On behalf of our Association's Board of Directors and management, I urge support of a supplemental credit system now before the House Committee on Agriculture and continuation of the 2% financing program under Title I of the Rural Electrification Act.

STATEMENT OF ROMEO M. KORTH, PRESIDENT, SOUTH TEXAS
ELECTRIC COOPERATIVE, INC., VICTORIA, TEX.

Mr. Chairman, my name is Romeo M. Korth. I am President of South Texas Electric Cooperative, Inc. who home office is Victoria, Texas. Our organization generates and transmits electric energy for its six (6) member cooperatives, who serve the rural areas of South Texas, along a considerable stretch of the Gulf Coast.

Our organization began serving power to member distribution cooperatives in 1963, and is a relatively new organization. The growth rate of our member cooperatives indicates that the power requirement is doubling every seven years, and, therefore, our organization will be forced to increase our production facilities and transmission facilities in order to meet the requirements of our members. Power production, transmission, and distribution require a great deal of capital investment on a long term basis, and if adequate loan funds at a reasonable rate of interest and on reasonable terms and conditions are not available, our organization will not be able to meet the requirements of the people of our growing and expanding area.

We urge the approval of House Bill 1400 by the committee, in order that the electric cooperatives of the nation can be assured of adequate financing with reasonable safeguards for all concerned. We respectfully suggest to the committee that no limitation be placed upon the R.E.A. program which has for more than 25 years been one of the most successful programs ever instituted by the Congress of the United States.

We respectfully request that every effort be made to prevent the inclusion of any provisions which will allow a review by the courts of loans made by the proposed Bank and/or the Administrator of R.E.A.

Experience in our state has shown us that it is sometimes possible for power companies that oppose a loan to delay and postpone through court action, the construction and operation of facilities necessary to the service of cooperative members in rural areas. We are not asking that no recourse be made available to the validity and correctness of purpose to loans which would be made by the Bank under H.B. 1400. We feel, however, that there must be available an adequate safeguard through a board of review, through review by the Secretary of Agriculture, or in some other method which would be fair to all concerned.

We request that the committee make every effort to insure that financing legislation will allow financing on rates, terms, and with conditions which will allow successful operation of the Bank and the pay-out of Government funds. It is our sincere belief that financing legislation which is too restrictive and does not allow reasonable conditions for the borrowers will not meet the requirements of the rural areas of America, and will not allow the continued necessary growth of the electric cooperative program.

STATEMENT OF BOARD OF DIRECTORS AND MANAGER, SOUTH CENTRAL
ELECTRIC ASSOCIATION, ST. JAMES, MINN.

We, the Directors and Manager of the above referred electric Association, along with almost 1000 similar groups in rural America, are very concerned with the problems facing all of us in the future if proper steps are not now taken to set up the necessary legislation which would authorize the rural electric systems to go on the private money market for part of the capital needed in the future to meet their growth demands.

The type of financing system proposed is already well established in other fields of rural financing. The Farm Credit System which includes such well known groups as the Federal Land Bank, the Production Credit Associations, and the Bank of Cooperatives have already established the fact that credit systems for rural groups are a practical solution to the problems of rural areas. It is, in fact, strange that authority for legislation to set up a Credit System for Electric Cooperatives had not been seriously considered years ago.

Our Association is a member of the Cooperative Power Association, a Minneapolis based Generation and Transmission cooperative composed of eighteen small distribution cooperatives such as ours. All of us will be directly effected if funds are curtailed or restricted during the next 10 years when a heavy outlay of funds will be required to build transmission lines and substations to meet our projected load growth. Extension of multi-phase lines in rural areas will be at an accelerated rate for some time to come and must be met if our rural economy is to be maintained. We therefore sincerely request favorable consideration to legislation now being considered which would authorize a Credit System for Electric Cooperatives. We realize details must be agreed upon but we believe the basic legislation is most urgent at this time.

RESOLUTION OF SHENANDOAH VALLEY ELECTRIC COOPERATIVE

Be it resolved by the Board of Directors of Shenandoah Valley Electric Cooperative, in regular meeting assembled at Dayton, Virginia, the 16th day of March, 1967, that by reason of its system having developed and expanded during the thirty years of its existence until it serves more than 13,000 families in the heart of the Shenandoah Valley of Virginia and in an adjacent area of West Virginia, all of which areas served by it have demonstrated remarkable growth and development during said period, and to keep apace of the continued growth of which area will require the Cooperative to borrow substantial additional funds from time to time and the present consumers continued use of electricity will require continued system improvement requiring substantial amounts of additional capital, and

Whereas, the following tabulation substantiates this growth:

This Board hereby registers its enthusiastic approval of the general aims and purposes of H.R. 1400 relating to Supplemental Financing for Rural Electrification now being considered by the Agricultural Committee of the U.S. House of Representatives; and

Be it further resolved that copies of the above resolutions be forthwith forwarded to the Honorable W. R. Poage, Chairman of the Agriculture Committee, U.S. House of Representatives, Washington, D.C.; Honorable Watkins M. Abbitt, Member of the House Agriculture Committee; Honorable William M. Wampler, Member of the House Agriculture Committee; Honorable John O. Marsh, Jr., Member of Congress from the Seventh Congressional District of Virginia; and to the Honorable Harley O. Staggers, Member of Congress representing Hardy County, West Virginia.

RESOLUTION OF SOUTHERN MARYLAND ELECTRIC COOPERATIVE, INC.,

HUGHESVILLE, MD.

RESOLUTION ADOPTED BY BOARD OF DIRECTORS AT REGULAR MEETING HELD MARCH 17, 1967

Whereas, Southern Maryland Electric Cooperative, Inc., is, and since 1937 has been, a borrower of the Rural Electrification Administration, and

Whereas, the REA program has been the means by which many thousands of Southern Marylanders have been provided with electric service who might otherwise not have it, and

Whereas, the providing of adequate and efficient service at a reasonable cost to our 33,000 member-consumers is, and must continue to be, the first concern of this Cooperative and its Board of Directors, and

Whereas, demands for new and increased service necessitates the doubling of our system capacity every seven years, requiring large amounts of growth capital, and

Whereas, the amounts available from REA loan funds are (and in the future will be increasingly so) insufficient for the purpose and must be supplemented by financing other than the Government which we feel is fair and honorable, and

Whereas, after careful consideration it is the feeling of this Board that the required supplemental financing would best be provided by the establishment of a Federal Bank for Rural Electric Systems under bills already introduced in the Congress and designated H.R. 1400 and S. 696, and

Whereas, the enactment of this legislation will at some reasonably future time, greatly reduce if not totally eliminate the need for Federal appropriations for the REA program,

Now, therefore, be it resolved, that in the vital interest of our 33,000 memberconsumers and others countrywide, this Cooperative support and work for the passage of this legislation, and

Be it further resolved, that a copy of this resolution be sent to each of our Senators and Congressmen, and to the appropriate Senate and House Committees requesting their support.

RESOLUTION OF PRICE ELECTRIC COOPERATIVES, INC.

Whereas, Hearings will soon be held before the House Committee on Agriculture regarding legislation relative to supplemental financing for Rural Electrification Administration borrowers,

And whereas, The Price Electric Cooperative, Incorporated, Phillips, Wisconsin after reviewing their financial requirements for the future, and after reviewing published information by the Rural Electrification Administration and the National Rural Electric Cooperative Association as to the financial requirements of other REA borrowers, have concluded that a rural electric credit system such as that which would be created by H.R. bills 1400, 1401, 1402, 3122, 3314 and 6026 would be the most logical approach to fulfilling these requirements.

Now therefore be it resolved, That the undersigned directors of Price Electric Cooperative Incorporated do hereby express their support of this legislation and request your support toward the adoption of legislation creating a credit system similar to that proposed in the aforementioned bills.

RESOLUTION OF NISHNABOTNA VALLEY RURAL ELECTRIC COOPERATIVE, HARLAN, IOWA

The Manager appraised the Board of the need for support from Iowa Congressmen concerning supplemental financing. After full discussion the following resolution was unanimously adopted.

Whereas, in 1951 this cooperative delivered 9,876,192 KWH to its members and in 1956, the figure was 16,779,835 KWH, and in 1966, this cooperative delivered 32,200,741 KWH to its members; and

Whereas, the increased use of electrical energy as shown above necessitates much heavier lines than were originally built; and

Whereas, engineering studies indicate that such an increase in capacity would require additional capital totaling over $5,000,000.00; and

Whereas, Northwest Iowa Power Cooperative is faced with the problem of supplying this additional power to Nishnabotna Valley R. E. C. and the other nine cooperatives comprising NIPCO necessitating the availability of low cost funds; and

Whereas, legislation has been proposed that would provide supplemental financing to enable Nishnabotna Valley Rural Electric Cooperative, Northwest Iowa Power Cooperative and other cooperatives serving the rural people to provide adequate, reliable and low cost power to members; and

Now, therefore be it resolved, that all Congressmen and Senators be requested and urged to support and promote legislation providing supplemental financing for the rural electric cooperatives of America, and that copies of this resolution be forwarded to Senators B. B. Hickenlooper and Jack Miller; and Representatives William Scherle and Wiley B. Mayne urging them to take an active part in enacting such legislation.

CERTIFICATE

I, Wilbert R. Jacobsen, Depose and state that I am the Secretary of the Nishnabotna Valley Rural Electric Cooperative, Harlan, Iowa and that the above is a true and correct copy of a part of the minutes of the Board of Directors meeting held at the Cooperative office on the date of March 9, 1967. I further state that all members were present and acting throughout the meeting.

In Witness Whereof, I have hereunto set my hand and affixed the seal of the Cooperative this 9th day of March 1967.

WILBERT R. JACOBSEN,

Secretary.

RESOLUTION OF RED RIVER VALLEY COOPERATIVE POWER ASSOCIATION

(Excerpts from the minutes of the Annual Meeting of the members of Red River Valley Cooperative Power Association held on Saturday, March 11, 1967 at Halstad, Minnesota.)

Whereas, Rural Electric Cooperatives have an ever increasing need for funds to provide adequate electric facilities for present rural consumers and to provide for future expansion to serve rural consumers, in as much as, the average growth each year in the use of electric power exceeds 7%, and

Whereas, Rural Electric Cooperatives must have a source of funds to provide a dependable source of low cost wholesale power which can best be provided from Generation and Transmission facilities owned by them, and

Whereas, the financial needs of the cooperatives for such distribution, generation and transmission facilities will exceed the amount that the Federal Government will be able to supply under the Rural Electrification Program alone, now Therefore be it resolved, that Red River Valley Cooperative Power Association does support the establishment of a Rural Electric Bank which will provide loans with the flexibility of interest rates, amortization requirements and maturities as is now being supported by N.R.E.C.A., and the continuation as long as necessary of the present REA loan program.

The motion for the above Resolution was made by member Virgil Tonsfeldt, seconded by member George Henderson and the vote recorded as follows: Ayes391, Nayes-None.

CERTIFICATION

1. Donald Helland, Being the Duly Elected Secretary of Red River Valley Cooperative Power Association Do Hereby certify that the Resolution in support of Supplemental Financing for Rural Electric Cooperatives was approved by the listed members in attendance at the annual meeting held on March 11, 1967. DONALD HELLAND, Secretary.

RESOLUTION OF PEARL RIVER VALLEY ELECTRIC POWER ASSOCIATION,

MISS.

COLUMBIA,

Whereas, it appears that present REA appropriations provided by Congress seem to be limited to approximately 300 million dollars ($300,000,000) annually, with little likelihood of any substantial increase thereof due to expenditures for the Vietnam conflict and other government programs being increased; and

Whereas, it is anticipated that the requirements of the EPA's of the United States of America are greatly in excess of that sum, with the estimate of needs for Pearl River Valley Electric Power Association for the next ten years being estimated at more than they were for the entire past twenty-nine years; and Whereas, the providing of capital to meet said needs is absolutely imperative, and the failure to so provide the fulfillment of said needs will be greatly detrimental to the area served by the Association, resulting in decrease in land values and economic activity; and

78-690-67-13

Whereas, in the inability of the Congress to appropriate the necessary capital for the Rural Electrification Administration program, it is imperative that the Electric Cooperatives be allowed to obtain financing by supplemental means; and Whereas, to effect the same there is presently pending in the United States Congress H.J. 1400, and the Board of Directors of Pearl River Valley Electric Power Association desires to adopt its resolution in support of said legislation: Be it, therefore, hereby resolved by the Board of Directors of Pearl River Valley Electric Power Association that this Board adopt its resolution in full and complete support of H.R. 1400 providing for supplemental financing; and further that in order to apprise the Mississippi delegation of its action that a certified copy of this resolution be forthwith submitted to each member of the Mississippi delegation in Congress, urging their full and complete support of said legislation.

CERTIFICATE

I, H. S. Carruth, do hereby certify that I am the duly elected, qualified and acting Secretary of Pearl River Valley Electric Power Association and the keeper of its records, and that the attached page contains and is a true and correct copy of a resolution duly adopted at the regular meeting of the Board of Directors of said Association duly convened and held in accordance with its bylaws, on March 16, 1967, at which a quorum was present and acting throughout; and I do further certify that said resolution is still in force and effect and has not been rescinded.

In witness whereof I have hereunto subscribed my name as Secretary and affixed the corporate seal of said Association, on this the 20th day of March, A.D., 1967.

H. S. CARRUTH, Secretary.

RESOLUTION OF JACKSON PURCHASE RURAL ELECTRIC COOPERATIVE

Whereas, studies and investigations over the past few years have established the need for supplemental sources of capital for our National Rural Electric program, the Kentucky Rural Electric Cooperatives, and for the Jackson Purchase Rural Electric Cooperative individually, in addition to the present REA 2 percent, 35 year program, and

Whereas, last year, and presently, legislative proposals were made to Congress and hearings were heard on the proposals in both the Senate and the House of Representatives, and

Whereas, there is now before our Senate and Congress a number of bills in which Kentucky can be playing a big part to solve the future financing problems of the rural electric program, and

Whereas, the service area of Jackson Purchase RECC is rapidly growing in the rural areas, increased agricultural products, recreation facilities, water districts, and small rural processing plants, and we can see that our financing is going to be completely exhausted before we can heavy-up for all of this increased power demand, and

Whereas, in our opinion, based on the trends of the past 5 years, our people are anxious to move back to the rural areas of this section of Kentucky if they can be assured of an adequate and dependable source of power which will provide them with the comfort and convenience of city living and an opportunity to increase their income.

Now, therefore, be it resolved, that we urge our Kentucky Senators and Representatives to support legislation that will supplement the long-established 2 percent loan program through a sound and viable rural electric credit system embodying the following:

1. Continue the present REA 2 percent, 35-year loan program for those systems which must have it.

2. Provide a mechanism which, with sufficient assistance from the Federal government, including capital investment, will give the rural electric systems access to the private money market.

3. Enable the rural electric systems to borrow funds at terms and interest rates and for purposes that will permit the systems to meet their responsibilities as rural electric utilities.

HOWARD V. REID, President, Board of Directors.