The best control of public utilities

Author(s): Frank G. Baum
Publisher: IEEE - Institute of Electrical and Electronics Engineers, Inc.
Publication Date: 1 January 1915
Volume: 34
Page(s): 1 - 23
ISSN (Paper): 0097-2444
DOI: 10.1109/PAIEE.1915.6590116



The author states as an axiom that "the best control of a public utility is that which develops an eagerness and ability on the part of the company to furnish the service, and an equal eagerness and ability on the part of the consumer to purchase the service." Five elements requisite for the development of this eagerness and ability on the part of the company and the consumers are stated and analyzed. One of the important elements is confidence in the company and its rates, and the author states his conviction that class rates are absolutely necessary for the best development of the business. All classes of consumers benefit by a diversified use of electric energy, which makes lower rates possible. The principle at the bottom of all rates is to make the plant earn all it can during every hour of the day so that the burden of the investment may be distributed. The same principle applies to nearly all public utilities, railroad, telegraph, express and postal service. There is confusion in the minds of consumers because rates for power are lower than rates for electric lighting, and the electric energy for the two very different kinds of service is measured in the same units, kilowatt-hours. But in the similar case of railway service, there is no feeling that passengers should be carried as cheaply as freight, because it is realized that the two kinds of service are very different, and one is measured in passenger-miles and the other in ton-miles. Therefore the author urges the establishment of class rates for electric service as being more scientific than the methods in general use at present, and less likely to lead to misunderstanding. Examples are given to show that the lighting consumer's rate must be much higher than the power consumer's, because the investment and cost of operation to serve the former are greater than are required to serve the latter, and because, for the same peak demand, the total energy used by the power consumers is much greater than that used by the lighting consumers. The paper outlines the method for determining class rates for different classes of service.