The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-09-14
SHOALS PLANT
TO GIVE LOW
ELECTRIC RATE
Average of z Cents KiIO-
watt Hour Is Announced
by IVA Chief.
BOON FOR FARMERS /
Greatly Extended Use OF
Power Expected in
Tennessee Basin.
BY MARSHALL M'NEIL
Times Special Writer

lines Specidl NElteI
WASHINGTON. Sept. 14.-Elec-
tricity will be sold at an average
rate of 2 cents a kilowatt hour to
typical general consumers within
the Tennessee river basin, under the
first rate schedule announced here
today by the Tennessee valley au-
thOrity.
These rates, comparable with the
lowest in this country and Canada,
comprise part of the long-Sought
government power 'yardstick"
against which may be measured the
charges of private utilities.
The rates, designed to be a ma
ior achievement of the Roosevelt
new deal, also promise wider use Of
electric power in the Tennessee ba-
sin and consequent tightening of
the load of labor upon urban and
rural inhabitants there.
Will Sell at Wholesale
The Tennessee valley authority
will sell power wholesale from its
great Muscle Shoals plant at mills
a kiloWatt hour it announced to-
day, suggesting at the same time
the retail rates, over which 1t will
also have jurisdiction.
The mills wholesale rate will
not represent the result of a gov
eminent subsidy, but instead was
computed by David E. Lilienthal.
IVA director in charge of power
development, to make the Shoals
plant self-supporting and self-liqui-
dating. He intends to set aside, in
addition to the statutory payments
to Alabama and Tennessee of 5 per
cent of the gross proceeds of power
sales, another reserve.
The total of these two will equal
the average payments by private
utilities. Director Lilienthal is de-
termined that no one shall have the
opportunity to attack his rates on
the basis Of government subsidies
to IVA.
Rates Drop Progressively
The rates announced by IVA
and drop progressively as consumers
use more power. The next rate is
2 cents a kilowatt hour, the next
cent, the next mills To just what
blocks of power these lower rates
apply was not made clear in the
statement, which avoided COM
parsons with private rates or the
! charges made by other governmental
bodies.
IVA also intends to extend to
rural consumers the same rate as
that charged to domestic urban con-
SumerS, and this decision forecasts
electification of large farm areas OF
the Tennessee valley basin not now
served with power.
A study indicates there are more
than 100000 farms within the
region, not per cent of them served
with electricity from central
station
The Lilienthal announcement fol-
lowed weeks of study of the Muscle
Shoals plant, its cost, and replaceN
ment value, and many consultations
with rate experts in various parW
of the country.
Boon to Farmers
THE farm user, we propose" the
! Lilienthal statement continued,
should pay the same rate for en-
ergy as the town and city house
holder These schedules, both for
town and farm, carry with them
/ requirement that the customer use
a reasonable amount per month as
a minimum.
These minimum requirements
vary, both in urban and farm terri
tory, with the size Of the customers
meter Farm users will have
/ larger m inim m requirement
wherever the greater distances be-
/ tween customers result in increased
costs Of service.
These wholesale rates have been
computed on a conservative basis, to
/ cover all the costs of furnishing
service, including operation, main
] tenance, depreciation and taxes. In
addition to these costs, we have
made provision for interest and re-
tirement, although such provision
is not required by the Tennessee
Valley Authority act"