More Shocks in Those Bills

Last year it was food prices. This year soaring electricity bills could be the main focus of consumer outrage. In Maryland, where the Potomac Electric Power Co. is seeking a 22% residential rate increase, bumper stickers proclaim FIGHT THE HIKE, and customers are underpaying bills in protest. To battle a 23% increase proposed by the Virginia Electric & Power Co., local governments are raising a $100,000 legal war chest. Some bitter citizens in North Carolina have threatened" the life of State Utility Commission Chairman Marvin Wooten if Duke Power Co.'s call for a 23% increase is approved. Wooten says philosophically: "When you are dealing with a man's pocketbook, it is an emotional matter."

Nationwide, electricity bills rose about 20% last year, and they may well go up as much or even more this year. The raises are most severe in areas where utilities burn imported oil. In Southern California, where power is generated by Indonesian, Venezuelan and Canadian oil, residential electricity bills have climbed by 50% since 1973. In New York City and vicinity, bills have risen a breathtaking 42% in the past year.

Steady Rise. By far the hardest-hit consumers are the tens of thousands who are stuck with the all-electric homes that the utilities promoted so heavily until the early 1970s. Many of these residents complain that their electricity bills now exceed their mortgage payments. For example, in Union Bridge, Md., Dale and Karen Thatcher are strapped by their latest two-month bill of $572 for their all-electric, seven-room farmhouse. They have unplugged the freezer and the TV, turned down the thermostat to 60DEG and swaddled themselves in heavy sweaters in a desperate attempt to economize.

New York's public service commission last week ordered Consolidated Edison Co. to reduce charges on all-electric homes by anywhere from $50 to $70 a year. The ruling climaxed a year-long rate protest led by Mrs. Christina Jackson of Hartsdale, N.Y. Aghast at the steady rise in her Con Ed bills--they have risen from $56 a month in 1969 to $252, even though she has cut back power consumption sharply--Mrs. Jackson recruited some 4,000 equally pained suburbanites into an active lobby. She cheered last week's decision as "a victory for the small man." In fact, the cost of the rate reduction for all-electric residences will be borne by other Con Ed customers, whose rates will rise slightly as a result.

Electricity bills have been inflating not only because of higher oil prices but also because the cost of about everything that utilities use, from transmission wire to turbines, has increased alarmingly. So have the interest rates that they must pay for the vast amounts of capital they need. To help the utilities with their financing difficulties, regulatory commissions in many states last year began allowing increases in fuel costs to be passed on directly to customers.

Consumer advocates have been calling for a variety of measures to ease the impact of higher electricity costs on residential users. Some want a system of special "lifeline" rates which guarantee an adequate minimum amount of power at very low rates for poor or aged people. Other consumerists argue for a reversal in the present electricity rate structure to penalize big consumers of electricity and reward smaller users with lower rates. For most homeowners, charges now decline gradually as consumption increases; base rates for big firms are as little as one-half as high as those for residences.

Utility officials argue that they can serve their large customers much more cheaply than smaller users. But Margaret Person, head of the Citizens' Action Program in Chicago, says that the preferential rates for large customers "encourage industry to waste energy." She added: "In effect, we are subsidizing U.S. Steel and other companies. They are getting a bargain."

Actual Cost. One rate-reform concept that is gaining favor is "peak load" pricing. The price of power for all customers, big and small, would reflect the actual cost of generation at any given time of day. Rates would be highest at peak-load times--they vary widely from region to region--when less efficient stand-by equipment must be used to meet demand. Rates would drop late at night and on weekends, when demand is low. Advocates are persuaded that this system would reduce the need of utility companies to spend on costly new capacity and would offer customers potential savings.

Meanwhile, one of the biggest generating companies in the Midwest, Wisconsin Electric Power, plans to experiment with other measures to discourage consumption. It wants higher rates but intends to increase them much faster for corporate customers than for residential users. Wisconsin Electric managers also polled residential customers to see how many would approve of having their water heaters turned off automatically during peak consumption periods. Fully half of the customers said that they would not mind.

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