The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-02-19
WEDNESDAY. FEBRUARY 10. 1895
PRIVATE BUsINEsS-AND IVA

PRIVATE BUSINESS-AND IVA
DERHAPs the most significant thing about the
IVA decision is the fact that it did not cause
the bottom to drop out of utility stocks And there
was no panic in the offices of the power companies
operating in the Tennessee Valley
The ominous warnings Of utility lawyers-who
earn their living by being ominous-had made it
appear that the republic could not stand in the face
OF such finding; that the rising of the morn
ing after would witness the downfall of the profit
system and ruin for all.
OF such thing happened. The decision
was accompanied by the usual speculative furry in
the stock market-and nothing more.
For the fact of the matter is that utility profits
in the Tennessee Valley haves been mounting
steadily since the IVA started work there.
The power companies didn't expect it and they
won't admit it out loud They still view with alarm
when rate reductions mentioned, but they
being hurt by those reductions just the way Henry
Ford vas hurt when he decided to sell his cars at
price that would stimulate demand rather than
return him first costs.
The Tennessee Electric Power Co., forced by IVA
to reduce its rates recovered the entire amount of
the reduction within five months Since then
revenues have been larger than before the reduc-
ton.
4
bama Power the three companies in whose terri
tory IVA operates, had larger net incomes in 1885
than in Enthusiastically larger.
And Tennessee Electric even in 1884 won the
Edison Institute award for "one of the most if not
the most remarkable sales increases in residential,
commercial and industrial power in the history of
the electrical industry"
This was no accident. Georgia Power Co.. larg-
est utility in iva territory now ranks first among
all companies east of the Rocky Mountains in kilo-
watt hour sales per customer, and it's yearly aver
age is go per cent ahead of the national average.
AS for the electrical equipment business it is
obvious that lower rates mean increased volume of
electricity used and a broadened market for uten-
sils. Accordingly Tennessee Electric led the entire
country in the total number of electric ranges sold
In the first year of the rate reduction and Georgia
Power second in spite of the fact that these COM
panies rank thrtleth and twenty third respectively
in size measured by the number of residential
consumers they serve
Georgia Power sold electric refrigerators
that year than any other company in the United
States, and Tennessee was second
Georgia Power led the country in sales of ranges
and Tennessee Electric was third
1INHE figures more impressive put another
- way.
In the first year after the rate reductions Georgia
Power increased its sales of refrigerators 176 per
cent, of ranges 576 per cent, and of water heaters
1872 per cent Tennessee Electric increased refriger
aor sales 329 per cent ranges 34 per cent and water
heaters TIA per cent. This no temporary gain,
Tor percentages are even higher in the second year
OF reductions
Dealers prospecting in similar manner Ten
tative figures indicate total actual sales of electrical
appliances averaging about $500 residential GUS
toner in the IVA territory. For the country as
whole, power company sales averaged around $4.S3
customer and appliance manufacturers sales $50
customer
And this isn't all Builders and companies SELL
ing home furnishings of all kinds are finding in
creased business in the IVA country. A shiny new
electric range in the kitchen, running water and
electric lights inspiring other improvements.
Seven per cent of the homes to which electricity has
been brought in one Alabama county have been
thoroughly remodeled or replaced with new struc-
lures.
In short the IVA low.rate yardstck is turning
out to be high-proht yardstck that any utility in
the country may use to its own gain Companies and
regulating commissions have been afraid to trust the
theory that reduced rates will increase business and
net income. iva proved it would work. The TvA
decision may yet go down in history as one of the
great victories of all time for business private as
well as public