The Alabama-Coosa River System 193 



tion with covering the costs of flood protection. On the one hand. 

 Section 1 of the Act requires: 



That the power from such development shall be considered 

 primarily for the benefit of the people of the section as a whole 

 and shall be sold to assure the widest possible use particularly 

 by domestic and rural consumers, and at the lowest possible cost. 



Consistent with the requirement that power be provided at the 

 lowest possible cost, provisions in Sections 10 and 11 appear as 

 follows: 



Section 10. An allocation of cost of flood control provided in 

 addition to that required to compensate for displaced valley 

 storage and of cost of navigation shall be approved by the Federal 

 Power Commission taking into consideration recommendations 

 of the Chief of Engineers, based upon flood control and naviga- 

 tion benefits estimated by the Chief of Engineers. 

 Section 11. ... In the event the Congress by legislative enact- 

 ment adopts a policy of compensating such licensees for naviga- 

 tion and flood control costs, any such allocated navigation and 

 flood control costs are hereby authorized to be compensated 

 through annual contributions by the United States. 



Furthermore, analysis by the Public Works Subcommittee in mak- 

 ing its report to the Committee of the whole ^^ provides an inter- 

 pretation of the intent of Section 3 of the Act, which is quoted 

 below in full: 



This section requires that the series of dams to be built by the 

 licensee, together with the existing hydroelectric power dams on 

 the Coosa River, be, in the judgment of the Federal Power Com- 

 mission, best adapted to the comprehensive plan for the develop- 

 ment of such river — a requirement found in section 10(a) of the 

 Federal Power Act. One purpose of this section is to require 

 that the ratio of costs incurred by the licensee to the benefits 

 which it obtains from the development shall be such as will 

 attract the investment of private capital. 



The last sentence of this analysis of Section 3 appears to place 

 a most unusual interpretation on Section 10(a) of the Federal 

 Power Act, which nevertheless is concurred in by the Alabama 

 Power Company in its letter to the Commission dated June 27, 

 1956, which repeats the concept that "the ratio of costs incurred by 

 the licensee to the benefits which it obtains from the development 

 shall be such as will attract the investment of private capital." 



^ House Report No. 1682, op. cit. 



