[PRCo] Public demand power rate cuts

Fri Sep 24 16:59:07 EDT 2010

THE INTRODUCTION TO THIS SERIES...
THIS SERIES OF ARTICLES IS ALL ABOUT THE PUBLIC FEELING THEY WERE BEING RIPPED OFF BY PUBLIC UTILITIES IN THE DEPRESSION.   THEIR ELECTED OFFICIALS INCLUDING THE PRESIDENT WERE HELPING TO DRUM UP THIS HATRED.   THIS STARTS WITH NEW BRIGHTON, OVER IN BEAVER COUNTY, DEMANDING THAT DUQUESNE LIGHT COMPANY SLASH THEIR RATES 30%.   IN THE END, THE POWER COMPANY VOLUNTARILY GAVE THEM A 28% CUT BUT ONLY IF YOU HAVE A HOUSE OF 7 ROOMS OR SMALLER.   IF YOU HAVE A LARGER ONE YOU PAY A PENALTY OF 35 CENTS A ROOM EACH MONTH.

YOU WANT TO PUT THAT IN TODAY'S DOLLARS?   USING THE CONSUMER PRICE INDEX, WHICH IS CONSERVATIVE, YOU GET $5.65 A MONTH FOR EACH ADDITIONAL ROOM ABOVE SEVEN.  I WOULD SUGGEST THAT $8 MIGHT BE CLOSER.   I THINK I NOW UNDERSTAND WHY MY DAD NEVER BOTHERED TO FINISH THE SECOND BATHROOM IN THE HOUSE IN CRESCENT HILLS.   THAT'S A PRETTY HEFTY PRICE TO PAY FOR TURNING THE LIGHTS ON A COUPLE TIMES A DAY JUST TO PUT ON A BAND-AIDE OR WASHING HANDS.   AND THAT IS IN ADDITION TO THE USAGE CHARGE!   THAT'S A PENALTY FOR HAVING ENOUGH MONEY IN YOUR POCKET TO BE ABLE TO AFFORD EXTRA ROOMS.

IT'S THE SAME TYPE OF ARGUMENT THAT MY VOLKSWAGEN DEALER USES WHEN HE CHARGES A HIGHER HOURLY LABOR RATE TO SERVICE AN AUDI THAN HE DOES FOR A VOLKSWAGEN.   A GOOD COMPARISON WOULD BE DRIVING IN FOR A TUNE UP WITH AN TUNE UP WITH AN AUDI A4 OR A VW PASSAT 4-MOTION ... BASICALLY THE SAME CAR BUT IF I OWNED THE AUDI I WOULD BE EXPECTED TO SHARE MORE MONEY WITH THE DEALER BECAUSE I HAVE IT.  THE AUDI TUNE UP WOULD BE ABOUT $30 MORE FOR THE CLOCK TIME. 

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Pittsburgh Press, wed., Jan. 30, 1935

1200 DEMAND LIGHT RATE CUT

New Brighton Move Paves Way for Other Groups to Seek Slashes 

Special to The Pittsburgh Press:

   NEW BRIGHTON, Pa., Jan. 30—An immediate reduction of 30 percent in the rates of Duquesne Light Company was demanded last night by the New Brighton Tax League, an organization of over 1,200 members.

   The action paved the way for a similar demand by branches of the Tax Justice League in Beaver, Butler and Allegheny Counties, known as the Tri-County League, Harry W. Shaffer, president of the Tri-County League said.  There are 35,000 members in the tri-county group.

   Beaver Falls, across the river from here, will also make a demand for a 30 percent reduction in Duquesne’s rates, Mr. Shaffer said, and later action will be taken by the county organization.

   Petitions will be circulated in New Brighton, Fallston, Brighton Heights and Pulaski Township, starting Friday, substantiating the demand of the leagu, Mr. Shaffer said.  Copies of the resolution calling for a 30 per cent slash in rates will be sent to the Duquesne Light and the State Public Service Commission.

   “We have also discussed the possibility of building a municipal plant, but we are tied down by franchises here,” Mr. Shaffer stated.

   The tri-County Tax Justice League, he pointed out, is engaged in congealing opposition to “excessive” rates of utilities.

   This activity followed similar maneuvers in municipalities in the Pittsburgh district.   Turtle Creek Borough already has sought information from the Public Works Administration relative to borrowing sufficient funds to build its own plant.

   Baldwin Township, adjacent to the City of Pittsburgh, is conducting a survey with the intention of not only building a plant to serve its residents but is considering the possibility of constructing a plant which might serve the 150,000 residents of South Hills.

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  Pittsburgh Press, Feb. 6, 1935, page 8

 DUQUESNE LIGHT OFFICIALS TAKE FIGHT TO P.S.C.

Legislature Gets New Rate Cut Proposal as Conference Is Held

Special to The Pittsburgh Press

   Harrisburg, Feb. 6—Officials of the Duquesne Light Company conferred with Public Service Commissioners yesterday as the Legislature received a resolution asking for a 30 percent cut in the company’s rates.

   Both the light firm and the Public Service Commission refused to answer questions as to whether voluntary rate reductions were discussed.

   C. Jay Godnough, chairman of the P. S. C., said the power officials had submitted statistics to support previous data laid before the Commission.

   “The information has all been referred to our bureaus,” the Chairman said.  “Until they can analyze it, I am not in a position to say what it means.”

No Change in P.S.C. Plans

   Frank R. Phillips, president of the Duquesne Light Company, who headed the utility delegration, contended it would be “discourteous” to Mr. Goodnough to give out information.

   Mr. Goodnough said there had been no change in the Commission’s plan to press a rate complain and investigation against the company, accused of making a profit greater than the six percent allowed by the Commission.

   The resolution presented in the House yesterday by Rep. J. P. Moran, of Turtle Creek, Democrat, was more specific.  It charged the Duquesne Light Company, owned by the Philadelphia Company, which in turn is controlled by four other companies, made the following profits:

   In 1930, 22.8 percent,

   In 1931, 22.9 percent,

   In 1932, 19.4 percent.

   Charging generally that “large power companies are charging exorbitant rates and are making huge profits by watering their stocks out of all proportion to their true value; that they are distributing their profits among a large number of holding companies, with high salaried officials and interlocking directorates,” the resolution pointed out President Roosevelt had been instrumental in providing the people with a “yardstick” for valuation of electric power.

30 Percent Reduction Urged

   “The Pittsburgh Press,” the resolution said, “in its issue of Nov. 20, made public a comparison between the rates charged by Duquesne Light Company and those shown by the ‘yardstick.’”

   Under the resolution, the General Assembly of the State would petiton both the P.S.C. and Gov. George H. Earle “to work together to bring about a reduction of 30 percent of the rates of the Duquesne Light Company, for the citizens of Allegheny County.”

   The P.S.C. was urged in a similar resolution, introduced by Rep. John J. Haluska, Democrat, of Cambria County, to proceed against the Associated Gas and Electric Company, The Penn Central Light and Power Company and the Johnstown Water Company to bring down rates.

Accountants in Pittsburgh

  Chairman Goodnough, After the conference yesterday with President Phillips, E. P. Griffith and C. K. Robinson, counsel for Duquesne Light, said P. S. C. accountants now are in Pittsburgh, checking the firm’s books to verify company data.

  Commission engineers also have made inspections of company properties and are tabulating statistics, the Chairman said.  The P.S.C. last Dec. 3 began a formal rate complaint against the company.

   Another new proposal for utility legislation came yesterday as Sen. Anthony Cavalcante, Democrat, of Uniontown, introduced a bill to make it unlawful for any water company to cut off the fire protection service to a municipality because of unpaid bills.

$100 A Day Fine

      The   bill specifies the remedies that the company has at law, in the event a municipality fails to pay its bills, and provides a $100 fine for each day a municipality may be left without fire protection because of arbitrary suspension service by a water company.

  Like a previous bill, introduced in the House, the Cavalcante measure is an outgrowth of the action of the Citizens Water Company of Scottdale in wrecking the fire plugs of the Borough of Everson, Fayette County, because of an unpaid bill. 

   The House bill by Rep. Harry Cochran, Democrat, of Fayette County, would make the water company liable for all fire damages attributable to an arbitrary suspension of service.

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 Pittsburgh Press, Feb. 20, 1935, Page 1

 HOUSE VOTES 30 PER CENT FORCE SLASH

    The Duquesne Light Co., facing the threat of a 30 percent forced reduction in its rates through action of the State Legislature, has offered a voluntary reduction to its consumers here.

   This was revealed today in City Council chambers shortly after word came from Harrisburg that the House of Representatives, without a dissenting vote, had petitioned the Governor and the Public Service Commission to act against the company.

   Council President Robert Garland announced that in a telephone conversation last night with C. Jay Goodnough, chairman of the P.S.C. that he was told of the company’s proposal to lower its tariff schedules. 

Extent Not Made Public

   The extent of the offered reduction was not made public, but it was the first concession of a major concern in the present battle against utilities in the Pittsburgh district.

   Frank R. Phillips, president both of the utility company and its holding company, the Philadelphia Company, refused to comment.

   “That’s all up to the Commission—we have nothing at all to say, no comment at all,” Mr. Phillips declared.

   The House, at Harrisburg, took its action through passage of a resolution sponsored by Representative J. P. Moran of Turtle Creek, which charged the company with earning excess profits.  It was given a favorable report by the House Public Utilities Committee.

Harrisburg Trip Planned

After Mr. Garland’s statement in Council, it was decided that members of Council and City Solicitor Ward Bonsall would go to Harrisburg next Tuesday for a conference with the Public Service Commission.

   The Commission already has called on the company to reduce its rates in line with its policy to hold utility profits to 6 percent on invested capital.

   This company had refused to do and on Feb. 6 submitted to the Commission data designed to explain its stand and indicating it would fight any reduction.

   The resolution passed today will not go to either the Governor, who has no direct authority in the matter, or [to] the Public Service Commission, which has complete authority, until the Senate concurs, if it does.

   The resolution charged power interests in general were collecting exorbitant rates from consumers, watering their stock, distributing profits among holding companies and “evading the spirit of the law.”

Big Profits Claimed

   Relative to the Duquesne concerne specifically, the resolution stated:

   The studies made show that the Duquesne Light Co. common stock is owned by the Philadelphia Co., which is controlled by the Standard Gas and Electric Co., which is controlled by the Standard Power and Light, which is controlled by the United States Electric Power Corp., and by H. M. Byllesby Corp., with a claimed valuation of 55 millions, made almost 11 millions profit in 1932 or 19.4 per cent; 22.8 per cent in 1930; 22.9 per cent in 1931.

   The resolution cited an article in the Pittsburgh Press of Nov. 20 which compared Duquesne Light Company rates with the power “yard stick” of President Roosevelt.  

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Pittsburgh Press, Feb. 20, 1935, page 21 --- no link --- if one side wins, someone else will try.

WATER CHARGES HELD EXCESSIVE

   William Kauffman, special assistant city solicitor, yesterday assured City Council that the city stood a “good chance” of recovering apparent overpayments to the South Pittsburgh Water Company, amounting to more than $650,000.

   Council, discussing the lengthy repot which held the company charged “unjust,” unreasonable and exorbitant rates,” heard City Solicitor Ward Bonsall recommend that the city proceed jointly with the Public Service Commission, which previously had instructed the company to show reason why it should not lower its rates.

To Check Figures

   Council advised city experts to evaluate company property to determine whether their figures will tally with those of the company, cited in the report.

   Councilman William A. Magee asked what was in the Law Department’s report that wasn’t in the report of the Public Service Commission’s previous report.

   “When we can show that from July 1, 1929, the company was earning more than it was entitled to, that’s something the Public Service Commission didn’t know up to now,” Mr. Kaufmann replied.

Advises New Contract

   The report recommended that “the present contract between the city and the company should be terminated and a new contract entered into wherein and whereby the city shall be accorded the privilege and right of a very substantial reduction of rates.”

   The report showed that between July 1, 1929 and December 31, 1933, the city paid the water company $2,465,601 whereas, it says, the company was entitled to only $1,801,391, leaving an apparent overcharge of $655,210.

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 Pittsburgh Press, Feb. 21, 1935, pg. 1

 LIGHT RATE CUT TO BE REVEALED

PSC To Lift Ban of Secrecy Tuesday, Disclose Utility’s Offer

    The ban of secrecy on details of the offer of the Duquesne Light Company to reduce rates will be lifted at 10 a.m. Tuesday

   Then city councilmen will be told in Harrisburg, in a conference with the Public Service Commission, of the proposition given by the company to the Commission.   The councilmen will be accompanied by City Solicitor Ward Bonsall and William Kaufman, assistant solicitor in charge of public utility litigation.

   That a rate reduction offer has been made by the company was established definitely today although all information of an official nature is withheld.

Goodnough Explains

   C. J. Goodnough, chairman of the [Public Service] Commission, said he did not tell Council President Robert Garland that an offer of reduced rates had come from the company.

   “I told him,” Mr. Goodnough said, “that the company had given us information I thought would be interesting to council—interesting enough, in fact, to have Council come to Harrisburg and confer about it.”

   Mr. Garland confirm what Mr. Goodnough said, adding that he had assumed there was an offer of a reduction.

   Frank R. Phillips, president of the Duquesne Light Company, declined to give any information as to the nature of the company communication to the Commission.

   The announcement that the company has made an offer came almost simultaneously with action of the House of Representatives at Harrisburg, which petitioned Gov. George H. Earle and the Public Service Commission to take action against the company.

Excess Profits Charged

   The House charged the Duquesne Light Co., with other utilities, earned excess profits.

   The bill sponsored by J. P. Morgan, of Turtle Creek, was given a favorable report by the House Public Utilities Committee.

   The commission started a formal rate complaint and investigation against the light company last December.

   Mr. Goodnough said that data submitted by Frank R. Phillips, president of the company, and other officials several weeks ago, has been studied and the commission soon will receive the reports of the experts studying the statistics.

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 Pittsburgh Press, Feb. 26, 1935, page 1

DUQUESNE LIGHT YIELDS, CUTS RATES

 Special to  The Pittsburgh Press

   HARRISBUEG, Feb. 26—The Duquesne Light Co. will cut residential, commercial, industrial and street light rates to an extent estimated to save consumers $1,281,000 a year effective May 1.

   The company’s offer was announced today by the Public Service Commission and represents a compromise, since the commission had instituted a rate case designed to produce reductions aggregating $1,700,000.

   The commission and eight members of Pittsburgh City Council, at a conference, agreed to accept the company’s offer.

   The most substantial of the cuts will affect the residential consumer living in a house of seven rooms or less and using 15 kilowatt hours per month.  He will pay 75 cents for his service under the new rate as compared to $1.05 heretofore, a reduction of 28 per cent.

Annual Savings Estimated

   The commission divided its estimate of annual savings to consumers as follows:

Residential consumers ……,,,,…………..$620,000

Small light and power………,,,,……………420,000

Schools, churches, etc………,,,,……..……..45,000

Rural line extensions………………..………..15,000

Street lighting ………………...……………….40,000

   Residential customers will pay five cents per kilowatt hour for the first 50 kilowatt hours, providing their residences do not have more than seven rooms and they pay their bills within 10 days after they are due.

   All consumption above 50 kilowatt hours will cost three cents per kilowatt hour.

   Seven kilowatt hours will be added to the bill for each room in addition to seven.  Power users will pay a higher rate based on voltage.

Apply to Most Users

   The residential rate under which the rate reduction is proposed is known as “Rate C.”   Many consumers take service under “Rate B,” which is not affected.

   Frank R. Phillips, president of the company, said the new rates would apply to 95 per cent of the residential customers of the company, and 80to90per cent of the commercial customers.

   The company serves not only Pittsburgh and McKeesport but 56 towns and 39 townships in Allegheny County as well as  32 cities and towns and 15 townships in Beaver County.

   In connection with the reduction, the company will put into effect a simplification of rate schedules, according to Mr. Phillips.

Acceptance Explained

   Members of the Public Service Commission said rejection of the company’s offer and a continued rate case, which at best would obtain a cut of $1,700,000, ran the risk of defeat in the courts.   In addition, they pointed out that the taxation affecting utilities now pending in the Legislature is estimated to cost Duquesne Light Company a million, three hundred thousand, and if enacted, would forestall further cuts.

   Rate payers occupying seven rooms or less, according to the commission will benefit to the extent of $413,725.  Two hundred thousand of the company’s 265,670 residential customers occupy seven rooms or less.  About fifteen thousand residential customers will be granted no savings according to the commission.

Compared to TVA Rate

   The Commission issued a table, comparing the reduced rates of the Duquesne Light Company with the tariff of the Tennessee Valley Authority.  This table indicated these comparisons:

              Kilowatt Hours      Duquesne Light       T. V. A.

                      10                            50 ¢                      1.00

                      20                           1.00                       1.30

                      30                           1.50                       1.75

                      50                           2.30                       2.85

    The City of Pittsburgh, the Commission estimated, will save 20,919 on its annual street lighting bill, which exceeds $700,000.

   A joint statement of the eight members of council who were here said in part:

   “Members of city council and the commission agreed that acceptance of the Duquesne Light Company’s offer was the proper thing to do in the interest of the public.”

   Absent was Councilman William A. Magee.

   “I think it very good,” said Council President Robert Garland.

   “It saves us a long rate case, which might take five years and cost a quarter of a million dollars.”

Kane Dissatisfied

   “I am not satisfied,” said Councilman John J. Kane, “but this is the best we can do under the circumstances.  It represents cuts we can get very soon.”

   “Our rate engineers,” said Mr. Phillips, “have been working on this problem for many months.

   We are making this reduction now because we believe there are definite indications that the present upturn in business marks the beginning of a sustained upward trend.

   “The economic interest of our company and of the people of the community is a common interest and if we can stimulate business with this action, we feel that it will not only be of great benefit to our customers, but to our company as well.”

Company’s Ninth Cut

   Mr. Phillips said this was the ninth rate cut made by the company since 1921; the total savings in these 14 years he said was fifty-seven millions.”

   Representative Roy E. Furman, Waynesburg Democrat, today introduced a bill in the House designed to reduce the confusion over the discount system of utility companies, including Duquesne Light and West Penn Power.

   Consumers now are offered a discount if they pay their bills on a scales schedule of dates.  Some must pay by the tenth of the month, others by the eighteenth, some by the twenty-fifth, and so on.

   Mr. Furman’s measure would compel the utilities to scrap this variety of deadlines, allowing discounts up to the first of the following month on all bills issued in the first 15 days of any month, and discount up to the fifteen of the following month on any bills issued after the fifteenth.

   The Furman bill prohibits penalties, except at the established interest rate of 6 per cent.

   Senator Anthony Cavalcante, Uniontown Democrat, introduced a bill abolishing the utility “ready-to-serve” or “service” charge, or any other fee for installing service.