DIVERSION: WEAPON OF THE UTILITIES
McMillin, Miles
Public Power News Diversion: Weapon Of The Utilities By MILES McMILLIN WHENEVER a fight over public ownership arises in any area, the utilities are sure to rush in with a carefully selected list...
...In that same year the nation's publicly owned systems paid 17.3 per cent in the form of taxes and cash contributions...
...It is reasonable to assume, moreover, that if the payments of the private systems have gone up since 1936, so have those of the public systems...
...Jacksonville And Tacoma The average contribution for the whole 22 is 3.9 of gross revenue...
...Both Tacoma and Jacksonville make other contributions in the form of free services and taxes...
...Tacoma, on the other hand, diverted only 1 per cent into its general fund...
...The sum was practically enough to pay.the costs of the entire city government...
...The utilities maintain a strict silence on Tacoma, but whoop it up about Jacksonville...
...Studies recently published by R. E. McDonnell, of the Burns and McDonnell Engineering Company, Kansas City, Mo., confirm my suspicions...
...Jacksonville's rates, averaging 2.2 cents per kilowatt hour, are among the highest in those cities operating their own systems...
...Public Power News Diversion: Weapon Of The Utilities By MILES McMILLIN WHENEVER a fight over public ownership arises in any area, the utilities are sure to rush in with a carefully selected list of cities which have extraordinarily high rates despite municipal ownership...
...In addition they furnished free services equivalent to 8.5 per cent of their gross income...
...He cites the figures published by the Federal Power Commission which show that in 1936 the private utilities in the country paid 13.3 per cent of their gross in the form of taxes and contributions...
...In late months the Edison Electric Institute, the power trust front which changed its name from the National Electric Light Association after the Insull debacle, has been having patriotic spasms about how private utilities are making total tax payments of from 20 to 25 per cent of gross while publicly owned systems are dodging their fair share...
...When only those which contribute are considered, the average contribution is 12 per cent of gross revenue...
...The average of the private systems throughout the country comes to about 3.65 cents per kilowatt hour...
...Tacoma's rates, averaging 0.5 cent per kilowatt hour, are the lowest in the nation...
...If those are taken into consideration we find that Jacksonville makes contributions totalling 46.8 per cent of gross revenue...
...In addition to actual cash contributions the municipal systems contributed free services and taxes amounting to $4,055,664 in 1943...
...Yet, it should be noted that Jacksonville's average is considerably lower than the nationwide average for private systems...
...The total reported contributions for all 22 cities, therefore, is 7.9 per cent of gross revenue and 16.96 per cent for the 11 contributing systems...
...Tacoma makes total contributions of 11.3...
...This amounted to 45.5 per cent of the gross revenue...
...This is, of course, bad policy...
...Answering The Institute But that's not the whole story...
...The difference is reflected in the rates charged to consumers in the 2 cities...
...McDonnell's research casts some interesting light on the boiling indignation Of the super-patriots of the power trust...
...In 1943 Jacksonville diverted from its municipal utility revenues $2,397,591 into the general funds of the city...
...Invariably, however, there is a good explanation for this, which the utilities, understandably enough, never present...
...Eleven of them contribute operating funds to the city government, the other half does not...
...There are many cities operating their own utility systems where service rates have been allowed to remain at disgracefully high levels...
...I have always suspected that if one had time to dig into the examples it would be found that revenues of the municipal systems were being used for general governmental purposes rather than the operation of the system and lowering of rates...
...The strategy, obviously, is to' weaken the most powerful argument for public ownership, namely, the low rates made possible by public operation...
...Thus we see that the 25.8 per cent figure of the public systems established in 1936 by the FPC exceeds the power trust's own figures for today, which are generally put at 24 per cent...
...Although it is frequently noticed that slight "mistakes" creep into the figures cited by the utilities, the cases, for the most part, are pretty accurate...
...The effect of this diversion of operating revenue on the rates charged to the people is best illustrated by Jacksonville, Fla., and Tacoma, Wash...
...McDonnell took 22 cities with a population of 50,000 or over and looked into their operational practices...
Vol. 9 • May 1945 • No. 19
