Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1937-01-19
lax on Municipal Power
Plants Seriously Talked
Continued from Page One.l

TENS, according to figures compiled
by the Federal Power Commission in
Washington, as of January 1, 1885,
while the list complied by the State
Utilities Commission as of January
L, 1886, shows "a municipally-owned
and operated electric systems.
Ten of these municipal electric
plants charge their customers rates
more than 100 per cent higher than
the rates now charged by the Carolina
Fower and Light Company and the
Duke Power Company, while one of
them charges a rate that is 200 per
cent higher than those of the two
leading private utility companies.
With the single exception of Rocky
Mount, which within the last two
weeks has reduced it's rates to the
same level charged by the Carolina
Power and Light Company these 9th
er municipally-owned systems charg-
ed anywhere from 10 per cent to 200
per cent more for current to domestic
users than do the private utilities
companies, figures obtained today by
this correspondent from the State
Utilities Commission show.
Private VS.. Public.
Yet these municipally-owne or OPP
Grated electric systems pay no taxes
to the State whatever, while from IS
to 20 cents of every dollar collected
by the Duke and the Carolina Power
and Light Company from their Gus
toners is paid over to the State in
taxes, which in turn are distributed
back to the cities and towns having
TO- al ~ II.
port of the schools and other State
activities. For the calendar year 1885,
the privately-owned electric compan-
les in the State paid $3,8OO,O0O to the
State in franchise and corporation
income taxes, while the 81 municipal
ly owned plants did not pay the State
one cent
If the municipally-owned electric
system should be brought under the
franchise tax, as Representative Vog-
Ter maintains they should be, they
would pay the State approximately
S500000 a year or more in taxes, on
the basis of figures obtained from the
Utilities Commission. If these NUM-
cipal electric systems would reduce
their rates and get them in line with
those of the private utilities, they
could greatly increase the consump-
ton of current and hence increase
the gross revenue of the companies,
just as the private companies have
done, observers agree. But in addi-
ton to paying no State taxes, these
municipally-owned plants likewise do
not come under the jurisdiction of
the State Utilities Commission, s.
that it is without pawer to bring a
bout any rate reductions.
Rates DECIDEDLY Higher.
Since the municipal plants do not
have to pay any State or Federal
taxes, their operating costs should be
much less and they hence should be
able to supply electrity to their Gus
toners more cheaply than the private
companies, it is pointed out here. But
in So out of 81 cities and towns hav
ing municipal systems, the rates
charged are decidedly higher than the
rates charged by the private compan-
les doing business in the same sec
lions of the State, the figures show
The reason for this, according to
those who know the inside history Of
municipal ownership and rate making,
is that many of these cities and
towns are weighing their rates with
! the difference etween their tax rev.
enue and their municipal expendl-
lures, so that from 10 to 100 per cent
of what their customers pay for cleo
tricity is really taxes which should
be levied against property owners, but
which are levied against electricity
users instead.
Rate Cut Would Boost Value.
The belief in informed circles is
growing, however, that if the cities
and towns having municipal electric
plants would reduce their rates, the
increase in volume would more thar
offset any probable loss, also that
! they can afford to pay the State ta2
on their earnings just as much a.
| private companies can, especially
since they would not have to pay any
Federal tax. The private power COM
panies in the State now pay fran
chise tax of six per cent on gross re-
ceipts and a Federal tax of three per
cent on gross receipts from domestic
users, making a totol of nine per cent
in taxes on all proceeds from domes-
tic sources.
It is expected, of course, that the
! cities and towns having these muni-
| cipal electric plants will vigorously
fight any move towards bringing
them under the State franchise tax
law. But with the State needing from
81 OOO 600 to $10,O00,000 in new rev.