits such as rightso(-way to construct and oper- ate their systems across federal lands and authority to condemn private property. Congress has been eminendy generous to. profit-making sous. Preference in relicens- ing is simply one way of making it possible for smaller. consumer -owned. nonprofit util- ities to compete against the much larger tour. There is nothing the least bit "unfair" about public preference- EHLERS .ten ASSK. INC. INDEPENDENT FINANCIAL SPECIALISTS Pt Long-term capital financing for utilities 507 Marquotte Avenue Minn*apolla. Minnaaota 55402 T*I*phono:1612)x4291