Electricity the Price of a Cigar per Day
He wasn't famous like his brother Samuel Insull. But Martin Insull was surely accomplished working closely with Sam. Martin was the president of Middle West Utilities Company. Sam was the undisputed leader of the rapidly growing electric utility industry in the roaring 1920's, owning large interests in Commonwealth Edison, Peoples Gas, Northern Indiana Public Service and other recognizable industry companies. Earlier he was Thomas Edison's personal secretary and then co-founded General Electric.
Martin Insull debated a college professor in a February 1931 issue of Public Utilities Fortnightly. The dueling articles addressed whether utility holding companies should be regulated, as they were starting four years later under the Public Utility Holding Company Act of 1935.
You might have heard of the professor taking on Insull in PUF. Professor James Bonbright went on to become the most quoted author on utility regulation. Bonbright's writings frequently appear in regulatory testimony and decisions and books and articles to this day.
Insull argued that the modest average of electric bills at that time demonstrated the industry, as is, without a further level of regulation, was sufficiently serving the public interest. A favorite part of the article declares:
"Yet the 8 ½ cents per day - the average domestic consumer's bill - is the cause of all this hullabaloo about the industry on the part of politicians....
Is it not absurd? We all spend time writing magazine articles and making speeches...
In the meantime, [the consumer] goes ahead buying electric household appliances and equipping his farm electrically so as to use more and more of [electric] service even in these times of depression...
Fie upon us!"
Actually, Insull estimated the average electric bill was less than 8 ½ cents per day, "the price of a cigar." And that more than half of domestic (residential) customers, the light and medium-use households, probably pay less than 5 cents per day.
Starting with the February issue, Public Utilities Fortnightly will include retrospectives, looking back at the colorful history of the electric and gas utilities industry as documented in the pages of PUF since 1929.
Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly
E-mail me: email@example.com