Evening star., 1932-01-24
POWER SITUATION CALLS
FOR STRICTER REGULATION
Need sor More Effeotive Supervision OF
Industry Arises From Increase
in Popular Ownership.

long 10. or at least are controlled BY.
some 80 so-called holding companies.
Then the next question Is, who owns
these operating and holding companies?
The answer isn't at all easy. Perhaps
the most that can be said Is that
1000, 900 or more Of you own the stocks
Of these public utilities. Perhaps no
kind of investment is more popular,
no kind OF stock Is more generally
owned, this wide distribution being due
to the customer ownership plan in
vented by the electric light and power
people.
Popular Ownership q Fact.
In several parts of the United States,
East as well as West, we know that the
ratio OF local owners to customers Is
something like one to ten. In the last
dozen years the customers have pur-
| chased IA per cent OF the securities
sold by the light and power companies.
To that degree we can say that the
consumers own the power plants that
generate the electricity they use, and
participation in the profits is divided
among millions of widely scattered men
and women. Popular ownership of the
power industry Is already fact.
What, however, would be the result II
every customer was also an owner in
this electric light and power business?
What would happen If there were 10
times as many owners as rlow-20 ,000,-
600 stockholders rather than 10000 900?
What would father have to pay then,
II the consumers themselves rather than
any so-called power trust furnished the
capital invested in generating plants,
transmission lines and distributing sys-
TENS?
Although the residential customers
pay about one-third of the revenues OF
the power companies, they consume
only one-sixth of the current. How
ever, as the average householder or
retail customer is the most exacting Of
all the consumers, big or little, in that
he uses most of his current in a few
hours of the "a, it seems probable that
If he represented the only class of Gus
toners, to meet his demands adequately
would require a generating capacity
much larger than one-sixth of the
present and distributing system not
much less extensive than the present
SO, as father pays one-third of the
bills, we might, for the purpose Of our
Illustration, let him and others like
him own one-third of the power busi-
ness. These 100000 customer -own-
ers then would need to invest In the
power companies of the country about
9fJUVOiUOV,UUU, OF SzUU apiece.
Who Gets S21?
or course, on this stock, at the latest
census figure of 66 per cent as the
average dividend rate, father would re-
ceive an income of 1920 year. His
average annual payment, however, for
electricity for heme use Is $3410, so
that there would be difference Of
$1,000 year between his bills and his
| dividends Whnrn This
There's the rub of the whole power
question, Who gets it?
Now, there are available some figures
on the breakdown of the average dollar
received from the ultimate consumer OF
| electric current, and these percentages
can be used to trace out the where
abouts Of the missing 5000.
The largest single item In expendi-
lures by the electric light and power
industry consists of wages and salaries.
even though relatively to its gross reve-
nue. this industry has a pay roll less
than half that of the railroads Yet
even though the generation and dis
trlbution Of electricity is labor-cheap.
more than third of that $1,000, or
s7.26, goes for the pay roll
The next largest item comprises
taxes OF all kinds-Federal, State and
local-to the amount of S3.44. A little
more than SO is spent for fuel-less
than third Of the electricity produced
Is now generated by water poWer-and
somewhat more thans$2 is the cost OF
the other supplies and materials neces-
sary for operation. Two other items
that are relatively unimportant in this
industry as compared with other lines
OF business are uncollected bills and
rents, each only IA cents.
Regulation Is Necessary.
The remaining s453 goes for depre,
! citation and the other reserves abso1
lutely necessary to safeguard the in.
vestment of the stockholders and the
service to the consumers. Without this
reserve the average rate for home cur
rent could be reduced "a of a cent a.
klowatt hour or the dividends could
be increased 2 per cent, neither OF
which would seem preferable to having
this moderate factor Of safety present
In the undertaking.
ownership of the electric light and
power business of the country Is in
creasing. And the protection of the
millions of private investors, not to
mention the insurance companies and
savings banks in whose solvency the
average citizen has a real interest, be-
comes an added reason for strict su-
pervision of the power industry.
Regulation by both State and Federal
commissions has already contributed to
making the industry more reliable and
conservative, as well as more efficient
ana progressive. With the increasing
dependence upon the electric current
by the country's industries, homes and
farms, and the broadening circle of in
Vestors as well as of customers, the
present national need Is for more ef-
fective, rather than less active, regula-
tion in the public interest.
However. considering it simply as the
source OF one item in the family budget,
the electric light and power business,
with its monthly bill of only s2.84 to
the average householder, might reason
ably, be regarded as presenting less of
an lmpelling political issue than the
quality of the nickel cigar, once pro
posed by Vice President Marshall, as an
economic problem Of national import.
tcopyright. 1882, by the North American
Newspaper Alliance, Inc)