Utility industry

“ Ames, the rate base of a utility were fixed at the amount prudently invested, the inevitable errors incident to estimating service life and net expense in plant consumption could never result in injustice either to the utility or to the community. ”

“ The nature of the electric utilities industry is such that about 90 per cent of all power generation and distribution is intrastate in character, and most of the States have developed their own regulatory systems as to certificates of convenience, rates, and profits of such utilities. ”

“ We hold that the very foundation of any successful reorganization of British industry must necessarily be found in the provision of the utmost facilities for transport and communication, the production of power at the cheapest possible rate, and the most economical supply of both electrical energy and coal to every corner of the kingdom. ”

“ Some industries do well, others ill, under public management, and between these lie many debatable cases. Waterworks and probably electric lighting, because of the comparative simplicity of their operation, are more suitable for public ownership than are gas works. No absolute line divides the one group from the other. But whatever the changes, the fact can not be ignored that the increase of public ownership is altering in manifold ways the organization of industry, and is reacting upon the production of wealth, and the distribution of incomes. ”

“ The obtaining of electrical energy from a commercial line is desirable because of its greater dependability, generally lower cost and the fact that unlimited use of electricity may be obtained without the overloading that frequently occurs where individual plants are set up. Probably the availability of public utility lines is the greatest asset of comfortable country life and one of the most important factors in creating genuine resale value. ”

“ But no one would question that the reasonable cost of an efficient public utility system 'is good evidence of its value at the time of construction.' We have said that 'such actual cost will continue fairly well to measure the amount to be attributed to the physical elements of the property so long as there is no change in the level of applicable prices.' McCardle v. ”

“ The third thing that we should be doing is working with utilities all across America, including here in Indiana, to do what some utilities are already doing in California. And this is a really smart thing. What they do is, the utility is able to make money not just on how much energy it sells, but it's also able to make money on how much energy its customers save. ”

“ For a new phase of the public utility problem has arisen—that of the private monopoly in the hydro-electric and superpower field. The private corporations are swiftly seizing upon every possible resource of water power and coal for the production of electric current, capturing and consolidating both private and municipal plants and tieing them into vast interconnected superpower systems. ”

“ We are confronted with regulation of a unique type of enterprise which I think requires considered rejection of much conventional utility doctrine and adoption of concepts of 'just and reasonable' rates and practices and of the 'public interest' that will take account of the peculiarities of the business. ”

“ The major problem in planning has been posed by the need to balance supply and demand, not only with regard to the final consumers but also at all stages of the production process and for each individual enterprise. This task entails detailed decisions on the allocation of thousands of different materials, machinery and equipment items, specialized labor skills, energy, and investment funds. With the expansion and growing complexity of the economy and, more particularly, of industry, the balancing task has assumed dimensions that defy solution by traditional means. ”

“ He showed how efficiency could be enhanced by transferring the responsibility of standards of work from the workers to the managers. He formulated, as a business and industry doctrine, that a definite relation between the expenditure of labor energy and the labor reward could be established; that the wage incentive, if applied to labor in relation to energy expended, would yield, or might be expected to yield increased returns. These incentives, rewards, stimuli, which employers could apply would produce, he stated with unscientific fervor, the workers' initiative. ”

“ The trust may consist of a single establishment; or of a group of establishments separately operated but united in a "pool" to divide output, territory, or earnings; or of such a group held together by a holding company, or combined into one corporation. Public utility is the name of special franchise enterprises of the kind just mentioned, including, in the broad sense, railroads and local utilities such as street railways, gas, water, and electric light-plants.
§ 5. #Industrial monopoly and fostering conditions.# The problem of monopoly is probably as old as markets. ”

“ A provision in the franchise relating to the quality of gas, or the rate of fare on street railways, or the candle-power of electric lamps may be framed carefully to cover the needs of today, but no one can foresee what will be needed five or ten years hence. Progress is continually being made in the mechanism of public utilities as in all other branches of industry. If regulation is to be effective, it must keep moving forward as new devices and methods come into use. A franchise has the defect of being a closed bargain. ”

“ Furthermore, the services sector has begun to occupy an important place of its own in industrialized economies. In this chapter. however, the term 'industry' will be used in the traditional sense to include mining and quarrying, manufacturing, construction, electricity, water, and gas. ”

“ Controversy with utilities is obviously injurious, also, to the public interest. The prime needs of the community are that facilities be ample and that rates be as low and as stable as possible. The community can get cheap service from private companies, only through cheap capital. It can get efficient service only if managers of the utility are free to devote themselves to problems of operation and of development. It can get ample service through private companies only if investors may be assured of receiving continuously a fair return upon the investment. ”

“ Public ownership and operating of the public utilities connected with transportation, communications, and electric power, and of such other industries as are already approaching conditions of monopolistic control. ”

“ A number of cities are entering the commercial and industrial enterprises such as the sale of water, gas, electricity, ice and coal. While usually these are operated on a low margin so as not to make money there is nevertheless, here, an opportunity to secure necessary funds for public improvements. ”

“ Industry must provide these expanding societies not only which employment but with products and aevices. They will experience massive increases the production of basic consumer goods and a concomitant build-up of industrial infrastructure – iron and steel, paper, chemicals, building material, and transportation. All this implies considerable increases in energy and raw material use, industrial hazards and wastes, accidents, and resource depletion.
28. The problems and prospects for industrial development vary among the Countries of the Third World, which differ greatly in size and resources. ”

“ An 'integrated public-utility system' as applied to gas utility companies is defined by § 2 (a) (29) (B) as 'a system consisting of one or more gas utility companies which are so located and related that substantial economies may be effectuated by being operated as a single coordinated system confined in its operations to a single area or region, in one or more States, not so large as to impair (considering the state of the art and the area or region affected) the advantages of localized management, efficient operation, and the effectiveness of regulation.'↑ 49 Stat. ”

“ The Public Utilities.—All business and industry are so dependent upon transportation, and the public convenience was so interested in having good service without discrimination that, for the railroads and other public utilities, regulation had been adopted as a national policy through the enactment of the Interstate Commerce law and the various state public utilities laws. ”

“ A public utility is entitled to such rates as will permit it to earn a return on the value of the property which it employs for the convenience of the public equal to that generally being made at the same time and in the same general part of the country on investments in other business undertakings which are attended by corresponding, risks and uncertainties ”

“ It may be that generating electricity by a steam plant at the mine mouth will be the most economical method for one community. Hydro-electric power may be best for another community. But certainly in every community there ought to be a central station to furnish cheap power--it ought to be held as essential as a railway or a water supply. And we could have every great source of power harnessed and working for the common good were it not that the expense of obtaining capital stands in the way. I think that we shall have to revise some of our notions about capital. ”

“ Each should supplement the other. In the full understanding of modern business competition has little real value; in the conduct of public utilities it has none whatsoever. We learned long ago that in gas-works or in water-works, in telephone service, even in the traction facilities of our largest metropolitan cities, it was no lasting help in the long run but merely an added expense burden upon the community, and so should be eliminated or at least brought down to its lowest possible level. ”

“ Until a short time ago it was customary to locate electric power-houses near the market, that is, in cities. But the benefits to be derived from having the electric plant near the source of power, so that the cost of production is greatly lessened, are becoming better recognized. ”

“ Mines have been opened, factories established, railroads built, electric plants constructed, by some individual or [Pg 67] corporation interested in making a profit on the investment, and with little or no relation to the well-being of the community. There has been no recognized intelligent guidance behind the development of the industrial system. ”

“ The need to extend an expensive physical plant to every point where customers are to be served, and the very much smaller cost per unit of delivering large amounts of water, gas, electricity, and transportation, on the same street, offers a greater inducement for one competitor to crowd out or buy out the other at a more than liberal price. ”

“ Enterprises of the other Parties may acquire, establish, and/or operate co-generation facilities which generate electricity using heat, steam or other energy sources associated with an industrial process. ”

“ And as further pointing out the characteristics of the public use justifying the fixing of prices, it will be noted that, with the exception of toll mills (which, however, to employ property devoted to a public use) , they all have direct relation to the business or facilities of transportation or distribution,-to transportation by carriers of passengers, goods, or intelligence by vehicle or wire; to distribution of water, gas, or electricity through ditch, pipe, or wire; to wharfage, storage, or accommodation of property before the journey begins, when it ends, or along the way. ”

“ While it is in the highest degree desirable that water-works, gas, and electric-lighting plants, street railways, and the other municipal enterprises, discussed in Chapter V., should be owned by the municipality, their operation, in cases where the employment of considerable labor and the carrying on of intricate business and mechanical operations is involved, should in general be entrusted to private companies. ”

“ Power to own, maintain and operate public utilities, such as waterworks, gas and electric plants, street railway systems, public markets, and the like is frequently conferred by the states upon their cities and other political subdivisions. ”

“ Suppose a fall of water, in a place where there are more mills wanted than there is water-power to supply them; the use of the fall of water will have a scarcity value, sufficient either to bring the demand down to the supply, or to pay for the creation of an artificial power, by steam or otherwise, equal in efficiency to the water-power. ”

“ The electrical industry is one of the most important industries, as an interruption in the current means a lack of light and power in factories; it also means a reduction in the means of transportation and a stoppage of the telegraph and telephone systems. ”

“ They exist for the people's use. Nothing should be placed in them unless required to facilitate their use by or for the people. Only the general need of water, gas, electricity, and transportation justifies the placing of pipes and wires and tracks in the streets. The public need is the sole test and measure of such occupation. To look upon the streets as a source of private gain, or even municipal revenue, except as incidents of their public use, is to disregard their public character. Adequate service at the lowest practicable rates, not gain or revenue, is the test. ”

“ The degree of protection which will be required for domestic industry beyond 1842, depends upon the reduction of wages, the accumulation of capital, the improvement in skill, the protection of machinery, and the cheapening of the price, at home, of essential articles, such as fuel, iron, and so forth. ”