Evening star., 1932-10-04

fore congressional committees 10 years
ago.
/, Since then I have noticed that the
possibility of overlapping jurisdiction
and duplicated action is sometimes
viewed with alarm by power company
officials, but as yet the public has not
voiced any loud complaint that 1t is
overprotected; better some overlap
than any gap; better oyerprotecti0n
than interpretation. The editor of a
technical journal recently asserted that
the basic unit in power engineering Is
the dollar-the unit of measurement
In my own efforts to comprehend the
economies of the electric power and
light business find that 1t helps to
distinguish in that business two kinds
Of do!lars-the investors dollar and
the customers dollar To have a gen.
eral idea Of the size of this industry
you need keep in mind only two ar%
proximate figures: there are l3 billions
OF the investors dollar-the value Of
thes power stations and Of the trans
mission and distribution systems that
cover our country with a network of
wires-and billions of the customers
dollar-the annual gross revenue from
this far-f1ung capital investment.
Leaving now those billions-which
few. if any. Of us can fully compre-
hend-let us think in terms of the
single dollar, on which the average
gross annual return is less than Is
cents, so that, taking one year with
another, a customers dollar Of new
business means about six Of the In
vestor's dollars must be found as new
capital.
Need Of More Dollars.
1T Is this continuing need OF more
dollars from investors that makes the
industry's credit standing with the pub
lie a matter of vital concern As
public Utility the industry simply has
to grow, and plainly the interest rate
demanded by the investor directly af-
fects the cost Of electricity to the con-
sumner. So it follows that the financial
health OF a power company Is a matter
Of large public interest. and thus de-
serves to be carefully looked after by
regulatory agencies.
Now, where does the investors dol
lar go? Taking the last Ave years, !
find that 10 cents of every new dollar
went into building steam plants, 8 cents
for building hydro plants. 14is cents
for additional suhstations, 1871 cents
for new transmission lines, 30 cents for
extending the distribution SYSTEM and
II cents for miscellaneous items. You
will note that only q little over one
quarter OF the whole construction ex-
penditure In these five years was for
generating stations-indeed, less than
was spent alone for the distribution
lines needed to reach new customers.
AS review the rapid growth Of the
power and light business and the great
improvement in the quality Of service
rendered. 1t Is this striking record of
material achievement that has won my
admiration through the years. I have
been In touch with the engineers and
executives who have contributed the in
ventive genius, financial daring and ef-
fective management necessary to create
q new major industry Yet while We
can frankly assert that in this industry
private initiative has glorfously sue
ceeded in its conquest Of material forces
we must no less frankly admit that the
same industry presents a sad record of
inglorious failure at many points where
human relations enter as the determin.
ing factor To put it politely, the power
industry has manifestly been weak in
its psychology and sociology The los
ing fight of the public utilities against
regulation has continued for quarter
OF century. Way do the power inter-
ests occupy one trench after another in
their retreat? They are only furnish
ing added excuse If not indeed some
reason, for continued attacks against
private ownership.
However. the business may look bet
ter TO us after we analyze what the
consumer gets for his dollar Even
though ownership Of the power and
light business is so broadly distributed
In this country that it has been called
the most practical socialism on earth, :"
you investors number only TIVE or three
million, while more than 20,000.000 of
us householders are regular customers
Of the power companies. The Gus
toners dollar, then, the dollar that
pays our monthly light bill, Is the one
that we are all interested in.
Average Bill S2.79.
"The country over, the consumption
Of electric current in the average home
Is now so kilowatt hours month, end
the average bill Is $2.79. At the aver
age rate. the customers dollar now
buys nearly 18 kilowatt-hours, whereas