End of a Feud

In the hills of eastern Kentucky, the fight between the Kentucky Utilities Co. and public power groups has been almost as bitter as the famed Hatfield-McCoy feud. For 13 years the rural electric cooperatives and the private power company have blocked each other's expansion in the courts and before the state Public Utilities Commission. As a result, customers suffered with poor service at high cost. Last week the feud finally ended. Kentucky Utilities had a precedent-setting, ten-year agreement with 15 local cooperatives to exchange generating and transmission facilities. And the generators were turned on in a brand-new steam power plant at Ford, Ky. Built by the East Kentucky Rural Electric Cooperative Corp., it will also supply surplus power to the Kentucky Utilities Co., after meeting needs of its own customers.

Get-Together. The peacemaker in the feud was Ancher Nelson, 49, a plain-spoken Minnesota Republican who was a farmer until he was appointed by President Eisenhower last year to replace onetime Agricultural Secretary Claude Wickard as boss of the Rural Electrification Administration. Shortly after he went into office, heads of the East Kentucky cooperative sought him out to plead their case in the long fight. The REA had authorized $28 million in loans to build a power plant at Ford and 798 miles of transmission line. But after giving the co-ops $15 million, the Government agency had stopped handing out cash, pending the outcome of the drawn-out court fight with the private company. The co-ops wanted the rest of the money. But the private companies objected; they charged that the new lines were wasteful because they would duplicate their old ones.

Nelson, mindful of the Administration's policy of partnership between public and private utilities, suggested that the two sides get together. They reluctantly consented, met in Washington and in Frankfort, Ky., spent most of their time scowling at each other across the table. Finally, they agreed to let power experts see if a solution could be worked out from an engineering standpoint. The engineers, unconcerned with the high-level wrangling, drew up a plan to integrate the public and private power systems.

Power Pattern. To both sides it made such good sense that they agreed to interconnect the systems at 19 different points. Each would help the other at periods of peak loads, thus lessening breakdowns and power shortages. The cooperatives would abandon plans for 292 miles of lines, use the $3,000,000 saved to increase capacity of the new plant at Ford. With peace in sight, the Government released the remaining $13,299,000 of its loan to the cooperatives so that they could further expand the Ford plant and complete their transmission system.

To keep power generation balanced between public and private utilities, the next big addition to the combined system's generating capacity will be built by the private companies. Best of all, wholesale power costs to the cooperatives will drop from ii mills to 8-c- mills a kwh. Said Ancher Nelson: "The agreement might well become a pattern for other states with power supply and cost problems in rural areas."

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