[PRCo] A federal comparison of power rates in 1935

[Fred Schneider]

In this article, I see many apples and prunes comparisons.   This list claims to have surveyed 50 cities with 100,000 or more population.    The census found 93 cities in 1930 with populations of 100,000 or more; Harrisburg, Allentown, Bethlehem,  and Wheeling were never over 100,000.  Somerville, Massachusetts is mentioned in the survey and it also was not on the census list.   We have no clue if they have selected them randomly or if the sample is biased to make certain companies look bad … considering it came from Washington, anything is / was possible.   If they mixed in cities that were not of the requisite population, how can we believe the sample was even random?

One would expect power to cost more in large cities than in small cities because more miles of lines are buried in streets and labor costs are higher.   New York and adjacent Yorkers should have the highest rates … no surprise.   Philadelphia was the third largest city.   One might expect PECO rates to near the top.    Pittsburgh was the 10th largest city in the nation with wages dominated by steel workers (you have to pay high rates to attract help in such an area); I would predict Duquesne Light to charge more than a power company in Salt Lake or Wichita or Knoxville or Peoria.  


A municipal power plant might offer cheaper rates for a variety of reasons, including but not limited to: (1) they borrow using low interest bonds instead of high interest bonds or stocks; (2) the may or may not depreciate their facilities (they don’t today); (3) they may cover some of their expenses in taxes because it makes the poor feel better if the rich property owners pay for their power, and (4) their plant and facilities are tax exempt while the privately-owned utilities pay taxes (going from private to public ownership shifts the property tax burden to the taxpayers).  

  And the Niagara Falls power costs … perhaps that has something to do with building a lot of long transmission lines???    Did Niagara Power pay for them?   This was 20 years before the write off of the flood damaged power plant so that has nothing to do with it.     The energy is cheap but no one every said that creating the facilities was economical.

 

http://news.google.com/newspapers?id=ZXEbAAAAIBAJ&sjid=kksEAAAAIBAJ&pg=1800%2C4643325

 

Pittsburgh Press, Monday February 4, 1935, page 15

 

PITTSBURGH ELECTRIC CONSUMERS PAY MORE, 50 CITY SURVEY SHOWS

 

Typical Residential Bill Here is $8.60 for Monthly Consumption of 250 Kilowatt Hours –Tacoma, Wash., Municipal Plant Charges Cheapest, With $3.90 

By Fred W. Perkins

Press Washington Correspondent 

WASHINGTON, Feb. 4—Pittsburgh residential consumers pay more for the same quantity of electric service than is being charged in 50 other American cities of more than 100,000 population, according to a survey made public today by the Federal Power Commission.

   The Commission’s report, sent to Congress in answer to a joint resolution ordering the survey, shows the typical residential bill in Pittsburgh to be $8.60 for a monthly consumption of 250 kilowatt hours.   Pittsburgh is just above Indianapolis where the bill is $8.53, and just below Philadelphia where householders pay $8.70 for this much electricity.

   At the bottom of the list of 100,000 population cities is Tacoma, Wash., where a municipal plant furnishes 250 kw. hours for $3.90.  At the top are the five boroughs of Greater New York, and at the very top is Yonkers, N. Y, where the bill for 250 kw. hours is $15.85. 

   Pittsburgh is about midway between these extremes, and is No. 48 in 75 grouping of cities that have the same rates.  For cities under 100,000 population the low of $4.80 is shown by the municipal plant at Springfield, Ill, and the high of $16.31 is registered by Mount Vernon and New Rochelle, N. Y.



McKeesport Rating Same

   McKeesport, also served by the Duquesne Light Company, is given the same rating for 250 kw. hours as Pittsburgh -- $8.60  Allentown, Bethlehem, Wilkes-Barre are somewhat higher at $9.08 and Wheeling, W. Va. Is placed at $9.25.

   A seeming peculiarity is that in Niagara Falls, where water power is used by a private company for generation of electricity, the charge for $2.50 kw.hours is $11.88, next to the top-ranking New York cities.   

   Commenting on this “vast variety of rate schedules” Commissioner Basil Manley of the Federal Power Commission, said the purpose is “fact finding, not rate-fixing.”

   He spoke of the “wide divergences in the rates charged in communities similarly situated and possessing the same general characteristics,” but added that so far as the private electric companies are concerned determination of reasonableness of the rates “is a function of the state utility commissions, upon which the Federal Power Commission has no desire to encroach.”

    

$1.04 for 15 KW Hours 

   The commission’s figures also snhow the charges for various lesser quanties than 250 kw hours.

   Beginning with 15 kw hours, Pittsburgh pays $1.05 for that quantity.  It is in the fifteen group of cities above 100,000 population at that charge.  Its companions are Boston, Canton, Ohio, Jacksonville (municipal plant), Oklahoma City, Somerville, Mass, Syracuse and Tulsa.

   For 25 kw hours, Pittsburgh is in the twentieth group, at $1.55, with Birmingham, Milwaukee and Syracuse.

   For 40 kw hours, Pittsburgh is shown to pay $2.20, with seven other 100,000 or more cities in group 23.   They are Dallas, Fort Worth, Hartfort, Conn., Memphis, Omaha, Seattle (municipal plant), and Springfield, Mass.

   For 100 kw hours, Pittsburgh is in the 24th group with Des Moines.   The charge is 44.10. 

   The tabulation of cities with low and high rates, prepared from the commissions figures, was viewed as significant, because in each of the low cities a municipal plant is operated.   The tabulation follows:

 

No             Low                                    High    

Kw Hrs      City                   Rate          City             Rate

15               Cleveland

                   Columbus       $0.60         Miami          $1.71

25               Cleveland       $0.88         Miami          $2.76

40               Cleveland       $1.31         Miami          $4.18 

100             Tacoma          $2.40        Jacksonville  $7.00

250             Tacoma          $3.00        Yonkers       $15.85

500             Tacoma          $6.40        Yonkers       $28.35 



   According to the figures, only in one instance, Cleveland, has a private utility met the low municipal rate, and then only on the 15 kw hour classification.

   Today’s report is the first result from the commission’s study.  For June 30 it promises a comprehensive analysis of rate conditions, trends and problems, as well the history and evolution of rate making.