The Tennessee Valley Authority said yesterday that the spiraling rise in coal and uranium prices in recent years is due, in part to oil company ownership of coal and uranium interests.
"When one company owns all the sources of energy, you don't have competition." TVA head Aubrey J. Wagner said after releasing a report highly critical of integrated oil companies acquiring other fuel holdings.
Wagners said release of the three-volume report was timed to congressional debate today over a floor and amendment Sen. Edward Kennedy (D-Mass.) will offer to prevent large oil and natural gas producers from buying up coal and uranium.
The report cites the four-fold rise in coal prices the last five years, and the three-fold jump in uranium prices since 1974. Some of the price boosts the report says, "is accounted for by the uncompetitive structure of the coal and uranium markets."
The agency scores the trend since the late '60s and early '70s when many major oil companies moved into coal and uranium markets.
"Since the same group of energy companies which dominate the coal markets also dominate the uranium market, consumers are even deprived of the potential benefits of price and supply competition between those two substitute fuels," the study said.
TVA is the nation's largest coal user, consuming about 5 per cent of U.S. production, and expects to have 17 nuclear power plants in operation by 1936. The federal agency was created by Congress during the Depression and is the nation's largest utility, serving seven Southeastern states. The TVA's fuel costs have risen from $455 million in 1975 to over $730 million last year.
"The coal and uranium markets are so concentrated that any further mergers of large coal companies, uranium companies or energy companies, will noticeably increase concentration and the likelihood of uncompetitive practices," the report said.
The report called for legislation preventing further acquisitions by large oil and other energy companies. "We are now endorsing legislation that would put a stop to further mergers for two or three years to determine whether it is in the public interest or not," Wagner said.
TVA also says it will take legal action to try to bar major acquisitions it considers to have anti-competitive implications even if the Federal Trade Commission and Justice Department do not file suits against such acquisitions.
The report is the result of an investigation of coal and uranium interests the agency undertook in April, 1976, but does not call for immediate legal action against mergers which have been completed.
Ironically, the TVA considered purchasing Peabody Coal Co., the agency's largest coat supplier, after Kennecott Copper Corp. was ordered to sell Peabody by the FTC three years ago. TVA later ruled cut buying the coal company after widespread criticism that the purchase would have given a government agency a major role in the U.S. coal market.
S. David Freeman, recently named by President Carter to TVA's three-member board, said the report documents that "TVA has been facing a steadily more concentrated market structure. The prices it has to pay do not reflect the kind of competition before the oil company takeovers."
Between 1970 and 1975, TVA residential customer's electrical rates nearly doubled.
The report details concentration of larger energy company holdings in the Midwest, Northern Great Plains, and Southwestern states. Concentration is not as heavy, the report said, in the Appalachian coal states, which now supply 30 per cent of TVA's coal needs.
Two recent mergers, involving Standard Oil Co. of California's purchase of AMAX Coal Co. and General Electric's merger with Utah International, "may have substantial adverse effects on Western coal markets," the report said.