Electric Lighting and Power Rates
| DOI | 10.1177/000271621405300122 |
| Author | Halford Erickson |
| Date | 01 May 1914 |
| Published date | 01 May 1914 |
| Subject Matter | Articles |
238
ELECTRIC LIGHTING
AND
POWER
RATES
BY
HALFORD
ERICKSON,
Member,
Wisconsin
Railroad
Commission,
Madison,
Wis.
Electric
lighting
and
power
plants
like
other
public
utilities
must
furnish
adequate
service
at
reasonable
rates
without
unjust
discrim-
ination.
What
constitutes
adequate
service
and
reasonable
rates
is
largely
a
question
of
facts.
Adequate
service
requires
efficient
and
well-maintained
equipment,
uniform
and
well
kept-up
voltage,
accu-
rate
meters
and
many
other
things
that
can
only
be
had
through
close
supervision.
What
are
reasonable
rates
is
a
matter
that
depends
very
largely
on
the
circumstances
under
which
the
service
is
fur-
nished.
Plants
that
are
operating
under
abnormal
conditions
may
have
to
accept
business
at
rates
that
yield
much
less
than
what
might
otherwise
be
regarded
as
reasonable
compensation.
When
conditions
are
normal,
the
plants
are
in
law
entitled
to
rates
that
will
cover
reasonable
allowances
for
operating
expenses,
including
depre-
ciation,
and
interest
and
profits
on
a
fair
value
of
the
plant
and
the
business.
Such
allowances
may
be
said
to
constitute
the
normal
cost
of
the
service.
As
normal
costs
are
also
the
economic
basis
for
normal
prices,
there
appears
to
be
a
close
relation
between
the
legal
and
the
economic
bases
for
rates.
The
work
involved
in
the
making
of
reasonable
rates
for
elec-
tric
and
other
utilities
is
thus
largely
made
up
of
determining
what
is
the
fair
total
cost
of
the
service
and
what
proportion
of
this
cost
should
be
borne
by
each
of
the
different
branches
of
the
service
and
by
the
different
classes
of
customers
or
individual
customers
in
each
of
these
branches.
In
order
to
find
these
costs,
it
is
necessary
to
determine
the
fair
value
of
the
property
and
business
that
is
em-
ployed
in
serving
the
public,
the
rates
that
constitute
reasonable
allowances
thereon
for
interest,
profits
and
depreciation
on
this
value,
as
well
as
what
is
a
fair
allowance
for
other
operating
expenses.
The
fair
value
of
the
property
and
the
business
is
largely
deter-
mined
from
those
facts
which
show
their
original
cost
and
what
it
would
cost
to
reproduce
them,
both
new
and
in
their
existing
con-
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