PUBLIC UTILITY ENTERPRISES

PUBLIC UTILITY ENTERPRISES

If I remember correctly, it was about two weeks ago, while confined to the house, that my wife brought me a letter from your Chairman. This letter contained a very cordial and hearty invitation to attend the sessions of your convention. Coming over on the train this morning, I fell in conversation with a gentleman— not a water works man—but interested in and manager of one of our Ohio utilities. He was lamenting the fact that he had ever engaged in a public utility enterprise because of having been drawn into a situation, as he described it, of having on the one hand an unappreciative and complaining public and being oppressed on the other by state laws that were working great hardships to his business. No doubt his statement was more or less exaggerated, but I dare say there have been times when conditions of this sort have prevailed. A few months ago I stood at this table in a convention of your Interstate Association and talked to its members about the scope and work of our Public Utilities Commission, knowing there were present a number of members from other states who woujd be interested along that line, but this morning in the presence of you gentlemen of our own State, I need not dwell on a familiar subject but rather step into the shoes of a typical utility man and discuss the dilemma of my fellow’ passenger with a view of suggesting some things that might correct or keep away a situation such as he felt he was laboring under. We will assume at the start that you are procuring for your patrons the very best water the “market affords” and that your service is above reproach. My first suggestion would then be to call attention to an idea that has been prevalent that the Utility Manager should keep out of the limelight, should avoid notoriety and should conduct his business in the most unobtrusive manner possible. This certainly, gentlemen, is old fashioned, antiquated and a misguided policy and should be cast into the discard. I feel that I am warranted in making the statement that the water company along with the telephone, electric, gas and transportation companies constitute the most important group of businesses that you can possibly name in your community. That being true, why should not the men at the head of these utilities assume the leading parts in the industrial developments of the community? Why should they not be members of Boards of Trade and Chambers of Commerce and leading members at that? By their very business education and experience are they peculiarly fitted to pass upon the merits of various enterprises seeking admittance and by taking upon themselves such responsibilities they will, in due time, imbue the minds of the people of having a common interest with them that goes beyond a mere selfish desire for profit and gain and so I would suggest for your consideration the value to all utility men of becoming identified with the development of your own town in whatever way it seems best to direct your activities. A second suggestion would he to use the local newspapers. Tell them what you are doing and what you hope to do. I believe it is true that when the public is igorant of the facts that it goes wrong nine times out of ten but on the other hand, I have that confidence in our people to believe that when they are put in possession of all the facts they can be depended upon to do the right thing nine times out of ten. Tt then becomes a matter of education and I do not know of any agency which is better adapted for educating your community than the town paper. Suggestion third would he to improve your office appointments. Right along with the idea T referred to a moment ago of keeping out of the public eye is the theory that your office should he on a hack street and that you should put on the appearance of poverty in the hope of exciting sympathy. Modem business methods means that your office be in the business portion of the town; that your windows be kept clean and attractive; that you should have modem desks and modem equipment. I think it has been some two years ago that a certain water works company located in the northwestern part of this State, petitioned the Commission for permission to issue bonds. I was directed to make an investigation which I proceeded to do. As I remember, I arrived in town (and by-the-way, it was not a small town but a sizable city) at night. In the morning I made inquiry of the hotel clerk where I would find the water works office. Following the direction, I found myself on a side street several blocks from the business district. I walked the length of the block in which I was told the office was located several times without locating it. At last I sought the assistance of a passerby and he pointed out the office. I approached. The curtains at the windows and door were pulled up from the bottom threefourths of their length. I opened the door with some misgivings. Inside was a small corridor bounded on two sides by the office walls and on the other sides by a tight partition reaching to the ceiling. Through a crack in the fortifications I saw a tousled headed girl. I asked her if I might see the Superintendent. She disappeared and after a muffled conversation with her superior, I was admitted through a door that would make a perfectly good door for a medicine cabinet. I was conducted through a labyrinth of chests, cabinets, wardrobes and a miscellanea of office furniture—everything but chairs. I was led around behind a roll top desk on top of which stood a huge cabinet reaching to the ceiling. One of the two chairs in the office was pried loose from its burden of old records, trade journals and catalogues and I sat down along side of the Superintendent in front of the roll-top desk much in the fashion of two ladies about to play a piano duet. I spent the first hour in impressing this man with the fact that I was in no way hostile to his company or its desire to issue some securities but that I wanted to help him in his efforts by securing the necessary data to support his petition. When we finally got down to a working basis he opened one of those mysterious cupboards and took out many books and papers. These papers were tied up in bundles with the kind of twine which comes around packages to our kitchen doors from the butcher and baker and candle-stick maker. We began our search for a certain item. My friend selected one of those packages, carefully untied the strings which were as carefully placed on the desk. He extracted a paper. I took some notes and handed it back. It was replaced in the package, the strings were restored and it was then put back and notwithstanding that many references .were made to this same package and some 20 others, we religiously followed the tying and untying the taking from and the putting back for three long days. From the office I went to the works expecting to see a dirty, run-down and out-of-date plant but to my surprise I found a foreman with modem ideas in charge of a clean, well ordered and efficient plant. If I had not visited the works, I would have gone away with the impression that they, no doubt, looked like the office. Now your consumers rarely see your plant; they see your office and if it does not present the appearance of being up-to-date a lot of people, particularly your lady customers, who do more or less advertising, will get the impression that your water supply is not of the best quality; that your meters are probably inaccurate; that your accounts are most likely kept in a slip-shod manner and presumably to their disadvantage. One more suggestion relates to the matter of approaching a prospective consumer. It is human nature to look upon water, air and sunshine as something Providence intended to give us without price. For that reason, I think instead of talking about selling water that it would be better to speak of furnishing a service. To give a homely illustration, let us imagine that on a very hot August day, Captain Wiles should start out from his home with a tin bucket and go out to the edge of Delaware where he knew there was a fine spring and there he would get a bucket of clear fresh water and bring it back into town taking it to the kitchen of Widow Jones. She would instantly recognize that the Captain had spent his time and his energy and had done her a good service and she would never forget it. That is just what you water works people are doing, only on a bigger and a better plan, and I think instead of letting your consumers have the idea that you are selling them water, something that they are already entitled to, you should tell them that you are selling them a service; that there are certain sources of water supply at a distance where they cannot go; that you have erected and established a water works plant; that you have laid a net work of pipes through their streets; that you have gone into their homes, bringing them water, where by the turn of a cock they can have it instantly, amply and uninterruptedly. In short, that you are performing a service for which you are entitled to compensation. So much for the consumer side of the discussion. Now, let us turn to the gentleman’s complaint of laws and oppressive authorities. I was interested, some time ago, in reading of an organization in the United States called the United States Chamber of Commerce. I didn’t know there was such a thing. Possibly some of you gentlemen know of it and have read of it, but it is a gigantic organization, representing 700 industrial assocations of the United States, with permanent headquarters at Washington. Their aim is not to try to influence Congress in any particular line; they have no opinion whether freight rates should be increased or decreased; they have no theory or purpose as to whether the tariff should be raised or lowered. Their sole idea and their sole effort is to accumulate information from all sources over the United States along their particular lines, and their efforts are limited, as I understand, purely to industrial enterprises, so that when Congress is in session, and some subject comes up, they have the available data at hand. There is no guess work about it. They can tell this Representative and they can tell that Senator exactly what a particular business is doing, and what it has done, and what it probably will do, all based upon data and information coming from these various sources. It looks to me as if the utilities should have an organization something like that. The idea of an organization for lobbying purposes is manifestly out of fashion, but the idea of an organization to give information to the people who are making laws is a very pertinent and very desirable thing to have. The question comes home to each of these utilities, “are we sufficiently prepared.” Are we prepared in two W’ays; are we prepared, first, as to having a unanimity of ideas on a particular subject—are we agreed among ourselves, and in the second place, have we the right kind of information available for instant presentation. I have to do more with the natural gas industries of the State than I do with the water works utilities, and I find among the natural gas people a marked variance in their idea on quite a few different things that are of very vital importance to them. I refer to this, as an illustration. About a year ago, I asked permission from the Commission to call together the heads of the natural gas ultilities in the State (and they very gladly consented) and I sent out letters asking the gentlemen managers to come to Columbus to the office of the Commission for an informal discussion of certain matters, and they responded. I think in the hearing room of the Commission were gathered together men who represented at least 90 per cent, of the gas industries of Ohio. Men who are recognized as authorities on natural gas meters. I spoke to them of two particular things that I knew were bound to come. The matter was entirely foreign to them. They had not thought about it. Each one of them got up and said, “we have no ideas on the subject, but we can see that it is a very important one and that we are going to be confronted with that question sooner or later,” and it wasn’t a year until they were obliged to take a hasty stand on those two propositions. It found them unprepared because of the two reasons that I have mentioned. They could not agree among themselves on what was the thing to do, and in the second place, they had collected no information to assist them in forming right conclusions. The ultilities of the State are unformly affected by certain laws. For instance, we have the law that limit price ordinances to ten years. Are you in harmony with that? If not, how many years should it be? Some of you may have one idea, some another. What do you think of the Utilities Law on the question of rates? Should your rates be based upon the present physical value of your plant? Do you know any reason why they should not be based upon the reproductive value of your plant? You may have some ideas on these and many other subjects affecting your business, but you probably have not gotten together on any one of them, and if some one of these questions should come up to-morrow to be passed upon by a legislative body, where do you stand. It is simply a matter of first knowing and then educating the proper people, and you cannot teach school until you have digested thoroughly the lesson yourselves.

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