Dixon-Yates contract
Encyclopedia
The Dixon-Yates contract was a 1954 contract between the AEC (Atomic Energy Commission
) and two private energy companies, Middle South Utilities and the Southern Company to supply 600,000 kilowatts of power to the AEC for their Tennessee plant. This power would replace power from the TVA (Tennessee Valley Authority
), which could be used instead for the growing power demand of the city of Memphis, Tennessee
. The TVA had asked for federal funds to build additional generating capacity for Memphis, but President Eisenhower
opposed using taxes to provide tax-free low-interest financing to benefit one metropolitan area.
The contract, actually with the Mississippi Valley Generating Company to build a coal plant, was named after its two signatories: Edgar Dixon, the President of Middle South Utilities, and Eugene Yates the Chairman of the Board of the Southern. Ken Nichols the AEC general manager told Lewis Strauss that replacing TVA power which the TVA was contracted to supply would cost an extra $4 million to $6 million a year, and would have preferred that the TVA procured the power directly. But Strauss and Eisenhower favoured the proposal, which was approved by the Joint Committee for Atomic Energy (JCAE) when it was still controlled by Republicans.
However in the 1954 Congressional elections the Democrats, who had made an issue of Dixon-Yates, won control of the House and Senate. In 1955 they gained chairmanship and majority control of the JCAE. The new chairman, Senator Clinton Anderson, reopened the Dixon-Yates hearings to force the AEC to cancel the contract. Most of the issues between the TVA and the AEC were resolved while Nichols was general manager, but eventually the city of Memphis came up with an alternative solution to its power needs and the contract was cancelled. Dixon-Yates claimed damages, but lost because of a conflict of interest involving a Bureau of the Budget consultant. Nichols said that The AEC was absolved of any involvment in the conflict of interest. Thus ended a time-consuming political fiasco.
United States Atomic Energy Commission
The United States Atomic Energy Commission was an agency of the United States government established after World War II by Congress to foster and control the peace time development of atomic science and technology. President Harry S...
) and two private energy companies, Middle South Utilities and the Southern Company to supply 600,000 kilowatts of power to the AEC for their Tennessee plant. This power would replace power from the TVA (Tennessee Valley Authority
Tennessee Valley Authority
The Tennessee Valley Authority is a federally owned corporation in the United States created by congressional charter in May 1933 to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley, a region particularly affected...
), which could be used instead for the growing power demand of the city of Memphis, Tennessee
Memphis, Tennessee
Memphis is a city in the southwestern corner of the U.S. state of Tennessee, and the county seat of Shelby County. The city is located on the 4th Chickasaw Bluff, south of the confluence of the Wolf and Mississippi rivers....
. The TVA had asked for federal funds to build additional generating capacity for Memphis, but President Eisenhower
Dwight D. Eisenhower
Dwight David "Ike" Eisenhower was the 34th President of the United States, from 1953 until 1961. He was a five-star general in the United States Army...
opposed using taxes to provide tax-free low-interest financing to benefit one metropolitan area.
The contract, actually with the Mississippi Valley Generating Company to build a coal plant, was named after its two signatories: Edgar Dixon, the President of Middle South Utilities, and Eugene Yates the Chairman of the Board of the Southern. Ken Nichols the AEC general manager told Lewis Strauss that replacing TVA power which the TVA was contracted to supply would cost an extra $4 million to $6 million a year, and would have preferred that the TVA procured the power directly. But Strauss and Eisenhower favoured the proposal, which was approved by the Joint Committee for Atomic Energy (JCAE) when it was still controlled by Republicans.
However in the 1954 Congressional elections the Democrats, who had made an issue of Dixon-Yates, won control of the House and Senate. In 1955 they gained chairmanship and majority control of the JCAE. The new chairman, Senator Clinton Anderson, reopened the Dixon-Yates hearings to force the AEC to cancel the contract. Most of the issues between the TVA and the AEC were resolved while Nichols was general manager, but eventually the city of Memphis came up with an alternative solution to its power needs and the contract was cancelled. Dixon-Yates claimed damages, but lost because of a conflict of interest involving a Bureau of the Budget consultant. Nichols said that The AEC was absolved of any involvment in the conflict of interest. Thus ended a time-consuming political fiasco.