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State Legislation on Public Utilities, 1936–38
Published online by Cambridge University Press: 02 September 2013
Extract
A survey of the state legislation on public utilities for the period 1936-38 reveals the continuation of certain trends which were pointed out in the article published by the author in this REVIEW in June, 1936.
The period under consideration in the present article (1936–38) witnessed a marked extension of the exercise of regulatory functions by the Federal Government, and at the same time a notable strengthening of the powers and an increase in activities of the public utilities commissions in several states.
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- American Government and Politics
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- Copyright © American Political Science Association 1938
References
1 The trends recorded were found in laws intended: (1) to further the creation of public corporations empowered to furnish public utility services; (2) to establish a new method of utilities regulation in the form of contractual relations between the Federal Government or federal agencies on the one hand and public utilities corporations on the other; (3) to stimulate municipal ownership and operation of selected public utilities.
2 See same article, pp. 528–531.
3 For contracts, with specific details, see TVA, Annual Report, 1936, pp. 141–289Google Scholar; 1937, pp. 135–333.
4 Ibid., 1937, p. 140. Standard residential rates per kwh. are: first 50 kwh., 3 cts.; next 150 kwh., 2 cts.; next 200 kwh., 1 ct.; over 1,000 kwh., 0.4 ct.; excess over 1,400 kwh., 0.75 ct.—minimum monthly bill, 75 cts. per meter. If bill is not paid within 10 days from date of bill, 10 per cent is added.
6 Ibid., pp. 137–138. It is interesting to note that municipalities contracting for TVA power agree not to use revenue from the sale of electricity as a general source of municipal revenue to be applied to reduction of taxes. Some municipalities are reported to have been reluctant to give up such a source of revenue.
7 Ibid., pp. 144–150.
8 Ibid., p. 145. A uniform system of accounts has been set up for electric departments operating under TVA contracts, and the TVA furnishes “advisory services” to such departments.
10 Ibid., p. 150.
11 TVA Notice of Action Taken by the Board of Directors, recorded in the minutes of a meeting held by the Board on July 28, 1938 (furnished to the writer by the Assistant General Counsel of the TVA, Mr. Joseph C. Swidler).
12 TVA Annual Report, 1936, pp. 205–218Google Scholar.
13 Ibid., 1937, pp. 294–300.
14 Public Utilities Fortnightly, Vol. 20, pp. 113–114 (July 22, 1937)Google Scholar.
15 TVA Annual Report, 1937, p. 299Google Scholar. The contract recognized the federal and state regulating authority as follows: “It is understood that Arkansas Co. is subject to regulation with respect to its rates and other matters by the governing bodies of cities, under franchise or charter power, by the department of public utilities of the state of Arkansas, by the Federal Power Commission, and by other regulatory bodies having jurisdiction, and that in executing this agreement, Arkansas Co. does so saving to itself the power to assert all constitutional rights with respect to rates and with respect to matters unrelated to this agreement heretofore available to it, as well as the right to perform its duties and obligations with respect to each of such regulatory bodies.”
16 The above information came from interviews with the legal and rate agencies of the TVA, April 1–2, 1938.
17 Federal Power Commission, Annual Report, 1937, pp. 21–22Google Scholar. The report calls attention to the results of contract rates in Tupelo and Corinth, Miss., and Athens, Ala.
18 Executive Order No. 7037.
19 U.S. Statutes, 74 Cong., 2 Sess., Chap. 432.
20 A considerable proportion of the materials on rural electrification in this article was procured by personal interviews (March–April, 1938) with federal rural electrification officials at the Washington and Chattanooga offices, state rural electrification officials, officials of local coöperatives, and members of public utilities commissions in Virginia, North Carolina, South Carolina, Georgia, and Tennessee, and with the research staff and local agents of the TVA at the Knoxville office.
21 Federal loans are authorized “for the purpose of financing the construction and operation of generating plants, electric transmission and distributing lines, or systems for the furnishing of electric energy to persons in rural areas, who are not receiving central station service.” Private individuals and corporations, as well as political units and public corporations, may set up projects and apply for loans. Preference, however, is to be given to “states, territories, and subdivisions and agencies thereof, municipalities, peoples' utility districts, and coöperatives, nonprofit, or limited dividend associations.” The loans “shall be self-liquidating within a period of not to exceed twenty-five years.” Before a loan can be made, the federal REA administrator is required to determine and certify that in his judgment the security therefor is reasonably adequate and that such loan will be repaid within the time agreed. Loans may be made also for the purpose of financing the wiring of the premises of persons in rural areas and the acquiring and installation of electrical and plumbing appliances and equipment. For an analysis of the act, see Nicholson, V. D. “The Rural Electrification Act of 1936”, Journal of Land and Public Utility Economies, Vol. 12, pp. 317–318 (Aug., 1936)CrossRefGoogle Scholar.
22 Alabama, Acts, 1935, No. 47; Montana, Laws, 1935, Chap. 98; New Hampshire, Laws, 1935, Chap. 135; New Mexico, Laws, 1935, Chap. 100; North Carolina, Laws, 1935, Chap. 288; South Carolina, Acts, 1935, No. 65; South Dakota, Acts, 1935, S.B. 172; Tennessee, Acts, 1935 (Extra Sess.), Chap. 3; Vermont, Laws, 1935, No. 157.
23 Mississippi, Laws, 1936, Chap. 183.
24 Ibid., Sec. 3.
25 Ibid., Enacting clause.
26 Ibid., Sec. 10.
27 Ibid., Sec. 13.
28 Ibid., Sec. 17.
29 Ibid., Sec. 13. No problem of conflict with the regulatory powers of a state commission exists, from the fact that Mississippi has no state public utilities commission.
30 Ibid., Sec. 23.
31 South Carolina, Acts, 1935, No. 65.
32 The above information relating to South Carolina REA was given to the author by the officials of the State Rural Electrification Authority, in an interview on March 30, 1938. The schedule of residential rates in effect as of April 1, 1938, is as follows: first 20 kwh., 7 cts.; next 30 kwh., 5 cts.; next 50 kwh., 3.5 cts.; next 100 kwh., 2.5 cts.; all additional, 1.75 cts. Bills for current are collected by the meter readers of the authority.
33 South Carolina, Acts, 1935, No. 65, Sec. 15.
34 Ibid., Sec. 16.
35 North Carolina, Laws, 1935, Chap. 288, Sec. 2.
36 Ibid., Secs. 2–3.
37 States which enacted laws establishing coöperatives prior to 1936: Alabama, Acts, 1935, No. 45; Indiana, Acts, 1935, Chap. 175; Maine, Laws, 1931, Chap. 230; North Carolina, Laws, 1935, Chap. 291; Tennessee, Acts, 1935 (Extra Sess.), Chap. 3; Vermont, Laws, 1935, No. 157.
38 States enacting laws establishing electric coöperatives in 1936–38: Arkansas, Laws, 1937, Chap. 342; Georgia, Laws, 1937, No. 503; Kentucky, Acts, Fourth Special Session, 1936–37, Chap. 6; Mississippi, Laws, 1936, H.B. No. 578; Nebraska, Laws, 1937, Chap. 50; New Mexico, Laws, 1937, Chap. 100; North Dakota, Laws, 1937, Chap. 115; Pennsylvania, Acts, 1937, No. 389; Texas, Laws, Third Called Session, 1936, No. 13; Virginia, Acts, 1936, Chap. 442.
39 Arkansas, Acts, 1937, Chap. 342.
40 Ibid., Sec. 5.
41 Ibid., Sec. 12.
42 Ibid., Sec. 6.
43 Ibid., Sec. 4.
44 Ibid., Sec. 25.
45 Ibid., Sec. 30.
46 Ibid., Sec. 31.
47 Public Utilities Fortnightly, Vol. 19, p. 516, April 15, 1937Google Scholar.
48 Georgia, Laws, 1937, No. 503.
49 Ibid., Sec. 4 (13). Virginia law, 1936, Chap. 442, significantly omits the broad contractual provision, while it makes coöperatives subject to the jurisdiction of the State Corporation Commission in the same manner and to the same extent as are other similar utilities under the laws of the state. For a detailed analysis of state legislation on rural electrification and coöperatives, see Marlett, D. L. and Strickler, W. M., “Rural Electrification Authorities and Electric CoöPeratives”, Journal of Land and Public Utility Economics, Vol. 12, pp. 287–301 (Aug. 1936)CrossRefGoogle Scholar.
50 This applies to power districts and municipalities, sharing in rural electrification, as well as to coöperatives.
51 For an informing presentation and discussion of power-district legislation prior to 1937, see Baum, Robert D., “Power District Legislation”, National Municipal Review, Vol. 26, p. 28 (Jan., 1937)CrossRefGoogle Scholar.
52 Mississippi, Acts, 1936, Chap. 187.
53 Wisconsin, Laws, 1937, Chap. 334.
54 Ibid., Section 199.03.
55 State ex rel. Wisconsin Development Authority et al. v. Dammann, Sec. of State, 280 N.W. 698.
56 Letter from John Ernest Roe, replying for the Wisconsin Hydro Authority, Aug. 22, 1938.
57 Public Utilities Fortnightly, Vol. 22, p. 248 (Aug. 18, 1938)Google Scholar.
58 Wisconsin, Laws, 1937, Sec. 101.34.
59 U. S. Statutes, 73 Cong., 2 Sess., Chap. 283.
60 Ibid., Sec. 1.
61 U. S. Statutes, 74 Cong., 1 Sess., Chap. 687, p. 854.
62 Ibid., 73 Cong., 2 Sess., Public Joint Resolution No. 18, Sec. l.
63 Federal Power Commission, Annual Report, 1937, p. 5Google Scholar.
64 Pennsylvania, Laws, 1937, No. 43.
65 Ibid., Sec. 1.
66 Ibid., Sec. 9.
67 Pennsylvania, Laws, 1937, No. 286.
68 Ibid., Art. II, Sec. 201 (b).
69 Ibid., Sec. 202.
70 Ibid., Sec. 307. The provisions relating to the sliding scale expressly exempt common carriers.
71 Italics mine. Ibid., Sec. 310a.
72 Ibid., Sec. 310 (3).
73 Ibid., Sec. 312. A scholarly analysis of the New York experience with temporary rates is found in Harbeson, R. W., “Temporary Rate Orders in New York”, Journal of Land and Public Utility Economics, Vol. 13, pp. 78–86 (Feb., 1937)CrossRefGoogle Scholar
74 Ibid., Sec. 401.
75 Ibid., Secs. 501–503.
76 Ibid., Sec. 505.
77 Ibid., Sec. 506.
78 Ibid., Sec. 507.
79 Ibid., Sec. 508.
80 Ibid., Sec. 701.
81 Ibid., Sec. 911.
82 Ibid., Sec. 1201 (a) (f). According to the Public Utilities Fortnightly, Vol. 22, p. 470 (Sept. 29, 1938)Google Scholar, the commission, on Aug. 31, 1938, “billed Pennsylvania utilities for $1,137,315 to cover costs of ordinary commission operations for the fiscal year ending May 31.”
83 Letter to the writer from the secretary to the chairman of the Pennsylvania Public Utilities Commission, Aug. 19, 1938.
84 State of New York Joint Legislative Committee to Investigate Public Utilities, Final Report, Feb. 24, 1936.
85 New York, Laws, 1936, Chap. 655.
86 Ibid., Chap. 780, Sec. 1 (4).
87 Ibid., Chap. 696, Sec. 1 (14).
88 Ibid., Chap. 242, Sec. 3.
89 Ibid., Chap. 269, Sec. 108.
90 Public Utilities Fortnightly, Vol. 21, p. 567 (April 28, 1938)Google Scholar.
91 New York Times, Aug. 17, 1938.
92 Ibid., Aug. 10, 1938.
93 Amendments Proposed by the ]N. Y.] Constitutional Convention, 1938, Art. III, Sec. 5.
94 Wisconsin, Laws, Special Sess. 1937, Chap. 9.
95 Utah, Laws, 1937, Chap. 87.
96 The information concerning the situation in Georgia was given to the author by Mr. Walter McDonald, chairman of the Georgia public service commission, in an interview on April 1–2, 1938.
97 Colorado, Laws, 1937, Chap. 82.
98 Alabama Power Company v. Harold L. Ickes, 82 L. ed. 263.
99 For an analysis of typical municipal ownership statutes enacted in 1934–35, see this Review, Vol. 30, pp. 531–533 (June, 1936).
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