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HomeMy WebLinkAboutThe Transferability of the TVA, BPA & Quebec Hydroexperience to AK 1980HYD 074 Alaska Energy Authority LIBUilY COPY THE TRANSFERABILITY OF THE TVA, BPA & QUEBEC HYDRO EXPERIENCE TO ALASKA By Henry Lee A paper prepared for the Office of Policy and Program Development of the Governor 's Office of Alaska THE IRA .. "!SFERl\BILITY OF THE TVA, EPA A;\D T:l:EC liYLJl-~0 EXPERIENCE TO ALASK...4. By Henry Lee ~ paper prepared for the Office of Policy and Program Development of the Governor's Office of Alaska. ; - I?\TRODL"CTI (I:\ pn,po:H_·n t s nf 1 <Jrge-sc;:lle hydro-elect ric development in .; ~:;helve prcJi,·zned llwir positit'l1 0:1 Alaska's ability to replicate t!H· success of ot.i1.::r such pro.;ra;ns in attract industrial development. T:!e ;Jurp0se of this ]J<::lper is to explore the feasibility of this premise. ifically, the paper looks at the experiences at the TVA and more ~rieflv examines the Bonneville and Quebec programs in an attempt to rench conclusions as to whether those experiences are transferrable. The paper does not represent a definitive research product, but rather prelir.1inary judgments. Hore data, especially concerning Bonneville and Quebec Hydro would have been useful to focus the issues, but the general conclusions would probably remain unchanged. The paper explores the ability of large-scale hydro-electric projects to attract industry. It does not address the job benefits of constructing hydro facilities, nor does it deal with environmental and social externalities. TVA, Bonneville and Quebec Hydro are very different in their purposes. TVA was established with a broad mandate to economically revitalize the Tennessee Valley; power production was only one of its initial purposes. The Bonneville Power Authority has a more limited mandate, to wholesale e]ectricity from hydro-electric dau.s built and operated by the Corps of Engineers and the Bureau of Reclamation. Quebec Hydro is the public power corporation of the province of Quebec and has responsibilities very similar to that of a large private utility company. There' is al::;\, a diffL'rcncc i:-: time. TVA_and Bonueville were set \J;) in ti1e rJiJ-l930s and their h~·dro projects came or. lir.e during the late thirties a:1d forties. Quebec ig just now beginning the construction i tlkir fadlities. Despite these limitations, two major conclus.ions are r1rsc., the experiences cf T\',\, Quebec and Bonneville are not easily tr~nsferrable to the Alaska situation. Of the three, Quebec is probably t!1e best model, but its enormous reserves of hydro power and its relatively ~~sv access t export markets constrain comparisons. Secondly, although there are many dissimilarities between Alaska and t:.e: T\'/' and BPA experiences, the major difference is that until the 1970s, t!.e: electric utility industrv confronted declining costs. The more electricity that was generated, the lower the unit cost of generating and distributing it. Therefore, TVA, and to a lesser extent BPA, undertook elaborate campaigns to subsidize, and subsequently increase, the demand for electricity. The greater the growth in demand, the more new generating faci~ities could be justified, the more the costs and subsequently the rates could be reduced. This phenomenon occurred throughout the United States between 1930-1970, but was more pronounced in the TVA area, since the Authority made a greater effort to subsidize demand. Hydro-electric potential in the valley was largely exhausted by the end of \.Jorld War II and from 1947 onwards, TVA has been constructing steam thermal units. In fact, one can argue that hydro-power primed the pump for inducing the demand growth '"'hich in turn justified the TVA's construction program of steam thermal plants which by the late 1960s called for seventeen new nuclear power plants. 3 As lvn1:~ 2 the dl'clini:J;;,: cost phe::omena continued, the TVA and grm,-c:1 programs paid large social dividends. Hm,'ever, in tilE: 19/Cic;, ::.'~c· situa::_i,,n clu:1ged. Suddenlv the industry faced a sc.:·:c2rio in ·,,,hich tll12 mere they bc:ilt, the higher their costs. If .:;~c "·>;s tt) graj·h the CC'St per unit of electricity produced during t::, period l93Cl-l980, one would dra,,· a "U"-shaped curve. During th·.: 1940s, '50s and '60s, the industry was on the lefthand side .,; ::.:H: curve \dth costs conti:-~uing to decline. In the 1970s and '80s, t e industr::: L•und itself on the steep part of the righthand side of L !.l' curve. l'oday, both TVA and BPA confront significant problems in that they face hi growth in demand which must be met by constructing high-cost thermal facilities which dramatically increase the rates their consumers must pay. Eventually, TVA and BPA rates will dampen the thirty-year demand growth sprial and an equilibriun will be found, but in the mean- tim..=, consu .. 1ers L1 the r.._·g::_o.l ,,,:'.11 hn;c tc go ::hrC'J[;h a cUfficu 1.t: tran$'1- tinn period .. To initiate such a demand growth spiral in the face of increasing costs of new construction is inadvisable unless 1) the reserves of hydro- electrical potential are inexhaustible over any reasonable span of time, and 2) the fluctualions in seasonal demand can be flattened or adjusted for. In t.he course of this paper, I ,,,ill focus primarily on the TVA e;;pcrience. The first section of the report is a brief summary of some of the issues relating to how energy effects industry locational decisions. The aecond section revie,,·s t.he history of the TVA, and the third section 4 looks briefly at th~ ec Hydro situ:nion CUld the Bonneville Po~'er Authorit':. At the end of sections t~·o and three, I attempt to draw o'l lusicns \d1ich arc transferrable to the Alaskan situation. 5 SECTIO?\ I. HYDRO-ELECTRICITY ,\..\D IXDUSTRIA:. Location decisions by industry are based on many criteria and ".:;ch of thE~se criteria is weighec accord to the type of industry .:t:<,_: t.'Te (lf plant bc:i.ng locoted. For c>xample, cost of labor is a major cv~ iJeration for ~any firms. Jn recent years, one of the attractions of t:;c S•.H:U1eastcrr. p;::rt nf the United States for industrial expansion has ~)•,·c:~ the presence of non-union labor. r\nother consideration hos been transportation costs. Hany firms ~e ~;' heaviJ~ the difference> between the cost of transporting the raw ~:lterials that they process vis-a-vis the cost of distributing the final pr0~uct to market. In many cases, the raw material transporation costs are significantly higher; therefore, industries such as steel locate in areas accessible to iron ore development. In terms of the timing of a locational decision, cost of capital is an import?nt ~0nsideratjon. In times when capital is expensive such as today, firms are often reluctant to finance major expansions, but rather perfer to ~ait until capital markets readjust. (From a theoretical economist's perspective, tl1is decision is largely dependent upon the expectations of future inflation rates. If a firm believes that inflation rates are going to stay about the same, the cost of capital will not be a major problem. Enwever, today most people do not believe that we are going to have double- digit inflation forever and therefore interest rates are a constraint.) Obviously, the more capital intensive a facility is, the more they will ~eight the cost of capital. In summary, industrial locations can be explained by a continuing effort to minimize total production and transportation costs. Industries confront 6 a number of g~ogra icallv-fixe~ factors such_as materials, energy resources, cli~ate and the availabili of buildings and sites. OLl:cr factors such as the m;nket for ·the finished goods and the labor supply are St':TICI·:hat more fle:-:ible, but even these factors are shaped ::: the cor:te:-:t of the region in 1'hich they are found. The locational ~Ltracti n or an~ of these ~ill vary directly with the importance of tllco factur in th prnductit1:1 process and inversely with its mobility. Tht:s in terms of hydro-electricity, its locational attraction will d~pend on its importance in the industrial production process. For "ur present purposes, the problem reduces to that of determining the i~.~ortance of electricity in specific processes. ln determining this importance, it is essential to understand the variation between heat and motive power. Heat is usuallv associated ., with fue1 such as coal, natural gas and oi}. Motive power is directly associated with electricitv. Because of the technical efficiency and convPnience of the e]ectric motor, electricity is the predominant form of energy used for motive power. On the other hand, electric space heating or other forms of electric heat tend to be more expensive than fuel-generated heat, so that it is normally not used for industrial heating. In regions such as the TVA, where both fuels and hydro power have been abundant, you find that most industries will use the hydro power for motive power, but will use coal and natural gas for heating purposes. The specific processes that are the exceptions to this rule are 1) electro pr,,cess industries, where their primary function is electro- U.tic, (as in the chemical industry), or 2) in situations where electric 7 h'"'Cil is necessary due:: to its inherent properties of controllability, cleanliness and convenience, ( uch as in many steel plants). Certain industries such as a1uminum reductio~ or smelting utilize electricity f,,,. :1e;:;t for both electrolytic purposes and heat producing purposes. hydro-po~er may seem on the surface to be an ;!ttrclctive f3ctor in industrial locational decisions, one finds its ttra tion is limited to a narro~ range of industries centering around electro-process industries and other industries which are heavily ~0tive intensive and have limited requirements for heat in their pro- d,:ction precess. Examples of the former types of i:1dustries are r:lJC'T:icals and aluminum, while examples of the latter would include econd;:n\' or consumer gcH1d industries. It is worth noting that most c•f the electro-processing industries tend to be capital intensive and tend to rely heavily on bulky raw materials which incrue significantly large transportation costs. Therefore, these industries must weigh heavily not only the availability of the hydro-power, but also the costs of capital and transportation. 8 SECTIO:~ 11. HYDt:O-ELECTRl CITY A.;\D !\"DUSTRLt.J..-DEVELOPNEl\T IN TVA AREA In this section, we will addres~ three questions: 1) to what extent did power from TVA's electric facilities attract industries to the valley? h'l;at is the nature of that attraction; 2) V.'hat type of industries develop tis a ~esult of the availability of TVA's hydro-power; and 3) to what extent is the TVA experience transferrable? His In the 1930s, the Tennessee Valley was one of the poorest regions of the country. This region of three million people had an average per capita income of $168.00 per year, or less than one-half the national average. Manufacturing employment accounted for only twelve percent of the labor force as compared to twenty-two percent for the nation. Aside from one major aluminum plant (ALCOA) and a number of iron foundries, the valley was heavily concentrated in farming, textiles and lumber, all nf which paid very lnw wages. The combination of low wages, high unemployment and a low standard of living created a tide of out-migrations which did not begin to slow dow~ until well into the 1950s. The region also was affected by major flooding problems. The Tennessee River, which was later to become the region's salvation, was a scourge of the area in the 1920s and early 1930s. Major flooding was co~non not only on the Tennessee, but also on the lower Ohio and Missi- ssippi rivers. Also, the Tennessee was largely unsuitable for any form of barge transportation save that of low-value sand and gravel shipments. In su~mary, the Tennessee Valley was characterized by an idleness of investments, unemployment and underemployment, exploitation, neglect, inefficiency and waste. ; - 9 The seeds l'-l the ':'\'/\ Act of 1933 \'ere so-wn as far back as l~orld War I, \,·hen the United States, historically dependent on Chile as a source of nitrates for Guniti s, felt that the threat of German U-boats demanded th~ devclnpmcnt of a dnDestic synthetic nitrate industry. To achieve this large hydro-electric facility were bui1t <Jt >1usc1 Sh~,a1s~ Alaharna a.icng the Tennessee River. 1"'1-ien the war eGucu, a fifteen-year debate began over the disposition of these :· c:i. iti"s. The prim.:1ry issue I.Jas ho~.-.· and by \<'hem these facilities would be 1:sed fc•r fertilizer production. Nacy alternatives "'ere proposed in t:Jc· Jf, bills that \d::re inlrc•duced in Congress ben:een 1931 and 1933 including government ownership and operation, sale to private interest, le;1se arrangements--hntll ~.-.·ith C'r lvith('Ut the hydro-electric facility. ln both 1928 and 1931, presidential vetoes prevented the enactment of a public authority to 0~1 and operate these facilities. However, with the onslaught of the depression and the election of President Franklin Ro,:Se\t: t, ti.e rnli_icol erviron!T'ent charged dra-:Jaticcll'l. In 1931, th~ Tennessee Valley Authority Act v-:as signed into la\.;, TVA Act It is important to remember that the TVA Act was not simply a bill to develop a public power authority. Rather, it was to establish a major government entity to develop the Tennessee River and to revitalize the economy of that region. Specifically, the Act called for the unified development of the region's natural resources to bring about the physical, economic and social development and improvement of the whole region. In assessing the significance of the TVA Act, it is essential that one look at both the TVA's non-power and power programs. 10 TVA's approach to industrial development was shaped by two . fac~ors. First, since agriculture had always provided the main SC\TCC of incc•me in tlle valley and employed the majority of the rk force, the primary need for developmental assistance appeared t be in agriculture. Secondly, while more industrial employment was needed in the valley to provide work for those underemployed on farms, rapid indus[rialization was not initially considered a feasi- blc solution. For these reasons, TVA's intentions initially were ~irected tc the pressing problems of the rural economy such as de- pJ0ted soils, eroded lands and uncontrolled water resources as a ~s to begin improving the valley's economic health. There were, however, two non-power programs that stand out in terms of their significance in rehabilitating the Tennessee River Valley area. The first was an intensive program to develop the phosphorous resources of ~he region as a feedstock for fertilizer. The second was a major program of flood controls and navigational improvement on the Tennessee River. Research Building upon the exis~ing ~~scle Shoals facilities, the TVA developed a major R&D progra~ for the production of various forms of fertilizer. hlhen the second 1-Jorld War became imminent, many of these plants were switched back to the production of munitions and more defense-related facilities began to locate in the TVA to build upon the nitrate/~tosphorous production base. The beneficial results of this program \>.'ere t\·JOfold. First, it gave the Tennessee Valley a 11 hc;dsto.rt in the devc·l,•pD<2lH of an integrat_ed chemica:i. products industry. For e;.;a;:;pl.::, in 1940, the o.m:r:onia industry began to relocate in the Tennessee Vo.lJey in order to utili~e the existing nitrate facilities. Sc:c;:ondly, being in tl1e heart cf the fertilizer production region, 1:1r!:ler;' i:l the T\'A \,·e:re o.hlc~ lt' take adva:1tage of the latest deve:i.opments ,_ in fertilizer research and to i!:lprove their crop production. rt In summary, it ·.,·as the fertilizer program that initially ar'tracted the chemical industry into the Tennessee Valley and that region today re~ains one of the centers for chemical production in this country. tion and Flood Control The 7ennessee River is the fifth largest in the United States and presented a major problem for civil engineers in terms of flood control and navigation. Prior to the TVA, the river not only was relatively unnavigatible, but also the periodic spring floods made it impossible to locate any form of development along its banks. The TVA proposed to place a series of high dams which woulo meet three oojectives: navigation, flood co~trol and power generation. For navigation purposes, the dams would create a series of inter-connected pools stretching 650 miles from the confluence of the Tennessee and Ohio Rivers to Knoxville, Tennessee. Nativation locks would allow river traffic to step upward or dov.nward through the pools. By 1952, TVA darns had created an unbroken stairway of lakes which provided a navigable channel 650 miles long. As a result, barge tonnage on the river increased from less than a million tons in 1933 to twelve million tons by the 1950s and over thirty million tons today, saving sl1ippers of freight millions of dollars in transporta- ticn costs. 12 Th12 t= t.:se of the: Tcnnessee Rive.r b9th for transportation and for prc,cc:ssin:-; v.•ater \..'as reflected in the expansion of industry along its shores. ~hereas investme~ts in indu~trial projects in the 1930s and l~~8s a~0unted to only sixty million dollars, industry invested almost .s L'rl :11:. red mi1linn dol:ars in the 1950s. Taking advantage of the :an pr·rtatinn improvements, more than one hundred waterfront plants ~0re built along the banks of the river. In addition, many of these indtJstrial sites would not have been available unless significant amounts ,,.· flnPd co;ltro] had been built into the Tennessee River system. T:1e alu;;:inu:>' industrv is an excellent example of the benefits of t~ese transportation improvements. Most of the bauxite in the United Stores in the 1930s \.:as lccated in the state of Arkansas. This supply became accessible by water to the Tennessee River industrial sites through these navigational improvements. Further, the finished aluminum p'oducts could be cheaply transported to markets through this same system since it fed directly into both the Ohio and Mississippi Rivers. Today, most of the bauxite is produced in Jamaica and can be brought through the ports of New Orleans and Mobile and easily transported to locations in the Tennessee Velley. However, despite this proximity to their source of raw materials, many aluminum companies are now actively e>:ploring the possibility of locating facilities in bauxite-producing countries. Part of this reason stems from the newly-created bauxite cartel which is pressuring the industry to locate investments in their countries. In part, it also has to do with the increased costs of labor, transportation and energy. In summary, although the availability of relatively inexpensive po\..:cr \vas a r,1ajc•r attraction for the aluminum industry, the accessibility 13 of lov:-cost tra:tsportation h':JS an equally signJ:..ficnat factor in the 'decision to expand the industry in the Tennessee River Valley. For our purposes of analyzing the power program's role in the on's development, we will be interested in two questions: l) how much cheaper was TVA's power than that of other power suppliers, and 2) what aspects of the power program other than low rates might have help~d foster industrial development? Initially, industrial development through low electricity rates to industry v.'as not the objective of the TVA Act. Instead, the primary o ective of tl;e authors was to provide the lowest possible rates to domestic and rural users of electricity. The goal was to electrify the homes and farms of the region, most of which had no sources of electrical po<.Jer. In better words, the power production program of the TVA was initially slated to be directed tO\.:rards social goals, not economic development goals. However, under the leadership of David Lilienthal, the TVA Board carne up with an intriguing scheme which ran contrary to the conventional thinking amongst utility planners. Lilienthal believed that by lowering costs significantly below market costs, one could develop momentum which would enable one to lower those costs still further. He reasoned that the biggest part of the cost of producing and distributing electricity was not for the generating facilities themselves, but for the development of the distribution system. Thus, once the poles and lines were in place, the incremental cost of supplying a co:-tsumer with more electricity was 14 relatively sr:1all. Therefore, the challenge f.or TVA was to create a large marke~ for its power, enabling it to take advantage of the . economies of mass production and distribution. As electricity use ir:cre~-:st~G, the unit cnst of distribution \·.:rould go do\\"!1 and the a\rerage rates t( c.o;;st;;ler '.-Jl'u}d f0llo\·.· suit. TVA proposed to lower its rates as a :.:eans to incre3SE: electricity usage, not as a response to increased use. As Lilienthal explained, "to reach the goal of wide use, rates had t~' be dramatically cut, cut not after the use had grov.rn, but as a way of ~aking it grow. This, we were convinced, would be financially sound, f c•r people \,'ould then use much more electricity and the income of the distributors wo\Jld rise proportionately. What had proven to be a good bushess rrinciple for Hc;ny Ford in the pricing of automobiles would be good business in the pricing of electricity." TV/\'s low r<Jtes, high use theory proved to be successful. TVA set wholesale rates to industry based on the two-part tariff, with a flat d2ma1.d char:e ~ased on th~ highest hourly load and an energy charge based on the total amount of electricity used. The flat demand charge, which was approximately $1.00 per kilowatt remained unchanged from 1933 to 1969. The energy charge was of a declining block variety with the per unit price declining with higher levels of electricity use. The significance of the TVA's rate structure is perhaps best seen in the residential sector. TVA's rates to consumers provided savings of as much as sixty percent of what they had been paying. In Tuppolo, Missi- ssippi, the first city to receive TVA power, average home use doubled in the first year, 1934, and the number of homes using electricity increased thirty percent. In general, TVA's residential rates were about fifty per- cent below the prevailing rates and most of the electricity bills in the 1.5 service area were forty to sixty percent Jess than those for areas served by private utilities in the Southeast. Table 1 shows the average residential electricity use and ~he ~ates for the TVA service area corn- pared to the national averages fro~ 1937 to 1979. Figure 1 shows a ·~pJriso~ hetwecn ·rvA residential bills and minimum-maximum bills for ; - sL: ;nivate utilities in tlh :;outheast region. In addition to a policv of the lowest possible rates, TVA promoted residential electricity use through other programs. For example, the Tv . .:.. established an Electric Home and Farm Authority which was designed tn increase electricitv use and improve the average standard of living. Tne EHFA was created in 1933 to promote the purchase and use of electrical appliances. It pursued its o ective primarily through generous low- interest loans and general promotional programs. The TVA approached the issue of industrial rates with one philosophy in mind. Specifically, they sought to increase the use of electricity through the sale of their surplus power to industry, thus justifying the increase load construction which would reduce costs. In other \Vords, the more power TVA could manage to sell to industry and the more industry it could attract to the Tennessee Valley, the more generating facilities they could justify building and the more they could lower the rates to their consumers. The success of this strategy again is dramatically shown in Table 1. This aggressive marketing campaign for additional industrial customers was one of the major factors in determining the success of the TVA·. ~arketing TVA's Power It is worthwhile at this juncture to say a little bit more about the n·A's marketing program. In the period between 1933 and 1939, TVA's attempt Year Fn:.: -19.·u 1934 1935 1 9 ~l6 1 rn 7 1 (! ].", ] 941 1 1 <J-.1 \ r;.:. .: '0' ' J /4 ·' 1 y:l::. 1lJ4S l () i; (, 1947 1948 194<) 1950 19'i1 19 s 2 19S3 1954 1955 1956 195 7 1958 1959 1960 1 961 1962 1963 1964 1965 1966 1967 1968 1969 k\·ih Usc liD 1 600 629 677 735 so so': 829 878 925 96S 1, 009 1, 044 1 , 1 1 7 1,186 1, 290 1,385 1,505 1,625 1 '765 1 '917 2,091 2,257 2,442 2,649 2,879 3,063 3,290 3,450 3,707 3,930 4' 138 4,353 4,545 4,814 5,072 5,434 5,788 6,259 ll.S. 16 T:\3LE l AVERAGE RES 1 DENTI AL k'w'h USE A.,\1) RATE kVn Rate S.GOC' 5.52 5.33 5.01 4.67 -~·: 4.31 4. 1 :) 3.91 --3.79 3. 6<J 3. ()6 3.55 3.47 j. :ll 3. 14 3.03 2.98 2.91 2.84 2.78 2. 76 2. 71 2.67 2.62 2.58 2.53 2.52 2.48 2.46 2.43 2.39 2.34 2.28 2.22 2. 18 2. 14 2.11 12 MONTHS EN"'DING JUN~ TVA Area Entire Yr. Avg. Bill kWh Use kwn Rate $ 36 41 51 71 92 1,379 1,449 1,247 1 '353 1,444 1 '512 1,597 1,706 1,754 1,903 2' 197 2,520 2 '765 3,079 3,612 3,927 I~ 1 :'.14 4, 734 5,240 5,812 6,023 7' 189 7,863 8,806 9,135 9,553 10,406 10,818 10,831 11,294 11,680 12,668 13,600 1.85~ ----1.84 2.06 Lll. 2.06 2.02 1. 96 l. 88 1. 85 1. 78 1.66 1. 57 1. 54 1. 48 1.38 l. 35 1.30 1. 26 1. 22 1. 16 1.15 1. 07 1. 03 0.99 0.98 0.96 0. 94 0.92 0.92 0.90 0.89 0.93 0.95 *New Classification started in 1937. Entire Yr. Avg. Bill $ 29 38 45 64 88 **Before TVA was established in 1933, the average residential rate in the Tennessee Valley region was between 5.5 and 6 cents per kilowatthour. 17 (Cont.) u.s. Entire Yr. TVA Area Entire Yr. Year k\o.'h Use kwn Rate Avg. Bill -1970 6,810 2.09¢ $142 14,560 l. 03¢ $150 1971 7,243 2. 14 155 14,400 1.22 176 1972 7)496 2.25 169 14,040 1. 28 180 1973 7,882 2.32 i83 15,080 1. 30 196 1974 8,019 2.54 204 14,480 1.45 210 1975 8,068 3.05 247 14,540 1. 76 256 19 76 8,209 3.33 273 14,370 2.26 325 1977 8,585 3.59 308 15,820 2.29 363 . 1978 8,814 3.92 346 16,250 2.59 420 . - 1979 8 1 92Qo\· 4. 1 o-:, 366-:, 15,130 3.05 461 *12 mo:~ths ending April 1979--LHest available information. Source: TVA Source: 18 FIGURE 1 CoMP.-..RISo~ OF TVA BILLS FOR RESIDENTL"L SERVICE WrrH 'i!l '.[J:--:IMt..:M A~D .1\{AXlMUM BILLS. OF SIX PRIVATE UTILITIES L"< THE SocrHE:\STER::-.: SnTES," 1924 ... No 1932·1940 2 'i:ly 8dl.o ..... ~.?//O•""S Monthly 8dls In Dollars ;-:'J /9:52 35 '59 4o r---,----.----.----,----.-----.----.----~---, 15 100 I':WH " 7 6 4 ,--,----r---.----r---.----~---r---T--~7 6 ~~----~--~--~--~~--~--~--~--~2 2S KYYII ~-,----r---~---r---..---~---r--~--~~ 2 ~~~~~~ 1924 1932 a. lh: comp;mics indudlJ arc: A!dbam3 Power Company, Montgomerr; Birmingham f:lt-crric c,),, Birmint:ham: Georgia Power Co., Atlanta; Tennessee Electric Power Co., r:h,,r:,rm•••.c:a: i\kmphi' P .. wer and Light Co., Memphis; and Tennessee Public Service Co .. Knoxville. 'fhe dara for 1939 represent 5 utilities since Knoxville was then served b)' a municipal pl:lnt and the dara for 19·10 repr<::~ent 3 utilities since Chattanooga and Memphis were also then served br municip31 pbms. Source: TV A, Anr.;a/ Repom, 1934-1940; Federal Power Commission, T rtrndJ in Rnidenri.:d R-11e< from 1924 to 1936, pp. 9-10, and Typical 'f-.'et Monthly BiiiJ for Electric Sertice (for each slate), 1937·1940. (See also Appendix Table F-2.) Cited in 19 tn rapidlv increase t!1c demand for its pcwer was contested by the private utilities who perceived the TVA as a major threat to their existence. This fear was not unrealistic. Between 1933 and 1939, the TVA assisted in tl?e formation of ninety-n:o r.1unicipally-ovn1ed distribution systems, (usu3lly by take-over of the previously o"rned private systems). IVA also made a strong push to assist in the formation of rural farm electric co-ops. Since only three farms in one hundred had electricity, major assistance was needed in the development of rural distribution systems and again the TVA was more than willing to provide a helping hand. 19~7, fllrty-seven rural cooperatives were marketing TVA power, pro- vicir:g these areas \dth electricity for the first time. Hhereas only :hree percent of the farms had electricity service in 1933, eighty percent were served by 1950. Despite these successes, the TVA was seriously hampered by a con- tinued string of court actions brought by the private sector. This litigation significantly enjoined the TVA from rapidly acquiring the wunicipal distribution systems it needed to market its power in the residential sector. Therefore, in order to develop the demand growth necessary to meet their goals, TVA officials had to rely heavily on an aggressive marketing campaign to attract large industry. By 1939, fifty-five percent of TVA sales went directly to industrial customers, primarily electro-process industrial facilities. However, with the end of the court litigation in 1939, the proportion of TVA sales going to r.1unicipal cooperatives and directly serving rural customers increased substantially and the proportion of TVA sales to industrial customers beaan to decrease. Therefore, it is fair to say that industrial customers 0 20 ht:l the TVA D·-•t or:ly to meet their need to-increase the demand for electricity, but it als0 provided an effective market during seven vears of litiguous warfare with the private utilities. 1\orld \>Jar I TVA played an imrortant role in readying the Tennessee Valley region for the war-born industrial expansion that it was to experience between 1938 and 19~5. The fertilizer/phosphate program had built up :J1; integrated cher:Jicol industry which centered around TVA's R&D facilities ot \jusclc Shoals. During the same period, the Aluminum Company of America (:\LCOA) held greutly expanded its operation, partly as a consequence of transportation improvements on the Tennessee River and partly as a re- sult of the availability of low-priced power. TVA also had the capacity to increase its generating capacity quickly and thus was able both to meet the wartime needs of expanding industrial operations and also to attract new industrial plants--particu- larly the federal government's atomic energy facilities. The Oak Ridge Atomic Energy Plant was established in the valley during World War II largely because TVA was capable of quickly providing large quantitites of power, by stepping up the completion of hydro-electric generating capacity. Similarly, TVA's ability to provide power on a timely basis contributed to the expansion of primary metals production, particularly aluminum. It was the rapid development of the nation's atomic energy network in the Tennessee Valley, first at Oak Ridge and then at Paducah, that compelled TVA to begin construction of a series of coal-burning power plants. Today, TVA's coal-fired capacity far exceeds its hydro-electric capacity. It \,·n,.; thi.s mcve from reJ innce on the Tennessee River as a source of power '- 21 to reliance on thermal generating facilities ~hat marked the beginning of TVA's departure from its original broad man.date. This is not to sav that TVA does not retain remnant~ of the original mandate, but rat:,cr that its present m:Jndate is considerably more limited than its per e t i ems of its role in the 1930s and early 1 40s. Further, while people can argue whether or not hydro-power was the principle factor in attracting the chemical industry or the aluminum industry to the Tennessee Valley, there is general agreement that it was the TVA's access to hydro-power and its ability to quickly expand that power base that attracted the atomic energy complex to the valley. Success of the TVA It is very hard to question the success of the total TVA program. It brought relative prosperity to one of the most depressed regions of the United States. Evidence of the industrial growth in the Tennessee Valley region in the early 1930s to the early 1950s abounds. Although industrial development tended to flourish throughout the soutnea&tern part of the United States, the effectiveness of the TVA program in attracting industrial expansion far exceeded that of their neighboring regions. For example, in the twenty-five year period between 1929 and 195~. manufacturing employment in the valley expanded ninety-nine percent compared with eighty two percent for the Southeast and sixty-four percent for the nation as a whole. Similarly, manufacturing income grew from 226 million in 1929 to almost 1.4 billion dollars in 1954, an increase of 502% as compared to &~2% in the Southeast and 321% in the nation over the same period. To accom~any the growing importance of this sector as a source of income ,_ in the valley was a shift in employment from low-wage industries such as lumber and textiles to high-wage industries such as chemicals and aluminum. High-wage industries more than doubled the number of their c·;·1;11 -\·c·es in the eight ye.Jrs bet\,'een 1939 and 1947. Real per-capita ir:cum£' in the valley increased thirty-nine percent during this twenty- five year period. Admittedly there were still problems. Low-wage industries still dominated the region and the enormous number of unemployed workers cdused the levels of out-migration to far exceed those of in-migration for most of this period. The Role of TVA in Industrial Development In attempting to determine the role of the TVA in the industrial development of the valley, I will address three topics: 1) the favorable conditions for industrial expansion in the valley independent of TVA, 2) the significance of TVA's programs in the valley's development, and 3) the significance of TVA's hydro-electric programs. First, the TVA region was blessed with an abundance of natural resources including the phosphate reserve, abundant supplies of water, timber for pulp and paper and significant potential for low-cost electricity. Further, the widespread underemployment of workers on farms and the de- pression-related unemployment provided a large pool of labor. Finally, the region was relatively close to many of the developing markets for both intermediate and final goods. Thus, it is fair to say that the Tennessee Valley had a broad mix of natural resources conducive to the support of a strong industrial base. 23 Significance of TVA's Programs ~ A detailed study of the TVA's programs and their effects on the valley 1 s industrial expansion conclud.ed that the programs were a signi- ficant factor behind one third of the new industrial jobs and at least one half of theincreased value added by industry. This same study found that because of the capital intensive nature of most of the TVA-oriented industries, this group accounted for well over half of the total new manufacturing investment of the valley. The specific industries attracted by TVA's programs were chemicals (including industrial chemicals); man-made fibers; fertilizers; primary metals such as aluminum and iron alloys; forest products such as pulp and paper and paperboard; electric machinery; and food processing. Of these industries, the chemicals, primary metals and paper industry plants were the most capital intensive requiring investments of from thirty thousand to seventy thousand dollars per worker as compared to an average for the region of less than eight thousand dollars. Therefore, TVA's programs can probably be credited with playing a central role in attracting new manufacturing investments. iurtner, it is im~ortant to remember that the TVA program was far more comprehensive than simply being a l1ydro-electric development program. There is no doubt that the efforts to improve the navigatibility of the Tennessee River and control its periodic flooding were major factors in the rapid expansion of the region's industrial base. Significance of TVA's Hydro-Power As we would expect, the development of hydro-electric potential on the Tennessee River was most important to the locational decisions of the electro-process industries that located or expanded in the region. But even with these industries, TVA's low-cost electricity was not the only 24 factor important in locational or e:>;pansion decisions. For instance, the largest aluminum company in America, ALCOA, had already built pro- duction plants and hydro-electric facilities before the TVA was created. In addition, the Tennessee Valley's relative proximity to both raw material sources and product mar~ets were important factors in the industry's location and expansion of production and capacity. As with the valley's aluminum industry, the electro-chemical industries that located into the region did so for reasons just as, if not more, important than TVA's low-cost electricity. These reasons included reserves of phosphate, plentiful water and TVA's own R&D facilities at >luscle Shoals. Even in those industries where low-cost electricity is mnst valued, TVA's low-ccst electricity was only one of the locational advantages of the region. Only in the case of the decision to locate the atomic energy complexes was TVA's hydro-electricity the most critical factor. But even in this instance, the main attraction was not the rel:iti'·e inexnenFive price 0f TVA e>lectricity, but rat'ber rhe ability of the TVA to rapidly expand its hydro-electric program. Therefore, it seems fair to conclude that TVA's power program was not the catalyst for, but only one aspect of TVA's efforts, to develop the industrial base of the region. Transferability of the TVA Experience to Alaska In the beginning of this section, we posed the question as to whether or not one could take the experiences of the TVA and transfer them to Alaska. The answer is probably one cannot make such a tranfer. The reasons for this judgment are several. 25 First, electricity is no longer a declining cost industry. The funcl~rnental TVA philosophy that the nore electricity generating capacity brought on line, the lower the unit cos~ of generating that electricity is no longer functional. The phenomenon that is shown so clearly in Table l has e:-:pired and been replaced by a reverse phenomenon in which the more electricity generating capacity built, the higher the rates. Further, if one uses a variety of subsidies and other incentives to fire ur the demand for electricity, one \.Jill find oneself in a demand spiral that will continually call for the further construction of new generating capacity which will be increasingly more expensive to build. Further, in the case of TVA, the distribution and transmission system was largely in place. Tl1is is not entirely the situation in Alaska, which does have a fairly good distribution system in some areas, but has almost no transmission facilities from the potential hydro-electric sites to the existing centers of consumption. Secondly, as a result of the nation's depression and the underemployment of many farm workers, the TVA region had an abundant supply of labor to meet the requirements of the industrial expansion. In fact, that expansion was insufficient to stem the out-migration from the valley. Alaska's total population is less than the unemployed and underemployed population in the TVA region during the 1930s. Third, TVA profitted significantly from the demands made upon its industrial base during World War II. It is highly unlikely that this country will ever again be involved in dra\.Jilout conventional war which would require the type of industrial expansion experienced in the TVA region and, as we shall see later, in the Bonneville Power region. Nor is it likely that an alternative shock of that magnitude will occur. 26 In fact, if one looks at recent national trends,_one sees a move away from hfi::avy manufacturing and towards service industries and light manufacturing. This is not to suggest that heavy manuf~cturing will die out in the United States, ~ut rather to say that it is unlikely that it will rapidly expand in any fashion similar to that experienced during World War II. finally, Alaska is not in the position to take advantage of the major transportation benefits that occurred to the industries locating in the Tennessee Valley. The only exception might be in areas in which the bulky raw materials necessary for certain types of metals processing are indi- genous to Alaska. For example, iron ore or bauxite deposits, if found, would be a major catalyst for the steel and aluminum industries to re- consider Alaska as a primary location. However, without these raw materials and without the transporation advantages experienced by TVA, it is unlikely that cheap abundant hydro-power will be a sufficient incentive to attract these industries to the state. Experts who have studied the TVA have reached the conclusion that it was the integrated nature of the river basin project that was the single most important stimulus for the industrialization of the valley. Such integrated river basin projects usually attract highly capital intensive and basic industries. Further, the mere increase in the physical availability of resources does not automatically create new industries. The composition of the resource development and other components of an integrated river basin project must be guided by national and international demands. Complimentary programs and projects beyond the normal scope of integrated river basin projects are absolutely essential to secure significant industrialization results. 27 Finally, if such projects are not firmly-conceived and viewed in proper perspective, they siphon off the productive energies of an . econo~y and end up as nothing more than monument building. 2.8 SECTION III. B0~'1~EVILLE AND My research of these two projects is more superficial than that undertaken with the TVA. Also, since the two projects are significantly diffe·rent, I thought it \.JOrth,-rhile to explore each separately. Bonnevi In the 1930s, the Bureau of Reclamation and the Corps of Engineers set forth to begin to harness the Columbia River both for reasons of po,.:er and flood control. Two major dams were designed with the first at Bonneville, which was to serve Portland, Oregon and the Lower Columbia region, and the second at Grand Coulee to serve Seattle and Spokane. Although construction was initiated in the 1930s on both of these darns, they were not fully operational until the last years of World War II. The Bonneville Power Authority itself originated out of a multi- year debate on how the power generated by Bonneville and Grand Coulee was to be distributed. This debate was conducted in the post-TVA Congress which was lobbied intensively by private utilities which perceived public power authorities as a major threat to their existence. Therefore, most of the early bills relating to Bonneville Power called for the establishment of an entity which would only serve large industries and would not integrate the grid systems. Finally, during the Roosevelt Administration, the Pacific Northwest Regional Office undertook a multi-year study which re- co~~ended that a grid be constructed which would inter-connect both Grand Coulee and Bonneville servicing Portland, Seattle and Spokane. Due to intense private utility lobbying, Congress was still reluctant to proceed and only established the Bonneville Power Authority on a trial basis for the purpose of going forward with the Regional Office's plan. 29 ~1en World War II broke out, the Office of Production Management and the War Production Board both felt that it was essential that a major industrial expansion be located on the West Coast for the purpose of supplying the defense industries involved in the war with Japan. Specifically, they were concerned about primary metals industries such as aluminum and steel and defense-related industries such as aircraft. As with the case of the TVA, they wanted to find an area in which electric power capacity could be upgraded rapidly. It just so happened that both Grand Coulee and Bonneville were due to be completed in the early 1940s. As a result, the Northwest had more potential capacity than any other for rapidly upgrading their system to meet the wartime needs. World War II saw the rapid expansion of the aluminum industry and certain sections of the defense industry into the Pacific Northwest. In fact, in 1944, approximately sixty-five percent of the power sold by the Bonneville Power Authority was to the aluminum industry. After the war, a genuine fear existed to the effect that BPA would have an enormous excess of capacity with no place to sell it. For this reason, the Authority undertook an aggressive marketing campaign. They adopted the TVA philosophy that by lowering rates they could increase the demand for electricity and thereby justify the construction of addi- tional generating facilities which in turn would result in the lowering of electricity costs for all of their customers. However, just as with TVA, this aggressive demand growth quickly out- stripped the availability of hydro-power. Thus, today the BPA region is confronting significant power shortages. To meet their needs, additional thermal generating capacity (primarily nuclear) will have to be constructed and this capacity will be extremely expensive. The end result is that the 30 BPA rates inexpensive for so many years, will_soon begin to rise towards the national average. The recent enactment of the Pacific Northwest Power Bill has given a strJcture for meeting the future power needs of the region, but the responsibility for utilizing this structure still lies with the four Northwest states and EPA. Conclusions It is very hard to draw any conclusions from the Bonneville '-, experience which might be transferrable to Alaska. The decisions to bui'd the hydrolele~tric facilities were not made by BPA, but rather the authority is simply a wholesaling vehicle for the federal government. Its success was largely attributable to two factors: 1) the declining cost nature of the industry, which, as forementioned, is no longer present, and 2) the dramatic increase in industrial expansion generated by the Pacific theatre of the second World War. Finally, the industrial expansion has had mixed blessings. In its initial years, it brought significant economic benefits to the North~esL r&~ion of Lhe coLntry, but in the last few years, it has resulted in the exhaustion of the limited hydro-electric potential and has created a possibility for signifi- cant shortages in the commercial and residential sectors later in this decade. Even with a rapid nuclear construction program, Bonneville Power predicts brown-outs and black-outs in the period between 1986 and 1992. Quebec Quebec Hydro-Electric Utility Corporation of the province of Quebec plans to undertake one of the most ambitious public works projects in human history. Specifically, over a period of twenty years, they plan ; - 31 to construct 36,000 megawatts of hydro-electrjc capacity from the rivers flowing into the James Bay. The Bay itself is located just south of Hudson Bay and is approximafely a thousand kilometers north northwest of Montreal. Specifically, Hydro Quebec plans to build this capacity in three phases. The first stage, the LeGrande Complex, will account for an installed capacity of 10,269 megawatts and will produce 62.5 billion kilowatt hours. Present plans call for the comple- tion of this complex by 1986. The second phase would include the con- struction of a large pump storage facility and the second stage of the Le Grande Complex and will account for another 8,000 megawatts prior to 1990. Finally, in the 1990s, Quebec plans to build a series of dams on three major rivers, the Nottaway, the Broadback and the Rupert. Specifically, they \dll divert water from the Nottaway and Rupert Rivers into the Broadback River on which they will then construct seven power houses. This complex will produce thirteen thousand megawatts of electricity and will compliment the construction of approximately three thousand additional megawatts of thermal power which will be constructed in the same period. In summary, Quebec plans to build hydro-electric generating capacity in the James Bay area which will increase their total capacity to produce electricity by over 125% within a fifteen-year period. This leads one to the obvious question of how do they plan to use that electricity. Demand Forecasting for Quebec Although I have not managed to obtain the full demand forecast for Quebec, I have read the abridged edition. Hydro Quebec estimates that its sale of thermal electricity will grow at an average annual rate of 6.2 percent between 1980 and 1996. . ~ 32 They are predicting a very slow population growth, but a significant increase in the number of households. Further they make optimistic assumptions regarding the work force and productivity--assumptions that would necessitate a dramatic reversal in present trends. However, the major assurnptio~ built into the Quebec forecast is that there will -be significant substitution of electricity for oil especially in the residential sector. Translated, this means that Quebec Hydro predicts an approximate eight to nine percent increase per year in the use of electricity for heating and a significant increase in the use of pmver for new appliances. They are predicting much lower growth in the industrial sector. In fact, their prediction for growth in manufacturing is only 2.8% per year. Finally, they are very pessimistic about the amount of conservation obtainable in the residential and commercial sectors, predicting only a 17% conservation factor over an eighteen-year period. Unless they plan to subsidize James Bay Power, it is likely that conservation will be significantly stronger than predicted. It is my judgment that Quebec Hydro is overly optimistic about their ability to switch homeowners from gas and oil to electricity. The planned construction of a natural gas pipeline from Alberta east through Montreal will result in the availability of reasonably priced gas for residential and commercial heating purposes sometime in the mid-1980s. This gas should be priced below electric resistance heating. (Unless there are some technological breakthroughs, the use of the heat pump is relatively infeasible in winter climates such as experienced in Montreal and Quebec.) 33 If Quebec continues to construct th&ir hydro capacity on schedule, it is inevitable that they will be left with significant surpluses of electricity. Even if the demand reaches their optimistic projections, the significnat variation in seasonal loads will insure that they will ~ave anywhere from three to nine thousand megawatts of surplus power in the sumner. In most cases, this would be a disastrous situation. However, Quebec has an out. Specifically, they can export much of this surplus electricity to the United States at a rate equal to at least 80% of the cost of replacement power in those states buying this electricity. In 1978, the Power Authority of the State of New York negotiated with Hydro Quebec for a thirteen-year diversity exchange agreement for 800 megawatts, which goes to meet ~ew York City's summer peak. This power is technically available to sell back to Quebec during the winter, but it is doubtful that Quebec will ever call for it. In the case of New York, Queb~c Hy~ro ~5mply de~icat~d one of their hydro facilities on the St. Lawrence River to this project. Queb~c Hydro is also negotiating several other arrangements including the sale of an equity interest in James Bay to New York and a firm power sale to New England of approximately 1800 megawatts for a ten-year period. Generally, Quebec Hydro is interested in two options. The first is the sale of firm power for a set time period which allows them to finance and prebuild power stations, which Quebec itself might not need until the twenty-first century. By prebuilding, they escape some of the problems of escalating costs and by selling the power, they get an immediate return on their investment. 34 The second type of arrangement of interest to them is the diversity exchange by which they transfer their surplus summer power to New York, Pennsylvania and New Jersey and retain that power to meet their own pea~s in the winter. In this way, they both increase their ~oad _factor by flattening the variations in seasonal peak demand, but also insure that they earn a higher return on their investment which e~ables them to offer lower prices to their own custo~ers. To an extent, exporting power serves the same function for Quebec that sales to large industry served for TVA and BPA--it provides a market for the surplus power and thereby keeps residential and commercial rates lower than they would otherwise be. There are limits to this strategy. First, many U.S. utilities are reluctant to purchase Quebec power, since they cannot earn a rate of return on that investment, but must simply pass the cost of purchased power along to their consumers. Secondly, by refusing to sell firm power ex-.:ep~ for p~-eS\'t J:€riods )[ timP-, Queber. Hydro limitr-th'!i.r potert:ial market. Thirdly, the sale of summer peaking power is only viable if made to summer peaking systems which are reasonably close to the Quebec border. Unfortunately for Quebec, the states which meet these criteria also border Ontario which just so happens to also want to sell excess power in the summer. It is not unreasonable to predict the possibility of a saturated market for summer peaking power. If Quebec summer surplus from James Bay is in the vicinity of 3,000 megawatts, they should have no problem selling it. On the other hand, if it is closer to 9,000 megawatts, they may confront a glutted market. 35 However, Quebec power should remain attractive for New England and the Mid-Atlantic area since it will be priced below electricity from oil- fired power plants. Thus, it can serve as an oil-backout option. Surn."T.a ry The Quebec situation has some factors which may be transferrable to Alaska, but it also has three significant differences. The similarities include the following: 1) Unlike the Bonneville and TVA programs, the Quebec Program has been inititated in the declining-cost era of utility construction. 2) Quebec is almost as much a winter peaking system as that of the Alaska railbelt region. 3) Quebec Hydro has managed to construct hydro-electric plants in remote northern climates below budget. 4) Quebec Hydro is very conscious of the benefits of prebuilding tneir ~apaclty to avoid iucure ~scalatiJnS in constr~ction costs. The three differences are: 1) Quebec has no plans to directly subsidize the cost of power, and therefore will probably not fall as deeply into the demand spiral as did TVA and Bonneville. In fact, by not subsidizing their rates and by building their capacity in stages, Quebec has an ability to adjust to changes in the market. Alaska, on the other hand, seems intent on subsidizing their power and will thus be more susceptible to the demand spiral syndrome. 2) Quebec has enormous hydro resources far exceeding those of the TVA and Pacific Northwest. It is hard to imagine a situation in which all of these resources are used up and Quebec·Hydro 36 is forced into an intense thermal generating construction prograrr., as was the case with TVA and Bonneville . . I am unsure of Alaska's economically developable capacity but I doubt that it is in the vicinity of 40,000 megawatts. Capacity potential of this amount gives one a lot of flexibility. ·- 3) Qu~ec has a readily available market to which it can sell surplus power. Thus, the cost to Quebec of overbuilding is small. The surplus power will be sold in the United States and will not remain idle. Further, this ability to export minimizes the seasonal load fluctuations. Unless Alaska can find a way to export power, it will not have this flexibility. 37 SECTION IV: CONCLU~IONS The questions revolving around the transferability of the TVA, BPA and· Quebec Hydro experiences to Alaska have been discussed in ~arlier sections. This final section serves as a vehicle to speak nore directly towards the lessons to be learned by Alaska from the experiences of these three hydro-electric programs. 1) The declining cost factor which shaped BPA's and TVA's success is no longer valid and therefore, the fundamental philosophy behind these programs is not transferrable given the utility economics of the 1980s, which tend to favor smaller decentralized projects. 2) The industrial expansion which resulted from World War II was one of the major reasons for the development of the primary metals and chemical industry in both the TVA and BPI rebion;. Not only ~s this p~enome~on of rapid industrial expansion not likely to be duplicated, but also recent trends show a significant shift away from basic materials-intensive goods. There seems to be a saturation effect taking hold. Finally, there is a trend to locate new material intensive industries in those countries in which the raw materials are located. In summary, there are a number of factors which will make it difficult for Alaska to utilize the availability of cheap hydro-power as a leverage to attract large-scale industrial 38 expansion. 3) In none of the three programs was the prime motivating force to attract large i~dustry. In the case of TVA and BPA, industry served as a siphon for surplus power, allowing the Authorities to take advantage of declining costs. The primary purpose of this policy was to provide benefits to the residential and commercial sectors in the form of lower rates and more reliable supplies of power. Export markets serve the same function for Quebec Hydro that industry served for TVA and BPA. There is nothing in the literature published by Quebec Hydro to suggest that major industrial expansion will result from the James Bay program, rather the program's benefits will accrue primarily to the resi- dential and commercial sectors. 4) The demand spiral syndrome which has recently overtaken both TVA and BPA is one which Alaska should seek to avoid less it create a permanent drain on the state's resources. Such a syndrome would be especially costly in Alaska, since seasonal load factors vary so dramatically and the state presently has no way of exporting its surplus power. 5) The integrated nature of the TVA's river basin program was the single most important stimulus for the industrialization of the valley. Projects that are not integrated and are oblivious to broad national and international trends drain the productive energies of an economy and end up as nothing more than monument building. 39 Alaska should insure that their projected ~ydro-electric development program be integrated into the broad dynamics of their economy. Using hydro-power as an isolated stimulus for change in their economy has a poor chance of realizing those changes. THE TRANSFERABILITY OF THE TVA, BPA & QUEBEC HYDRO AUIIIEkiENCE TO ALASKA iriti HYD 1\., I. DATE ROOM DUE BORROWER'S NAME NUMBER . HIGHIMITH #42-302L PIUNTm IN u.a.Ao