To the editor:
I enjoyed your Dec. 19 comments about the Rural Electric Administration and those of Clare Olsen on Jan. 13 which defended REA. As Olsen says, REA has done a lot of good in the past. But, the fact is, like the Bureau of Indian Affairs, REA is a troubled agency with a lot of bureaucratic stupidity. That stupidity has gotten a once-worthy agency in trouble.The REA electric power program has approved loans to many cooperative distribution systems for schemes to generate power. Most are not profitable. REA has ordered the cooperatives to raise rates to pay for the losses. In some cases, state regulatory agencies have prohibited the necessary rate hikes. In that case, REA declares the borrower is in default. The REA borrower then files for bankruptcy protection while they work things out.
So, like the S&L's, which will cost every man, woman and child in the U.S. over $2,000 in taxes to bail out the insurance premiums, there is fear that more government funds will be required to bail out REA. This has REA bureaucrats scared and they are running for cover. The resulting delay has prevented loans for rural areas of the United States.
This head-in-the-sand attitude, coupled with congressional approval to let REA loan billions to new Pacific island nations, increases borrower overhead. The bureaucratic abuse may very well be designed to force cooperatives and others into the commercial market. But, because REA has corrupted the commercial market, REA borrowers can't get off the expensive government dole.
But, Utah's concerns are that it took congressional action to force other agencies to swap land so a costly REA-financed power plant in eastern Utah could sell enough power to pay its mortgage.
And an REA delay to release telephone loan funds resulted in a very tough letter signed by all five of Utah's congressmen to the Secretary of Agriculture, of which REA is one of his agencies.
Art Brothers, president
Beehive Telephone Company