New York into Business

The State of New York last week definitely decided to go into the hydroelectric power business on a scale as large as the U. S. at Boulder Dam. The Legislature at Albany passed a bill creating a State Power Authority to conduct this ambitious utility enterprise. The Power Authority will construct a $171,547,000 dam and generating plant near Massena Point on the international rapids of the St. Lawrence River. It will market the energy-- some 2,000,000 h. p.--there produced, through private distributing agencies already in the utility field.

This legislative enactment concluded a decade of intense political conflict in New York. With water power as a prime issue Republicans have wanted to lease State resources on the St. Lawrence for 50 years to private utility companies. Democrats have demanded public development of State property. Time and again this Democratic doctrine helped Alfred Emanuel Smith win the Governorship. Franklin Delano Roosevelt carried it forward as a party policy. Last year Governor Roosevelt secured a truce in the old fight while a special commission of five experts investigated the feasibility of St. Lawrence power developed by the State. In February the Commission brought in its report: State development of power was highly practical, soundly economic, provided transmission and distribution to the consumer were left to private companies with their network of local wires already in operation. Glad to drop Power, a losing issue for them, the State Republicans accepted this compromise proposal.

The Power Authority must first obtain consent from the Federal Government and Canada to dam the international rapids. Then it must negotiate marketing contracts with private companies, particularly Niagara Hudson Power Corp., for the distribution of its power. These contracts, of great importance in the whole scheme, constitute the State's new method of rate regulation whereby the benefits of public production may be passed along to the consumer. If reasonable contracts for the control of prices cannot be made, the Power Authority must return to the Legislature for additional permission to go into the power transmission and distribution business.

Governor Roosevelt acclaimed the execution of his Power policy as a great victory for the consuming public. He insisted it would bring "more and cheaper electricity into the homes of the State, into the small shops and small industries, into the farms and the flats." His investigating commission, however, had not been so sanguine of immediate benefits to the Little Fellow. While the development was primarily for the benefit of the domestic and rural consumer, the Commission pointed out that the big industrial users whose demand for power is on a 24-hr. basis would possibly "receive a larger percentage of reduction in rates than will the domestic consumer."

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