Shotgun Wedding

As boss of Pacific Gas & Electric Co., the West Coast's biggest utility, James B. Black has carried out two basic ideas. The first is that power is the farmer's best friend. The second is that P.G. & E. is the one to supply that power. In California's 400-mile-long Central Valley, Jim Black's first premise proved right. Once a desert, Central Valley has blossomed into a rich farming area, made California the biggest U.S. producer of fresh vegetables. This has been due to cheap P.G. & E. power, which enables farmers to pump water from wells all over the valley.

But on the second score, Jim Black has long had a battle on his hands. His opponent: the Interior Department's Bureau of Reclamation, which stepped into the valley with an irrigation plan 16 years ago and has been trying to put itself into the power business ever since. In the dog-eat-dog fight between public and private power, free-enterprising Jim Black scuffled with the bureau from coast to coast. Once when the bureau tried to sign up a small California town as a customer for its cheaper power (cheaper chiefly because the bureau paid no taxes), Black beat the plan in a public referendum. Last week Jim Black scored his biggest victory, and thereby put off the threat of competition from the bureau for at least ten years.

Power but No Glory. The fight started in 1935 (the year Black became P.G. & E.'s president), when the Bureau of Reclamation started building Shasta and Keswick dams to get water and power to irrigate the southern part of Central Valley. The first generating units were completed in 1944, yet the bureau's irrigation program won't get under way until this summer. Thus for seven years the bureau has had plenty of power but nothing to do with it.

The public power-minded bureau had a solution: start competing with P.G. & E. But before congressional committees, Black argued that the bureau would merely be duplicating lines that P.G. & E. already had. Black's solution was for P.G. & E. to buy the bureau's power at the dams and sell it to its own customers. When Congress showed no signs of providing a duplicate transmission system, the bureau finally agreed to Black's plan.

Second Thoughts. Then it tried to get into the power business through the backdoor. Under law, the bureau is obliged to give preference in the sale of public power to such public customers as municipalities. Therefore, the bureau asked P.G. & E. to deliver some Government power to "preference customers" on a fee basis, instead of buying it and then reselling it. Black refused, saying it would simply be turning over some of his best customers to the Government. At that, the bureau went to Congress again, asking for its own transmission lines and steam plants.

This time Congress was more receptive, and Black gave in, rather than face the competition of the bureau's cheaper power. But the bureau, still hoping for its own transmission system, agreed to supply P.G. & E. only day-to-day, would sign no contract. At this, even Congress got fed up, told both P.G. & E. and the bureau last year to get together on a contract.

Wary Bridegroom. Under a contract to be filed this week with the California Public Utilities Commission, the bureau agrees to let P.G. & E. wheel (i.e., transmit) Government power to preference customers for ten years. In addition, P.G. & E. will still buy surplus Government power at the source (i.e., Shasta and Keswick), for sale to its own customers.

While it was a victory for Jim Black and private power, the deal with the bureau is also a shotgun wedding with Congress holding the gun, and Black is wary of the marriage's success. Says he: "We can't afford to relax an instant."

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