The Republican., 1925-07-23
WILD ELEPHANTS.


a coming gigantic power monopoly
will cause no tremors of fear among
well-informed people. He depicts
what is miscalled superpower as a
wild elephant which, with the power
of nationwide concentration of capi-
tai, will trample the people under its
hoofs and in the shape of exorbitant
profits, will suck their lifeblood thru
its hugh trunk. This would be awful
if it were true or could become true,
but the practice which he calls super
power, has already dispelled any
dread that It will have such effect in
the country.
Superpower is one of the worst mis-
nomers ever conceived when the word
is applied, as in the power industry.
1t is used to describe the connection Of
adjoining power systems and the sale
of surplus energy by one to the other.
By means of this interconnection the
surplus of one district may be passed
on until a shortage in a distant dis
trict is relieved. For example, be-
tween the Columbia river and the
southern border of California the
country is covered by about five COM
panies, each Independent of the others
as to ownership, operation and man.
agement. No. l company on the
north has a surplus Of energy, which
it cannot sell in its own territory. No.
on the south has a shortage on ac-
count of drought. 1t is impracticable
to transfer the surplus of No. l to 5,
but by interconnection No. l passes it
to No. 2, which does not need it but
passes an equal amount of its own
energy to No. 8, which uses it to re-
place the same amount that it passes
on to No. 4, and No. thus is en-
No. 5.
Who is injured by this operation
Nobody. On the contrary many are
greatly benefited. Sale of its surplus
energy reduces the overhead cost of
Nc. l and the price it must obtain
among its own consumers in order to
earn a fair return on its capital
overhead constituting rs to so per
cent of total cost of hydro-electric
power. Indirect purchase of that
surplus by the method described. gives
No. 3 opportunity to supply a broad
market and its customers reliable SER
vice.
Interconnection of power systems
does not mean consolidation. One
sells energy to the other, but each re-
tains its distinct identity, just as do
two connected railroads. The Pinchot
theory was demolished in advance by
Secretary of Commerce Hoover, in
the following paragraph from an ar
ticle in the Philadelphia Chamber of
Commerce News Bulletin:
Interconnection does not imply
capital consolidation or the building
up of great trusts. 1t implies the
sale and resale of power from one
utility distribution system to another,
tween utilities in the erection of CEN
trail stations. 1t must embrace mu-
nicipal plants as well as corporation
plants. 1t implies no gigantic exploi-
tation, for that is impossible under the
State regulation of rates and profits"
Regulation is effective, for it has
given the customer the full benefit of
economies made in the last twelve
years. Though Mr. Pinchot said,
"There is little or no reduction from
wartime rates." the United States
bureau of labor statistics says that
rates for electric service are now S12
per cent less than in 1913, while the
wide difference represents the prog
ress of the electric industry and the
cash value of economies, which is put
in the consumers pocket by the vigi-
lance of the state commissions. It is
not added to the profits of the COM
panies.
The trrrible monopoly which Mr.
Pinchot sees is fiction Of an imagin-
alton fervered by many years study
of water power from prejudiced
viewpoint The power industry is
fully controlled by state commissions
in forty-six states, and the companies
cannot escape. Our chief concern
should be to make regulations more
efficient, by electing men qualified by
education and experience as well as by
character, to do justice between public
utilities and the public. With such
men, the size Of the companies which
serve the public will be of small con-
sequence, for the commissions will
tame any that tries to be Wild ele-
phant.