R. L. Evans, AM.LEE,, in reading a paper sponsored by the} Central China Centre of the Institution of Electrical Engineers before the eighth general meeting of the Engineering Society China held at the Henry Lester Institute of Medical Research yesterday afternoon, said that each individual public utility had its own particular problems.
In his paper, entitled "Notes on Cost Allocation for Rate Construction in the Electric Supply Industr: Mr, Evans stated, it was not presumed that the method of cost) analysis applicable to electricity supply to which he referred, would do equally well for other public utilities, "Originally", Mr. Evans went on to say, "electric and gas generating and producing stations supplied only lighting; traction service was run on schedule more to supply business needs, and water was considered as a household commodity, while the telephone was used also chiefly to fill the business needs. When' these services were put to other uses, these were met by different charges for various classes of service in the case of telephone, water, gas and electricity companies; and freight, excursion, slow and express rates in the cases of traction.
"The main difference between electricity supply and the other two classes of supply companies is that with both gas and water it is possible to store the finished product, while this cannot done directly with electricity today. This fact has a lange bearing on the' overall costs of production."
"When electricity supply companies were in their infancy, it was safe to say that the cost per unit to electricity was based on the cost of the lighting supply only, but when the electric motor was developed, the advantage to the power station of being able to sell its products during the period when lighting was not required, was quickly realized, and to start with, power and other classes of service were supplied on more or less an incremental cost basis."
"The development of the electric motor changed conditions in the industry, and from being a by-product, the supply of power assumed the major portion of the station's output. This necessitated more correct costing, and very early the engineers associated with the electrical industry propounded the two-charge theory of rates."
Text read from the printed page and cleaned; old type leaves the occasional error.