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    "label": "Letter, Assistant Director for Legislative Reference to President Dwight D. Eisenhower",
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    "title": "Letter, Assistant Director for Legislative Reference to President Dwight D. Eisenhower",
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    "ocrText": "- 2 -\nfacilities for the utilization of such nuclear material for the development\nof and subsequently the routine production of atomic power.\nOne aspect of the atomic power provisions which gives the Bureau of\nthe Budget concern is the general question of pricing and procurement\npolicy for fissionable material (primarily plutonium) produced as a by-\nproduct in the generation of electric power.\nThe problem stems from the Congress' refusal to follow your recom-\nmendation that private ownership of fissionable material be allowed. The\nenrolled bill provides for retention of title by the Government to all\nfissionable material, the payment by AEC of a \"fair price\" to licensees\nfor fissionable material produced as byproducts of power reactor operation,\nand the making of \"reasonable charges\" for materials and services supplied\nto licensees. As a result, AEC is required to buy all plutonium offered to\nit by private licensees and has no authority to refuse to issue more and\nmore licenses, unless there occurs a shortage of atomic fuel. Altogether,\nthese provisions could result, over a period of time, in heavy commitments\nby and large costs to the Government, including indirect subsidies to\nlicensees, notwithstanding your announced desire that the atomic power\nindustry be a self-sufficient one.\nThe standards governing pricing (both \"fair prices\" and \"reasonable\ncharges\") leave great discretion to AEC; the \"fair price\" for byproduct\nplutonium can be established over a wide range and will be of critical\nimportance both for the new industry (since it will determine the alloca-\ntion of costs between plutonium and electric power) and for the Federal\nbudget.\nIn the area of procurement policy, the possibly adverse budgetary\neffects of the bill's provisions could probably be overcome by AEC's\nstrongly encouraging reactor designs which would maximize the production\nof power rather than of plutonium, to avoid the establishment of an industry\ndependent upon Government plutonium purchases.\nBecause of the substantial budgetary implications of AEC's price and\nprocurement policy, the Bureau of the Budget intends to discuss this prob-\nlem with the Commission during their development of the policy.\nAs a result of the lengthy Senate debate, several \"public power\"\namendments to the Joint Committee bill were adopted. Government agencies\nauthorized to produce, distribute, or market electric energy are explicitly\nnot precluded from obtaining commercial licenses. The Atomic Energy Com-\nmission is required, in selling byproduct electric energy, to give pref-\nerence to public bodies and cooperatives or to privately-owned utilities\nserving high-cost areas. Similarly, in granting commercial licenses, it\nmust, when opportunity is limited, give such preference to public bodies\nand cooperatives. This preference guaranteed public bodies and cooperatives\nis similar to that found in existing power legislation, but it was not in\nthe bill developed by the executive branch.\nM and"
}