POWER: Dr. Raver Marches On

Last week the biggest thing mankind has ever made began to spurt power . As Grand Coulee’s first bolt of electricity sped to Bonneville’s Government-owned transmission lines, it signaled the start of another round in an old, old fight : public v. private power.

To the people of the Pacific Northwest, public power is nothing new. Seattle has had a municipal utility since 1905, and some other towns in Washington and Ore gon have had them even longer. But behind these scattered outposts lies a web of big private systems, covering a far wider area than the famed British grid. Eleven of them have combined assets of well over $400,000,000. But compared with Grand Coulee and Bonneville, the Northwest’s private power resources are minuscule. When they reach their combined ultimate capacity of 2,438,400 kilowatts, the Bonneville Power Administration (which administers the output of both dams) will be the biggest dispenser of electricity in the world.

Boss of all this public power is a grave, greying New Deal engineer named Dr. Paul J. Raver, who became BPA administrator in 1939. Dr. Raver’s ambition is to put every kilowatt in the Northwest under public ownership. Backed by the White House and his two titanic dams, he has moved steadily toward this end. Said President Franklin Thomas Griffith of Portland General Electric Co.: “It is axiomatic that no private utility can compete with the Treasury of the U. S.”

But the path of socialized power has not always run smooth. Dr. Raver’s eager hands were partly tied by the original BPA legislation, which permits BPA to buy or build transmission lines and distribution equipment, but not to buy whole companies. (Now in Congress is a bill to give BPA this power.) Fifteen months after Bonneville’s generators started purring, the project’s first report ruefully admitted it had only one short-term customer, no transmission lines. Anti-Federal news papers headlined: “Bonneville Dam Has Everything But Customers.” Meanwhile Dr. Raver’s predecessor, the late James Delmage Ross, began to go after business through Municipals and Public Utility Districts, local autonomous public-power bodies that mushroomed after the Bonneville Act.

Mr. Ross soon found that the PUDs were not the handy tools they seemed. Able (unlike Bonneville) to take over power companies entire, they often spoiled Ross’s plans by refusing to do so, buying plants and lines piecemeal instead. By early 1939 the citizens of 14 PUDs in Washington had gone to the polls, but only seven of them voted to use Bonneville power; the others turned it down. Some claimed their own steam plants were cheaper — almost lese majesty in the Columbia River Valley.

Worst blow was delivered last year in Eugene, Ore., whose citizens turned down Bonneville power. This left 125 miles of Bonneville transmission lines, built in hopes of a big new customer, with almost no place to go. Four months later Portland turned down Bonneville too. So, this month, did Tacoma and Spokane. In these riotous elections the PUDs and the private utilities sometimes made cause against BPA. Dr. Raver’s own campaigning was often vitriolically abetted by that of Harold Ickes, who helped lose several elections by introducing the Federal interference issue into an already three-cornered fight.

With the loss of Eugene, Powerman Raver began to turn his interest from PUDs and Municipals to industrial customers. On that front he had better luck. The luck: defense expansion, which found BPA (unlike most private utilities) with plenty of firm power to spare. First, he got Aluminum Co. to build a new plant in Vancouver; soon he lured other new industries to the quiet Columbia Valley. BPA, thanks to its industrial clients, now has contracts (of varying length) totaling well over $50,000,000.

With Coulee’s enormous load added, the industrialization of the Northwest proceeds apace. But the influx of new customers does not cheer the eleven private utilities. They know Raver’s 100% public-power dream proceeds apace too.

Ten weeks ago Dr. Raver took on his Biggest private adversary first. He was bald, thin-nosed Donald C. Barnes, president of Engineers Public Service, which owns Puget Sound Power & Light. No amateur fighter is Utilitycoon Barnes ; for 35 years his company has fought off purchase by Seattle City Light. But when Raver offered to buy out Puget Sound, Veteran Barnes (with Wendell Willkie’s experience to guide him) knew the only real question would be price. Raver had another new weapon: SEC’s tentative integration plan for E. P. S. (issued this month) implies that Puget Sound has no place in its system.

As to price, nobody knows what figures (if any) have been mentioned in the Barnes-Raver tête-à-têtes. Puget Sound has total assets of $137,343,000, and E. P. S. (which owns 99.3% of the common) has sunk some $33,000,000 in the property. Before he can claim anything for his common, Mr. Barnes must get $70,000,000 for Puget Sound’s bonds and prior preference stock, and satisfy the holders of $26,400,000 of preferred, who also, with the prior preference, are owed $16,224,000 in arrearages. That means he must get Dr. Raver to pay something over $100,000,000 and persuade preferred holders to cut their claims. He may.

Meanwhile ten other Northwest private utilities watched the Raver-Barnes negotiations, wondered how soon their turn would come and what the price would be.