Electric power industry. Part II. Monopoly of power. [Preferential low rates captured industrial and commercial customers]

By about 1910, the elements in technology, the law, and business (discussed in Part I) firmly supported the concept of monopoly in the electric power industry. Samuel Insull continued to justify the monopoly. If power plants were expensive to build, the way to bring down the cost, he said, was to build fewer and larger plants and to use them as efficiently as possible. The residential customer was charged the high rates for use at any time. There was no competition for the lighting business; power plants were too expensive to be built for single houses or apartment buildings, as heating and hot water plants were. But industrial customers could and did build their own plants, and to secure their business, special rates were devised. An attempt was made to electrify the railway systems, but Insull failed to capture the rail business; in all other areas, however, the monopoly for electric power was successful. Today, higher rates are charged residential customers, and in effect, residential customers are subsidizing industry. In a sense, though, these lower rates to industry enhance power plant efficiency and result in savings for all customers. The present expansion program of electric companies is almost the onlymore » way the companies can increase their capital investment and reduce operating costs. Nuclear power plants cost a great deal to construct, but can be fueled more cheaply than coal-or oil-burning plants. It is observed that the purchase of nuclear power plants is impeding the development of solar power, wind power, or fuel cells, or any of the other alternative systems that could be utilized in scattered areas. These power-generation techniques would require development of energy storage techniques and not much research effort has been applied to energy storage in 70 years. (MCW)« less