Average bills in cities of 50,000-100,000 population for utilities grouped by the nature of their corporate control

Average cost of electricity in cities of 50,000 to 100,000 population in cents per kilowatt-hours based on average bills

The typical bills of subsidiary companies are considerably above those of independent companies at each level of consumption. The differences average 1.15 cents per kilowatt-hour in favor of the independent company when the consumer uses 25 kilowatt-hours per month, over one-third of a cent when he uses 250 kilowatt-hours per month, and a half cent when his consumption is 500 kilowatt-hours per month.

It might be contended that these differences between municipal, independent, and subsidiary electric utilities are due to differences in the sizes of the cities served by these different types of utilities. Undoubtedly the size of the city does have some influence on rates. The following tabulations made for private plants only indicate the importance of this factor.

Average bills for 25 kilowatt-hours for cities of 100,000 and more grouped by size of population, private companies only

1 These figures would be reduced to $1.50, $1.51, and $1.50 respectively if New York City were counted once rather than 9 times and Los Angeles once rather than twice, i. e., if the counting in this group were by cities rather than companies.

Average bills for 25 kilowatt-hours for cities of 100,000 and more grouped by size of population, private companies only—Continued

Low averages due to presence of two cities having competition-Springfield, Ill., and Lakewood, Ohio, and two companies at Niagara Falls.

Bills in private plants in cities of 50,000 to 100,000 are considerably higher than in cities of larger size, and, in general, the larger the size of the city above 100,000 the lower the average bill.

Since municipal electric systems serve cities which are on the average smaller than those served by private companies, a comparison of municipal and private bills in cities of equal size should be even more favorable to municipal systems than the figures shown in the tables of this report. As between independent and subsidiary companies, the influence of size of city on bills does not seem sufficiently important in cities between 50,000 and 100,000 population to mitigate in any way the unfavorable comparison of subsidiary companies with independent companies in this population range.

This conclusion has been checked by comparing the bills of independent companies with those of subsidiary companies serving cities with population immediately above and below (when the cities are ranked in order of size) the cities served by independent companies. Of the 26 comparisons thus possible, only 4, 10, 3, and 3 respectively were favorable to the subsidiary companies when bills for 25, 100, 250, and 500 kilowatt-hours were compared. The average bill for 25 kilowatt-hours in the 26 cities served by holding-company subsidiaries was 38 cents (or 1.5 cents per kilowatt-hour) more than in the 13 cities served by independent companies.

(Whereupon, at 12 o'clock noon, the committee adjourned until tomorrow, Wednesday, Apr. 17, 1935, at 10 a. m.)

PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

WEDNESDAY, APRIL 17, 1935

UNITED STATES SENATE,

COMMITTEE ON INTERSTATE COMMERCE,

Washington, D. C.

The committee met, pursuant to adjournment on yesterday, at 10 a. m., in Room 412, Senate Office Building, Senator Burton K. Wheeler presiding.

Present: Senators Wheeler (chairman), Lonergan, Bone, Donahey, Minton, Moore, Truman, Couzens, Hastings, White, and Shipstead. The CHAIRMAN. The committee will come to order. I wish to say this morning to those representing the opposition to the bill, S. 1725, you submitted to me a list of names of persons you desired heard. I understand that that is practically the same list of names of persons heard before the Committee on Interstate and Foreign Commerce of the House of Representatives. I just want to warn you in advance that you are not going to have the time you had before the House committee. I am only going to give you to the end of next week. You will just simply have to arrange your affairs and your witnesses to meet that suggestion.

Somebody has suggested to me that they wanted to have the group heard with reference to gas. You will have to come within the time I have mentioned. You gas people and you electric-light people will have to get together and arrange the time among yourselves, for we are going to close these hearings at the end of next week. So I just want to give you that notice now, and there is going to be no carrying on indefinitely in our hearings.

Senator WHITE. Mr. Chairman, would it be possible, and I do not know that these interested parties want it, but would it be possible to assign to each group a definite time? Now, if you say you are going to close the hearings at the end of next week that may mean much or it may mean little, depending upon the actual time the committee is in session. I am wondering if it would not be more satisfactory to all concerned if they could know definitely that they might have, say, 2 hours or 1 hour or 3 hours, or whatever the time might be that would be allotted to them.

The CHAIRMAN. What I intend to do is to give them at least 2 hours every morning, and probably will give them as much more time in the afternoon as we possibly can. But that will have to depend entirely upon the situation over on the floor.

Senator WHITE. Well, just so that each one of them could understand that his group, or each group, would have, say, at least 2 hours.

The CHAIRMAN. Yes; 2 hours every morning. And then if it is possible, I will give them more time by holding afternoon sessions. But I want them to definitely understand we are going to close these hearings a week from Saturday, and want them to so arrange their witnesses. And I will add this statement: That if any of your people have not then testified before the committee and desire to file statements I will permit them to do so, and their statements will be made a part of the record, but I am not going to take up the time of the committee with repetition of a lot of matters.

All right, Mr. Chantland, we will hear you.

STATEMENT OF COL. WILLIAM T. CHANTLAND, ATTORNEY IN CHARGE OF THE LEGAL DIVISION IN THE UTILITIES INVESTIGATION BY THE FEDERAL TRADE COMMISSION, WASHINGTON, D. C.

Colonel CHANTLAND. Mr. Chairman, will you sit until 12 o'clock? The CHAIRMAN. You may go ahead. We will try to remain in session longer than 12 o'clock today, if possible.

Colonel CHANTLAND. I should like to finish today, if I may.
The CHAIRMAN. Go ahead.

Colonel CHANTLAND. Mr. Chairman and gentlemen of the committee, for the record I should state that I am the attorney of the Federal Trade Commission's staff who, since Judge Healy became a member of the Securities and Exchange Commission, has had charge of the utilities investigation carried on at the direction of the Senate. Prior to July 1, 1934, when Judge Healy was appointed to the Securities and Exchange Commission, I was his chief assistant and, so to speak, executive officer, and have devoted my entire time to the investigation of utilities throughout its entire period, from February 15, 1928.

At the request of Senator Wheeler, I shall endeavor to tell you something about the character of the evidence and how it was gathered, in the investigation which the Senate directed and which has led up to this bill, as well as to other legislation already enacted.

The CHAIRMAN. I understand that what led up to the investigation was that my former colleague (Senator Walsh) wanted to have the investigation made here by the Senate.

Colonel CHANTLAND. Yes, sir.

The CHAIRMAN. But the utilities were opposed to it. They wanted to have it done by the Federal Trade Commission.

Colonel CHANTLAND. That is correct.

The CHAIRMAN. And after they had had it done by the Federal Trade Commission they probably wished they had had it done by the Senate: is that it?

Colonel CHANTLAND. I have heard expressions to that effect, Senator Wheeler.

The CHAIRMAN. Go ahead with your statement.

Colonel CHANTLAND. I hope to make the kind of statement which will be informative in showing the convincing nature of the evidence. The facts as developed by our investigation are all of the utilities' own making and have been checked by them before introduction into our record. But, cf course, the conclusions stated are our own;