Evening star., 1934-08-06
POWERPLANSEE
POLICY REVERSAL
Other U. S. Agencies Cam
paign 10 Cut Outputs as
President Urges increase.
NY DAVID LAWRENCE.

power development, Is complete re-
gersai Of the preaehments by other
agencies Of the Federal Government.
which have insisted that excess plant
capacity in industry must be discour-
aged and that new capital must not
be put into fields already oyerbuilt.
The total excess of generating ca
pacity In the United States today is
as PER cent.
Tne plans Of the President for de-
selopine hydro-electric projects would
give the United States an output OF
electrical energy every year equal TO
two-thirds OF the total central station
load which America has developed In
the last so years And IL can hardly
be said that the utility companies un-
derestirnated the needs of this the
most highly electrified country in the
world. For one Of the throubles
which the utility industry is suffer-
ing from today-overcapit pitalization-
Is directly due to optimistic anticipa-
ton OF future growth.
Use Il PuEEIing.
Hence. Just what the American
people are going 10 do with all this
surplus power is something Which
Is most puzzling. For. whenever the
big proiects--on which the Federal
Government would ultimately spend
o billion dollars-are discussed by
the proponents OF water power devel-
opment. the argument usually made
Ia that the people will benefit by
cheaper rates.
One simple way to get cheap rates
with eficient operation would be to
subtract from the light bill of the
American people about IA cents out
OF every dollar OF consumer revenue
received by the electric power COM
panieS. Thus. a reduction of IA per
cent in the total bill of $500, 900 900
for home use Of electricity would
save the consumers about S84 900 900.
This is what the utilities pay in taxes.
II the utility companies could chop
off tnis tax bill. they, too. could
reduce rates. And that's what Fed
eral and State operated plants will
do-they will pay no taxes. People in
other sections of the country will pay
the subsidies and deficits.
Mr.. Roosevelt thinks this is justified
because, as he said in the West. the
United States must be developed
everywhere in the hope of moving
more population TO the sparsely settled
areas. This is q splendid national
concept but the usual way to handle
1t is not to build more houses and
pave streets and make a lot of cleo
trical power available until a sub
stantial number of people has shown
some signs of buying railroad tickets
or migrating to the new areas. The
commercial development companies
are, as a rule, active with their booster
advertising, seeking new industries. to
induce people TO move into the Western
communities and rural regions.
One of Smallest Items
The big question is what the people
are going to do when they get to the
realm of cheaper power Electricity is
one of the smallest items in the house
holders budget.
It is true the use of electrical ap-
pliances is being stimulated, and
America has only scratched the sur
face of the business 1t can do In elec-
trical appliances But the real cost
is not the hydro-electric projects or
the generation of electrical energy.
It's the transmission and distribution
systems, which represent 80 per cent
of the total cost of doing business.
Already the country has big system
for distributing electrical energy. The
investment amounts to about sl4,-
600 900 900.
Also, the coal industry thinks the
steam plant is just about as economi-
cal as the water power project. The
National Coal Association has been
pleading with Federal Government
agencies to stop lending money for
the building of power plants that take
away the market for coal. The posi-
BILE plight of the miners who are to be
thrown out of work permanently If
Goals uses are curtailed is contraSted
with the temporary advantage of the
employment given on construction
projects.
Some idea of the investment of the
American people in existing power
systems may be gained by study of
recent figures which show that 10 per
cent of all the stockholders own only
one share of stock, and that three
fourths of the total number of stock
holders own 10 shares or less
It is interesting to note that two
thirds OF all the stockholders are
women. Through the fact that saw
1ngs banks and insurance companies
and educational institutions own large
quantities of utility securities, it may
be said that the ownership of the
public utilities of America, against
which the Government is about to en-
gage in competition through the gen.
Grafton Of excess power, is very widely
oiffuSed among large percentage of
the people. 1t runs into many mil
lions of individuals.
Rates Bound to Come Down.
Rates are bound to come down
when there is surplus of power, but
nnally they come to the point of dim
inlShing returnS-the below cost line.
The municipal government pays no
taxes on its plant buys cheap power
from the Federal Government. and
the people in other parts of the coun-
try make up the difference. This
procedure ultimately would force the
private company TO liquidate its in
VeStment. Already, the example Of
what happened at Knoxville, Tenn.
this month, when private company
was forced out Of business by the
Federal Government, Is before the
country.
Nearly two years ago, when Mr.
Roosevelt was campaigning, he made
his famous power speech at Port
land, Greg, He said then that
whether on Statewide or Federal
owned power sites, private capital
should be given the first opportunity
10 transmit and distribute the power
on the basis of the best service and
the lowest rates to give reasonable
profit"
In last weeks speech at Portland
the President made no reference to