The Waterbury Democrat., 1934-12-28

power industry Tn COnneetlcuL as
 compared with 1883, added taxa
 tion, largely increased cost of ma
 terials and additional labor costs
 have completely offset the gains
 made in gross revenues, keeping
 net earnings stationary and im-
 peding considerably progress
 statement reviewing the year by Viggo D. Bird, president of the Connecticut Power company.
 No prediction for the coming year Ncan be made until the entire
 utility situation with respect to
 the current federal attitude is
 clarified, MT Bird declared. His
 statement follows:
 'The year 1884 has been another
 year replete with problems for the operating utility companies, even
 though there have been variations in the nature of such problems as
 compared with the immediately
 preceding years. AS contrast to
 1883, there has been an increase fin
 output as well as in the number of
 customers served, particularly for
 the electric companies but also to
 q somewhat lesser degree for the gas companies. This in itself has
 been most encouraging trend and a distinct indication of recovery
 accelleration. As a result of 1t, gross operating incomes have in-
 creased, a factor which might un-
 der normal conditions have been
 reflected in the net earnings of the companies had 1t not been for the
 multiplicity of burdens placed
 upon them. These, in turn, re-
 suited in operating problems as
 different as they were diverse, with the consequence that net earnings
 have generally remained stationary
 and in some instances have actu-
 ally declined, as compared with
 1893.
 with the depreciation in our national currency, and the consc- quent and general increase in
 prices of all commodities, supplies
 of all nature, used and consumed
 in the generation of our product and in the rendition of our service, have so advanced in cost as to greatly increase our operating ex-
 penses and completely wipe out all
 increment profits.
 ''In addition to that, the curtail- ment of working hours, imposed by the provisions of the MIRA has materially increased labor costs which burden is still major prob. lem in an already complex and
 difficult situation.
 "In view of the fact that the
 company's policy and constant cf- fort has always been to decreasa
 rates as fast as revenues would permit, the constantly increasing nnCfc of xvn11 O z increased taxes, have made the
 maintenance of this policy increas. ingly difficult. However, in spite of these heavy odds, the customary high standard of service rendered to the public has been maintained with federal, state and locaI
 governments constantly in need oi greater and greater revenues with
 which to meet lavish expenditures
 tax levies for 1884 have increased materially over 1883, so that fo1
 every dollar received from our
 customers for service rendered twenty cents now represents taxes of one nature or another imposed ] upon the utilities by these govern.
 mental agencies.
 '.This latter situation has there. fore become one of our most seri. l ous problems, and yet it is not oul l problem alone, but equally as mucf | the problem of each and every in. dividual consumer, who in the ui. | timate analysis is the one who l-pays the taxes. This is self evident since only dollars a utility com pany has with which to defray its expenses of whatever nature arc the dollars received from the con- sumers of it's product. The only
 hope of relief from this burden ot
 steadily mounting taxes lies in the | force of public opinion directed | toward a reduction in government tai expenditures.
 Steadily increasing taxes, stead | fly widening government interfer- ence with the conduct of private utility operations can only accom- plish one objective in the 1nog run namely, that of impairing the ability of utility companies to give
 good service at continually lowered prices.
 "The activities of the Tennessee
 Valley authority embrace the po- tential possibilities of a real>social
 contribution that would accrue to the ultimate good of the utility in- dustry as a whole, as we'll as to its consumers, by spreading the gospel that lower and lower rates necessarily follow as the inevlt- able result of increasing the per customer consumption. AS dem- onstration openly subsidized by the government, it would be invalu- able, as private companies are justly barred from such subsidies and experiments. Such a result can, however, only be attained II the so-called federal yardsticks' are fairly established, with the
 proper allocation of capital costs as well as operating costs and taxes. on a basis comparable to
 that which would pertain for a
 privately owned and operated util- ity. The private utility companies
 are universally subject to state utii-
 ity commission regulation. Their
 capital cost allocations are. con-
 trolled by these regulatory bodies and their expense allocations also,
 and taxes are imposed upon the
 utilities by governmental agencies.
 In other words, their expenses are largely beyond their control, m fact