ustxtxb_obs_1976_07_02_50_00012-00000_000.pdf

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July 2, 1976, 12:00 AM, CDT

c.1 .frit%e o v,o 1-1\(6 Oc f cce. vos p-c .el ”c \(ac “Home of Texas Traditional Music” Down-Home Food 217 So. Lamar Austin, Texas 13001

<div id="pico"><p>c.1   .frit%e o  v,o 1-1\(6  Oc f cce.   vos   p-c .el ”c   \(ac    “Home of Texas Traditional Music”  Down-Home Food  217 So. Lamar   Austin, Texas  13001<p_  503 B WEST I7 "r1 -1 476.0116 Munn,  Texas  71701 12  The Texas Observer   you'll be tickled  about the ribs.  Mon.-Fri.  11:00-7:30 Sat.  12:00-4:00 The  Outpost  Barbecue  10930 Printers     Stationers     Mailers     Typesetters  High Speed Web Offset Publication Press   Complete Computer Data Processing Services   Counseling  Designing  Copy Writing  Editing  Journals    Magazines    Newspapers    Books  The Only 100% Union Shop in Texas!  FlUITURA  512 / 442-7836  Box 3485  1714 S. Congress   Austin, Tx 78764  projects an over-the-decade growth of 8.4%  and is the prime participant in the South  Texas Nuclear Project. To find a utility  thinking in a different way, one must look  beyond Texas.  A good utility for comparison is  Jacksonville Electric Authority in Florida,  which ranks right behind San Antonio  among municipals for size and whose problems and climate are similar. JEA's current  peak load in summer is 1,116 MWe,  compared to San Antonio's 1,500 MWe.  Jacksonville Electric Authority holds the  distinction of having been the first in the  nation to get hit with the increased cost of  fuel. 100% oil-fired, three years ago they  had to present their customers with a doubling of electric bills in three months. As a  result, from a former peak-load growth rate  of 9%, they dropped to no growth at all in  peak-load the year the fuel-cost adjustment  took effect, regaining only a 3 to 4% peakload growth the following year.  They cancelled plans to add another 550  MWe generating plant and are experiencing  load growth, but do not project 9%. Over  the next decade, they may approach 8%  peak-load growth.  JEA ponders how to meet that level. By  relying solely upon fuel-adjustment  charges, they've avoided rate increases.  Recently, thanks to "softening" of oil  prices, they've managed to pass along to  their customers a  reduction in  costs, albeit  slight. In spite of being too small to think of  building a nuclear plant on their own and  having no plans to participate in anybody  else's ...in spite of seeing no likelihood of  buying power from any other members of  the Florida gridfor no Florida utilities will  have extra power to sellJEA is not rushing to construct more generating capacity  yet. They're still studying their options, including better methods of load management.  Florida Power Corporation, an investorowned St. Petersburg utility, has installed  special, electric power meters in 250  selected customers' homes. Each meter  costs the utility about $300 to purchase and  install. If all customers were so equipped,  around $90 million would be needed, which  is about the size of one year's proposed  bond issues at San Antonio's CPS. The  meters contain small cassette tape recorders, which permit hour-to hour analysis  of usage and let the utility offer customers  power at off-peak times for half price.  Power at peak hours carries a double price.  In operation only for six months, the meters  have enabled some customers to obtain  savings averaging 15%. The experiment is  not finished: summer peaks in St.  Petersburg are about equal to winter peaks  in size.  Jacksonville and all the other Florida  utilities are carefully awaiting the outcome  of this test. A utility could go a long time  without building additional generating plant  on the customers' ability to reduce peak  loads 15%.  Also in Florida, an experiment was   conducted to answer the question whether  electric power is subject to the economic  eoncept of price elasticity. \(You remember  price elasticity from your dozing days in  Eco. 301: the notion that if the price of  Utility spokesman in the U. S. have often in  the past denied that this was true for electric  power.  In Gainesville, a utility economist  sampled electricity use in a large group of  residences during 1974  the year of the  rate hikes  and compared the samples  with annual consumption in the same homes  during the good old days of 1973. An  interesting pattern emerged.  Poor homeswhich, as the CPS rate  book correctly observes, lack air  conditioningexhibited the same low level  of consumption all year round, both years.  But the middle and high-income homes  behaved differently.  In the cheap power years, their electric  consumption showed a huge peak of demand through the year  rising sharply  through May and June to a tip in July and  August, tapering off more slowly through  October.  In 1974, the middle and upper-income  homes started out the same way. Indeed,  the rising curve was steeper than ordinary  that summer. But then, when they saw their  June bills, with the fuel-adjustment charges  included, the affluent all took action. Their  consumption curves dropped that summer  to a little more than half the prior year's  peaks  the peaks had the tops knocked  off. Is electricity price elastic? For  everybody but the poor, yes.  Electric light may or may not be a luxury.  But air conditioning sure is. The  middle class knows how to turn it off.  Utility economist W. E. Roth, writing in  Public Utilities Fortnightly,  draws these  implications:  `First, the low-income homes sampled are  being price discriminated against under the  present declining block structure since they  are being charge peak-load capacity and  fuel costs for which they are not causally  responsible. The highand middle-income  homes sampled are being subsidized by the  low-income group...  "Second ... if the peak-load capacity and  fuel costs are allocated to those whose demand is creating the peak-load  requirements, the data... suggest that the  growth in peak-load demand will be  slowed."  Applying these implications to San  Antonio, it can be seen that peak-load  pricing could signficantly reduce the long  term rate of peak-load growth. Just what the  figure might be is hard to say. But if, instead  of 7.8% average, the peak loak grew at only  4% over the next ten years, no additional  generating capacity beyond the coal-fired  plants now in construction would be needed  before 1985.  Rather than hustling to finance its part of

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