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FAR FROM CHEAP
Everyone has heard, time and time again, the socialist propaganda line that the way to get cheap electric power is to have the government provide it. And, undoubtedly, a great many people have come to believe that because of a lack of access to the facts. An excellent refutation of the cheap government power claim recently appeared on the editorial page of the Saturday Evening Post. It was written by Eugene A. Stephenson? Professor Emeritus of Engineering at the University of Kansas, who took the Tennessee Valley Authority as his example.
TVA claims that it earned a net income from power operations of "$214,000,000 during the 1939-52 .period. But, as Professor Stephenson shows, “net income for TVA is not comparable to that of other public utilities . . .” TVA is free from such ^expenses-"as state and federal income taxes, corporation taxes,- certain local property taxes, etc., etc. During those 13 years, it paid to Alabama and Tennessee some $26,000,000 “in lieu of taxes.” Had TVA been a private operation, with the same gross income, its tax bill would have been $119,600,000. 1
TVA’s interest-free capital, Professor Stephenson continued, is “an even greater advantage.” Its depreciated capital investment in power facilities is about $600,000,000. No interest is paid on this huge sum. Had TVA paid interest at the modest rate of 2.6 per cent on that power investment, the total since 1939 would have amounted to $123,000,000. Instead, of course, this came out of the taxpayers.
Dr. Stephenson’s conclusion hit the nail on the head: “This abbreviated story of ‘cheap’ public power provides a startling example' oi the struggle which faces those who still
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