Cooking with Electricity

In the electric utility business, which measures its costs in mills and its profits in millions, the American Electric Power Co. has become the biggest producer of all by serving small-town America. Stretching from southwestern Michigan through the rich Ohio Valley to depressed Appalachia, it serves nearly 2,400 towns, only four of which have a population as high as 100,000. A.E.P. has prospered mainly because it has invested wisely in new technology, and thus has been able to drop its rates to one-sixth below the national average for private utilities. This week, in a fallout-proof red brick building at Canton, Ohio, the company will begin operating a remarkable system that will open the way to still lower costs. Minute by minute, three computers will monitor both power production and power demand at 14 of A.E.P.'s 20 plants. When extra power is needed in an area, the computers will not only figure out which plants can supply it most cheaply, but will automatically order them to produce it and transfer it to homes and factories across the company network.

Thanks to bargain prices, the company's 1,500,000 residential customers use 25% more power than the national average. One-third of them have electric water heaters and two-thirds have electric stoves--nearly double the national average. Cheap power has also attracted industry. Last year more than 400 companies established or expanded plants along A.E.P.'s power lines. A.E.P. has increased its dividend every year since 1953 and has doubled its revenues to 1964's expected $417 million

Well Connected. Powering A.E.P.'s drive is President Donald Cook, 55, a financial expert who also has a lively interest in sales, technology, law and government. He works at his job ten hours a day in his Manhattan office and another three hours at home, frequently tours his bailiwick; last week he was off on a Cook's tour of facilities in Indiana and Virginia. An ardent advocate of private power, he believes that cutting costs and passing the savings on to consumers is a form of public service. As it happens, he is also well connected in Washington.

Cook came to A.E.P. in 1953 from the Securities and Exchange Commission, where he had worked up from financial analyst to chairman under Harry Truman. Along the way, he earned two law degrees from George Washington University, became a C.P.A., and struck up a close friendship with a young Congressman, Lyndon Johnson. When Johnson became a Senator, he drafted Cook to become counsel to his famed Senate Preparedness subcommittee. Said Johnson then: "He's rough, but he's fair. I don't think there's an abler man in Government." Don Cook is now one of the President's most-heeded business advisers and is talked of in Washington as a possible candidate for Secretary of the Treasury in a new Johnson Administration.

Cut & Spend. Cook confesses that the prospect of a Washington job holds "a fatal fascination." But whether or not he returns to Washington, he will continue to have some influence on the U.S. economy. Shortly after the tax cut, Cook told Johnson at the White House that over the next seven years A.E.P. will spend $1 billion to build new plants, dams and lines, which will bring down electricity costs even further. Businessman Cook also argues vigorously for still another tax cut, and, like his mentor, is unworried about unbalanced budgets. "A.E.P. has grown from $100,000 in assets to $2 billion, and I can't remember when we ever had a balanced budget," he says. "Every year we have had to borrow to grow."

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