Evening star., 1932-07-31
BY GEORGE OTIS SMITH,
Chairman, Federal Power Commission.

LC TATE regulation has broken
down" is a comment frequent
ly heard because easily made.
~ Yet this criticism, with its
generous, countrywide appl1-
cation, is not so easily backed up with
facts of equally wide application.
Some of us began to be interested
In public regulation of electric utilities
when the commissions of New YORK,
California and Wisconsin were pioneer
agencies in this new line Of govern
mental activity. Yet in the relatively
few years principles have bsen worked
out in practice and system set up
for public control over rates, service
and security issues.
Taking into account the work of these
three older commissions. is failure the
ultimate result of their Is years OF
effort? Even a searching glance at the
record ought to discover enough evl-
dence to prove whether or not state
regulation has broken down. Can the
people control private business or Is II
beyond their power? What Goes the
record show?
The business of supplying electric
current to all users began just SO years
ago. but only in the latter half OF that
period could public regulation ps Salo
to have had much influence, II any.
Briefly reviewing this quarter century,
we find the industry growing 10 1ully
- times its 1907 size, whether meas
I1red by total plant investment, gross
revenues or population served, with
an even greater increase in current
II is against this background OF engi-
neering progress and corporate groWtn
we must measure the development OF
rrhlic regulation. True, there has been
some lag, but where or when IN human
affairs has not political actlon laggeo
far behind scientific discovery, mecnan-
Ical invention and industrial activity
It seems to be a habit OF human
nature to let enterprises Of private mt III
ative develop considerable strength be
fore seeking effective means OF protect
ing the public against any unWise use
of that strength.
Thus, the light and power utility was
given some years of freedom from in
reference by public authorities. This
respite for the infant industry may
have possessed some beneficial elements,
vet the fact remains that thereby the
infant commissions started under
handicap.
The practical test of success or failure
must be found in the record OF what
has been. Service, rates and security
issues are the points of contact be-
tween utility and public. AS to these,
the progress made in the past quarter
century Is something that Is known TO
ALL The marked contrast between the
part-time service given IS years ago
to scattered cities and towns and thaG
now available "a hours a day to 10
per cent of the country's population
is common knowledge.
Doubtless more Of the credit for all
this improvement must be accorded TO
the electric light and power industry
than to commission action. 1t was
simply good business. Yet the construc-
tive help given by State commissions
in protecting the industry from itself
must not be overlooked. The waste
involved in duplicated service, which
the commissions in earlier days had
to forbid, would have put a real bur-
den on the consumer. The commissions
required betterment of service without
calling into play wasteful competition.
And when we come to rates, the rec
ord for the rs years is a plain one. In
1907 the average rate for domestic elec-
trio service the country over was nearly
twice what it now is, with the logical
result of lowered rates-namely, that
the number of residential customers has
increased about ffteenfold In these rs
years.
Whether the fact that kilowatt
hour now costs the user some AZ cents
less than In 1907 can be credited wholly
to the influence of the State commits
sions is a matter of opinion. The fact
that the unregulated prices of other
items in the cost Of living have nearly
doubled in the same period would at
least suggest that regulation has not
failed in this matter of the price OF
electricity.
mission reports that the reductions
In rates for residential consumption OF
electricity totaled over $7,400, 900, while
the most recent reductions oroereo py
the California Commission amount 70
$3.50 600 and thus meet the petitions OF