When We Socialize Kilowatt-Hours

"In the year 1949, this Commission granted six general increases to electric utilities. Two were municipally owned and the average increase was 16.6 per centum. Four were privately owned and the average was 2.8 per centum. Dur ing the following year one municipality was granted a general increase in electric rates of 10.5 per centum and a private utility received 6.0 per centum. In 1951, two pri vately owned electric utilities were granted general in# See The TVA Idea by Dean Russell. [ 181 ] creases of 10.6 per centum. To date, during the present year, :five general electric rate increases were approved two to municipally owned utilities averaging 6.4 per cen tum [plus Jamestown at 18.84 per centum] and three to private utilities averaging 6.9 per centum." INCREASES IN ELECTRIC RATES (Granted by the N. Y. Public Service Commission, 1949-1952) YEAR PUBLICLY OWNED Number of Average cases increase PRIVATELY OWNED Number of Average cases increase 1949 --- 2 1950 --- 1 1951 1952 - 3 16.6% 10.5% 10.5% 4 1 2 3 2.8% 6.0% 10.6% 6.9% "The City [of Jamestown] had the advantage of issuing tax exempt bonds at an interest rate of 1.6 per centum.

While legally absolved from the payment of real estate taxes, both city and county, [the utility] pays the City of Jamestown $175,000 annually in lieu of taxes although city officials admit that such payment is $45,000 less than a privat~ly owned utility would pay for State and County, School and City real estate taxes based upon identical assessed valuations." "In common with all municipally owned utilities, the operation is exempt from the New York State gross earn ings tax of 3 per centum and a like percentage on dividends in excess of 4 per centum on paid-in capital stock employed in the State. It pays no taxes toward unemployment insur ance or social security. The federal income tax, which ab[ 182] sorbs 52 per centum of the net income of privately owned electric utilities ... does not apply. The foregoing are de cided advantages in the operation of any business ..." "Production costs [of the new Jamestown power plant], excluding depreciation, are 6.93 mills per kwh, whereas a nearby private utility generates at a cost of 4.40 mills per kwh, in a comparably small 30,000kw station ... The pro posed residential rates to be paid by residents of the City of Jamestown will be $61,600 (11.4%) in excess of rates now being paid by the customers of a private utility serv ing adjacent territory. While exact figures and percentages are not available, both Commercial and Industrial sched ules also appear substantially higher . . ."

"It appears, to date, that all the beneflts which How from either partial or complete tax exemption have been dissi pated and the residents of Jamestown must pay higher electric rates in all classifications than the neighboring customers of a privately owned utility which bears its al lotted share of the burden of supporting government." [ 183 ] A JUST PRICE AND EMERGENCY PRICE FIXING t~ 5. .A JJappBP ~ IT was a cold winter's night, and our child was seriously ill with virus pneumonia. His temperature had soared to 104~~o, and he was fitfully sleepless. What the doctor pre scribed by telephone happened to be in our medicine cab inet. So in a moment's time, we were able to apply the treatment. My wife and I were mighty glad that we had provided a "stand-by" supply of medicine. Stich an experience is common to many of us, I suspect. It has been used to illustrate the purpose of stand-by gov ernmental controls over wages and prices-including rents -now being proposed to replace active controls when the present law expires. What position should one take on this issue? Should it be thought of as a stand-by economic first aid kit, like the medicine cabinet in one's home, ready for quick use in the event of a possible emergency? Or is there a catch somewhere, so that the analogy is not the parallel that it seems?