Power Company Balks at Rate Cut
Pacific Power & Light manager warns that a state-mandated rate reduction will kill rural electricity expansion.
The story, cleaned up
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That the recent decision of the Public Service commission in the Pacific Power & Light case is going to materially retard the extension of electric lines in this territory is the belief of G. D. Longmuir, local manager for Kennewick and Pasco. In discussing the decision Mr. Longmuir said: 'Prospects for additional power line extensions in the territory served by the Pacific Power & Light company seem to be remote in the face of the decision just handed down by the Public Service commission of Washington in the electricity rate case. This decision is the result of a rate hearing held in North Yakima last May and it materially reduces a number of the company’s service rates. The reduction is so pronounced that it seems apparent that no more transmission and distribution lines will be built in this territory. The company contends that in order to secure any additional business more lines have to be built, and inasmuch as it cannot secure money to build more lines, no larger earnings can be expected.'
“The company states that it has cost it approximately 7% to borrow money and the probabilities of the company borrowing money at 7% and investing it in a risky business producing a return of 5.7% seems doubtful.”
The conflict between public utility regulation and private corporate investment is a recurring theme in Washington history. This 1915 dispute mirrors modern arguments regarding the affordability of utilities versus the capital requirements of infrastructure expansion.
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