OCR Text |
Show Nation, the annual increase has been about 115 kilowatt-hours per year. In the fiscal year ending June 30, 1950, the gross operating revenues of municipal and cooperative electric systems distributing TVA energy amounted to $81,573,169. Net income amounted to $14,- 402,525, about 18 percent of total revenues. Cum- ulative earnings over the whole period that these municipalities and cooperatives have been distrib- uting TVA electricity are $86,925,636. The rate of return earned by many of these distributors has been high. After allowable payments in lieu of taxes, many of these municipalities in recent years have received a net return in excess of 12 to 20 per- cent on the investment in power facilities. This raises the question whether further rate re- ductions are in order. Past experience indicates that such reductions would result in more rapid in- creases in consumption and hence in net revenues. In fact, such large demands have developed in the homes, farms, and factories of the area, coupled in recent years with the requirements of defense load, that the Authority had difficulty in meeting them. The area is periodically threatened with power shortages. Conclusions Power is not a commodity to be sold at maxi- mum profit. It should rather be considered a service to be used to provide better living. The fol- lowing standards, based on the experience of the TVA in marketing power, represent important con- siderations in setting electric power rates in compre- hensive river basin programs. (1) Wholesale rates charged by the Government should be as low as possible, consistent with cover- age of power costs and charges, includiag deprecia- tion on all limited-life assets, and with providing a return, at least equal to the Government's cost of money when the project was undertaken. (2) To make the benefits of low-cost power available to the ultimate consumer, rates of power distributors and their resale rates are best condi- tioned upon a dynamic promotional rate and service REGIONAL TRENDS IN SALES OF ELECTRIC ENERGY 1929-1949 Comparison of East South Central States with other Regions o£ the United States East South Centred Pacific West South Central South Atlantic East North Central West North Central Middle Atlantic New England Mountain Source: Tennessee Valley Authority FIGURE 7. 773 |