South Bend news-times. (South Bend, Ind.) 1913-1938, 1913-11-28
TWO VERSIONS.


mated cost Of the installation OF an
independent distributing plant for
South Bend TO distribute electrical
current for street lighting. Leaders OF
the controversy have waxed eloquent
in defense of their positions and some
little acrimony has been displayed.
We are Of the opinion that the ar
gument in question is entirely fruit
less and aside from the real point in
which the people are interested.
The state public utility commission
will give 10 every customer OF public
utility the benefit Of a reasonable rate.
This means such a rate as will insnre
10 the utility company a reasona pie.
return upon its actual investment.
This actual investment will be arrived
at by a physical valuation OF its prop
critics. South Bend as a customer OF
the utility company will secure this
benefit the same as any private user.
To the end that the lowest possible
rates may be secured the commission
will not permit duplication of plants
either power plants or distributing
pants. II is self evident that sim
gle distributing plant used for trans
mission Of current for power. private
lighting and public lighting is more
economical than a duplication Of such
distributing plants for each of such
purposes.
Any plan leading to such dunlication
means uneconomic waste and is alb
surd.
Believing Mr.. Rice to be sincere in
his attitude, we think he is misguided,
and for the following reasons:
In determining a reasonable rate
the commission must Of necessity de-
termine the reasonable selling price Of
current at the generator. This will
include the cOmpany's reasonable
profit on so much OF its properties
used to develop and generate the cleo
trio current. To this basic price will
be added the further cost OF distribu-
ton. The element OF distribution will
involve classification as TO volume of
current used and the hours of service.
But the cost OF distTibution-build-
ing OF lines and maintenance must be
borne by the customers requiring the
distribution. The cost Of distribution
will be an important element in CLASH
fication and rate making.
In other words in determining.
fair rate for street lighting the COM
mission will figure proportion of the
expense OF maintaining the present
distributing plant as chargeable against
she street lighting. AS the same pole
lines are used for transmission of cur
rent for other purposes than street
lighting ia is evident that the proper
tion to be charged against street light
ing must be less than the expense of
building and maintaining an indepen-
dent system. IL is incOnceivable that
the electric company is SO eXtrava-
gantly managed that the city could
operate a distributing plant for street
lighting cheaper or with less invest
ment than pro rata share OF sys-
tenn rendering duplicate or triplicate
service.
There is another phase of the ques-
ton. If the city operated its own
distributing plant for street lighting
the existing distributing plant Of the
electric company would still De need
ed TO care for its private consumers.
The current distributed will always
have 10 pay the expense of diStribu
ton. The greater the volume Of cur
rent going over a distributing plant
the higher price the customer must
pay. lie must bear his pro rata ex-
pense for the cost Of distribution.
IL the city uses its own distributing
plant. the total expense of electrical
distribution in South Bend Will be
saddled on the private consumers.
Mr.. Rice and his frien6s are in this
position: With right To demand the
lowest reasonable rate both for the
city and private users. they advocate
an additional investment for the city
10 pay out of its treasury and would
thereby increase the cost of electricity
10 every private user. Not necessarily
increase the rate above the present
rates but increase il above what the
commission could reasonably allow if
one distributing plant rendered all the
necessary service.
II must be borne in mind that when
the commission Is through the utility
company will be allowed merely a
reasonable return on its investment.
Whatever increases the volume OF
business done with their fixed invest
ment lowers the cost Of the product.
Whatever decreases the volume Of
business dOne-either in generating or
distributing current makes for nee
essarily higher reasonable price
Mr.. Rice's activities should be d.
rected toward presenting the most ia
vorable aspect 10 the commission To
the end that ali rates be lowered rs
much as pOssible-not in adding 20 the
investment and expense OF operation
which in the end the people mus pay.