well beyond what is required to merely supply the population growth. Additional amounts of electricity will be needed to operate expanded sewage treatment facilities and to provide improved technology for maintaining clean air within our cities. Much research and effort is now being spent in an effort to develop electrically operated transportation vehicles, including automobiles, so as to eliminate exhaust gases associated with the use of petroleum products. Rather than adopting the suggestions of those who in opposing the expansion of electrical generating capacity have proposed alternate energy sources such as coal, oil or gas, I believe instead that the cities can best be relieved of much of the pollution that has historically been caused by the use of these alternate fuels through the expanded use of electricity.

Presently, electrical systems, individually and through cooperative efforts, are attempting in many different ways to alleviate the overall problems. For example, interconnections and similar arrangements across the country are helping to increase the reliability of electric service to all the interconnected systems. In fact, without such interconnections, the effects of delays that have already occurred in providing generating capacity might have been much more serious. However, the ability of interconnections to minimize the effects of capacity shortage is limited. To insure that these interconnections make their maximum contribution to the reliability of electric service, each member of the interconnected systems must install capacity sufficient to meet its peak loads and have reserve capacity for contingencies. Current delays are limiting the ability of several utilities to meet this responsibility.

Furthermore, substantial effort and money is being spent by the industry in research and development programs for developing improved or new technology for meeting environmental concerns. In one such program, TVA has joined with Commonwealth Edison Company, other privately and publicly owned utilities, and the Atomic Energy Commission to build and operate the Nation's first demonstration liquid metal fast breeder plant on the TVA system. Our goal is to demonstrate to the Nation that the breeder can produce electricity efficiently and reliably with a minimum impact on the environment and at the same time conserve the Nation's energy resources. If we succeed, a most important result will be to extend the life of our uranium reserves perhaps 100 times, giving assurance of a supply of basic energy for electric generation adequate for centuries. Another field in which considerable research is being conducted by a number of electric utilities is the development of technology for a workable system for removing SO, from large coal-fired steam plants. We have planned, designed, and this fall hope to begin construction of a $35 million facility to test a limestone-scrubbing process for removal of SO2. We are proposing to locate this facility on one of the large units at TVA's Widows Creek Steam Plant. Incidentally, as a measure of the costs involved in such a program, the cost of this generating unit (which was completed in 1965) was $65 million.

The industry is also involved in many study programs to help provide factual answers to the questions of what are the real environmental impacts to land, air and water that are associated with the production of electrical power. TVA itself is involved in a number of such programs. For example, in cooperation with the Environmental Protection Agency, TVA is designing a special research facility to be installed at our Browns Ferry Nuclear Plant to fully investigate the effects of heated water on fish and aquatic life, an environmental area where standards are necessarily now being set without, we believe, adequate factual background. As additional assurance that TVA can supply the long-term electric load growth we are continually planning further in advance and extending the lead

times-or the interval between ordering equipment and getting it into operation. Moreover, to help minimize the consequences of interruptions to or shortages of bulk power supply that could possibly occur on the TVA system, TVA is presently developing continguency pians providing detailed steps to be followed by TVA and its distributors in reducing loads on the system. We understand that similar plans are being made by electric utility systems throughout the country. In addition to participating in the types of efforts I have just described, TVA is investigating various alternatives in the use of fuels and methods of generation that would alleviate concerns of the public and thereby hopefully eliminate many of the obstacles that are now handicapping efforts to satisfy growing electrical demands. However, at best, most of the efforts we can engage in offer hope for the long-term period but they provide few immediate benefits.

It also should be pointed out that the efforts to comply with the more stringent environmental standards that are being considered, and many of which have been adopted, will lead to substantial increases in the consumer's cost of electricity. Based on preliminary studies of proposals relating to strip mine regulation, improved mine safety, fly ash removal, SO2 control, sulfur taxation, waste heat control and projected delays associated with satisfying environmental requirements, we have tentatively estimated that annual costs to the TVA system for such protection will range from about $75 million to a possible $830 million, depending on what standards and controls are actually adopted. To put these figures in perspective, TVA's power revenues last year were slightly above $640 million.

In conclusion, we believe that in order to assure that now and in the future the Nation will have an adequate supply of electrical power, for which except in rare instances there is no acceptable substitute, we must aim our efforts at the total environment. We must remember that the purpose of our efforts is to improve the total quality of human life. Overall human welfare must be at the center of our concern-a concern for the present generation as well as those to come. It seems imperative that to provide solutions it will be necessary for all problems relating to the furnishing of an adequate power supply to be considered on a collective basis from an overall national viewpoint. Because of the complexity of the problems that have neither quick nor easy solutions, it is clear that much patience, balanced reasoning, research, and money must be put forth by all of us-the electric industry, environmental groups, consumers and the government.

Mr. WAGNER. In the statement we have attempted to address ourselves to the specific questions that your committee has raised, and I believe it follows pretty largely the outline that you gave us.

Our comments are based upon our understanding of problems facing utilities throughout the country, and they specifically reflect TVA's experience within the Tennessee Valley region.

TVA, with nearly 20 million kilowatts of presently installed generating capacity, is the power supplier for an area of approximately 80,000 square miles containing about 6 million people.

If it will be of use to the committee, I have a small map that shows that area, and it may be helpful to you.

Mr. HOWARD. Without objection, a copy of the map will be made a part of the record at this point.

Mr. WAGNER. TVA generates, transmits, and sells power to 160 municipalities and rural electric cooperatives. These distribution systems in turn retail the power to more than 2 million electric customers, including homes, farms, businesses, and most of the region's industries. In addition, TVA supplies power directly to 48 industries which have large or unusual power requirements, and to 11 Federal installations.

An adequate supply of power on the TVA system is important not only to electric consumers in our area, but also to consumers in other areas, for this system is interconnected at numerous points with neighboring systems with which we exchange power.

As a result, the power supply situations in 36 States can be affected by TVA's ability to generate power. Similarly the generating capability of the systems in these States can have an effect on TVA. This emphasizes the need to look at the energy situation for the entire Nation, and not just at each individual power system.

At the present time, Mr. Chairman, TVA is experiencing no power shortages, and barring unprojected schedule delays, we expect to be able to meet near term (1972 to 1975) power demands on our system with adequate margins.

I should perhaps interject here that this is our expectation, if we can maintain the construction schedules that we now have, and if interruptions to those schedules should occur, schedules will change.

However, there are other geographic areas in the country, including some near the TVA system, which we understand now are experiencing capacity shortages, or anticipating such shortages within the very near future. These areas include portions of the southeast and west central regions and localized sections of the northeast and east central regions.

Looking ahead to the 1975 to 1985 period, we at TVA, along with officials of most other power systems, believe power requirements facing each system have been accurately forecast, and that in general facilities are planned to meet this demand.

However, considering recent developments in many areas vitally affecting the construction and operation of electric utility facilities, it seems overly optimistic to expect that these planned facilities will all actually be available by planned operating dates as necessary to adequately supply the power demands during such period with safe or reasonable margins. If delays similar to those of the past few years continue to occur, it is anticipated that utilities in all regions of the Nation will be adversely affected.

For example, it now appears that TVA may experience a tight power supply situation in 1979 because recent changes in licensing procedures have delayed the construction start for one of our nuclear plants which was scheduled for operation at that time.

As to the long range outlook (1985 and beyond), it is difficult to make reliable projections as to the likelihood or the extent of power shortages. The constantly changing conditions affecting the industry, and the increasing and unpredictable amounts of time required to place facilities in service, make such estimates extremely tenuous.

TVA's experience, as well as that of the utility industry as a whole, has demonstrated that an abundant supply of electric energy is a vital

force in creating and maintaining the high quality of life that flows from a healthy and growing economy.

As this growth continues, many citizens-and we think appropriately so are now seeking to analyze the effects of economic growth, with its associated energy production, upon the utilization of natural resources to support this growth. The current energy "crisis" can probably be attributed to the tensions and adjustments resulting from attempts to achieve a proper balance between the duty to protect and conserve the natural environment and the equally valid obligation to meet the growing energy demand necessary for preserving and improving the total quality of human life.

The evolution of this process with few guidelines and little overall national direction has contributed significantly to problems confronting the electrical utility industry in meeting the Nation's power demands. Briefly, I would like to identify some basic problem-causing areas, and then, of course, we would be glad to answer your questions on the specific areas, if you have any.

The first of these is the imposition of increasingly more stringent air and water quality standards upon existing, as well as planned facilities. TVA is currently facing such a problem in regard to the continued operation of our coal-fired steam plants which now amount to approximately 80 percent of TVA's generating capacity. These plants were designed and constructed to utilize fuel from coal fields within or near the Tennessee Valley region.

Since this coal has a relatively high sulfur content, the plants were designed, and operating plans adopted, to assure adequate dispersion of emissions to keep ambient air quality-the quality of the air at ground levels, where we live and breathe-at harmless levels.

Recently, however, attention has shifted from emission dispersion to emission limitation as an air quality method. So stringent are some of the sulfur emission standards that have recently been adoptedstandards controlling the amount of sulfur coming out of the stacks without regard for the concentrations produced at ground level—and so short the periods allowed for compliance, that it would be impossible to complete the installation of equipment at all of TVA's plants within the time allowed and still maintain reliability of power supply, even if there were proven technology available for sulfur dioxide removal at large coal-fired steam plants, and there is yet no such proven technology.

Since there are not sufficient available sources of low sulfur coal or other alternative fuels, TVA could be faced with the possible shutdown or curtailed operations of such facilities unless more realistic periods for compliance are adopted.

Another example of a change in standards that TVA has experienced relates to the elimination of waste heat at our Browns Ferry Nuclear Plant. The plant was designed to comply with water quality standards existing at the time when construction was begun, and construction was virtually complete when new standards were adopted. TVA is now installing cooling towers at Browns Ferry at a cost of approximately $36 million.

These were towers that were unplanned, because there was no knowledge about the now existing standards.