The Wilmington morning star., 1941-02-23
UTILITY PLANTS
FOUND ADEQUATE
Increased Efficiency OF Pow
.er Producers Meets New
High Demand
Bv Cambridge Associates

Although expansion has been
undertaken in poWer-produclng
facilities in certain areas, there is
by no means a boom in electric
generating equipment, nor from
all appearances is there likely to
be during 1871. Here and there
during the last twelve months, new
plants have been erected, mostly
operated by steam, and mostly
along the Atlantic seaboard. The
net increase, however, is only a
small percentage of the total
capacity of the industry.
This fourteen billion dollar in
dustry arrived at the year 1880
with a substantial excess Of capa-
city, and for a few years this re-
NAMED a problem. The recovery
for this industry, however, was
much more dynamic than that of
industry as a whole, and a new
all-time high in power consump-
ton has been chalked up in each
Of the last four years.
Efficiency Responsible
Ten years have passed since
over-capacity first became evident,
and in that time the industry has
gone far in increasing the eff
cheney of the units already in serv-
ice. In many cases it has been
necessary only to modify equip
ment slightly in order to step up
capacity by important percentages.
Thus, while the margin Of safety
is now smaller than it Las been in
the recent past, there is little doubt
that the industry will be able to
meet all the demands that are to
be placed on it under the defense
program.
The question Of the power grid
has been raised again as a part of
the national defense survey, but
it is not being stressed at the
moment because of lack of ur-
gency. Undoubtedly such ~intercon-
nections as will be made in the
next twelve months will be die
tated by expediency Of the mo
ment rather than long-term plan
ming. And although progress has
been made in distance transmits
sion, thousand-mile power lines are
not regarded as economically justi-
fled as yet. AS a practical opera
tor nee remarked, 1.-The cheapest
way to transport power is in a
coal car"
Rate Cuts Slowing
Rate reductions are not as fre-
quently made as in the early years
Of the recovery, and those which
are announced are generally small.
The margin of profit has been
narrowing for several years, and
as long as this trend has been
Offset by large increases in con-
sumption Of electricity, particular
ly for residential use, profits have
continued to mount. Nevertheless,
a shortage of water In the north
east section Of the country in the
first half Of 1910 demonstrated the
v%ulnerability of the power business
to relatively small changes in con-
ditions. If the cost of coal should
rise materially, the effect would
be quickly felt. Rate increases, to
compensate for increases in cost,
are hardly to be expected, at least
on a widespread scale.
Fortunately, demand is still
strongly in the ascendant, and the
improved industrial use will fire.
quently balance the call for power
over the hours of the Cay for more
efficient employment of machin-
cry. And at the same time most
utility operating companies have
taken advantage of unprecedented
demand for their senior securities
to put financial houses in order.
This has been accomplished
through funding debt into long
term low coupon issues, and
through provision for systematic
retirement of the debt through Sc
rial maturities or sinking funds.
For the year 1871, problems of the
utility companies are not as COM
plicated nor as serious as those
facing many another industry. S