WHITHER, UTILITIES? WITHER, UTILITIES!

Like the man who at long last saw the end of double-digit inflation (for treble digits are on the horizon), we have a consolation for the oil companies: The electric utilities are far worse off. The oil companies were able, in the first half of 1974, to spend 6.5 billion on capital investments in the US, where they earned only $2.9 billion; the rest came from borrowed capital, capital recovery, and profits earned abroad (Chase-Manhattan Report).

None of these possibilities are open to the capital-intensive electric utilities, which have begun to canibalize their capital spending budgets to keep their heads above water. Like everybody else, the utilities are faced with rising costs for fuel, labor and construction; but the rates for electric power are set by regulatory agencies whose public hearings are forums for political propaganda against corporate profits. Instead of using profits for investments, which in the power industry pay off only after decades, the regulators found it much more popular to "pass them on to the consumer." And a large part of the investments did not go to increase productivity and thus lower the price of electricity, but to satisfy the doctrinaire requirements of superenvironmentalists.

For example, in most countries environmental standards require stacks to be sufficiently high to ensure the dilution of all pollutants, not just particulates. The 1970 Clean Air Act requires pollutants to be measured at the top of the stack and prescribes standards that are at present unattainable for some gases, though particles can be removed very effectively. The result is not just a disaster for utility budgets; it has also removed the alcaline neutralizing effect of the particles and left the gases free to combine into acids with the water in the atmosphere. In some regions, the acidity of rain has increased by a factor of 1,000 over the normal level. Thanks to environmentalist zeal, the visible part of stack emissions has disappeared, but diluted sulfuric and nitric acid rains from the skies instead.

In our April editorial (which, we are happy to note, was reprinted by four other periodicals), we noted how Con Edison of New York, by far the highest taxed utility in the country, was mugged by these Friends of the Poor. The familiar story is beginning to repeat itself elsewhere.

Detroit Edison, unable to raise the necessary funds, has cut back its construction budget by 37%. Philadelphia Electric has reduced it by $600 million, or 18%. New York State E&G cut it by 50%. Consumers Power Co. of Michigan was granted only 50% of the rate increase it asked for, though its need for new investments is urgent. Southern California Edison and a number of others have postponed some new plant construction indefinitely.

Long Island Lighting Co. has cut its tree trimming budget by half, as has Virginia E&P and many other power companies; the trees will be trimmed automatically when they catch fire on shorting the power lines, and the resulting costly and dangerous outages will be automatic, too. Montana Power Co. has deferred the replacement of utility poles in rural areas together with the accompanying replacement of insulators and other hardware.

And yet the capital crunch is not the worst aspect. When the power gives out in a decade or so, people may wake up to what the "consumer advocates" are doing to them. Perhaps the necessary capital can then be found quickly.

But where will the experts be found to put it all together again? The new school year has started and enrollment in engineering colleges continues on its downward trend. When the power gives out, will Ralph Nader man the transformer stations? Will Bella Abzug woman the switchboards?