The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1928-04-27


ertheless it is true. The essential
facts are set forth in an open letter
to the electrical industry bv Morris
Llewellyn Cooke, well known engi-
! neer and economist of PHILADELPHIA
Mr.. Cookies letter is printed in pam
phlet form under the title "WHAT
PRICE ELECTRICITY FOR OUR
HOMES" 1t may be obtained on re-
quest from Mr.. Cooke at his office,
1920 Locust Street, PHILADELPHIA.
am sending you copy under separ-
ate cover.
Mr.. Cooke points out that the level
of rates charged for electricity for
power purposes has been steadily and
markedly declining during the last 5
years, but that lighting rates have
been actually rising. Average domes-
tic rates are from five to ten times
as great as average wholesale power
rates.
The net result is that domestic and
nghtlng customers pay tWo-thirds of
the total revenue from electricity but
use only one-fifth of the current con-
sumed.
Even if we Assume that the total
charge paid for electricity by all kinds
OF consumers, big and little, is reason
able (which it is not), here is clear
proof that domestic and lighting con-
sumers are practically carrying the
overhead charges for the entire in
dustry.
Any electric rate above 5 cents, Mr..
Cookies letter shows, is an unfair rate
except under unusual conditions.
Cleveland, Ohio, has long had a scent
rate-fixed by city ordinance-and
the private company which provides
the service is very prosperous. The
MASSACHUSETTS Public Utility Depart
ment has ordered the rates in Wor
cester reduced to 5 cents. and quite
recently lowered an 8.5 cent rate in
Cambridge to a similar amount.
Most of the rates in publicly owned
electric plants rlnge well below five
cents. In Pasadena publicly owned)
the average domestic rates in 1927
were 4.8 cents for lighting and 2.7
for power. In Tacoma (also publicly
oWned) the top rate for the first 40
units is As cents and after that 1 cent
with p cent rate for heating.
The average domestic rate for all
of Ontario (publicly owned) in 1925
was 81 cents, in 1926 for all the cities
Of Ontario it was 1.6 cents, for the
city of Toronto it was II cents. and
for the city of Ottawa only l cent. If
to be more than fair to the private
companies, we add another cent for
taxes, dividends, and any other posi-
bic costs the companies have to paw
that the public plants do not, still the
fact remains that in general we are
paying private companies more than
double what we ought to pay, and in
particular cases three or four or five
times too much.
These figures supply food for
thought. [ am not advocating public
ownership. On the contrary, | am
working for effective regulation. But
1t ought to be clear to any one with
a head on his shoulders that rates
charged by private plants running
from double to ten or even twenty
times the rates of publicly operated
plants can not continue without max
ing people ask whether the private
companies are not earning too much,
an: whether after all their accusation
that public ownership is wasteful and
inefficient is actually true.
Many people will make the natural
deduction that if private operation, as
the companies claim, is so much more
economical, efficient, and generally
desirable, then certainly it ought to
be able to compete on equal terms
with the, publicly owned plants which
the agents of private companies are
never tired of denouncing.
Most electric companies make a !
practice of not knowing what it costs
them to supply the different classes
OF service. Their accounting methods
often make it impossible to obtain |
costs in the sense in which that term
is used in other industries. But to
the people who pay the bills it is clear
that the rates of any particular COM
pany ought to be more nearly based !
on cost of service plus fair profit
rather than on "what the traffic will
BEAR" which is the general practice
now.
When the electric industry began,
lts customers were all lighting Gus
toners, and the demand for current
was largely in the evening. The rates
based on this limited demand were
necessarily high. That situation has
now been completely reversed.
Most of the current used today goes
to industrial uses, and domestic SER
vice is more and more, as the term
goes, off peak" If there is any dis
elimination, therefore, as between
classes of service, it should be in ia
vor of the lighting customer. AS it
is, however, the domestic consumers
are actually penalized under the cleo
trlcal industry's theory of rates.
Although the lighting rates have
been rising, the cost of nrodnco
ing electricity has been steadily fall
ng. That means that the companies
nave been taking the benefit of this
reduction In the form of excess profits
instead OF giving it to the household
9r. The benefit of all such reductions
turing the next five years should go
70 the people who pay the present eY-
,essive domestic rates.
The saloon put itself out of hnsi-
ness by its own excuses. The cleo
TIC monopoly seems to be travelling
precisely the same road. If the nres.
ent abuses continue, there can be on1v
me result. The exactions of the cleo
nc industry will drive the people to
'uDi i ownership in self defense.
The basis for these and MANY other
11ertlnent statements is set forth in
Mr. Cookies pamphlet. hone that
you VIII make such use of it. as well
Is OF this letter, as will assist in clar-
I, Lyng and correcting this vital matter