Commutation

As a favorite whipping boy of the New and Fair Deals, the U.S. public-utility industry has endured 20 years of federal encroachment. Last week the private utilities got a reprieve from the new Republican Administration: a policy statement placing a major responsibility for new waterpower development on local and private groups (see NATIONAL AFFAIRS). The statement did not mean an end to federal competition in power, or a retreat from such massive federal developments as Bonneville and TVA. What most utility men saw in it was mainly a hope for the future, a challenge to private power to prove that it could grow as fast as the nation.

The fact is that, despite the inroads made by public power, both federal and local (see chart), the private-utility industry has been growing faster than any other in the U.S. More than doubling every ten years, power output has soared from 82 billion kw.-h. in 1933 to an estimated 440 billion this year; last week, in the once sluggish summer season, output hit an alltime record of 8.5 billion kw.-h.

Pooled Strength. The postwar growth has been phenomenal. Where utility men once waited for new demand before expanding, they now gear expansion to projections of the growth of their area--and step out to anticipate it. Since 1945, thanks largely to President Elmer Lindseth's program to lure new industry to his area, Cleveland Electric Illuminating's power sales have jumped 92%; Philadelphia Electric, a sparkplug in the industrialization of the Delaware Valley (TIME, June 8), has spent $320 million to supply 227,000 new customers; Detroit Edison, under President Walker Cisler, has doubled its investment (to $700 million) since the war, by 1956 will have increased its capacity from 1,300,000 to 3,000,000 kw. One result of such expansion: electricity is one of the few commodities that costs less now (2.76-c- per kw.-h.) than it did 20 years ago (5.52-c-).

In the past few years, utility men have also displayed a new aggressive spirit in pooling their resources to meet the challenge of atomic power. When the Atomic Energy Commission wanted a 900,000 kw. plant to supply its Paducah, Ky. works, five utilities combined to do the job at Joppa, Ill.; last year 15 companies joined to put up the two biggest private-power plants in the U.S. (total capacity: 2.2 billion kw.) to supply power to AEC's Portsmouth, Ohio atomic plant. Utility men have not forgotten that their own future may lie in atomic energy. For the past couple of years, 27 power companies have been hard at work with AEC, figuring out when & how atomic power can be made commercially feasible.

First Effects. One of the first effects of the Eisenhower Administration's new power policy became evident as long as three months ago, when Interior Secretary Douglas McKay withdrew the Government's opposition to Idaho Power's plan to build three dams on the Snake River in the Northwest. Another result of the new policy is likely to be more far-reaching: all over the U.S., public-power rates may go up. For years, utility men have complained that the Government has underestimated its power costs and pegged its rates at unrealistically low levels, reflecting not the actual cost but the help of Government subsidies. Said an Interior Department spokesman last week: "We can't continue to get power as cheap as in the past."

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