rds, if we could improve our load
factor, our interest cost would be reduced, an effect would be
produced upon the other items going to make up the cost of current,
and we probably could make more money out of our customers at a lower
price per unit than we get from them now.

Many schemes are employed for improving the load factor, or, in other
words, to encourage a long use of central station product. Some
companies adopt a plan of allowing certain stated discounts, provided
the income per month of each lamp connected exceeds a given sum. The
objection to this is that it limits the number of lamps connected.
Other companies have what is known as the two-rate scheme, charging
one rate for electricity used during certain hours of the day and a
lower rate for electricity used during the balance of the day, using a
meter with two dials for this purpose. Other companies use an
instrument which registers the maximum demand for the month, and the
excess over the equivalent of a certain specified number of hours
monthly in use of the maximum demand is sold at greatly reduced price.
The last scheme would seem particularly equitable, as it results in
what is practically an automatic scale of discounts based on the
average load factor of the customers. It does not seem to be just that
a man who only uses your investment say 100 hours a year should be
able to buy your product at precisely the same price as the man who
uses your investment say 3,000 hours a year, when the amount of money
invested to take care of either customer is precisely the same. Surely
the customer who uses the product on an average 30 times longer than
the customer using it for only 100 hours is entitled to a much lower
unit rate, in view of the fact that the expense for interest to the
company is in one case but a fraction per unit of output of what it is
in the other. This fact is illustrated by the interest columns on the
graphic chart already referred to. Supposing that the central station
manager desired to sell his product at cost, that is, an amount
sufficient to cover his operating, repairs and renewals, general
expense, and interest and depreciation, he would have to obtain from
the customer having the poorest load factor, as shown on the load
chart, over four times as much per unit of electricity as it would be
necessary for him to collect from the customer having the largest load
factor. No one would think of going to a bank to borrow money and
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