"The Wrong Horse"

Is private enterprise always more efficient than the Government? Last week TVA Chairman Gordon R. Clapp, in a University of Chicago lecture, answered with a flat no. As evidence, he pointed to the "race" between TVA and Electric Energy, Inc., a combine of five privately owned utility firms, to supply power for Atomic Energy Commission installations at Paducah, Ky. In 1950 AEC contracted with TVA to build a power plant at nearby Shawnee, Ky., and with Electric Energy, Inc. to build a similar plant at Joppa, Ill., just across the Ohio River.

The Joppa plant was scheduled to get into operation three months ahead of TVA's. Said Clapp: "Both TVA and E.E., Inc. suffered from delayed deliveries from equipment manufacturers. Both encountered labor difficulties. Both projects missed the completion dates originally scheduled. Trade journals and some of the daily press heralded this 'race' . . . After a while, however, the cries of the professional spectators died down. It began to be apparent that the wrong horse was coming in ahead. Two years and three months from the time construction was started, the first unit at TVA's Shawnee plant was placed in commercial operation, while the smokestacks of Joppa . . . were still clean and cold."

As for costs, Clapp added, Electric Energy, Inc. had to raise its estimates from $126 a kw. to $184, while TVA kept "well within" the original estimate of $147.50. Said Clapp: "If this story has a moral, perhaps this is it: enterprise is where you find it."

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