Evening star., 1934-05-16

follow volume production and lowered
costs. In no other industry will vol
ume consumption so certainly yield
larger returns. No other industry
offers greater possibilities for increased
production with such relatively small
additional capital investment and
operating expenses. Once the power
plant Is constructed, the addition Of
another generating unit represents a
relatively small additional cost. Once
the transmission and distribution lines
are constructed the delivery of greater
volume Of energy to the meters of
consumers imposes little or no addi-
tional expense for such delivery.
These are facts known not only to all
who are technically informed on the
subject. but are now fairly well under
stood by the man on the street.
May I give you one illustration OF
the effect Of lowered rates upon con-
sumption. The private power company
which serves the National Capital is
a steam plant whose fuel supply is
about 200 miles distant. Ten years
ago, it was charging the high rate of
10 cents per kilowatt for domestic
service. AS the result Of an agree
ment between the Public Service Com
mission and the company, rate re-
ductions have been made each year
for 10 years. The result today is one
of the lowest schedules for residential
use in the United States, ranging
from 3.9 cents to is cents per kilo-
watt hour. An analysis of the rate
and consumption data shows that
every time the rate was reduced the
consumption increased. The annual
kilowatt consumption per customer
was 456. while today it Is 1858, or
almost double. In 1926, the revenue
received per customer was $3068,
while the revenue received in 1898
was $3l.69, or only S1.01 greater cost
to the customer for practically double
the volume Of electric energy. While
most utility stocks have suffered rad
lea! declines during the depression,
the record shows that the value of
the preferred stock in this company
has continued without impairment
and has today a higher market value
than it had in 1926, while the earn
ings on the common stock have in
creased from $3.50 to $68.08, all
Notwithstanding a reduction in rates
in the meantime to point little more
than one-third Of the original rate.
Decrease of rates has resulted in in
creased consumption, increased earn
ings and an increased surplus In the
company's treasury.
Expects Further Reductions.
hold no brief for this rate sched-
ule as being ideal. as I am confident
yet further reductions will be realized.
But this Is an illustration of what
may be done when there is co-opera-
tive effort between the power COM
pany and the regulatory authority,
and without waste Of energy, time
and money in resisting public
regulation
An illustration in another industry
may indicate the practicability OF
this program. Industrial vision
years ago led leaders of the auto
mobile industry in the direction of
volume production, and marketing at
reasonable price. This put the auto
mobile within the reach Of the aver
age man. 1t is now the serviceable
utility for the millions. Had a short
sighted policy controlled the industry
the automobile today would be the
luxury of the few. If the electric
power industry will think construc-
lively of how the millions Of potential
customers may be made consumers OF
electricity. and how present con-
sumers may be encouraged to increase
their consumption by reduction OF
rates, I believe it will thus find a
larger measure Of permanent and de-
served prosperity.
The American farm Is an almost
virgin field inviting the resourceful-
ness. the ingenuity and the business
ability of the industry to electrify the
millions Of farms which are now
denied this great economic and social
agency. OF the 6,250,000 farms In
the United States, only 100000 have
utility electric service, while 10000
have individual lighting plants. This
leaves 5,400, 900 farms without cleo
tricity to light their homes or to re-
lteve the farmer and his family of
burdens and drudgery. Here Is a
great unconquered empire, awaiting
eagerly the coming of this benefcent
agency.
The Home Appliance Field.
Yet another field Of opportunity
for covering rates is volume pro-
duction and distribution Of the various
useful home appliances, such as re-
frigerators. ranges, washers, dish
washers, small heat units and others
too numerous to mention. These are
available today, but not at prices
within the means of the masses. 1t
follows that these appliances are not
to be generally found in the humble
homes, but only, or chiefly. in the
homes of the well-to-do. The wide
distribution and use Of these ap-
pliances would create an enormous
additional demand for power and
would also serve to equalize social
conditions in town and country.
The objective of lower rates is not
to be fully obtained by employment of
only the means I have thus far indi-
Gated, but will also require thorough
house cleaning in those portions Of the
industry which need it.
Before we may have adequately